Amgen 2006 Annual Report Download - page 33

Amgen 2006 Annual Report 31
In April 2006, we acquired Abgenix, a company with expertise
in the discovery and development of monoclonal antibodies
and our co-development partner for Vectibix™ (panitumumab).
We paid approximately $2.1 billion in cash for all of Abgenix’s
outstanding shares and assumed their outstanding debt with
a fair value of approximately $686 million.
In October 2006, we acquired Avidia. We paid cash of
$275 million for the outstanding shares, net of cash acquired
and our existing equity stake, and may be subject to pay
additional amounts upon the achievement of certain future
events. Avidia focused on the discovery and development of
a new class of human therapeutic known as Avimer™ proteins.
In 2006, we invested $1.2 billion in capital projects. The
investment related primarily to the ongoing manufacturing and
site expansions in Ireland, Puerto Rico and other locations.
Capital expenditures for the manufacturing expansion in Ireland
related to construction of a new bulk manufacturing, formulation,
fill and finish facility. Expenditures for the Puerto Rico site
expansion related primarily to additional bulk manufacturing
capacity and upgrades to our formulation, fill and finish facility.
Stockholder value
We seek to create long-term value for our stockholders by
maintaining an appropriate balance of near-term financial
performance and strategic investments that will enable sustained
long-term growth of our business, including developing our
pipeline, expanding our manufacturing capacity and supporting
our marketed products.
Our stock repurchase program reflects, in part, our confidence
in the long-term value of Amgen common stock. Additionally,
we believe that it is an effective way of returning cash to our
stockholders. The manner of purchases, amount we spend and
the number of shares purchased will vary based on a variety of
factors, including the stock price and blackout periods in which we
are restricted from repurchasing shares, and may include private
block purchases as well as market transactions. In 2006, we
repurchased $5 billion of common stock (including $3 billion
repurchased in conjunction with our $5 billion convertible
debt issuance discussed above), representing approximately
70.2 million shares. In December 2006, our Board of Directors
authorized the repurchase of up to an additional $5 billion of
common stock. As of December 31, 2006, we had approximately
$6.5 billion remaining under the program. Since inception of
the stock repurchase program in 1992, Amgen has purchased
588 million shares at a cost of $22.3 billion. Theoretically, these
shares were worth $40.2 billion based on the closing price of
our common stock at December 31, 2006.
At year-end 2006, the closing price for Amgen common stock
was $68.31 per share. Over five-year and ten-year periods
beginning December 31, 1996, an investment in our common
stock would have increased by 315 percent and 403 percent,
respectively. A similar investment in the S&P 500 Index would
have increased by 66 percent and 124 percent, respectively,
and a similar investment in the NASDAQ Composite Index would
have increased 54 percent and 96 percent, respectively, over
the same timeframes.
Capital expenditures
($ in millions)
2006 $1,218
2005 867
2004 1,336
2003 1,357
2002 659
04 05 060302
Stock repurchases since
inception of stock repurchase
program in 1992
($ in millions)
**Based on the closing
price of Amgen stock at
December 31, 2006
12/31/06 Theoretical Value **Cost
$40,166
$100 invested in Amgen vs. S&P 500 Index and NASDAQ
Composite Index
(Five-year and ten-year comparison)
NASDAQ S&P 500 Amgen
2006 $196 $224 $503
2001 154 166 415
1996 100 100 100
12/31/ 0612/31/ 0112/31/96
Amgen
S&P 500
NASDAQ
$22,265