Amgen 2001 Annual Report Download - page 29

AMGEN 2001 ANNUAL REPORT
prior year. This decrease was
primarily due to the adverse
impact of wholesaler buying
patterns, including Year
2000-related sales to whole-
salers 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 par-
tially offset by a mid-single
digit rate increase in demand,
which includes the effect of
higher prices in the U.S.
Corporate partner revenues
In 2001, corporate partner revenues were $252.0 million,
an increase of $5.8 million or 2% over the prior year.
This increase was due to slightly higher revenues,
primarily related to INFERGEN®
, substantially offset
by lower amounts earned from Kirin-Amgen, Inc. In
2000, corporate partner revenues were $246.2 million,
an increase of $84.8 million
or 53% over the prior year.
This increase was primarily
due to amounts earned from
Kirin-Amgen, Inc. related
to the development program
for Aranesp™
.
Royalty income
In 2001, royalty income was
$252.7 million, an increase
of 40% over the prior year.
In 2000, royalty income was
$181.0 million, an increase of
33% over the prior year. These
increases were primarily due to higher royalties from
Johnson & Johnson relating to their sales of Epoetin alfa.
Cost of sales
Cost of sales as a percentage of product sales was 12.6%,
12.8%, and 13.2% for 2001, 2000, and 1999, respec-
tively. The decrease in 2001 was primarily due to reduced
royalty obligations, substantially offset by the impact of
the $39.5 million write-off of certain inventory in the
fourth quarter of 2001. The decrease in 2000 was primar-
ily due to increased manufacturing efficiencies.
Research and development
In 2001, research and development expenses increased
$20.0 million or 2% over the prior year. This increase
was primarily due to higher staff-related costs necessary
to support ongoing research and product development
activities, partially offset by lower clinical manufacturing
and product licensing-related costs.
In 2000, research and development expenses
increased $22.2 million or 3% over the prior year. This
increase was primarily due to higher staff-related costs
necessary to support ongoing research and product devel-
opment activities and higher clinical trial costs. These
increases were substantially offset by a reduction in clinical
manufacturing and product licensing-related costs.
Selling, general and administrative
In 2001, selling, general and administrative (“SG&A”)
expenses increased $143.8 million or 17% over the prior
year. This increase
was primarily due
to higher outside
marketing expenses,
staff-related costs,
and consulting
expenses as support
for new product
launches was
increased.
In 2000, SG&A
expenses increased
$172.6 million or
26% over the prior
year. This increase
was primarily due to
higher staff-related
costs and outside
marketing expenses
as the Company continued to support its existing prod-
ucts and prepared for anticipated new product launches.
97 98 99 00 01
NEUPOGEN® Sales
($ in millions)
2001 $1,346.4
2000 1,223.7
1999 1,256.6
1998 1,116.6
1997 1,055.7
97 98 99 00 01
Total Product Sales
($ in millions)
2001 $3,511.0
2000 3,202.2
1999 3,042.8
1998 2,514.4
1997 2,219.8
97 98 99 00 01
Selected Operating Expenses
(as a Percent of Product Sales)
R&D
2001 24.6%
2000 26.4
1999 27.0
1998 26.4
1997 28.4
SG&A
2001 27.6%
2000 25.8
1999 21.5
1998 20.5
1997 21.8
Cost of Sales
2001 12.6%
2000 12.8
1999 13.2
1998 13.7
1997 13.6
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