The Other Shoe Has Finally Dropped: Merck to Eliminate 8,500 Jobs

Posted in BioBusiness, BioJobBuzz

After Merck rehired Roger Perlmutter to replace Peter Kim as head of R&D (he left Merck about 10 years ago to lead Amgen R&D), it was pretty obvious that reorganization and job cuts were likely. However, it was not clear, until today, how extensive the cuts would be and what exactly what would be changing at Merck.

Today, Merck revealed plans to eliminate about 8,500 jobs–mainly in R&D, marketing and sales–in an attempt to save $2.5 billion by the end of 2015. In addition to the job cuts, R&D focus will be shifting and Merck’s headquarters will be relocated again (it was moved from Whitehouse Station to Summit several years ago) to Kenilworth, NJ (the former headquarters of Schering Plough which Merck purchased for roughly $41 billion in 2009)

According to a post at the Pharmalot Blog, while it is not exactly clear where the job cuts will take place, most industry insiders expect that the majority of them will likely take place in NJ.  The shift in R&D focus is intended to emphasize oncology, diabetes, acute hospital care, vaccines, oncology and a greater effort in biologics. Further the company intends to either license or discontinue research on “selected late-stage compounds” and reduce its investment in “platform technologies.”

Once one of America’s preeminent pharmaceutical companies, Merck has stumbled over the past decade (with the Vioxx scandal and the Vytorin and Zetia controversies) and it continues to struggle with regulatory approval of some of its new medicines. Perlmutter was hired to transform R&D and bring his expertise in oncology to bear at Merck.

Time will tell.

Until next time…

Good Luck and Good Job Hunting!!!!!

Bureaucratic Shakeup and More Layoffs at Merck?

Posted in BioBusiness

The Twitterverse was buzzing with activity late last week about a possible shakeup at Merck as Roger Perlmutter takes control as its new head of R&D.  As many of you may know, Perlmutter used to work at Merck but left to become Amgen’s Executive VP of R&D when Peter Kim, the now former Head of Merck’s R&D, was hired several years

Kim’s tenure at Merck was rife with missteps, misdirection and drug approval failures. So, when Amgen replaced its CEO and Merck fired Kim, Perlmutter saw an opportunity to return to the fold with Merck now under the tutelage of CEO Ken Frazier (the man who engineered the company’s Vioxx legal strategy).

Fierce Biotech substantiated the Twitter rumors that a major shakeup may be underway at Merck. According to an article published early on Friday, a Merck spokesperson confirmed that Perlmutter is indeed shaking things up and reorganizing Merck’s R&D infrastructure.

The spokesperson said

“I can confirm that some members of management, but not all Franchise leadership, are leaving the company but are working to ensure a smooth transition.”

The departure of several senior leaders was later confirmed by the Wall Street Journal.  While not confirmed, rumors suggested that Rupert Vessey will lead Merck’s Discovery and Early Development programs.

While Merck spends close to $8 billion annually on R&D, its late stage development pipeline is thin and Perlmutter was hired to strengthen it. Changes at the top usually mean that other changes will take place among the rank and file. That said, stay tuned for possible additional layoffs among Merck R&D personnel.

Until next time….

Good Luck and Good Job Hunting!!!!!!!

The Amgen Chronicles

Posted in BioBusiness

I have been in the business long enough to remember when Amgen was the largest and most successful biotechnology company in the world. During most of the 90s and early 2000s, Amgen was second to none. But, a lack of innovation, questionable marketing practices and an uncreative executive management team forced the once invincible biotech Giant to recently stumble and relinquish its world class status

For those of you who may not be familiar with Amgen, it was founded in 1980 by a team of scientists led by George B. Rathmann. The company’s original name was Applied Molecular Genetics which was officially changed in 1983 to Amgen. Its first product, Epogen (EPO; epoetin-alfa) an erythropoiesis-stimulating hormone was approved in 1989 when Gordon Binder was CEO. 

EPO quickly became the company’s flagship blockbuster product and was largely responsible for Amgen’s early success.  The company’s second blockbuster product Neupogen (Filgrastim) a recombinant-methionyl human granulocyte colony factor (G-CSF)—also under Binder’s leadership—which stimulates neutrophil (white blood cell) production was approved in 1998. In the early 2000s the company—now under the tutelage of its third CEO, Kevin Shearer—introduced a longer acting, second generation EPO product called Aranesp (darbepoetin-alfa) and Neulasta (pegfilgrastim), a second generation, longer-acting PEGylated version of recombinant G-CSF.

