Amgen Inc.’s plans to cut 226 employees, or about 4 percent of the staff at its Thousand Oaks headquarters, is a blow to the greater Valley region, but some say there could be a silver lining if those employees look for opportunities in the area. Amgen, the world’s largest biotech company, announced on Oct. 19 plans to lay off about 380 workers in total, about 2 percent of its global workforce, as it restructures its research and development unit. The biotech giant said the layoffs weren’t an “across-the-board reduction” in R&D, but a “targeted, strategic” trimming, so it could focus its resources. Amgen officials declined to give a timeline for the job losses or discuss the move’s estimated cost savings. The mid-October layoffs are a much smaller version of Amgen’s 2007 announcement of about 2,200 layoffs, which caused new intellectual talent to enter the market and helped some smaller companies gain top employees, said Brent Reinke, chairman of the Bio Science Alliance, an organization that aims to build a bioscience cluster along the 101-corridor. “Now (that talent) is suddenly available to companies in this area that may be able to draw upon it,” Reinke said. The recent layoffs, which account for nearly 6 percent of the firm’s total R&D staff, will allow the company to use “scarce dollars” to focus on several drugs as they enter the expensive final stages of testing, company spokeswoman Mary Klem said. Some of those drugs include treatments for ovarian and pancreatic cancer, which are currently in the last trial phase. A struggling economy and regulations have also played a role, Klem said. Amgen will report its third quarter results on October 24. In the second quarter, the biotech firm reported about $4 billion in revenue, an increase from $3.8 billion during the same period in 2010. However, profit dipped slightly to $1.17 billion from $1.2 billion in 2010. Research and development costs, which the company said helped contribute to the layoffs, have been rising for Amgen. In the second quarter, the publicly traded company saw its R&D costs jump 21 percent to $819 million. A major part of that increase was due to investment for “late stage clinical programs” for its ovarian and pancreatic cancer drugs. During the quarter, R&D costs accounted for about 20 percent of Amgen’s revenue — a tally some investors have criticized. While a hit to the local economy, the cuts are part of a larger retrenchment among big biotech firms as they attempt to maintain margins as patents expire for drugs and firms face competition from overseas and startups, said James Schultz, vice president of marketing at PBS Biotech Inc. in Camarillo. Former Amgen employees dot the region’s biotech companies, but many are individuals who were not laid off but left voluntarily. Joel Balbien, a biotech and green tech consultant, said the majority of the workers coming from the recent layoffs will likely exit the region because there are more opportunities in biotech clusters in San Diego, San Francisco and Boston. “We unfortunately haven’t seen the type of ecosystems develop around Amgen in Thousand Oaks that we have seen around other major, hugely successful companies both in biotech and microelectronics” in other regions, Balbien, managing director of GreenTech Consulting, said. PBS Biotech Inc. has benefitted from proximity to Amgen. Employees there left Amgen on their own and were not laid off, the firm said. PBS Biotech was co-founded in 2007 by Dr. Brian Lee, a former Amgen scientist. The firm, which manufactures machines that allow cell cultures to grow, has four former Amgen employees, including its director of technology development and its chief financial officer, Schultz said. “Hopefully, we will have people giving us a phone call asking if we could use their services,” Schultz said, adding PBS will “put the word out” that it’s looking for former Amgen R&D staffers.
