In Thousand Oaks, Amgen Inc. rules.
It's the biggest private employer in town. Its 8,300 local employees, known as "Amgenites," make an estimated average annual salary of $162,000. Its sleek corporate headquarters with sweeping views of the Santa Monica Mountains looks more like a college campus, and frequent late-afternoon "fermentation parties" offer free beer for all.
In this city of nearly 127,000, the biotech giant and its well-heeled workforce have kept the area's economy humming -- including a new Four Seasons hotel nearby that opened in November, gourmet restaurants and hip boutiques that sit among its rolling hills and 4,000 oak trees, some more than 300 years old.
But is the party ending? This summer, things are increasingly looking glum at the once go-go Amgen.
After studies have raised safety concerns about two of Amgen's bestselling drugs, U.S. sales of its most profitable product, Aranesp, fell almost 20% last quarter. Regulators are issuing new warnings and investors are pummeling the stock, which has lost nearly a quarter of its value since the start of the year and fallen to its lowest level in nearly four years.
Last week, the U.S. Centers for Medicare and Medicaid Services dealt an unexpected and serious blow to the company when the government announced plans to limit what dosages of anemia drugs it would pay for under Medicare. Included was Amgen's Epogen and Aranesp medications, which made up 60% of the company's profit last year.
Worse yet, layoffs may loom. Although plans have not been finalized, the company is expected to announce it is reducing its workforce by as much as 15% in the next several weeks, according to three people familiar with the matter.
The company, however, says layoff talk is premature.
"We have made no announcements regarding staff reductions," Amgen spokesman David Polk said.
Amgen has already delayed plans for a new $1-billion plant in Ireland and has slowed manufacturing operations elsewhere. Many contractors and temporary workers have left the company in recent months and employee overtime has been curtailed, those familiar with the matter say.
Mark Shoenenbaum, a biotech analyst at Bear Stearns Cos., said that if pressure on Amgen continued to mount, it might have few choices but to cut expenses further. "There's likely fat in places they can find," he said.
