Amgen plans to reduce its headcount by 12-14% or 2,200-2,600 staff in an effort to "create operational efficiencies" and support R&D investments. These initiatives, expected to yield savings of between $1 billion - $1.3 billion in 2008, are in part, due to lower Aranesp sales. Restructuring charges are expected to be $600 - $700 million in 2007 and 2008, which includes $289 million for asset impairment and related costs reported in the second quarter.

With the restructuring, the company plans to improve its cost structure by reducing capital expenditures by approximately $1.9 billion during 2007-2008; closing certain production operations and rationalizing other facilities improve efficiencies; and determining the highest R&D priorities for future growth.

"At Amgen we have always been committed to investing in the future while squarely facing the challenges of today," said Kevin Sharer, Amgen's chairman and chief executive officer. "Recent changes in coverage rules and adjustments to Amgen's FDA approved labels for Epogen and Aranesp have and will adversely affect Amgen's revenue. These initiatives respond to that new reality by taking account of reduced revenues and appropriately lowering costs across the company. We will continue to strongly support our research efforts directed at development of new medicines for grievously ill patients. These changes will also position Amgen for success in 2008 and beyond."

Cell Therapeutics, Inc. will acquire Zevalin, the first FDA-approved radioimmunotherapy, from Biogen Idec. CTI will be responsible for marketing, sales, and development of the drug in the U.S. The drug will continue to be sold outside the U.S. by Bayer Schering under a previous agreement with Biogen Idec. Zevalin was approved by the FDA in 2002 to treat patients with relapsed indolent non-Hodgkin's lymphoma (NHL). In 2006, Biogen Idec reported $16.4 million in Zevalin sales in the U.S.

Under the terms of the agreement, CTI will pay Biogen Idec $10 million in cash, as much as $20 million more in milestone payments when the product receives approval for a first-line indication in NHL, and royalties on sales. CTI has also agreed to share the cost of certain clinical trials of Zevalin with Bayer Schering. The acquisition is subject to certain closing conditions.

"Zevalin is an effective yet underutilized drug with a favorable tolerability profile, producing high rates of complete response coupled with long-term remissions, all following just a single therapeutic dose," said Jack W. Singer, M.D., chief medical officer of CTI. "We believe the potential cost savings and practice efficiencies compared to standard combination chemotherapy will become increasingly attractive to oncology group practices in the ever-evolving reimbursement environment. We are currently planning to conduct registration-directed trials to expand the label into first-line treatment in both the aggressive and indolent NHL settings," Dr. Singer noted.

"Acquiring Zevalin returns CTI to a select group of biotech companies who market and sell a commercial product in the U.S. We see potential for substantial revenue growth for this product with additional clinical data and increased patient and physician knowledge about its potential in treating patients with NHL," said James A. Bianco, M.D., president and chief executive officer of CTI. "Importantly, in addition to the untapped revenue potential for Zevalin, it is an excellent complement to pixantrone, which is in phase III trials in similar patient populations. Ensuring this important cancer treatment remains available to patients fits into CTI's mission of making cancer more treatable."

Pharmatek Laboratories, Inc. has added cytotoxic and high-potent drug development capabilities to its pharmaceutical chemistry development services. These services include: analytical method development, preformulation testing, formulation development, manufacturing for early phase clinical trials, release testing, and stability testing and storage.

"This expansion was driven by an increase in demand for cytotoxic and high-potent drug development and manufacturing outsourcing among our clients," said Dr. Jeffrey Bibbs, chief executive officer of Pharmatek. "This added capability enables us to provide a broader level of services to our clients with cytotoxic and high-potent candidates."

The company's cytotoxic and high-potent development services will take place in a separate dedicated facility. Manufacturing capability includes two validated and licensed class 100,000 high-containment suites designed with barrier technology for cGMP manufacturing of final form drug products, with dedicated HVAC and HEPA filtration systems to ensure product containment within the suites.

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