SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-12477
AMGEN INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3540776
------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1840 DeHavilland Drive, Thousand Oaks, California 91320-1789
---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 447-1000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
As of March 31, 1997, the registrant had 264,872,827 shares of Common
Stock, $.0001 par value, outstanding.
AMGEN INC.
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1.Financial Statements .......................3
Condensed Consolidated Statements of
Operations - three months
ended March 31, 1997 and 1996 ...................4
Condensed Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 ............5
Condensed Consolidated Statements of
Cash Flows - three months
ended March 31, 1997 and 1996 ...............6 - 7
Notes to Condensed Consolidated Financial
Statements ......................................8
Item 2.Management's Discussion and Analysis
of Financial Condition and Results of
Operations ................................15
PART II OTHER INFORMATION
Item 1.Legal Proceedings .........................20
Item 5.Other Information .........................22
Item 6.Exhibits and Reports on Form 8-K ..........22
Signatures........................................23
Index to Exhibits.................................24
PAGE 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The information in this report for the three months ended
March 31, 1997 and 1996 is unaudited but includes all adjustments
(consisting only of normal recurring accruals) which Amgen Inc.
("Amgen" or the "Company") considers necessary for a fair
presentation of the results of operations for those periods.
The condensed consolidated financial statements should be read
in conjunction with the Company's financial statements and the notes
thereto contained in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
Interim results are not necessarily indicative of results for
the full fiscal year.
PAGE 3
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Revenues:
Product sales .................... $536.0 $476.9
Corporate partner revenues ....... 27.4 21.8
Royalty income ................... 12.1 9.2
------ ------
Total revenues ............... 575.5 507.9
------ ------
Operating expenses:
Cost of sales .................... 72.0 66.9
Research and development ......... 147.7 130.6
Marketing and selling ............ 68.1 67.6
General and administrative ....... 44.4 39.2
Loss of affiliates, net .......... 8.5 13.3
------ ------
Total operating expenses ..... 340.7 317.6
------ ------
Operating income .................. 234.8 190.3
------ ------
Other income (expense):
Interest and other income ........ 15.9 19.0
Interest expense, net ............ (0.3) (2.3)
------ ------
Total other income (expense) . 15.6 16.7
------ ------
Income before income taxes ........ 250.4 207.0
Provision for income taxes ........ 70.1 63.4
------ ------
Net income ........................ $180.3 $143.6
====== ======
Earnings per share:
Primary earnings per share ....... $0.65 $0.51
Fully diluted earnings per share . $0.65 $0.51
Shares used in calculation of:
Primary earnings per share ....... 278.1 283.6
Fully diluted earnings per share . 278.1 283.6
See accompanying notes.
PAGE 4
AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
March 31, December 31,
1997 1996
--------- -----------
ASSETS
Current assets:
Cash and cash equivalents ............... $ 264.8 $ 169.3
Marketable securities ................... 779.5 907.7
Trade receivables, net .................. 206.5 225.4
Inventories ............................. 100.4 97.4
Other current assets .................... 86.0 102.8
-------- --------
Total current assets................. 1,437.2 1,502.6
Property, plant and equipment at cost, net 981.6 910.5
Investments in affiliated companies....... 113.0 109.6
Other assets.............................. 241.3 242.9
-------- --------
$2,773.1 $2,765.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................ $ 76.6 $ 75.0
Accrued liabilities ..................... 422.3 449.7
Current portion of long-term debt ....... 40.0 118.2
-------- --------
Total current liabilities............ 538.9 642.9
Long-term debt............................ 59.0 59.0
Put warrants.............................. 157.4 157.4
Commitments and contingencies
Stockholders' equity:
Common stock, and additional paid-in
capital; $.0001 par value; 750 shares
authorized; outstanding - 264.9
shares in 1997 and 264.7 shares in
1996................................. 1,059.8 1,026.9
Retained earnings ....................... 958.0 879.4
-------- --------
Total stockholders' equity........... 2,017.8 1,906.3
-------- --------
$2,773.1 $2,765.6
======== ========
See accompanying notes.
PAGE 5
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Cash flows from operating activities:
Net income ............................... $180.3 $143.6
Depreciation and amortization ............ 36.4 27.9
Loss of affiliates, net .................. 8.5 13.3
Cash provided by (used in):
Trade receivables, net .................. 18.9 (13.7)
Inventories ............................. (3.0) (1.4)
Other current assets .................... 16.8 1.0
Accounts payable ........................ 1.6 (22.4)
Accrued liabilities ..................... (27.4) (55.0)
------ ------
Net cash provided by operating
activities .......................... 232.1 93.3
------ ------
Cash flows from investing activities:
Purchases of property, plant and
equipment .............................. (102.5) (42.5)
Proceeds from maturities of marketable
securities ............................. 149.3 84.9
Proceeds from sales of marketable
securities ............................. 184.6 383.5
Purchases of marketable securities ....... (205.7) (358.1)
Increase in investments in affiliated
companies .............................. - (2.0)
Increase in other assets ................. (3.4) (17.9)
------ ------
Net cash provided by investing
activities ......................... 22.3 47.9
------ ------
See accompanying notes.
(Continued on next page)
PAGE 6
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Cash flows from financing activities:
Decrease in commercial paper ............. $ - $(69.7)
Repayment of long-term debt .............. (78.2) -
Net proceeds from issuance of common
stock upon the exercise of stock
options ................................ 24.3 33.4
Tax benefits related to stock options .... 8.6 8.6
Repurchases of common stock .............. (101.7) (104.5)
Other .................................... (11.9) (13.3)
------ ------
Net cash used in financing activities .. (158.9) (145.5)
------ ------
Increase (decrease) in cash and cash
equivalents ............................. 95.5 (4.3)
Cash and cash equivalents at beginning of
period .................................. 169.3 66.7
------ ------
Cash and cash equivalents at end of period $264.8 $ 62.4
====== ======
See accompanying notes.
PAGE 7
AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
1. Summary of significant accounting policies
Business
Amgen Inc. ("Amgen" or the "Company") is a global biotechnology
company that discovers, develops, manufactures and markets human
therapeutics based on advances in cellular and molecular biology.
