Amgen cuts ‘several hundred’ U.S. jobs, primarily sales reps, as COVID-19 speeds a shift to digital
Amgen is cutting “several hundred” 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.
“We made these changes to better enable Amgen to make additional investments we believe are needed to take advantage of patient-focused opportunities, including launching new products, and investing in R&D,” the company said in an emailed statement. “These decisions are never easy, and we are committed to helping those impacted with transitional support.”
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.
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.