Amgen Pleases the Street -- but Will Layoffs Keep Critics at Bay?

NEW YORK (TheStreet) -- Amgen, (AMGN) the sprawling biotechnology company, pleased investors with higher profits and big layoffs yesterday, but its moves will not quiet those who want a more basic restructuring.

The maker of the osteoporosis drug Prolia said it will cut employment by 2,400, moving much of its research to Cambridge, Mass., and South San Francisco, Calif., from its headquarters offices in Thousand Oaks, Calif., and boosting production in Ireland at the expense of plants in Colorado and Seattle, Wash

Amgen shares were up $5.69 per share in overnight trading. As of 10:45 a.m., shares rose 4.8% over Tuesday's close to $129.20.

Amgen chose to announce the layoffs after delivering quarterly earnings of $1.55 billion, or $2.01 per share, on $5.2 billion in revenue, up from last year's earnings of $1.26 billion, or $1.65 per share, and revenue of $4.89 billion.

All these figures beat consensus estimates. Plus, TheStreet Ratings considers Amgen a "buy."

Amgen acquired its Ireland plant in 2011 from Pfizer (PFE), and acquired its Washington state facilities with the purchase of Immunex in 2002. The South San Francisco research facilities came with last year's purchase of Onyx Pharmaceuticals

Amgen will now focus more of its research effort on the Onyx pipeline of cancer drugs

But analysts like Geoffrey Poydras of AllianceBernstein have been calling for a larger restructuring, pointing to Amgen's high research costs, scattered pipeline of new drugs and aging product line

Poydras' reaction to the layoff news was to call it "less of a restructuring and more of a re-allocation! Unlikely that this will appease dissatisfied investors who are looking for real savings, not just moving things around." Poydras in the past has suggested that Amgen split itself into two companies, one focused on exploiting existing drugs for dividends and the other focused on research

The moves are unlikely to quiet the chatter surrounding Amgen, which have in the past included rumors it would merge with AstraZeneca (AZN)  or make some other moves aimed at lowering its tax exposure.

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