EXHIBIT 99
FACTORS THAT MAY AFFECT AMGEN
Amgen operates in a rapidly changing environment that involves a number of
risks, some of which are beyond our control. The following discussion highlights
some of these risks.
Our product development efforts may not result in commercial products.
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We intend to continue an aggressive product development program.
Successful product development in the biotechnology industry is highly
uncertain, and very few research and development projects produce a commercial
product. Product candidates that appear promising in the early phases of
development, such as in early human clinical trials, may fail to reach the
market for a number of reasons, such as:
. the product candidate did not demonstrate acceptable clinical trial
results even though it demonstrated positive preclinical trial
results
. the product candidate was not effective in treating a specified
condition or illness
. the product candidate had harmful side effects on humans
. the necessary regulatory bodies such as the U.S. Food and Drug
Administration, did not approve our product candidate for an
intended use
. the product candidate was not economical for us to manufacture and
commercialize
. other companies or people have or may have proprietary rights to
our product candidate, such as patent rights, and will not let us
sell it on reasonable terms, or at all
. the product candidate is not cost effective in light of existing
therapeutics
Several of our product candidates have failed at various stages in the
product development process, including Brain Derived Neurotrophic Factor (BDNF),
Megakaryocyte Growth and Development Factor (MGDF) and Glial Cell-line Derived
Neurotrophic Factor (GDNF). For example, in 1997, we announced the failure of
BDNF for the treatment of amyotrophic lateral sclerosis, or Lou Gehrig's
Disease, because the product candidate, when administered by injection, did not
produce acceptable clinical results for a specific use after a phase 3 trial,
even though BDNF had progressed successfully through preclinical and earlier
clinical trials. In addition, in 1998, we discontinued development of MGDF, a
novel platelet growth factor, at the phase 3 trial stage after several people in
platelet donation trials developed low platelet counts and neutralizing
antibodies. In 1999 we discontinued development of GDNF after a phase 1/2 trial
of GDNF in Parkinson's disease failed to demonstrate a statistically significant
benefit. Of course, there may be other factors that prevent us from marketing a
product. We cannot guarantee we will be able to produce commercially successful
products. Further, clinical trial results are frequently susceptible to varying
interpretations by scientists, medical personnel, regulatory personnel,
statisticians and others which may delay, limit or prevent further clinical
development or regulatory approvals of a product candidate. Also, the length of
time that it takes for us to complete clinical trials and obtain regulatory
approval for product marketing has in the past varied by product and by the
intended use of a product. We expect that this will likely be the case with
future product candidates and we cannot predict the length of time to complete
necessary clinical trials and obtain regulatory approval. See "- Our current
products and products in development cannot be sold if we do not obtain and
maintain regulatory approval."
Our current products and products in development cannot be sold if we do not
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obtain and maintain regulatory approval.
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We conduct research, preclinical testing and clinical trials and we
manufacture our product candidates. We also manufacture, price, sell, distribute
and market our products for their approved indications. These activities are
subject to extensive regulation by numerous state and federal governmental
authorities in the U.S., such as the FDA and the Health Care Financing
Administration, as well as by foreign countries, including the European Union.
Currently, we are required in the U.S. and in foreign countries to obtain
approval from those countries' regulatory authorities before we can market and
sell our products in those countries. In our experience, obtaining regulatory
approval is costly and takes many years, and after it is obtained, it remains
costly to maintain. The FDA and other U.S. and foreign regulatory agencies have
substantial discretion to terminate clinical trials, require additional testing,
delay or withhold registration and marketing approval and mandate product
withdrawals. EPOGEN(R) is currently approved in the U.S. and NEUPOGEN(R) is
currently approved in the U.S., the EU and in some other foreign countries for
specific uses. We currently manufacture and market EPOGEN(R) and NEUPOGEN(R) and
we plan to manufacture and market many of our potential products. Even though we
have obtained regulatory approval for EPOGEN(R) and NEUPOGEN(R), these products
and our manufacturing processes are subject to continued review by the FDA and
other regulatory authorities. In addition, later discovery of unknown problems
with our products or manufacturing processes could result in restrictions on
such products or manufacturing processes, including potential withdrawal of the
products from the market. If regulatory authorities determine that we have
violated regulations or if they restrict, suspend or revoke our prior approvals,
they could prohibit us from manufacturing or selling EPOGEN(R) or NEUPOGEN(R)
until we comply or indefinitely. In addition, if regulatory authorities
determine that we have not
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complied with regulations in the research and development of a product
candidate, then they may not approve the product candidate and we will not be
able to market and sell it. If we are unable to market and sell our products or
product candidates, our business would be adversely affected.