Principles of consolidation
The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries as well as affiliated
companies for which the Company has a controlling financial interest
and exercises control over their operations ("majority controlled
affiliates"). All material intercompany transactions and balances
have been eliminated in consolidation. Investments in affiliated
companies which are 50% or less owned and where the Company exercises
significant influence over operations are accounted for using the
equity method. All other equity investments are accounted for under
the cost method. The caption "Loss of affiliates, net" includes
Amgen's equity in the operating results of affiliated companies and
the minority interest others hold in the operating results of Amgen's
majority controlled affiliates.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined in a manner which approximates the first-in, first-out
(FIFO) method. Inventories are shown net of applicable reserves and
allowances. Inventories consist of the following (in millions):
March 31, December 31,
1997 1996
------ -------
Raw materials ...... $ 14.2 $15.9
Work in process .... 54.7 56.2
Finished goods ..... 31.5 25.3
------ -----
$100.4 $97.4
====== =====
Product sales
Product sales consist of two products, EPOGEN(R) (Epoetin alfa)
and NEUPOGEN(R) (Filgrastim).
Quarterly NEUPOGEN(R) sales volume in the United States is
influenced by a number of factors including underlying demand and
PAGE 8
wholesaler inventory management practices. Wholesaler inventory
reductions tend to reduce domestic NEUPOGEN(R) sales in the first
quarter each year. In addition, the discretionary aspects of some
cancer chemotherapy administration has had a slight seasonal effect
on NEUPOGEN(R) sales.
The Company has the exclusive right to sell Epoetin alfa for
dialysis, diagnostics and all non-human uses in the United States.
The Company sells Epoetin alfa under the brand name EPOGEN(R). Amgen
has granted to Ortho Pharmaceutical Corporation, a subsidiary of
Johnson & Johnson ("Johnson & Johnson"), a license relating to
Epoetin alfa for sales in the United States for all human uses except
dialysis and diagnostics. Pursuant to this license, Amgen does not
recognize product sales it makes into the exclusive market of Johnson
& Johnson and does recognize the product sales made by Johnson &
Johnson into Amgen's exclusive market. These sales amounts, and
adjustments thereto, are derived from third-party data on shipments
to end users and their usage (see Note 4, "Contingencies - Johnson &
Johnson arbitrations").
Income taxes
Income taxes are accounted for in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109 (Note 3).
Stock option and purchase plans
The Company's stock options and purchase plans are accounted for
under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees".
Earnings per share
Earnings per share are computed in accordance with the treasury
stock method. Primary and fully diluted earnings per share are based
upon the weighted average number of common shares and dilutive common
stock equivalents during the period in which they were outstanding.
Common stock equivalents are outstanding options under the Company's
stock option plans. Put warrants on the Company's common stock may
also be dilutive under the reverse treasury stock method.
In February 1997, SFAS No. 128, "Earnings Per Share" was issued
and is required to be adopted on December 31, 1997. At that time,
the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under
the new requirements, primary and fully diluted earnings per share
will be replaced with basic and diluted earnings per share. Basic
earnings per share excludes the dilutive effect of stock options and
will therefore be higher than primary earnings per share. Basic
earnings per share for the three months ended March 31, 1997 and 1996
was $.68 and $.54, respectively. Diluted earnings per share under
the new standard is expected to be essentially the same as primary
earnings per share amounts calculated under principles currently
used.
PAGE 9
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results may
differ from those estimates.
Basis of presentation
The financial information for the three months ended March 31,
1997 and 1996 is unaudited but includes all adjustments (consisting
only of normal recurring accruals) which the Company considers
necessary for a fair presentation of the results of operations for
these periods. Interim results are not necessarily indicative of
results for the full fiscal year.
2. Debt
During the three months ended March 31, 1997, the Company paid
off $78.2 million of maturing debt consisting of $28.2 million of
promissory notes and $50 million of debt securities.
Long-term debt consists of the following (in millions):
March 31, December 31,
1997 1996
-------- --------
Promissory notes .......... $ 40.0 $ 68.2
Debt securities ........... 59.0 109.0
------ ------
99.0 177.2
Less current portion ...... (40.0) (118.2)
------ ------
$ 59.0 $ 59.0
====== ======
The Company has registered $213 million of unsecured debt
securities of which $59 million were outstanding and $100 million
were available for issuance at March 31, 1997. The debt securities
outstanding at March 31, 1997 bear interest at fixed rates averaging
5.8% and mature in approximately one to six years.
In April 1997, the Company issued $100 million of debt
securities under its shelf registration which bear interest at a
fixed rate of 8.1% and mature on April 1, 2097. These securities may
be redeemed in whole or in part at the Company's option at any time
for a redemption price equal to the greater of the principal amount
to be redeemed or the sum of the present values of the principal and
remaining interest payments discounted at a determined rate plus, in
each case, accrued interest. These securities place limitations on
liens and sale/leaseback transactions.
PAGE 10
As of March 31, 1997, $150 million was available under the
Company's line of credit for borrowing and to support the Company's
commercial paper program. No borrowings on this line of credit were
outstanding at March 31, 1997.
3. Income taxes
The provision for income taxes consists of the following (in
millions):
Three Months Ended
March 31,
1997 1996
------ ------
Federal(including U.S. possessions) . $65.1 $57.3
State ............................... 5.0 6.1
----- -----
$70.1 $63.4
===== =====
The decrease in the effective tax rate in the current year is
the result of a favorable ruling received in the third quarter of
1996 from the Puerto Rican government with respect to tollgate taxes
applicable to earnings in Puerto Rico.
4. Contingencies
Johnson & Johnson arbitrations
In September 1985, the Company granted Johnson & Johnson a
license relating to certain patented technology and know-how of the
Company to sell a genetically engineered form of recombinant human
erythropoietin, called Epoetin alfa, throughout the United States for
all human uses except dialysis and diagnostics. Johnson & Johnson
sells Epoetin alfa under the brand name PROCRIT(R).
