Amgen’s exit a new blow for Seattle biotech industry
The move takes out the largest biotech employer in the area, eliminating 610 jobs in Seattle and 50 jobs at a manufacturing plant in Bothell. It highlights the region’s struggle to grow into a world-class biotech hub, an effort hobbled by outside takeovers and product failures.
Seattle Times business reporter
Amgen at a glance
Companywide: 20,000 employees, with headquarters in Thousand Oaks, Calif.
Cutting locally: 610 at Seattle waterfront R&D campus, 50 at Bothell small-scale biotech manufacturing plant
Business: Therapies for cancer, arthritis, osteoporosis and heart
Timeline of Amgen’s Seattle acquisition
1992: Immunex first approaches Port of Seattle about buying 29 acres at Terminal 88 for a headquarters and R&D campus.
1998: Immunex buys site for $13.5 million. City, county and Port agree to pay for a West Galer Street bridge over the adjacent railroad tracks.
2001: Immunex falls short in producing its blockbuster rheumatoid-arthritis drug Enbrel. In December it accepts buyout offer from Amgen, initially valued at $16 billion in cash and stock.
2003: Amgen widens its research base in Seattle in May by adding cancer research to arthritis.
2004: Amgen moves 750 scientists to the new campus, dubbed Helix. Final cost: $625 million.
2006: Amgen announces plans to build a big expansion of Helix campus, with room to double the workforce.
2007: Expansion plans are scrapped amid financial woes. Amgen cuts 50 jobs in Seattle as part of larger cutback.
2014: Amgen announces it will close Seattle and Bothell operations by 2015 as it refocuses its spending and retrenches into its South San Francisco and Boston operations. For the Seattle area, Amgen’s departure means the loss of 660 jobs.
Source: Seattle Times archives
Amgen said Tuesday it will close its operations in Seattle and Bothell, eliminating 660 jobs and dealing a hard blow to the state’s biotech industry.
The closure of the largest commercial biotech employer in the area also draws the final curtain on the direct legacy of Immunex, Seattle’s biggest success in the roller-coaster industry, which Amgen acquired in 2002.
The planned closure by 2015 of Amgen’s scenic campus overlooking Elliott Bay and its small-scale manufacturing plant in Bothell highlights the region’s struggle to grow into a world-class biotech hub, an effort hobbled by outside takeovers and product failures.
“It is disappointing and unfortunate anytime a job is lost in Washington state, and this is a big loss in an important industry,” said Jaime Smith, a spokeswoman for Gov. Jay Inslee. “The company has assured us the move is about a global restructuring — the sort of moves we’ve unfortunately seen before.”
Immunex, which developed the blockbuster rheumatoid-arthritis drug Enbrel but then stumbled as production fell short of demand, once represented the hope that Seattle would grow its own biotech giant. The company’s alumni still play big roles in local biotechs, including two of the latest to go public.
Amgen, based in Thousand Oaks, Calif., finished the initial phase of Immunex’s waterfront Helix campus and moved in during 2004, but employment shrank from roughly 1,600 at the time of the acquisition.
The company, which reported strong financial results Tuesday, said that by the third quarter it will start to close the facilities not only here, but in Boulder and Longmont in Colorado as well.
Amgen said it will cut 2,400 jobs globally and concentrate most of its U.S. operations in South San Francisco and the Boston area. Its headquarters will remain in Southern California. The cuts represent between 12 and 15 percent of Amgen’s global workforce, the company said.
“The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years, and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit,” the company said in a statement.
Amgen said it will offer relocation to some staff members and will eliminate the remaining positions, but gave no details.
Amgen employees said rumors of layoffs were going around the office for a couple of weeks, but no one expected the entire facility to close.
Employees will not know their fate for two or three weeks, several workers leaving the Helix campus said Tuesday afternoon, speaking on condition of anonymity.
“I understand from a business angle but I think it is shortsighted,” one researcher said.
Bob Nelsen, of ARCH Venture Partners, a longtime investor in the Seattle biotech scene, said Amgen’s departure “is not good,” but the area’s strength in various disciplines “will make up for it in the long run.”