Guidelines and recommendations published by various organizations can reduce the
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use of our products.
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Government agencies promulgate regulations and guidelines directly
applicable to us and to our products. However, professional societies, practice
management groups, private health/science foundations and organizations involved
in various diseases from time to time may also publish guidelines or
recommendations to the health care and patient communities. Recommendations of
government agencies or these other groups/organizations may relate to such
matters as usage, dosage, route of administration and use of concomitant
therapies. Organizations like these have in the past made recommendations about
our products. Recommendations or guidelines that are followed by patients and
health care providers could result in decreased use of our products. In
addition, the perception by the investment community or stockholders that
recommendations or guidelines will result in decreased use of our products could
adversely affect prevailing market prices for our common stock.
Our sales depend on payment and reimbursement from third party payors, and a
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reduction in the payment rate or reimbursement could result in decreased use or
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sales of our products.
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In both domestic and foreign markets, sales of our products are dependent,
in part, on the availability of reimbursement from third party payors such as
state and federal governments, under programs such as Medicare and Medicaid in
the U.S., and private insurance plans. In certain foreign markets, the pricing
and profitability of our products generally are subject to government controls.
In the U.S., there have been, and we expect there will continue to be, a number
of state and federal proposals that could limit the amount that state or federal
governments will pay to reimburse the cost of drugs. In addition, we believe the
increasing emphasis on managed care in the U.S. has and will continue to put
pressure on the price and usage of our products, which may adversely impact
product sales. Further, when a new therapeutic product is approved, the
availability of governmental and/or private reimbursement for that product is
uncertain, as is the amount for which that product will be reimbursed. We cannot
predict the availability or amount of reimbursement for our product candidates,
including those at a late stage of development, and current reimbursement
policies for existing products may change at any time. For example, we believe
that sales of ARANESP(TM) will be affected by government and private payor
reimbursement policies.
If reimbursement for EPOGEN(R) and NEUPOGEN(R) changes adversely or if we
fail to obtain adequate reimbursement for our future products, health care
providers may limit how much or under what circumstances they will administer
them, which could reduce the
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use of our products or cause us to reduce the price of our products. This could
result in lower product sales or revenues which could have a material adverse
effect on us and our results of operations. For example, in the U.S. the use of
EPOGEN(R) in connection with treatment for end stage renal disease is funded
primarily by the U.S. federal government. In early 1997, HCFA instituted a
reimbursement change for EPOGEN(R) which adversely affected Amgen's EPOGEN(R)
sales, until the policies were revised. Therefore, as in the past, EPOGEN(R)
sales could be adversely affected by future changes in reimbursement rates or
the basis for reimbursement by the federal government for the end stage renal
disease program.
If our intellectual property positions are challenged, invalidated or
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circumvented, or if we fail to prevail in present and future intellectual
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property litigation, our business could be adversely affected.
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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. Third parties may challenge,
invalidate or circumvent our patents and patent applications relating to our
products, product candidates and technologies. In addition, our patent positions
might not protect us against competitors with similar products or technologies
because competing products or technologies may not infringe our patents. For
certain of our product candidates, there are third parties who have patents or
pending patents that they may claim prevent us from commercializing these
product candidates in certain territories. Patent disputes are frequent, costly
and can preclude commercialization of products. We are currently, and in the
future may be, involved in patent litigation. For example, we are involved in
ongoing patent infringement lawsuits against Transkaryotic Therapies, Inc. and
Aventis S.A. with respect to our erythropoietin patents. The trial court decided
in our favor on January 19, 2001, however, Transkaryotic Therapies, Inc. and
Aventis S.A. have appealed the decision. If we ultimately lose these or other
litigations we could be subject to competition and/or significant liabilities,
we could be required to enter into third party licenses for the infringed
product or technology, or we could be required to cease using the technology or
product in dispute. In addition, we cannot guarantee that such licenses will be
available on terms acceptable to us.
Our success depends in part on our ability to obtain and defend patent
rights and other intellectual property rights that are important to the
commercialization of our products and product candidates. We have filed
applications for a number of patents and have been granted patents relating to
erythropoietin, recombinant G-CSF and our other products and potential products.