A number of disputes have arisen between Amgen and Johnson &
Johnson as to their respective rights and obligations under the
various agreements between them, including the agreement granting the
license (the "License Agreement"). These disputes have been the
subject of arbitration proceedings before Judicial Arbitration and
Mediation Services, Inc. in Chicago, Illinois commencing in January
1989. A dispute that has not yet been resolved and is the subject of
the current arbitration proceeding relates to the audit methodology
currently employed by the Company for Epoetin alfa sales. The
Company and Johnson & Johnson are required to compensate each other
for Epoetin alfa sales which either party makes into the other
party's exclusive market. The Company has established and is
employing an audit methodology to assign the proceeds of sales of
EPOGEN and PROCRIT in Amgen's and Johnson & Johnson's respective
exclusive markets. Based upon this audit methodology, the Company is
seeking payment of approximately $12.6 million (excluding interest)
from Johnson & Johnson for the period 1991 through 1994. Johnson &
PAGE 11
Johnson has disputed this methodology and is proposing an alternative
methodology for adoption by the arbitrator pursuant to which it is
seeking payment of approximately $423 million (including interest
through December 1996) for the period 1989 through 1994. If as a
result of the arbitration proceeding, a methodology different from
that currently employed by the Company is instituted to assign the
proceeds of sales between the parties, it may yield results that are
different from the results of the audit methodology currently
employed by the Company. As a result of the arbitration, it is
possible that the Company would recognize a different level of EPOGEN
sales than is currently being recognized. As a result of the
arbitration, the Company may be required to pay additional
compensation to Johnson & Johnson for sales during prior periods, or
Johnson & Johnson may be required to pay compensation to the Company
for such prior period sales. While it is impossible to predict
accurately or determine the outcome of these proceedings, based
primarily upon the merits of its claims and based upon certain
liabilities established due to the inherent uncertainty of any
arbitrated result, the Company believes that the outcome of these
proceedings will not have a material adverse effect on its financial
statements. A trial commenced in March 1996, regarding the audit
methodologies and compensation for sales by Johnson & Johnson into
Amgen's exclusive market and sales by Amgen into Johnson & Johnson's
exclusive market. In December 1996, testimony in the arbitration
ended. Final argument before the arbitrator on the parties'
respective audit methodologies and claims is scheduled for May 19,
1997, whereafter the matter will be fully briefed and submitted to
the arbitrator for decision.
The Company has filed a demand in the arbitration to terminate
Johnson & Johnson's rights under the License Agreement and to recover
damages for breach of the License Agreement. A hearing on this
demand will be scheduled following the adjudication of the audit
methodologies for Epoetin alfa sales.
On October 2, 1995, Johnson & Johnson filed a demand for a
separate arbitration proceeding against the Company before the
American Arbitration Association ("AAA") in Chicago, Illinois.
Johnson & Johnson alleges in this demand that the Company has
breached the License Agreement. The demand also includes allegations
of various antitrust violations. In this demand, Johnson & Johnson
seeks an injunction, declaratory relief, unspecified compensatory
damages, punitive damages and costs. On October 27, 1995, the
Company filed a complaint in the Circuit Court of Cook County,
Illinois, which is now pending in the United States District Court
for the Northern District of Illinois, seeking an order compelling
Johnson & Johnson to arbitrate the Company's claim for termination
before the arbitrator and any related counterclaims asserted in
Johnson & Johnson's October 2, 1995 arbitration demand filed with the
AAA. The Company is unable to predict at this time the outcome of
the demand for termination or when it will be resolved. The Company
has filed a motion to stay the AAA arbitration pending the outcome of
the existing arbitration proceedings before Judicial Arbitration and
Mediation Services, Inc. discussed above. The Company has also filed
an answer and counterclaim denying that AAA has jurisdiction to hear
PAGE 12
or decide the claims stated in the demand, denying the allegations in
the demand and counter claiming for certain unpaid invoices.
Synergen ANTRIL(TM) litigation
Lawsuits have been filed against the Company's wholly-owned
subsidiary, Amgen Boulder Inc. (formerly Synergen, Inc.), alleging
misrepresentations in connection with Synergen's research and
development of ANTRIL(TM) for the treatment of sepsis. One suit,
filed by a limited partner of the partnership with which Amgen
Boulder Inc. is affiliated, has been certified as a class action.
That suit seeks rescission of certain payments made by the limited
partners to the partnership (or unspecified damages not less than $52
million) and treble damages based on a variety of allegations
relating to state and federal law claims. The plaintiffs in that
suit also have filed a second amended complaint alleging violations
of federal securities laws. In August and September 1996, the
parties filed cross-motions for summary judgement. The Court heard
argument on November 1, 1996. Since then, the parties'
representatives have reached a tentative settlement agreement which
is subject to final approval by the Court and the approval of the
limited partners of the partnership. Under its terms, the
plaintiffs, who include present limited partners of the partnership,
will receive $14.5 million in exchange for the transfer of ownership
of their units; the suit will be dismissed with prejudice and the
parties will exchange mutual releases. In a separate matter, two
broker dealers who acted as market makers in Synergen, Inc. options
have also filed a suit claiming in excess of $3.2 million in trading
losses.
FoxMeyer Health Corporation
On January 10, 1997, FoxMeyer Health Corporation ("FMHC") filed
suit (the "FoxMeyer Lawsuit") alleging that defendant McKesson
Corporation defrauded FMHC, misused confidential information received
from FMHC about subsidiaries of FMHC (FoxMeyer Corporation and
FoxMeyer Drug Corporation, collectively the "FoxMeyer Subsidiaries"),
and attempted to monopolize the market for pharmaceutical and health
care product distribution by attempting to injure or destroy the
FoxMeyer Subsidiaries. The Company is named as one of twelve
"Manufacturer Defendants" alleged to have conspired with McKesson
Corporation in doing, among other things, the above and (i) inducing
FMHC to refrain from seeking other suitable purchasers for the
FoxMeyer Subsidiaries and (ii) causing FMHC to believe that McKesson
Corporation was serious about purchasing FMHC's assets at fair value,
when, in fact, McKesson Corporation was not. The Manufacturer
Defendants and McKesson Corporation are also alleged to have
intentionally and tortiously interfered with a number of business
expectancies and opportunities. The complaint seeks from the
Manufacturer Defendants and McKesson Corporation compensatory damages
of at least $400 million and punitive damages in an unspecified
amount, as well as FMHC's costs and attorney's fees. On January 31,
1997, the Company filed an answer denying FMHC's allegations. On
February 4, 1997, a notice of removal was filed in the Federal
District Court for Dallas, Texas (the "District Court"), which was
referred by the District Court to the Federal Bankruptcy Court in
PAGE 13
Dallas, Texas. Subsequently, on February 7, 1997, a motion to
transfer venue was filed in the Federal Bankruptcy Court in Dallas,
Texas, requesting that this matter be transferred to the Federal
Bankruptcy Court in Delaware, where the FoxMeyer Subsidiaries'
Chapter XI bankruptcy action is pending. The Company is a creditor
in such bankruptcy proceeding. On March 18, 1997, the Manufacturer
Defendants filed in the Delaware bankruptcy court a motion to
intervene in the creditors committee (the "Chapter XI Committee")
action that asserted that the Delaware bankruptcy court should enjoin
the FoxMeyer Lawsuit. Also on March 18, 1997, the Delaware
bankruptcy court converted the FoxMeyer Subsidiaries' Chapter XI
bankruptcy action to a liquidation proceeding under Chapter VII. The
order converting the FoxMeyer Subsidiaries' bankruptcy to a Chapter
VII proceeding also stayed all adversary proceedings and other
proceedings filed in the bankruptcy until a permanent trustee is
elected. As such, no substantive resolution of the motions filed in
the Delaware bankruptcy court is expected until after election of the
permanent trustee. Similarly, on April 1, 1997, the Delaware
bankruptcy court ordered that the litigants in the FoxMeyer Lawsuit
be stayed from any further litigation until election of the permanent
trustee. Accordingly, no substantial resolution of any motions
currently pending in the FoxMeyer Litigation is expected until after
election of the permanent trustee.
