Amgen 2000 Annual Report Download

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Amgen 2000 Annual Report dramatically
improving
people’s lives
vitality
freedom
determination
confidence
independence
agility

Table of contents

  • Page 1
    Amgen 2000 Annual Report dramatically improving people's lives vitality freedom determination confidence independence agility

  • Page 2
    ... Selected Financial Information Letter to the Shareholders Chronic Kidney Disease Cancer Rheumatoid Arthritis Products and Product Candidates Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures about Market Risk Consolidated...

  • Page 3
    We aspire to be the best human therapeutics company. We will live the Amgen Values and use science and innovation to dramatically improve people's lives.

  • Page 4
    ... of Operations Data (In millions, except per share data) Years ended December 31, 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 Revenues: Product sales1 Other revenues Total revenues Research and development expenses Selling, general, and administrative expenses Other items, net2 Net income...

  • Page 5
    ...treated of diseases. We estimate the worldwide anemia market could be as large as $10 billion by 2005. Introducing ARANESPâ„¢ globally gives it the potential to be Amgen's biggest product ever. Anakinra, interleukin-1 receptor antagonist (IL-1ra), is the cornerstone of our inflammation franchise. We...

  • Page 6
    ... Australia, and New Zealand. We started, or made the decision to start, four registration trials and received one line extension. One new product candidate already in clinical development was in-licensed, and we in-licensed or acquired another eight research and preclinical projects. We plan in 2001...

  • Page 7
    ... Enhanced our small molecule capabilities through the acquisition of Kinetix Sales and Marketing teams prepared for the launch of ARANESPâ„¢ and other late-stage product candidates Received FDA licensing of our Longmont, Colorado, manufacturing facility front in next year's annual report. Another...

  • Page 8
    launching a stream of products that will dramatically improve people's lives 7

  • Page 9
    chronic kidney disease Danielle End-Stage Renal Disease Treatment gives Danielle the vitality and freedom to live more actively, which includes enjoying her grandson more. vitality freedom 4 5

  • Page 10
    cancer Jeff Non-Hodgkin's Lymphoma Focused on completing his treatments, Jeff also is determined and confident that he will soon get back to the ballpark with his son. determination confidence 6 7

  • Page 11
    rheumatoid arthritis Janis Rheumatoid Arthritis Janis hopes that treatment will give her agility and independence for those special morning visits with not only her mom but also her own daughter. independence agility 8 9

  • Page 12
    ... the vitality and freedom to participate more actively in life, without the need for blood transfusions. Amgen's late-stage product candidate, ARANESP â„¢ (darbepoetin alfa), may represent an important advance for anemic patients with chronic kidney disease. Through molecular engineering, Amgen...

  • Page 13
    ...by to donating his own blood prior to surgery! His hip replacement was successful. He went on to get his bachelor's degree in accounting and is now a practicing CPA. Just last year he was married. This story illustrates the huge contribution EPOGEN® has made to the lives of kidney patients. ARANESP...

  • Page 14
    ...frequently 16 require pain medication and have reduced quality of life. Another of Amgen's product candidates, keratinocyte growth factor (KGF), is a recombinant form of a naturally-occurring growth factor that stimulates the development of mucosal cells. Early clinical trials suggest KGF may offer...

  • Page 15
    ... analysis, small molecule science, antibody technologies, and kinase biology. Our researchers work closely with Amgen's preclinical and clinical oncology groups to expedite the development of novel cancer therapies. All researchers likewise support the in-licensing of exciting new cancer therapeutic...

  • Page 16
    ...in the rate of disease progression. Amgen has submitted regulatory files for the approval of anakinra for the treatment of rheumatoid arthritis patients around the world. Amgen's second product candidate for RA, soluble TNFreceptor type I (sTNF-RI), is in early studies to assess its effectiveness in...

  • Page 17
    ... impact in RA patients whose inflamed joints produce increased levels of this cytokine that drives the devastating joint erosion of the disease. The potency of therapy with Amgen's product candidate, anakinra, a recombinant form of naturally-occurring interleukin1 receptor antagonist (IL-1ra), has...

