Biotechnology giant Amgen Inc is gearing up for cost cuts as it weathers a siege on its lucrative anemia drug business that accounted for about half of its sales last year.

Amgen's Epogen and its newer and longer-lasting Aranesp were the top revenue producing biotech drugs in the United States last year, respectively reaping sales of $2.5 billion and $4.1 billion, funded in large part by government health programs in the United States and abroad.

This year is a different story. Anemia drug revenue at Amgen has dipped 10 percent in the first half and the company's shares have shed nearly 27 percent of their value as safety and overuse concerns fuel reimbursement cutbacks by the agency that runs government health programs for elderly, disabled and poor Americans.

The Epogen/Aranesp franchise is under attack on several fronts, said Fariba Ghodsian, managing director of Dafna Capital Management LLC, a biotech-focused investment firm that does not own Amgen shares.

On the competitive front, Amgen's battle to keep Roche Holding AG's rival anemia drug out of the U.S. market is scheduled to go before a jury next month.

Thousand Oaks, California-based Amgen has been buying companies with promising drugs in development, but has yet to show investors that those products will offset lost sales from expiring patents on key drugs and further expected declines in revenue from Aranesp and Epogen.

As a result of these challenges, we have commenced a global review of the company's business plans to identify opportunities to improve our cost structure in response to any resulting declines in revenues, Amgen said in a regulatory filing on Friday.

Amgen added that it will refocus spending on critical research and development and operational priorities.

Spokesman David Polk declined to comment on any pending job cuts.

We have made no announcements regarding staff reductions, he said.

Hints of the trouble now crippling what has long been the world's biggest biotechnology company surfaced late last year.

This March, the U.S. Food and Drug Administration put its strongest black box safety warning label on the class of red blood cell boosters that includes Aranesp, Epogen and Johnson & Johnson's Procrit.

The U.S. Centers for Medicare & Medicaid services, which spent roughly $1.7 billion on Aranesp and Procrit in 2005, in July scaled back coverage for cancer patients and said it also plans to cut payments for dialysis patients next year.

Amgen and J&J were feeling the pinch by June.

U.S. Aranesp sales fell 19 percent to $578 million in the second quarter. J&J followed news that domestic Procrit sales dropped 14 percent to $449 million with word that it planned to reduce its global work force by 3 to 4 percent.

J&J years ago licensed rights to market Epogen to cancer patients under the name Procrit, while Amgen kept the dialysis market.

Amgen's Epogen sales have yet to take a hit, although the company said in Friday's filing that it saw a small decline in dosage and usage in the June quarter.

Another shoe could drop in September, when U.S. regulators are scheduled to discuss use in patients with chronic kidney disease.

And Amgen said the risk does not end there. The company expects European Union health officials to issue label changes for anemia drugs, including those made by Shire Pharmaceuticals Group Plc and Roche, by year end.

It's been a tough year for Amgen, said John McCamant, the Berkeley, California-based editor of the Medical Technology Stock Letter, who takes a tough stance with regard to Amgen.

They didn't anticipate this. In my opinion, they should have, he said.