False Claims Act matter
Amgen has been advised that it and certain purchasers of its
products have been named as defendants in a civil lawsuit initiated
by a former employee of Amgen in the United States District Court for
the Eastern District of Pennsylvania. This suit was filed under the
qui tam provisions of the Federal False Claims Act (the "Act") which
permit an individual to bring suit in the name of the United States
and share in any recovery. The suit alleges, among other things,
that Amgen individually and in conspiracy with some of its customers
violated the Act as a result of certain of its sales and reporting
practices relating to its products. Under the law, the government
must investigate the allegations and determine whether it wishes to
intervene and take responsibility for the lawsuit. The lawsuit will
remain under seal until the government completes its investigation
and determines whether to intervene. However, permission from the
Court has been obtained by Amgen to make the disclosures contained
herein. The Complaint seeks an order requiring Amgen to cease and
desist from such allegedly improper practices, as well as treble
damages in an unspecified amount plus a civil penalty of not less
than $5,000 and not more than $10,000 for each alleged violation of
the Act. If the government does not intervene, the plaintiff has the
right to continue to pursue the claim on the government's behalf.
Amgen is fully cooperating with the government's investigation and is
engaged in ongoing discussions with it regarding the allegations.
Amgen has advised the government that it disputes and will vigorously
contest the allegations in the Complaint. Although it is too early
in this action for Amgen to fully assess this matter or reliably
predict its outcome, an unfavorable result in this matter could have
a material adverse effect on the Company's results of operations in
that period.
PAGE 14
While it is not possible to predict accurately or determine the
eventual outcome of the above described legal matters or various
other legal proceedings (including patent disputes) involving Amgen,
except with respect to the False Claims Act matter, the Company
believes that the outcome of these proceedings will not have a
material adverse effect on its financial statements.
5. Stockholders' equity
During the three months ended March 31, 1997, the Company
repurchased 1.7 million shares of its common stock at a total cost of
$101.7 million under its common stock repurchase program. The Board
of Directors has authorized the Company to repurchase up to $450
million of shares during 1997. Stock repurchased under the program
is retired.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Cash provided by operating activities has been and is expected
to continue to be the Company's primary source of funds. During the
three months ended March 31, 1997, operations provided $232.1 million
of cash compared with $93.3 million during the same period last year.
The Company had cash, cash equivalents and marketable securities of
$1,044.3 million at March 31, 1997, compared with $1,077 million at
December 31, 1996.
Capital expenditures totaled $102.5 million for the three months
ended March 31, 1997, compared with $42.5 million for the same period
a year ago. Over the next few years, the Company expects to spend
approximately $350 million per year on capital projects and equipment
to expand the Company's global operations.
The Company receives cash from the exercise of employee stock
options. During the three months ended March 31, 1997, stock options
and their related tax benefits provided $32.9 million of cash
compared with $42 million for the same period last year. Proceeds
from the exercise of stock options and their related tax benefits
will vary from period to period based upon, among other factors,
fluctuations in the market value of the Company's stock relative to
the exercise price of such options.
The Company has a stock repurchase program to offset the
dilutive effect of its employee benefit stock option and stock
purchase plans. During the three months ended March 31, 1997, the
Company purchased 1.7 million shares of its common stock at a cost of
$101.7 million compared with 1.8 million shares purchased at a cost
of $104.5 million during the same period last year. The Company
expects to repurchase up to $450 million of its stock under the
program in 1997.
PAGE 15
To provide for financial flexibility and increased liquidity,
the Company has established several sources of debt financing. The
Company had a shelf registration under which it could issue up to
$213 million of debt securities. During the three months ended
March 31, 1997, $50 million of maturing debt securities under this
shelf registration were repaid. The $59 million of debt securities
outstanding at March 31, 1997 mature in approximately one to six
years. In April 1997, the Company issued the remaining $100 million
of debt securities under the shelf registration which bear interest
at a fixed rate of 8.1% and mature on April 1, 2097. These debt
securities were issued to refinance a portion of debt that has
matured or will mature in 1997 (see Note 2 to the Condensed
Consolidated Financial Statements). The Company also repaid $28.2
million of promissory notes during the three months ended March 31,
1997. The Company has a commercial paper program which provides for
short-term borrowings up to an aggregate face amount of $200 million.
As of March 31, 1997, the Company had no outstanding commercial
paper. The Company also has a $150 million revolving line of credit.
No borrowings on this line of credit were outstanding at March 31,
1997.
The primary objectives for the Company's investment portfolio
are liquidity and safety of principal. Investments are made to
achieve the highest rate of return to the Company, consistent with
these two objectives. The Company's investment policy limits
investments to certain types of instruments issued by institutions
with investment grade credit ratings and places restrictions on
maturities and concentration by type and issuer. The Company invests
its excess cash in securities with varying maturities to meet
projected cash needs.
The Company believes that existing funds, cash generated from
operations and existing sources of debt financing are adequate to
satisfy its working capital and capital expenditure requirements for
the foreseeable future, as well as to support its stock repurchase
program. However, the Company may raise additional capital from time
to time to take advantage of favorable conditions in the markets or
in connection with the Company's corporate development activities.
Results of Operations
Product sales
Product sales increased $59.1 million or 12% for the three
months ended March 31, 1997, compared with the same period last year.
NEUPOGEN(R) (Filgrastim)
Worldwide NEUPOGEN(R) sales were $244.4 million for the three
months ended March 31, 1997, an increase of $11.6 million or 5% over
the same period last year. This increase is primarily due to demand
growth in domestic and, to a lesser extent, international markets.
Unfavorable foreign currency effects reduced worldwide NEUPOGEN(R)
sales growth by approximately three percentage points. In addition,
PAGE 16
tight European governmental budgets have reduced the sales growth
rate.