  • Page 18
    ...'s research and development strategy is focused on four main therapeutic areas-chronic kidney disease, cancer, inflammation, and neurology/metabolism-and three potential patient-delivery modalities-protein, small-molecule, and antibody therapeutics. Disease Description Amgen products 1 Amgen...

  • Page 19
    ... facility supports the Company's commercial paper program. As of December 31, 2000, no amounts were outstanding under this line of credit. 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...

  • Page 20
    ... patterns, including Year 2000-related sales to wholesalers in the fourth quarter of 1999 for which the Company provided extended payment terms, as well as adverse foreign exchange effects. The Company believes these factors were partially offset by a mid-single digit rate increase in demand, which...

  • Page 21
    ... due to amounts earned from Kirin-Amgen, Inc. related to the development program for ARANESPTM (darbepoetin alfa), the Company's novel erythropoiesis stimulating protein. Cost of Sales Cost of sales as a percentage of product sales was 12.8%, 13.2% and 13.7% for 2000, 1999 and 1998, respectively...

  • Page 22
    ... securities. Income Taxes The Company's effective tax rate was 32.0%, 30.0% and 29.5% for 2000, 1999 and 1998, respectively. The tax rate in all three years reflected the tax benefits from the sale of products manufactured in the Company's Puerto Rico manufacturing facility. The Company's tax rate...

  • Page 23
    ... in the U.S., the European Union, Canada, Australia and New Zealand. The Company anticipates selling ARANESP TM, if approved, in most of these markets beginning in 2001. Because the Company is unable to predict the timing and the extent to which health care providers in the U.S. may transition...

  • Page 24
    ..., Average Interest Rate 2000 2001 2002 2003 2004 Thereafter Total Fair Value 12/31/99 Available-for-sale debt securities Interest rate Commercial paper Interest rate Long-term debt Interest rate Interest rate swap related to commercial paper issuances: Pay fixed/receive variable Avg. pay rate Avg...

  • Page 25
    ... December 31, 2000 1999 1998 Revenues: Product sales Corporate partner revenues Royalty income Total revenues Operating expenses: Cost of sales Research and development Selling, general and administrative Loss of affiliates, net Other items, net Total operating expenses Operating income Other...

  • Page 26
    ...' Equity Current liabilities: Accounts payable Commercial paper Accrued liabilities Total current liabilities Long-term debt Stockholders' equity: Preferred stock; $0.0001 par value; 5.0 shares authorized; none issued or outstanding Common stock and additional paid-in capital; $0.0001 par value...

  • Page 27
    ... the exercise of employee stock options and in connection with an employee stock purchase plan Tax benefits related to employee stock options Issuance of common stock for the acquisition of Kinetix Pharmaceuticals, Inc. Repurchases of common stock Balance at December 31, 2000 See accompanying notes...

  • Page 28
    ... 31, 2000 1999 1998 Cash flows from operating activities: Net income Write-off of acquired in-process research and development Depreciation and amortization Tax benefits related to employee stock options Gain on equity investments Other non-cash expenses Loss of affiliates, net Cash provided...

  • Page 29
    ...of purchase. Under the Company's cash management system, the bank notifies the Company daily of checks presented for payment against its primary disbursement accounts. The Company transfers funds from shortterm investments to cover the checks presented for payment. This system results in a book cash...

  • Page 30
    ... uses in the United States. The Company sells Epoetin alfa under the brand name EPOGEN®. Amgen has granted to Ortho Pharmaceutical Corporation (which has assigned its rights under the product license agreement to Ortho Biotech Products, L.P.), a subsidiary of Johnson & Johnson ("Johnson & Johnson...

  • Page 31
    ... interest is capitalized. Interest costs capitalized for the years ended December 31, 2000, 1999 and 1998, were $12.3 million, $11.6 million and $19.2 million, respectively. Employee Stock Option and Stock Purchase Plans The Company's employee stock option and stock purchase plans are accounted for...

  • Page 32
    ... certain products based on advanced biotechnology. Pursuant to the terms of agreements entered into with Kirin-Amgen, the Company conducts certain research and development activities on behalf of Kirin-Amgen and is paid for such services at negotiated rates. During the years ended December 31, 2000...

