EXHIBIT 99
AMGEN INC.
FACTORS THAT MAY AFFECT THE COMPANY
Factors That May Affect the Company
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.
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 selected for product development,
all will not be successfully commercialized. 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. For example, the Company has previously announced product
development failures in connection with BDNF (for subcutaneous
injection for ALS), a product candidate that did not produce acceptable
clinical results in a specific indication with a specific route of
administration after a Phase III trial; although this product candidate
had demonstrated acceptable preclinical and earlier clinical trial
results sufficient to warrant advancement to a later stage clinical
trial. Further, 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, pricing, and sales and
marketing of its products are subject to extensive regulation by
numerous state and federal governmental authorities in the U.S., such
as the FDA, HCFA, as well as by foreign countries, including the EU.
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. The
regulatory approval process can be both a long and complex process,
both in the U.S. and in foreign countries, including countries in the
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EU. 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 state and federal governments (for
example, under Medicare and Medicaid programs in the United States) and
private insurance plans. In certain foreign markets, pricing and
profitability of prescription pharmaceuticals are subject to government
controls. In the United States, there have 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. For example, 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. As the Company previously announced, in early
1997, HCFA instituted a reimbursement change for EPOGEN(R) which has
adversely affected the Company's EPOGEN(R) sales. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results
of Operations - Results of Operations - Product Sales - EPOGEN(R)
(Epoetin alfa)".
Guidelines
In addition to government agencies that promulgate regulations and
guidelines directly applicable to the Company and its products,
professional societies, practice management groups, private
health/science foundations and organizations involved in various
diseases may also publish, from time to time, guidelines or
recommendations to the health care and patient communities. These
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 health care providers and
that result in, among other things, decreased use of the Company's
products could have a material adverse effect on the Company's results
of operations. In addition, the perception that such recommendations
or guidelines will be followed could adversely affect prevailing market
prices for the Company's common stock.
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Intellectual property and legal matters
The patent positions of pharmaceutical and biotechnology companies
can be highly uncertain and often 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 competition and/or significant liabilities,
could require the Company to enter into third party licenses or could
cause the Company to cease using the technology or product in dispute.
In addition, 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
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 achieve product commercialization
earlier than the Company, receive patent protection that dominates or
adversely affects the Company's activities, or 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).
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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 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 period fail to meet the investment
community's expectations, there could be an immediate adverse impact on
the Company's stock price.
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