The largesse from the EPO and Filgrastim franchises allowed Amgen to rapidly expand in the 2000s and to heavily invest substantial resources into new drug development (both small molecule and biotechnology). Unfortunately, most of these investments did not pan out; with the possible exception of XGEVA (denosumab) and Prolia (denosumab) a monoclonal antibody (MAb) treatment that recently received approval for the treatment of skeletal-related events including pathological faction in patients with bone metastases from solid tumors and postmenopausal osteoporosis respectively.

In the 2000s, Amgen’s went on something of a “buying spree” during Mr Shearer’s 11 year tenure at the company. During this time Amgen acquired eight companies including three high profiles and well known ones; Immunex (2002) a MAb development company; Tularik (2004) a small molecule discovery company and Abgenix (2006) another MAb development entity. The Immunex acquisition, clearly the most profitable one, gave Amgen access to Enbrel (etanercept) a tumor necrosis factor α MAb indicated for the treatment of various forms of arthritis. Enbrel is currently one of the world’s top selling biotechnology products.

Despite its lack of R&D productivity, Amgen was recognized until recently as the world’s largest and most profitable biotechnology company in the world. However, its lack of R& D productivity coupled with a recent, highly publicized regulatory and criminal inquiry into inappropriate marketing associated with its EPO franchise has seriously tarnished the company’s once impeccable reputation. Interestingly, it appears that Amgen is finally attempting to reinvent itself.

Last week, the company announced that its CEO, Kevin Shearer and Dr. Roger M. Perlmutter, head of R&D will retire early next year. Mr. Shearer will be succeeded by Robert Bradway, a former Wall Street executive who is Amgen’s current chief operating officer. Dr. Perlmutter will be replaced by Sean Harper, MD, the company’s chief medical officer. And, last month, Amgen announced that it plans on buying back up to $5 billion shares of its publicly-held stock in an attempt to return profit to shareholders. Finally, today, the company announced that it entered into a deal with Watson Pharmaceuticals, a leading generics company, to develop biosimilar versions of some of its competitor’s blockbuster cancer-fighting biotechnology drugs. The press release made it clear that the deal did not include developing biosimilar versions of any of Amgen’s currently marketed biotechnology products. Nevertheless, today’s announcement strongly suggests that Amgen is willing to use anything at its disposal (in this case its substantial expertise in biomanufacturing rather than new drug development) to generate additional revenue streams for the company.

The recent organizational changes and strategic decisions made by Amgen’s board of directors and management team tends to validate the need for change at the company so that it can remain profitable and possibly restore its reputation as a global biotechnology leader. That said, like most other things in life, only time can tell!

Until next time…

Good Luck and Good Job Hunting!!!!!!!

 

Amgen Executives Must Stand Trial in Stock Manipulation Case

Posted in BioJobBuzz

A federal judge ruled that Amgen Inc. must defend itself against charges that it misled investors about safety concerns with its flagship anemia drug, Aranesp.

A US district court judge dismissed charges against five of nine Amgen officers and directors but left plaintiffs 30 days to amend their complaint in order to include those defendants. The investors, led by Connecticut Retirement Plans and Trust Funds, assert that positive statements made by company officials regarding the safety of Amgen’s two anemia drugs, Aranesp and Epogen, were knowingly at odds with clinical studies that had raised concerns.

The plaintiffs assert, according to court filings, that they unknowingly purchased artificially inflated shares, between April 2004 and May 2007. In one instance, during its fourth-quarter 2006 conference call, Amgen announced results of a clinical trial that tested Aranesp in 939 patients with anemia from cancer. The Food and Drug Administration, according to court filings, described the study as "demonstrat(ing) significantly shorter survival rate in cancer patients receiving (anemia drugs) as compared with those (sic) receiving transfusion support."

Describing the results of the study during the conference call, Roger Perlmutter, a defendant and executive vice president of research and development, said, "We did not see a statistically significant adverse affect of Aranesp on overall mortality in this patient population, and so we conclude that the risk/benefit ratio for Aranesp in these extremely ill patients with anemia secondary to malignancy is, at best, neutral and perhaps negative."

Sounds misleading to me! It is unfortunate that companies compromise their scientific integrity and corporate reputation simply to boost their stock price in the short term. I think companies are slowly learning that if they are dishonest or disingenuous with the American public that the public will soon lose confidence in them and their products. This, in turn, will lead to a decrease in sales and ironically a reduction in company stock price. As the old adage goes “Honesty is always the best policy!”

Until next time….

Good luck and Good Job Hunting!!!!!!!!!!!!