Quarterly NEUPOGEN(R) sales volume in the United States is
influenced by a number of factors including underlying demand and
wholesaler inventory management practices. Wholesaler inventory
reductions tend to reduce domestic NEUPOGEN(R) sales in the first
quarter each year. In addition, the discretionary aspects of some
cancer chemotherapy administration has had a slight seasonal effect
on NEUPOGEN(R) sales.
Cost containment pressures in the health care marketplace have
contributed to the slowing of growth in domestic NEUPOGEN(R) usage
over the past several years. These pressures are expected to
continue to influence such growth for the foreseeable future.
The growth of the colony stimulating factor ("CSF") market in
the EU in which NEUPOGEN (R) competes has slowed, and is expected to
continue to slow, principally due to governmental budget issues and
cost controls in EU countries. Despite these market factors, as well
as competition from another granulocyte CSF product, the Company
experienced slightly positive NEUPOGEN(R) sales growth, measured in
local currencies, in the EU in 1996 and in the current period.
Although the Company's CSF market share in the EU has remained
relatively constant over the last several quarters, the Company does
not expect the competitive intensity to subside in the near future.
EPOGEN(R) (Epoetin alfa)
EPOGEN(R) sales were $291.6 million for the three months ended
March 31, 1997, an increase of $47.5 million or 19% over the same
period last year. This increase is primarily due to a continued
increase in the U.S. dialysis patient population and the
administration of higher doses.
Cost of sales
Cost of sales as a percentage of product sales was 13.4% and
14.0% for the three months ended March 31, 1997 and 1996,
respectively. In 1997, cost of sales as a percentage of product
sales is expected to range from 13%-14% reflecting continuing
efficiencies of the Puerto Rican operations.
Research and development
During the three months ended March 31, 1997, research and
development expenses increased $17.1 million or 13% compared with the
same period last year. This increase is primarily due to staff-
related expenses for clinical and preclinical activities necessary to
support ongoing product development activities. In 1997, annual
research and development expenses are expected to increase at a rate
exceeding the Company's product sales growth rate. Increases are
planned for internal efforts on development of product candidates,
for discovery, and for licensing efforts.
PAGE 17
Marketing and selling/General and administrative
Marketing and selling expenses increased $0.5 million or 1%
during the three months ended March 31, 1997 compared with the same
period last year. This increase was relatively small because higher
staff-related costs and higher outside marketing expenses were
substantially offset by lower European marketing expenses resulting
from the favorable effects of foreign currency exchange rates and
lower expenses related to the Johnson & Johnson arbitration.
General and administrative expenses increased $5.2 million or
13% during the three months ended March 31, 1997 compared with the
same period last year. This increase is primarily due to higher
legal and staff-related expenses.
In 1997, marketing and selling expenses combined with general
and administrative expenses are expected to have an aggregate annual
growth rate lower than the anticipated annual product sales growth
rate due in part to the favorable impact of foreign currency exchange
rates on European expenses and reduced expenses related to the
Johnson & Johnson arbitration.
Interest and other income
Interest and other income decreased $3.1 million or 16% during
the three months ended March 31, 1997 compared with the same period
last year. This decrease is primarily due to capital gains realized
in the prior year period which did not reoccur in the current year
period. Interest and other income is expected to fluctuate from
period to period primarily due to changes in cash balances and
interest rates.
Income taxes
The Company's effective tax rate for the three months ended
March 31, 1997 was 28.0% compared with 30.6% for the same period last
year. The decrease in the tax rate is the result of a favorable
ruling received in the third quarter of 1996 from the Puerto Rican
government with respect to tollgate taxes applicable to earnings in
Puerto Rico.
Foreign currency transactions
The Company has a program to manage certain portions of its
exposure to fluctuations in foreign currency exchange rates arising
from international operations. The Company generally hedges the
receivables and payables with foreign currency forward contracts,
which typically mature within six months. The Company uses foreign
currency option and forward contracts which generally expire within
12 months to hedge certain anticipated future sales and expenses. At
March 31, 1997, outstanding foreign currency option and forward
contracts totaled $34.6 million and $107.2 million, respectively.
PAGE 18
Financial Outlook
Worldwide NEUPOGEN(R) (Filgrastim) sales for 1997 are expected
to grow at a rate lower than the 1996 growth rate. Future
NEUPOGEN(R) sales increases are dependent primarily upon further
penetration of existing markets, the timing and nature of additional
indications for which the product may be approved and the effects of
competitive products. Although not approved or promoted for use in
the United States, the Company believes that approximately 15%-20% of
its domestic NEUPOGEN(R) sales are from off-label use as a supportive
therapy for various AIDS-related treatments. Changes in AIDS
therapies, including therapies that may be less myelosuppressive, may
affect such sales. NEUPOGEN(R) usage is expected to continue to be
affected by cost containment pressures on health care providers
worldwide. In addition, international NEUPOGEN(R) sales will
continue to be subject to changes in foreign currency exchange rates.
EPOGEN(R) (Epoetin alfa) sales for 1997 are expected to remain
strong but grow at a rate lower than the 1996 growth rate. The
Company anticipates that increases in both the U.S. dialysis patient
population and dosing will continue to drive EPOGEN(R) sales. The
Company believes that as more dialysis patients' hematocrits reach
target levels, the contribution of dosing to sales increases will
diminish. Patients receiving treatment for end stage renal disease
are covered primarily under medical programs provided by the federal
government. Therefore, EPOGEN(R) sales may also be affected by
future changes in reimbursement rates or the basis for reimbursement
by the federal government. On February 12, 1997, the Health Care
Finance Administration ("HCFA") issued an Electronic Program
Memorandum to their Fiscal Intermediaries and Carriers (as
defined by HCFA) regarding the institution of a ninety day rolling
hematocrit edit when hematocrits exceed 36%. The new method of
calculation is referred to as the hematocrit measurement audit
(HMA). The HMA allows reimbursement for patients who temporarily
exceed 36% through the averaging of submitted claims for the
previous 90 days. The HMA eliminates reimbursement for the
last submitted claim if an average hematocrit of 36.5% is exceeded
for the previous 90 days and also eliminates medical justification
for hematocrits being kept over 36%. Fiscal Intermediaries and
Carriers must implement this change by July 1, 1997.
The Company anticipates that total product sales and earnings
will grow at double digit rates in 1997, but these growth rates are
expected to be lower than 1996 growth rates. Estimates of future
product sales and earnings, however, are necessarily speculative in
nature and are difficult to predict with accuracy.
