The pandemic has led to “lasting changes” in the way Amgen does business, CEO Robert Bradway said while opening the company’s year-end sales call on Tuesday. And as a result of those changes, several hundred US jobs are on the chopping block.
Amgen confirmed the job cuts in an email to Fierce Pharma, adding that they’ll take place primarily in the US sales force. The moves position the company to make additional investments in product launches and R&D, according to Amgen.
“These decisions are never easy, and we are committed to helping those impacted with transitional support,” the statement said.
SVB Leerink’s Geoffrey Porges brought the topic of commercial reductions during the Q&A portion of Tuesday’s call, asking how they would play out in a “post-Covid world.”
“Wouldn’t you expect to have to ramp back up once we eliminate social distancing?” he asked.
Murdo Gordon, EVP of global commercial operations, said “a couple of factors” went into the reorganization, including the pivot to product launches and a shift to digital that he believes will persist beyond the pandemic.
“What we’re doing is looking at our overall commercial model, and… making it more productive and making it more efficient,” Gordon replied.
“It’s that persistency that we’re betting on. What we haven’t done is compromised the ability to have competitive share of voice in our field facing interactions both on the medical side both on the commercial side in front of the customer,” he added later.
Despite the US cutbacks, the company is placing “large investments” in the field force in Japan, China and Russia, Gordon said.
For the full year, Amgen reported a revenue increase of 9% to $25.4 billion —though noted that the growth was partially offset by lower net selling prices and the pandemic. Analysts zeroed in on Amgen’s KRAS G12C drug sotorasib, which got attention last week when the biotech unveiled a breakthrough round of data from a pivotal study in non-small cell lung cancer. They also took note of Amgen’s asthma drug tezepelumab, which is expected to go before regulators in the first half of this year.
“We are big believers in both of these therapies as sotorasib should have a rapid launch given the unmet need and 6-12 months lead to market over Mirati’s adagrasib,” Cowen’s Yaron Werber and Brendan Smith said in a note to investors.
“Amgen’s early stage pipeline, however, continues to be sluggish. In particular, the BiTE program needs validation amid ongoing setbacks – now including the enrollment pause for AMG 701 (BCMA for RRMM), stopping Ph1 for AMG 596 (EGFR vIII for glioblastoma), ongoing challenges to the CD33 programs for AML, and slow progress with MCL 1.”
Porges wrote that he believes expectations for sotorasib and tezepelumab are “largely priced in, and there are only so many questions analysts can ask about combination strategies and secondary tumor trial timelines.”