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.
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."
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Our current products and products in development cannot be sold if we do
not obtain and maintain regulatory approval.
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 HCFA, 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),
Kineret(TM), and Neulasta(TM) are currently approved in the U.S. and NEUPOGEN(R)
and Aranesp(TM) are currently approved in the U.S., the EU, and in some other
foreign countries for specific uses. We currently manufacture EPOGEN(R),
NEUPOGEN(R), Aranesp(TM), Kineret(TM), Neulasta(TM), and INFERGEN(R) and market
EPOGEN(R), NEUPOGEN(R), Aranesp(TM), Neulasta(TM), and Kineret(TM), and we plan
to manufacture and market many of our potential products. Even though we have
obtained regulatory approval for EPOGEN(R), NEUPOGEN(R), Aranesp(TM),
Kineret(TM), Neulasta(TM), and INFERGEN(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), NEUPOGEN(R), Aranesp(TM), Kineret(TM),
Neulasta(TM), and INFERGEN(R) until we comply or indefinitely. In addition, if
regulatory authorities determine that we have not 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 use of our products.
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
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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 reduction in the payment rate or reimbursement could result in decreased
use or sales of our products.
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 recently approved products or 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) are and 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 other current or future
products, health care providers may limit how much or under what circumstances
they will administer them, which could reduce the 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
circumvented, or if we fail to prevail in present and future intellectual
property litigation, our business could be adversely affected.
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
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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 with respect to our erythropoietin patents. The
trial court decided in our favor on January 19, 2001, however, Transkaryotic
Therapies, Inc. and Aventis 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 or obtained
rights 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 or
obtained rights to 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 of erythropoietin, and
pharmaceutical compositions of erythropoietin. We have also been issued or
obtained rights to U.S. patents relating to G-CSF that cover aspects of DNA,
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 been granted or obtained rights to a patent in the EU relating to
erythropoietin and a patent in the EU relating to G-CSF, two patents in the EU
relating to darbepoetin alfa and hyperglycosylated erythropoietic proteins, and
a patent in the U.S. and a patent in the EU relating to anakinra.
We face substantial competition, and others may discover, develop, acquire
or commercialize products before or more successfully than we do.
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 in certain
circumstances against a product marketed by Immunex. 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 newly approved products and late stage
product candidates may face competition when and as they are approved and
marketed. For example, Aranesp(TM) competes with an Epoetin alfa product
marketed by Johnson & Johnson in certain anemia markets and Kineret(TM) competes
in certain circumstances with rheumatoid arthritis products marketed by
Immunex/Wyeth (formerly American Home Products Corporation), 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
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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 results to be below expectations.
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
- 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 business could be adversely impacted.
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.
Our stock price, like that of other biotechnology companies, is highly
volatile. For example, in the fifty-two weeks prior to February 25, 2002, the
trading price of our common stock
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has ranged from a high of $75.06 per share to a low of $45.44 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
- 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.
The value of our common stock to be issued to Immunex shareholders in the
merger will fluctuate.
In the merger, Immunex shareholders will receive 0.44 of a share of
our stock and $4.50 in cash for each share of Immunex common stock they own. As
a result of Immunex shareholders receiving a portion of the merger consideration
in shares of our stock, the value of the merger consideration to be received by
Immunex shareholders will depend on the market price of our stock at the time
the merger is completed. The market price of our stock at the closing of the
merger will likely vary from time to time. These variations may be caused by a
number of factors, including changes in the businesses, operations or prospects
of Amgen or Immunex, the timing of the merger, regulatory considerations, and
general market and economic conditions. See "- Our stock price is volatile,
which could adversely affect your investment." Additionally, the payment of our
common stock to Immunex shareholders in connection with the merger would dilute
the share ownership of our existing common stockholders and may affect the value
of our common stock. The merger consideration will not be adjusted for any
increase or decrease in the market price of our stock or Immunex common stock.
We may not realize all of the anticipated benefits of the merger.
The success of the merger will depend, in part, on our ability to
realize the anticipated synergies, cost savings, and growth opportunities from
integrating the businesses of Immunex with the businesses of Amgen. Our success
in realizing these benefits and the timing of this realization depend upon the
successful integration of the operations of Immunex. The integration of two
independent companies is a complex, costly, and time-consuming process. The
difficulties of combining the operations of the companies include, among others:
- consolidating research and development and manufacturing operations
- retaining key employees
- consolidating corporate and administrative infrastructures
- coordinating sales and marketing functions
- preserving our and Immunex's research and development, distribution,
marketing, promotion, and other important relationships
- minimizing the diversion of management's attention from ongoing
business concerns
- coordinating geographically separate organizations
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We cannot assure you that the integration of Immunex with us will
result in the realization of the full benefits anticipated by us to result from
the merger.
Our business and stock price may be adversely affected if the merger with
Immunex is not completed.
Our acquisition of Immunex is subject to several customary conditions,
including obtaining clearance from governmental entities and the approvals of
the transaction by our stockholders and those of Immunex. If our acquisition of
Immunex is not completed, we could be subject to a number of risks that may
adversely affect our business and stock price, including:
- the diversion of our management's attention from our day-to-day
business and the disruption to our employees and our relationships
with customers and joint venture partners as a result of efforts
relating to the acquisition
- the market price of shares of our stock may decline to the extent that
the current market price reflects a market assumption that the
acquisition will be completed
- under certain circumstances, we could be required to pay Immunex a
$475 million termination fee
- we must pay costs related to the merger, such as legal and accounting
fees and a portion of the investment banking fees, and, under certain
circumstances, could be required to reimburse Immunex for up to $15
million of costs
- we would not realize the benefits we expect by acquiring Immunex
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