Except for the historical information contained herein, the
matters discussed herein are by their nature forward-looking. For
reasons stated, or for various unanticipated reasons, actual results
may differ materially. Amgen operates in a rapidly changing
environment that involves a number of risks, some of which are beyond
the Company's control. Future operating results and matters which
may affect the Company's stock price may be affected by a number of
factors, certain of which are discussed elsewhere herein and are
discussed in the sections appearing under the heading "Management's
PAGE 19
Discussion and Analysis of Financial Condition and Results of
Operations--Factors That May Affect Future Results" in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996,
which sections are incorporated herein by reference and filed as an
exhibit hereto.
Legal Matters
The Company is engaged in arbitration proceedings with one of
its licensees and various other legal proceedings. For a discussion
of these matters, see Note 4 to the Condensed Consolidated Financial
Statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is engaged in arbitration proceedings with one of
its licensees. For a complete discussion of these matters see Note 4
to the Condensed Consolidated Financial Statements - "Contingencies -
Johnson & Johnson arbitrations". Other legal proceedings are also
reported in Note 4 to the Condensed Consolidated Financial Statements
and in the Company's Form 10-K for the year ended December 31, 1996,
with material developments since that report described below. While
it is not possible to predict accurately or to determine the eventual
outcome of these matters, except with respect to the False Claims Act
matter, the Company believes that the outcome of these legal
proceedings will not have a material adverse effect on the financial
statements of the Company.
Transkaryotic Therapies and Hoechst litigation
On April 15, 1997, Amgen filed suit in the United States
District Court in Boston Massachusetts against Transkaryotic
Therapies Inc. and Hoechst Marion Roussel alleging infringement of
several U.S. patents owned by Amgen that claim an erythropoietin
product and processes for making erythropoietin. The suit seeks an
injunction preventing the defendants from making, importing, using or
selling erythropoietin in the U.S.
Genentech litigation
On October 16, 1996, Genentech, Inc. filed suit in the United
States District Court for the Northern District of California seeking
an unspecified amount of compensatory damages, treble damages and
injunctive relief on its U.S. Patents 4,704,362, 5,221,619 and
4,342,832 (the "`362, `619 and `832 Patents"), relating to vectors
for expressing cloned genes and the methods for such expression.
Genentech, Inc. alleges that Amgen has infringed its patents by
manufacturing and selling NEUPOGEN(R). On December 2, 1996, Amgen
was served with this lawsuit. On January 21, 1997, the Company
answered the complaint and asserted counterclaims relating to
invalidity and non-infringement of the patents-in-suit. On February
10, 1997, Genentech, Inc. served Amgen with a reply to the
PAGE 20
counterclaim and an additional counterclaim asserting U.S. Patent
5,583,013 (the "`013 Patent"), issued December 10, 1996, seeking
relief similar to that sought for the `362, `619 and `832 Patents.
On March 31, 1997, Amgen answered this pleading and asserted
counterclaims relating to invalidity and non-infringement of the `013
Patent.
FoxMeyer Health Corporation
On January 10, 1997, FoxMeyer Health Corporation ("FMHC") filed
suit (the "FoxMeyer Lawsuit") in the District Court of Dallas County,
Dallas, Texas, alleging that defendant McKesson Corporation defrauded
FMHC, misused confidential information received from FMHC about
subsidiaries of FMHC (FoxMeyer Corporation and FoxMeyer Drug
Corporation, collectively the "FoxMeyer Subsidiaries"), and attempted
to monopolize the market for pharmaceutical and health care product
distribution by attempting to injure or destroy the FoxMeyer
Subsidiaries. The Company is named as one of twelve "Manufacturer
Defendants" alleged to have conspired with McKesson Corporation in
doing, among other things, the above and (i) inducing FMHC to refrain
from seeking other suitable purchasers for the FoxMeyer Subsidiaries
and (ii) causing FMHC to believe that McKesson Corporation was
serious about purchasing FMHC's assets at fair value, when, in fact,
McKesson Corporation was not. The Manufacturer Defendants and
McKesson Corporation are also alleged to have intentionally and
tortiously interfered with a number of business expectancies and
opportunities. The complaint seeks from the Manufacturer Defendants
and McKesson Corporation compensatory damages of at least $400
million and punitive damages in an unspecified amount, as well as
FMHC's costs and attorney's fees. On January 31, 1997, the Company
filed an answer denying FMHC's allegations. On February 4, 1997, a
notice of removal was filed in the Federal District Court for Dallas,
Texas (the "District Court"), which was referred by the District
Court to the Federal Bankruptcy Court in Dallas, Texas.
Subsequently, on February 7, 1997, a motion to transfer venue was
filed in the Federal Bankruptcy Court in Dallas, Texas, requesting
that this matter be transferred to the Federal Bankruptcy Court in
Delaware, where the FoxMeyer Subsidiaries' Chapter XI bankruptcy
action is pending. The Company is a creditor in such bankruptcy
proceeding. On March 18, 1997, the Manufacturer Defendants filed in
the Delaware bankruptcy court a motion to intervene in the creditors
committee (the "Chapter XI Committee") action that asserted that the
Delaware bankruptcy court should enjoin the FoxMeyer Lawsuit. Also
on March 18, 1997, the Delaware bankruptcy court converted the
FoxMeyer Subsidiaries' Chapter XI bankruptcy action to a liquidation
proceeding under Chapter VII. The order converting the FoxMeyer
Subsidiaries' bankruptcy to a Chapter VII proceeding also stayed all
adversary proceedings and other proceedings filed in the bankruptcy
until a permanent trustee is elected. As such, no substantive
resolution of the motions filed in the Delaware bankruptcy court is
expected until after election of the permanent trustee. Similarly,
on April 1, 1997, the Delaware bankruptcy court ordered that the
litigants in the FoxMeyer Lawsuit be stayed from any further
litigation until election of the permanent trustee. Accordingly, no
substantial resolution of any motions currently pending in the
PAGE 21
FoxMeyer Litigation is expected until after election of the permanent
trustee.
Consensus interferon litigation
On December 3, 1996, Schering Corporation filed suit in the U.S.
