Exhibit 99
Factors That May Affect Future Results
Amgen operates in a rapidly changing environment that
involves a number of risks, some of which are beyond the
Company's control. The following discussion highlights some
of these risks, and others are discussed elsewhere herein
and in other documents filed by the Company with the
Securities and Exchange Commission.
Product development
The Company intends to continue an aggressive product
development program. Successful product development in the
biotechnology industry is highly uncertain, and only a small
minority of research and development programs ultimately
result in the commercialization of a product. Of the
candidates that are commercialized, all may not be
commercially successful. Product candidates that appear
promising in the early phases of development may fail to
reach the market for numerous reasons, including, without
limitation, results indicating lack of effectiveness or
harmful side effects in clinical or preclinical testing,
failure to receive necessary regulatory approvals,
uneconomical manufacturing costs, the existence of third
party proprietary rights, failure to be cost effective in
light of existing therapeutics or other factors. There can
be no assurance that the Company will be able to produce
future products that have commercial potential.
Additionally, success in preclinical and early clinical
trials does not ensure that large scale clinical trials will
be successful. Clinical results are frequently susceptible
to varying interpretations which may delay, limit or prevent
further clinical development or regulatory approvals. The
length of time necessary to complete clinical trials and
receive approval for product marketing by regulatory
authorities varies significantly by product and indication
and is often difficult to predict. See "--Regulatory
approvals."
Regulatory approvals
The Company's research and development, preclinical
testing, clinical trials, facilities, manufacturing and
marketing of its products are subject to extensive
regulation by numerous governmental authorities in the U.S.
and other countries. The success of the Company's current
products and future product candidates will depend in part
upon obtaining and maintaining regulatory approval to market
products in approved indications. Even if regulatory
approval is obtained, a marketed product and its
manufacturer are subject to continued review. Later
discovery of previously unknown problems with a product or
manufacturer may result in restrictions on such product or
manufacturer, including withdrawal of the product from the
market. Failure to obtain necessary approvals, or the
restriction, suspension or revocation of any approvals or
the failure to comply with regulatory requirements could
have a material adverse effect on the Company.
Reimbursement; Third party payors
In both domestic and foreign markets, sales of the
Company's products are dependent in part on the availability
of reimbursement from third party payors such as governments
and private insurance plans. In certain foreign markets
pricing and profitability of prescription pharmaceuticals
are subject to government controls. In the United States,
there has been, and the Company expects there to continue to
be, a number of state and federal proposals to implement
price controls. In addition, an increasing emphasis on
managed care in the United States has and will continue to
increase the pressure on pharmaceutical pricing and usage.
Further, significant uncertainties exist as to the
reimbursement status of newly approved therapeutic products,
and current reimbursement policies for existing products may
change. Changes in reimbursement or failure to obtain
reimbursement may reduce the demand for, or the price of,
the Company's products which could have a material adverse
effect on the Company including results of operations.
Specifically, patients in the U.S. receiving EPOGEN(R) in
connection with treatment for end stage renal disease are
covered primarily under medical programs provided by the
federal government. Therefore, EPOGEN(R) sales may be
affected by future changes in reimbursement rates or the
basis for reimbursement by the federal government.
Guidelines
In addition to government agencies that promulgate
regulations and guidelines directly applicable to the
Company and its products, private health/science foundations
and organizations involved in various diseases may also
publish, from time to time, guidelines or recommendations to
the healthcare and patient communities. These private
organizations may make recommendations that affect the usage
of certain therapies, drugs or procedures, including the
Company's products. Such recommendations may relate to such
matters as usage, dosage, route of administration and use of
concomitant therapies. Recommendations or guidelines that
are followed by patients and healthcare providers and that
result in, among other things, decreased use of the
Company's products could have a material adverse effect on
the Company. In addition, the perception that such
recommendations or guidelines will be followed could
adversely affect prevailing market prices for the Company's
common stock.
Intellectual property and legal matters
The patent positions of pharmaceutical and
biotechnology companies can be highly uncertain and involve
complex legal, scientific and factual questions. To date
there has emerged no consistent policy regarding breadth of
claims allowed in such companies' patents. Accordingly,
there can be no assurance that patents and patent
applications relating to the Company's products and
technologies will not be challenged, invalidated or
circumvented or will afford protection against competitors
with similar products or technology. Patent disputes are
frequent and can preclude commercialization of products.
The Company currently is, and may in the future be, involved
in patent litigation. Such litigation, if decided
adversely, could subject the Company to significant
liabilities, cause the Company to obtain third party
licenses or cease using the technology or product in
dispute. However, there can be no assurance that such
licenses will be available on terms acceptable to the
Company, or at all.
The Company is currently involved in arbitration
proceedings with Ortho Pharmaceutical Corporation, a
subsidiary of Johnson & Johnson ("Johnson & Johnson"),
relating to a license granted by the Company to Johnson &
Johnson for sales of Epoetin alfa in the United States for
all human uses except dialysis and diagnostics. See Note 4
to the Condensed Consolidated Financial Statements,
"Contingencies - Johnson & Johnson arbitrations."
Competition
Amgen operates in a highly competitive environment.
The Company competes with pharmaceutical and biotechnology
companies, some of which may have technical or competitive
advantages, for, among other things, the development of
technologies and processes and the acquisition of
technology from academic institutions, government agencies
and other private and public research organizations. There
can be no assurance that the Company will be able to produce
or acquire rights to products that have commercial
potential. Even if the Company achieves product
commercialization, there can be no assurance that one or
more of the Company's competitors will not: (1) achieve
product commercialization earlier than the Company, (2)
receive patent protection that dominates or adversely
affects the Company's activities or (3) have significantly
greater marketing capabilities.
Fluctuations in operating results
The Company's operating results may fluctuate from
period to period for a number of reasons. Historically the
Company has planned its operating expenses, many of which
are relatively fixed in the short term, on the basis that
revenues will continue to grow. Accordingly, even a
relatively small revenue shortfall may cause a period's
results to be below Company expectations. Such a revenue
shortfall could arise from any number of factors, including,
without limitation, lower than expected demand, changes in
wholesaler buying patterns, changes in product pricing
strategies, increased competition from new and existing
products, fluctuations in foreign currency exchange rates,
changes in government or private reimbursement, transit
interruptions, overall economic conditions or natural
disasters (including earthquakes). The Company also
experiences a degree of seasonality in its operating
results. See "Results of Operations - Product sales -
NEUPOGEN(R) (Filgrastim)."
Rapid growth
The Company has adopted an aggressive growth plan that
includes substantial and increased investments in research
and development and investments in facilities that will be
required to support significant growth. This plan carries
with it a number of risks, including a higher level of
operating expenses, the difficulty of attracting and
assimilating a large number of new employees, and the
complexities associated with managing a larger and faster
growing organization.
Stock price volatility
The Company's stock price, like that of other
biotechnology companies, is subject to significant
volatility. The stock price may be affected by, among other
things, clinical trial results and other product development
related announcements by Amgen or its competitors,
regulatory matters, announcements in the scientific and
research community, intellectual property and legal matters,
changes in reimbursement policies or medical practices or
broader industry and market trends unrelated to the
Company's performance. In addition, if revenues or earnings
in any quarter fail to meet the investment community's
expectations, there could be an immediate adverse impact on
the Company's stock price.