(Adds analyst, company comment; updates shares)
By Bill Berkrot
July 29 Amgen Inc on Tuesday said it would cut up to 15 percent of its work force and close plants in a series of moves aimed at reallocating resources as it prepares to introduce new medicines it hopes will drive future growth.
High on the list of potential growth drivers is evolocumab, a cholesterol-lowering medicine from a new class of drugs that analysts see having multibillion-dollar sales potential. The company said it plans to file applications seeking U.S. and European approval this quarter.
It has already filed for U.S. approval of new drugs to treat heart failure and advanced melanoma and expects important data on other medicines this year.
"That gives us the potential for several high potential new product launches in 2015," Chief Executive Robert Bradway said on a conference call.
Amgen's second-quarter profit sailed past Wall Street expectations after a disappointing first quarter, and the company significantly raised its full-year earnings forecast. Its shares rose more than 4 percent to $129.
Amgen now expects 2014 adjusted earnings of $8.20 to $8.40 per share, up from its prior view of $7.90 to $8.20 per share. It sees full-year revenue of $19.5 billion to $19.7 billion compared with its previous forecast of $19.2 billion to $19.6 billion.
Wall Street was looking for $8.09 per share and revenue of $19.41 billion.
"The company was pretty roundly criticized for a seasonally weak Q1," said Cowen and Co analyst Eric Schmidt. "Q2 tends to be strong and we're seeing that in spades.
"It's a solid beat and raise," Schmidt said. "This is not necessarily a high expectation stock like some others in biotech, so people are going to be pleased."
Amgen said it will slash 2,400 to 2,900 jobs, primarily in the United States, in 2014 and 2015 and close plants in Colorado and Washington. It plans to expand in South San Francisco, California, and Cambridge, Massachusetts.
Amgen will maintain its Southern California headquarters with reduced staff in fewer buildings.
The company will take accounting charges of $775 million to $950 million primarily this year and next. The moves will reduce operating expenses by about $700 million in 2016, Amgen said, adding that most of the savings will be reinvested in new product launches.
"They're not being very clear about whether it will result in significant improvement in profitability," Sanford Bernstein analyst Geoffrey Porges said of the restructuring moves.
Excluding items, Amgen earned $2.37 per share, topping analysts' average expectations by 30 cents, according to Thomson Reuters I/B/E/S.
Net profit rose to $1.55 billion, or $2.01 per share, from $1.26 billion, or $1.65 per share, a year ago.
Revenue rose 11 percent to $5.2 billion, exceeding analysts' estimates of $4.89 billion.
The results were helped by solid demand for rheumatoid arthritis drug Enbrel, which had sales of $1.24 billion. (Reporting by Bill Berkrot; Editing by Leslie Adler and Grant McCool)