Many news sources have published articles regarding Amgen’s recent announcement that it will undergo restructuring due to declining sales of two of its blockbuster drugs, anemia drugs Aranesp and Epogen. Included in the restructuring is, first, a 12% to 14% cut in the company’s workforce of 20,000, which is a loss of 2,200 to 2,600 employees. Next, capital expenditures will be reduced by about $1.9 million between 2007 and 2008. Further, certain operations facilities will be closed down while others will be reduced in size for efficiency purposes. Also, the adjusted earnings per share guidance has been lowered to between $4.13 and $4.23 per share from previously estimated $4.28 per share. Restructuring pre tax charges are estimated between $600 million and $700 million for 2007 and 2008, but the restructuring plans implemented by Amgen are estimated to save the company between $1 billion and $1.3 billion next year.

Amgen, founded in 1980, has seen a steady increase in sales and profits since Epogen was introduced into the market in 1989. This plan for restructuring is the first one of its kind that Amgen has experienced in its 27-year history as a biotechnology company. The company has grown to employ 20,000 employees worldwide, with 11 of its facilities located in some of the biggest cities in the U.S., including San Francisco, CA; Cambridge, MA; and Seattle, WA. The restructuring plans come in the wake of “payment limits by insurers and safety warnings from U.S. regulators.” FDA approved labels for Amgen’s drugs have undergone changes including the inclusion of a “black box” warning. These warnings coupled with numerous studies into the safety of the drugs have adversely affected Amgen’s anemia drug sales, which have, in turn, caused the company’s restructuring.

Click on the following links to read the full version of the articles which have contributed to this post:

Associated Press (in Forbes): “Amgen to Cut Up to 2,600 Jobs”

Bloomberg: “Amgen Will Cut 2,200 to 2,600 Jobs, Saving $1 Billion”

The New York Times: “Amgen to Cut Jobs, a First for the Biotech Giant”

The Benton Crier: “Amgen to cut up to 2,600 jobs”

Associated Content: “Biotech Firm Amgen Announces Layoffs”

A recent article in The Boston Globe highlights some developments with the Danversport Trust, started on June 1, 2007 when it was approved by Judge John Casey. The trust has been established as a means for those who were effected by the November 2006 warehouse explosion  (occupied by CAI, Inc. and Arnel Co.) to “negotiate a group settlement against any party found responsible.” The explosion caused over $20 million in damage and displaced many families whose homes were either severely damaged or destroyed.

So far, authorities have not found either CAI or Arnel responsible for the explosion. According to officials, the explosion was most likely caused by the ignition of chemical vapors from an unknown source. Final reports have not yet been made available. Some members of the community, however, are planning to band together and hire their own team of experts to find out what really happened. One possibility is the presence of natural gas in the building structure; however, there is not yet any evidence of that.

Jan Schlichtmann, the attorney representing The Danversport Trust, says that once findings are released concerning the cause of the explosion the trust will then have a better idea of who to approach regarding settlement negotiations. “If a settlement is reached, the money would be paid into the trust” and the beneficiaries of that trust would be the property owners whose property was effected by the explosion. The trust is also accepting private donations which, thus far, exceed $7,000. Based upon the needs of each beneficiary (so far there are over 200, including minor children), the money in the trust will be distributed under a benefits plan, with some money also being used “for the long-term improvement of Danversport.”

While some property owners have already reached monetary settlements with their insurance companies, a great number of them have yet to return to their homes and businesses. Out of 70 homes and businesses that were severely damaged or destroyed by the explosion, more than half of them are still being repaired and/or rebuilt.

The Boston Globe: “Victims form trust for settlement”