We market our erythropoietin and G-CSF products as EPOGEN(R) and NEUPOGEN(R),
respectively. In the United States, we have been issued several patents relating
to erythropoietin that generally cover DNA and host cells, processes for making
erythropoietin, various product claims to erythropoietin, cells that make levels
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of erythropoietin and pharmaceutical compositions of erythropoietin. We have
also been issued U.S. patents relating to G-CSF that cover aspects of DNAs,
vectors, cells, processes, polypeptides, methods of treatment using G-CSF
polypeptides, methods of enhancing bone marrow transplantation and treating burn
wounds, methods for recombinant production of G-CSF and analogs of G-CSF. We
also have a patent in the EU relating to erythropoietin and a patent in the EU
relating to G-CSF, and two patents in the EU relating to darbepoetin alfa and
hyperglycosylated erythropoietic proteins.
We face substantial competition, and others may discover, develop, acquire or
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commercialize products before or more successfully than we do.
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We operate in a highly competitive environment. Our products compete with
other products or treatments for diseases for which our products may be
indicated. For example, although we maintain a substantial share of the
chemotherapy induced neutropenia market, NEUPOGEN(R) competes against a product
marketed by Immunex Corporation. EPOGEN(R) faces competition from other
treatments for anemia in end stage renal disease patients in the U.S. Further,
we believe that some of our late stage product candidates may face competition
when they are approved and marketed. For example, ARANESP(TM) will compete with
an epoetin alfa product marketed by Johnson & Johnson in certain anemia markets
and anakinra could compete with rheumatoid arthritis products marketed by
Immunex, Centocor Inc./Johnson & Johnson and others. Additionally, some of our
competitors, including biotechnology and pharmaceutical companies, market
products or are actively engaged in research and development in areas where we
are developing product candidates. Large pharmaceutical corporations may have
greater clinical, research, regulatory and marketing resources than we do. In
addition, some of our competitors may have technical or competitive advantages
over us for the development of technologies and processes. These resources may
make it difficult for us to compete with them to successfully discover, develop
and market new products.
Our operating results may fluctuate, and this fluctuation could cause financial
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results to be below expectations.
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Our operating results may fluctuate from period to period for a number of
reasons. In budgeting our operating expenses, we assume that revenues will
continue to grow; however, some of our operating expenses are fixed in the short
term. Because of this, even a relatively small revenue shortfall may cause a
period's results to be below our expectations or projections. A revenue
shortfall could arise from any number of factors, some of which we cannot
control. For example, we may face:
. lower than expected demand for our products
. changes in the government's or private payors' reimbursement
policies for our products
. changes in wholesaler buying patterns
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. increased competition from new or existing products
. fluctuations in foreign currency exchange rates
. changes in our product pricing strategies
Of these, we would only have control over changes in our product pricing
strategies and, of course, there may be other factors that affect our revenues
in any given period.
We plan to grow rapidly, and if we fail to adequately manage that growth our
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business could be adversely impacted.
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We have an aggressive growth plan that includes substantial and increasing
investments in research and development, sales and marketing and facilities.
Our plan has a number of risks, some of which we cannot control. For example:
. we may need to generate higher revenues to cover a higher level of
operating expenses, and our ability to do so may depend on factors
that we do not control
. we may need to attract and assimilate a large number of new
employees
. we may need to manage complexities associated with a larger and
faster growing organization
. we will need to accurately anticipate demand for the products we
manufacture and maintain adequate manufacturing capacity, and our
ability to do so may depend on factors that we do not control
Of course, there may be other risks and we cannot guarantee that we will be
able to successfully manage these or other risks.
Our stock price is volatile, which could adversely affect your investment.
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Our stock price, like that of other biotechnology companies, is highly
volatile. For example, in the fifty-two weeks prior to May 2, 2001, the
trading price of our common stock has ranged from a high of $80.4375 per share
to a low of $45.4375 per share. Our stock price may be affected by such factors
as:
. clinical trial results
. product development announcements by us or our competitors
. regulatory matters
. announcements in the scientific and research community
. intellectual property and legal matters
. changes in reimbursement policies or medical practices
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. broader industry and market trends unrelated to our performance
In addition, if our revenues or earnings in any period fail to meet the
investment community's expectations, there could be an immediate adverse impact
on our stock price.
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