Amgen is cutting 500 jobs, and its U.S. sales teams are bearing the brunt of it. The California-based drugmaker confirmed Wednesday that it is shrinking its workforce, "primarily in the U.S. sales force," as it pivots to upcoming drug launches and adopts pandemic-time digital marketing tools for the long run. A spokesperson confirmed the total number of jobs is approximately 500.
Amgen would not disclose details about which
product teams or therapeutic areas are affected by the cuts.
SVB Leerink analyst Geoffrey Porges questioned Amgen
during its year-end sales call yesterday about rumored commercial field
reductions, asking whether the cutbacks stem from a shift to
digital-oriented promotions rather than in-person detailing.
Murdo Gordon, EVP of global commercial operations,
acknowledged the reorganization without giving specifics and said the
company looked at its "overall commercial model" with an eye
to "making it more productive and making it more
efficient."
CFO Peter Griffith did note the digital efforts will
lead to a decrease in expenses, with SG&A declines “due to changes in our
commercial model, including an increased focus on digital efforts.”
Gordon pointedly said Amgen is not compromising
its "ability to have a competitive share of voice in our field facing
interactions both in the medical side, both on the commercial side in front of
the customer." Amgen will augment its traditional marketing work
"with highly efficient digital channels of communication," he said.
And while Amgen is cutting back in the U.S. it's
making "large investments" in Japan, China and Russia, he
said.
The digital adoption at Amgen, as with many other
pharma companies, is a consequence of the pandemic-accelerated shift to
tech channels.
“COVID-19 is leading to some lasting changes in how we
do business. For example, we expect to continue leveraging digital
capabilities, call on customers and run clinical trials around the world with
improved speed, efficiency and effectiveness,” CEO Robert Bradway said during
the call.
For 2020, Amgen beat analyst expectations with 9%
growth on reported sales of $25.4 billion.
Gains were driven by volume growth, although offset by lower net selling prices
and COVID-19 pandemic impacts.
Amgen’s pipeline for 2021
Along with digital engagement, analysts keyed in on
Amgen’s pipeline for 2021. Its KRAS-inhibiting cancer
drug, sotorasib, piqued attention in particular, partly on the basis
of newly reported positive data last week
and its prospects for approval this year. Amgen filed for FDA approval in
December.
Sotorasib is expected to reach blockbuster status as a
monotherapy—consensus peak sales estimates are $2 billion, Jeffries said in a
note, but that could go up by $1 billion or more if combination therapies
pan out by summer or year-end.
Other, more immediate potential portfolio additions
include closely watched tezepelumab to treat severe asthma and, in
particular, to serve patients with low eosinophil levels where there is
currently no treatment. Amgen, with partner AstraZeneca, plans to file for FDA
approval in the first half of 2021.
Also in the works is a new indication for Repatha
to treat pediatric patients with
a rare disorder causing high cholesterol levels and a submission for Otezla in
plaque psoriasis.