Amgen plans to cut about 300 jobs and close one of its South San Francisco buildings as part of a reorganization that will combine cancer organization with Onyx Pharmaceuticals, which the biotech bought for $10.4 billion.
The shine on the Onyx acquisition – and the Kyprolis cancer drug that was the Onyx crown jewel – brightened recently after a company-sponsored study found that Kyprolis patients lived twice as long as patients taking the rival treatment Velcade before their multiple myeloma worsened.
Yet Amgen, which is bsaed in Thousand Oaks, Ca., has been laying off employees and closing buildings as it launches new drugs and prepares for more. The biotech is also facing competition for some of its medications and pressure from an activist investor, Daniel Loeb, whose Third Point fund took a stake in Amgen last year and recommended reducing what it termed the company’s “bloated cost structure.”
Onyx brought 750 jobs to Amgen, as well as a building in South San Francisco, not far from an Amgen research site, an Amgen spokeswoman says.
In a memo to staff on Tuesday, Amgen ceo Robert Bradway wrote that 300 Onyx jobs would be cut and Onyx headquarters in South San Francisco would be shuttered. “These combined oncology capabilities will create the focus and efficiency Amgen requires to progress our vision in oncology, and to remain a world leader for the long term,” he wrote.
The cuts, first reported by Xconomy, are part of a larger reorganization that will merge the cancer teams into a single organization, Bradway noted, adding that he expects Amgen to retain all of the Onyx sales and medical staffs, while shifting some Onyx researchers to Amgen laboratories in South San Francisco. However, Xconomy noted that the fate of another 200 Onyx employees is uncertain.
By Jonathan Rockoff
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