District Court for the District of Delaware against the Company
alleging infringement of U.S. Patent No. 4,530,901 (the "`901
Patent") by the manufacture and use of the Company's consensus
interferon product. The complaint seeks unspecified damages and
injunctive relief. The Company filed a motion to dismiss (the
"Motion to Dismiss") the action on January 24, 1997. On January 22,
1997, the Company filed an action for declaratory relief in the
United States District Court for the Central District of California
in Los Angeles naming Biogen Inc. and Schering Corporation as
parties. The action seeks a declaration that the `901 Patent is not
infringed by the Company's use of Infergen(R) and/or that the `901
Patent is invalid. By agreement between the parties, the Motion to
Dismiss was withdrawn and a motion to transfer the case to California
was filed on March 10, 1997.
Item 5. Other Information
The Company's 1998 Annual Meeting of Stockholders will be held
on May 7, 1998, at 10:30 A.M., PDT, at the Regent Beverly Wilshire,
9500 Wilshire Boulevard, Los Angeles, California, 90212.
Item 6. Exhibits and Reports on Form 8-K
(a) Reference is made to the Index to Exhibits included herein.
(b) Reports on Form 8-K
The Company filed three Current Reports on Form 8-K each
reporting events under Item 5 thereof during the three months ended
March 31, 1997. The report filed on February 26, 1997 contains a
press release reporting the Company's results of operations for the
year ended December 31, 1996 and a discussion of various legal
matters involving the Company. The report filed on February 28, 1997
contains information regarding the Company's new Stockholder Rights
Plan and redemption of rights under the then existing rights plan.
The report filed on March 14, 1997 contains a press release reporting
the Company's clinical progress and new research programs and the
first supplemental indenture to the indenture providing for issuance
of the Company's debt securities.
PAGE 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Amgen Inc.
(Registrant)
Date: 5/12/97 By:/s/ Robert S. Attiyeh
------------------ ------------------------------------
Robert S. Attiyeh
Senior Vice President, Finance
and Corporate Development, and
Chief Financial Officer
Date: 5/12/97 By:/s/ Larry A. May
------------------ ------------------------------------
Larry A. May
Vice President, Corporate
Controller and Chief
Accounting Officer
PAGE 23
AMGEN INC.
INDEX TO EXHIBITS
Exhibit No. Description
*3.1 Restated Certificate of Incorporation as amended.
3.2 Amended and Restated Bylaws. (21)
4.1 Indenture dated January 1, 1992 between the Company and
Citibank N.A., as trustee. (11)
4.2 Forms of Commercial Paper Master Note Certificates. (14)
4.3 First Supplement to Indenture, dated February 26, 1997
between the Company and Citibank N.A., as trustee. (24)
4.4 Officer's Certificate pursuant to Sections 2.1 and 2.3
of the Indenture, as supplemented, establishing a series
of securities "8-1/8% Debentures due April 1, 2097."
(26)
4.5 8-1/8% Debentures due April 1, 2097. (26)
*4.6 Form of stock certificate for the common stock, par
value $.0001 of the Company.
10.1 Company's Amended and Restated 1991 Equity Incentive
Plan. (25)
10.2 Company's Amended and Restated 1984 Stock Option Plan.
(22)
10.3 Shareholder's Agreement of Kirin-Amgen, Inc., dated May
11, 1984, between the Company and Kirin Brewery Company,
Limited (with certain confidential information deleted
therefrom). (1)
10.4 Amendment Nos. 1, 2, and 3, dated March 19, 1985, July
29, 1985 and December 19, 1985, respectively, to the
Shareholder's Agreement of Kirin-Amgen, Inc., dated May
11, 1984 (with certain confidential information deleted
therefrom). (3)
10.5 Product License Agreement, dated September 30, 1985, and
Technology License Agreement, dated, September 30, 1985
between the Company and Ortho Pharmaceutical Corporation
(with certain confidential information deleted
therefrom). (2)
10.6 Product License Agreement, dated September 30, 1985, and
Technology License Agreement, dated September 30, 1985
between Kirin-Amgen, Inc. and Ortho Pharmaceutical
Corporation (with certain confidential information
deleted therefrom). (3)
10.7 Company's Amended and Restated Employee Stock Purchase
Plan. (22)
10.8 Research, Development Technology Disclosure and License
Agreement PPO, dated January 20, 1986, by and between
the Company and Kirin Brewery Co., Ltd. (4)
10.9 Amendment Nos. 4 and 5, dated October 16, 1986
(effective July 1, 1986) and December 6, 1986 (effective
July 1, 1986), respectively, to the Shareholders
Agreement of Kirin-Amgen, Inc. dated May 11, 1984 (with
certain confidential information deleted therefrom). (5)
PAGE 24
10.10 Assignment and License Agreement, dated October 16,
1986, between the Company and Kirin-Amgen, Inc. (with
certain confidential information deleted therefrom). (5)
10.11 G-CSF European License Agreement, dated December 30,
1986, between Kirin-Amgen, Inc. and the Company (with
certain confidential information deleted therefrom). (5)
10.12 Research and Development Technology Disclosure and
License Agreement: GM-CSF, dated March 31, 1987, between
Kirin Brewery Company, Limited and the Company (with
certain confidential information deleted therefrom). (5)
10.13 Company's Amended and Restated 1987 Directors' Stock
Option Plan. (25)
10.14 Company's Amended and Restated 1988 Stock Option Plan.
(22)
10.15 Company's Amended and Restated Retirement and Savings
Plan. (22)
10.16 Amendment, dated June 30, 1988, to Research,
Development, Technology Disclosure and License
Agreement: GM-CSF dated March 31, 1987, between Kirin
Brewery Company, Limited and the Company. (6)
10.17 Agreement on G-CSF in the EU, dated September 26, 1988,
between Amgen Inc. and F. Hoffmann-La Roche & Co.
Limited Company (with certain confidential information
deleted therefrom). (8)
10.18 Supplementary Agreement to Agreement dated January 4,
1989 to Agreement on G-CSF in the EU, dated September
26, 1988, between the Company and F. Hoffmann-La Roche &
Co. Limited Company, (with certain confidential
information deleted therefrom). (8)
10.19 Agreement on G-CSF in Certain European Countries, dated
January 1, 1989, between Amgen Inc. and F. Hoffmann-La
Roche & Co. Limited Company (with certain confidential
information deleted therefrom). (8)
10.20 Rights Agreement, dated January 24, 1989, between Amgen
Inc. and American Stock Transfer and Trust Company,
Rights Agent. (7)
10.21 First Amendment to Rights Agreement, dated January 22,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (9)
10.22 Second Amendment to Rights Agreement, dated April 2,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (10)
10.23 Agency Agreement, dated November 21, 1991, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (12)
10.24 Agency Agreement, dated May 21, 1992, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (12)
10.25 Guaranty, dated July 29, 1992, by the Company in favor
of Merck Sharp & Dohme Quimica de Puerto Rico, Inc. (13)
10.26 936 Promissory Note No. 01, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (12)
10.27 936 Promissory Note No. 02, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (12)
10.28 936 Promissory Note No. 001, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (12)
PAGE 25
10.29 936 Promissory Note No. 002, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (12)
10.30 Guaranty, dated November 21, 1991, by the Company in
favor of Citicorp Financial Services Corporation. (12)
10.31 Partnership Purchase Agreement, dated March 12, 1993,
between the Company, Amgen Clinical Partners, L.P.,
Amgen Development Corporation, the Class A limited
partners and the Class B limited partner. (13)