  • Page 33
    ...development (see Note 11) Amgen Foundation contribution Other items, net $(73.9) $(49.0) $(23.0) 30.1 25.0 $(18.8) - - $(49.0) - - $(23.0) Legal Award In September 1985, the Company granted Johnson & Johnson's affiliate, Ortho Pharmaceutical Corporation, a license relating to certain patented...

  • Page 34
    ... of 2000, the Company contributed $25.0 million to the Amgen Foundation. This contribution will allow the Amgen Foundation to increase its support of non-profit organizations that focus on issues in health and medicine, science education and other activities that strengthen local communities over...

  • Page 35
    ...Right at any time prior to the public announcement that a 10% position has been acquired. Stock Repurchase Program The Company has a stock repurchase program primarily to reduce the dilutive effect of its employee stock option and stock purchase plans. Stock repurchased under the program is intended...

  • Page 36
    ... with the number of shares generally determined by the employee's salary grade, performance level and the stock price. In addition, certain management and professional level employees normally receive a stock option grant upon hire. As of December 31, 2000, the Company had 67.8 million shares of...

  • Page 37
    ... regarding options granted after 1994. Pro forma information regarding net income and earnings per share shown below was determined as if the Company had accounted for its employee stock options and shares sold under its employee stock purchase plan under the fair value method of that statement...

  • Page 38
    ...Purchase Plan The Company has an employee stock purchase plan whereby, in accordance with Section 423 of the Internal Revenue Code, eligible employees may authorize payroll deductions of up to 10% of their salary to purchase shares of the Company's common stock at the lower of 85% of the fair market...

  • Page 39
    ... liabilities consisted of the following (in millions): December 31, 2000 1999 Employee compensation and benefits Income taxes Sales incentives, royalties and allowances Due to affiliated companies and corporate partners Clinical development costs Other $ 151.9 116.7 107.6 92.8 50.5 99.7 $ 619...

  • Page 40
    ...wholesalers accounted for 51% and 59%, respectively, of gross trade receivables. Other product sales Total product sales Other revenues Total revenues Note 11 Business Combination Geographic Information The Company sells NEUPOGEN® through its foreign affiliates in countries of the European Union...

  • Page 41
    ...and development related to the acquisition of Kinetix Pharmaceuticals, Inc. (see Note 11, "Business Combination"). In addition, the Company made a contribution of $25 million to the Amgen Foundation (see Note 4, "Other Items, Net - Amgen Foundation Contribution"). After applicable tax effects, these...

  • Page 42
    ... Inc. as of December 31, 2000 and 1999, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in accordance with accounting principles generally accepted in the United States. Los Angeles, California January 23, 2001 45

  • Page 43
    ...) AG Alpenquai 30 Postfach 2065 CH-6002 Luzern Switzerland Amgen Europe B.V. European Logistics Center Minervum 1150 4817 ZG Breda The Netherlands Amgen GmbH Handelskai 388, 661 A-1020 Vienna Austria Amgen GmbH Reisstrasse 25 D-80992 Munich Germany Amgen Greater China, Ltd. Rm 1501-4, 15/F Dah Sing...

  • Page 44
    ... Sales and Marketing George Morstyn Senior Vice President Development and Chief Medical Officer Steven M. Odre Senior Vice President General Counsel and Secretary Roger M. Perlmutter Executive Vice President Research and Development Kevin W. Sharer Chairman of the Board Chief Executive Officer...

  • Page 45
    Corporate Information Corporate Office One Amgen Center Drive Thousand Oaks, California 91320 -1799 (805) 447-1000 SEC Form 10-K A copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed with the Securities and Exchange Commission, is available without charge ...

  • Page 46
    Design: Howry Design Associates, SF/CA Photography: Catherine Ledner Executive Portrait: Jamey Stillings

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    Amgen Inc. One Amgen Center Drive Thousand Oaks, CA 91320-1799 www.Amgen.com © 2001 Amgen Inc. All rights reserved. MC14945 900M/3-01 P50300-2