The closure underscores the importance of having a homegrown anchor for the sector, he said. “We need to keep a big company here, and not sell.”
Chris Rivera, president of the Washington Biotechnology and Biomedical Association, said that while the news was a letdown given Immunex-Amgen’s history in Seattle, he is “pretty confident” those employees who want to stay here will be able to find a job in the sector.
“There are plenty of opportunities here,” with about 190 biotechnology and pharmaceutical companies in the area, he said.
The sector here is dominated by small, early-stage companies and a handful of large nonprofit research institutions.
Rivera noted, however, that companies from the outside are also looking to expand their presence in Seattle. For example, Celgene, a large New Jersey-based biotech company, announced last week it would open a genetic cancer-therapy research center in Seattle. Bristol-Myers Squibb, Novo Nordisk and Gilead Sciences are other national or global companies with local R&D operations.
Amgen’s pullback comes as the biotech giant, which overextended itself through acquisitions, reinvents itself in a perpetually changing field.
Wall Street is pressuring the company to cut back on expenses, even as it has to pour billions into bringing new osteoporosis and heart therapies to market, said Michael Yee, an analyst with RBC Capital Markets.
“They are cutting back on all that legacy overhead and moving to more focused efforts in biotech hot spots,” Yee said.
Enbrel, the immune-disease drug that prompted Amgen to buy Immunex, is still making money. It was Amgen’s top-selling U.S. drug in the latest quarter with nearly $1.2 billion in sales, nearly a third of the company’s U.S. sales. It also led the 8 percent bump in quarterly sales the company reported Tuesday.
A roller-coaster field
Seattle’s biotechnology industry has a history of ups and downs — rising on promising new therapies and vast sums of investor capital, falling on unsatisfactory clinical trials or missteps that trigger takeovers by larger out-of-town companies.
Icos, developer of the erectile-dysfunction drug Cialis, was the largest local biotech after Immunex’s sale, but its staff was quickly axed and its facilities sold once it was acquired by Eli Lilly in 2007.
A more recent candidate to follow Immunex as the region’s biotech bellwether was Dendreon, which grew rapidly, then just as quickly shrank as its prostate-cancer therapy was eclipsed by less costly and less difficult to produce competitors.
But the past year has brought initial public stock offerings by at least three local biotech companies.
Likewise, in December the startup Juno Therapeutics, with backing by the Fred Hutchinson Cancer Research Center, Seattle Children’s Research Institute and New York’s Memorial Sloan-Kettering Cancer Center, launched with what would eventually become an astonishing $176 million in backing.
So Seattle remains a bastion of early-stage commercial biotech as well as an acknowledged center of academic research and innovation in the field.
But it lacks a sizable corporate headquarters in the industry, though soon it will have empty space suitable for one.
Immunex, flush with cash from Enbrel, was in the midst of building the $625 million Helix campus facility when it was taken over by Amgen.
Nevertheless the campus was finished in 2004, after some $19 million in taxpayer money paid for an overpass to the facility. Also, Amgen built a futuristic-looking pedestrian bridge, inspired by the structure of DNA, to connect the campus with Elliott Avenue West.
Shortly before the 750,000-square-foot campus opened, an Amgen executive told The Seattle Times that the company wanted to be “where the hottest places in the world are for research, and Seattle is one of those places.”
In 2006, Amgen announced plans to double its staff at Helix and build an additional 550,000 feet of adjacent space. But financial woes forced the company to abort its plans in 2007; the adjacent land still stands empty.
It’s unclear how quickly the huge space, designed especially for biotech work, could be filled by another tenant.
Amgen said that at each site it is “actively engaging” in talks with third parties about potential future use of the facilities.
“It’s a beautiful campus, with terrific views,” said John Cox, senior vice president for Alexandria Real Estate Equities, a firm that owns biotech real estate across the country.
The location should command a premium, but Seattle’s biotech community has always seen “kind of slow growth. Never great, never terrible,” he said.
Seattle Times reporters Brandon Brown and Coral Garnick and deputy business editor Rami Grunbaum contributed to this story, which includes information from Seattle Times archives.Ángel González: 206-464-2250 or email@example.com. On Twitter @gonzalezseattle