10.32 Amgen Supplemental Retirement Plan dated June 1, 1993.
(15)
10.33 Promissory Note of Mr. Kevin W. Sharer, dated June 4,
1993. (15)
10.34 Promissory Note of Mr. Larry A. May, dated February 24,
1993. (16)
10.35 Amgen Performance Based Management Incentive Plan. (25)
10.36 Agreement and Plan of Merger, dated as of November 17,
1994, among Amgen Inc., Amgen Acquisition Subsidiary,
Inc. and Synergen, Inc. (17)
10.37 Third Amendment to Rights Agreement, dated as of
February 21, 1995, between Amgen Inc. and American Stock
Transfer Trust and Trust Company (18)
10.38 Credit Agreement, dated as of June 23, 1995, among Amgen
Inc., the Borrowing Subsidiaries named therein, the
Banks named therein, Swiss Bank Corporation and ABN AMRO
Bank N.V., as Issuing Banks, and Swiss Bank Corporation,
as Administrative Agent. (19)
10.39 Promissory Note of Mr. George A. Vandeman, dated
December 15, 1995. (20)
10.40 Promissory Note of Mr. George A. Vandeman, dated
December 15, 1995. (20)
10.41 Promissory Note of Mr. Stan Benson, dated March 19,
1996. (20)
10.42 Amendment No. 1 to the Company's Amended and Restated
Retirement and Savings Plan. (22)
10.43 Amendment Number 5 to the Company's Amended and Restated
Retirement and Savings Plan dated January 1, 1993. (25)
10.44 Amendment Number 2 to the Company's Amended and Restated
Retirement and Savings Plan dated April 1, 1996. (25)
10.45 First Amendment to Credit Agreement, dated as of
December 12, 1996, among Amgen Inc., the Borrowing
Subsidiaries named therein, and Swiss Bank Corporation
as Administrative Agent. (25)
10.46 Fourth Amendment to Rights Agreement, dated February 18,
1997 between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (23)
10.47 Preferred Share Rights Agreement, dated February 18,
1997, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (23)
10.48 Consulting Agreement, dated November 15, 1996, between
the Company and Daniel Vapnek. (25)
10.49 Agreement, dated May 30, 1995, between the Company and
George A. Vandeman. (25)
*11 Computation of per share earnings.
*27 Financial Data Schedule.
*99 Sections appearing under the heading "Management's
Discussion and Analysis of Financial Condition and
Results of Operations-Factors That May Affect Future
Results" in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
----------------
PAGE 26
* Filed herewith.
(1) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended March 31, 1984 on June 26, 1984 and incorporated
herein by reference.
(2) Filed as an exhibit to Quarterly Report on Form 10-Q for the
quarter ended September 30, 1985 on November 14, 1985 and
incorporated herein by reference.
(3) Filed as an exhibit to Quarterly Report on Form 10-Q for the
quarter ended December 31, 1985 on February 3, 1986 and
incorporated herein by reference.
(4) Filed as an exhibit to Amendment No. 1 to Form S-1 Registration
Statement (Registration No. 33-3069) on March 11, 1986 and
incorporated herein by reference.
(5) Filed as an exhibit to the Form 10-K Annual Report for the year
ended March 31, 1987 on May 18, 1987 and incorporated herein by
reference.
(6) Filed as an exhibit to Form 8 amending the Quarterly Report on
Form 10-Q for the quarter ended June 30, 1988 on August 25, 1988
and incorporated herein by reference.
(7) Filed as an exhibit to the Form 8-K Current Report dated January
24, 1989 and incorporated herein by reference.
(8) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended March 31, 1989 on June 28, 1989 and incorporated
herein by reference.
(9) Filed as an exhibit to the Form 8-K Current Report dated January
22, 1991 and incorporated herein by reference.
(10) Filed as an exhibit to the Form 8-K Current Report dated April
12, 1991 and incorporated herein by reference.
(11) Filed as an exhibit to Form S-3 Registration Statement dated
December 19, 1991 and incorporated herein by reference.
(12) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1992 on March 30, 1993 and incorporated
herein by reference.
(13) Filed as an exhibit to the Form 8-A dated March 31, 1993 and
incorporated herein by reference.
(14) Filed as an exhibit to the Form 10-Q for the quarter ended March
31, 1993 on May 17, 1993 and incorporated herein by reference.
(15) Filed as an exhibit to the Form 10-Q for the quarter ended
September 30, 1993 on November 12, 1993 and incorporated herein
by reference.
(16) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1993 on March 25, 1994 and incorporated
herein by reference.
(17) Filed as an exhibit to the Form 8-K Current Report dated
November 18, 1994 on December 2, 1994 and incorporated herein by
reference.
(18) Filed as an exhibit to the Form 8-K Current Report dated
February 21, 1995 on March 7, 1995 and incorporated herein by
reference.
PAGE 27
(19) Filed as an exhibit to the Form 10-Q for the quarter ended
June 30, 1995 on August 11, 1995 and incorporated herein by
reference.
(20) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1995 on March 29, 1996 and incorporated
herein by reference.
(21) Filed as an exhibit to the Form 10-Q for the quarter ended
June 30, 1996 on August 12, 1996 and incorporated herein by
reference.
(22) Filed as an exhibit to the Form 10-Q for the quarter ended
September 30, 1996 on November 5, 1996 and incorporated herein
by reference.
(23) Filed as an exhibit to the Form 8-K Current Report dated
February 18, 1997 on February 28, 1997 and incorporated herein
by reference.
(24) Filed as an exhibit to the Form 8-K Current Report dated March
14, 1997 on March 14, 1997 and incorporated herein by reference.
(25) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1996 on March 24, 1997 and incorporated
herein by reference.
(26) Filed as an exhibit to the Form 8-K Current Report dated April
8, 1997 on April 8, 1997 and incorporated herein by reference.
PAGE 28