UPDATE 2-Amgen signals R&D changes to employees

Wed Oct 12, 2011 7:27pm EDT

* Employees are told changes are under evaluation

* Aims to improve focus, reallocate resources

Oct 12 (Reuters) - Amgen Inc , the world's largest biotechnology company, has told its research and development staff it is evaluating changes in its R&D programs, a company spokeswoman said on Wednesday.

The company told employees the changes would be aimed at improving focus and reallocating resources to key pipeline assets and activities, Amgen's Mary Klem said in a statement.

She said additional details of the plans will be given on Oct. 24 when Amgen, based in Thousand Oaks, California, announces its third-quarter financial results.

Last year, Amgen posted revenue of $15.1 billion and spent $2.9 billion, or about 19 percent of its revenue, on R&D -- a level that some investors have deemed too high.

"The $3 billion R&D line item annually is high and investors see room to start to trim this," said RBC Capital Markets analyst Michael Yee.

He estimated that for every $100 million -- or 3 percent -- of R&D cuts, Amgen's earnings per share could increase by between 8 cents and 10 cents. Yee has forecast Amgen's 2011 EPS at $5.20.

Worldwide, the company's staff totals about 17,000.

Shares of Amgen have lost about a third of their value since early 2006, when safety concerns began to emerge about its flagship anemia drugs Epogen and Aranesp.

The company's shares closed at $56.64 on Wednesday and were unchanged after-hours.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.