Amgen: Cutting Costs, Buyback And No Split Of The Group

Cutting Costs Buyback And No Split Of The Group

Redundancies increased by 5%, saving 2018 for $ 1.5 billion and no more than $ 750 million, dividend increase of 30% in the first quarter of 2015 and increase to $ 4 billion plan to repurchase its own shares, of which two billion to be spent by the end of next year. This is the strategy outlined by Amgen in the aftermath of good third-quarter report and the resulting rise in quarterly estimates for 2014. For now a split in the group is ruled out and 2018 plans to return to its shareholders approximately 60% of the net profits of extraordinary items.

Yielding to pressure, an activist investor Daniel Loeb, the pharmaceutical group with headquarters in Thousand Oaks, California, said that they expected by the end of 2015 a decrease of 23% of the area of its plants and a reduction of 20% of the staff, about 1,100 more than the 2,900 redundancies announced earlier. Hence the doubling of the savings to 2018.

For 2015, Amgen expects to achieve a turnover of between 20.8 and 21.3 billion dollars, more than the 20.3 billion expected by analysts. Earnings per share are expected to share from 9.05 to 9.40 dollars compared to estimates for $9.08.

Loeb, owner of the New York investment fund Third Point, has recently acquired a share in Amgen and now is pushing the giant biotechnology to assess the way of a split of the company as assets mature and are growing fast.

Robert Bradway, a former executive at Morgan Stanley in 2012 became CEO of Amgen, last year he orchestrated an agreement from $10.4 billion to buy Onyx Pharmaceuticals and Kyprolis, its leukaemia drug. In July Always Bradway announced the cuts to close some plants and reduce the workforce by 12% -15%.

Amgen had explained that all the savings will be invested in potential new sources of growth, such as a cholesterol drug.

The company’s shares are up 21% over the past three months.

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