Amgen 2007 Annual Report Download - page 157

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We have supply agreements with various third-party contract manufacturers for the production, vialing and
packaging of ENBREL and certain of our other products and product candidates. The following table summa-
rizes the minimum contractual commitments to all third-party contract manufacturers at December 31, 2007 (in
millions):
Year ending December 31, Commitments
2008 .................................................................. $200
2009 .................................................................. 159
2010 .................................................................. 148
2011 .................................................................. 142
2012 .................................................................. 128
Thereafter .............................................................. —
Total contractual purchases ............................................ $777
The amounts above primarily relate to our long-term supply agreement with Boehringer Ingelheim Pharma
KG (“BI Pharma”) for the manufacture of commercial quantities of ENBREL. Under the terms of this agreement,
we are required to purchase certain minimum quantities of ENBREL each year through 2012. Amounts owed to
BI Pharma are based on firm commitments for the purchase of ENBREL and reflect certain estimates such as
production run success rates and bulk drug yields achieved.
Amounts purchased under contractual inventory commitments from third-party contract manufacturers for the
years ended December 31, 2007, 2006 and 2005 were $153 million, $333 million and $386 million, respectively.
10. Contingencies
In the ordinary course of business, we are involved in various legal proceedings and other matters that are
complex in nature and have outcomes that are difficult to predict. In accordance with SFAS No. 5, “Accounting
for Contingencies,” we record accruals for such contingencies to the extent that we conclude that it is probable
that a liability will be incurred and the amount of the related loss can be reasonably estimated.
Certain of our legal proceedings are discussed below:
Transkaryotic Therapies (“TKT”) and Aventis Litigation
On April 15, 1997, Amgen filed suit in the U.S. District Court for the District of Massachusetts (the
“Massachusetts District Court”) against TKT and Hoechst Marion Roussel, Inc. (“HMR” — now Aventis
Pharmaceuticals Inc., together with TKT, the “TKT Defendants”) alleging infringement of three U.S. patents
owned by Amgen that claim an erythropoietin product and processes for making erythropoietin. Amgen sought
an injunction preventing the TKT Defendants from making, importing, using or selling erythropoietin in the
United States. On October 7, 1999, Amgen filed an amended complaint, which added two additional patents to
the litigation. The TKT Defendants’ amended answer asserted that all five of the patents-in-suit were not in-
fringed, were invalid or were unenforceable due to inequitable conduct.
Amgen’s motion for summary judgment of literal infringement was granted by the Massachusetts District
Court on April 26, 2000 with respect to claim 1 of U.S. Patent No. 5,955,422 (the “‘422 Patent”). On May 15,
2000, the trial began in the Massachusetts District Court. On June 9, 2000, the Massachusetts District Court
granted the TKT Defendants’ motion for non-infringement of U.S. Patent No. 5,618,698 (the “‘698 Patent”), re-
moving the ‘698 Patent from this action. On July 21, 2000, the Massachusetts District Court granted Amgen’s
motion for judgment on the TKT Defendants’ defenses of invalidity based upon anticipation and obviousness.
On January 19, 2001, the Massachusetts District Court ruled that claims 2-4 of U.S. Patent No. 5,621,080
(the “‘080 Patent”), claims 1, 3, 4 and 6 of U.S. Patent No. 5,756,349 (the “‘349 Patent”) and claim 1 of the ‘422
Patent were valid, enforceable and infringed by TKT’s erythropoietin product and the cells used to make such
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