Amgen 2007 Annual Report Download - page 3

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Dear Stockholders,
2007 was not the year we expected. Amgen was challenged
as never before across a broad front. Shareholder value
suffered, top and bottom line growth slowed, and we found
it necessary to restructure and shrink the organization.
There is another story about 2007 for Amgen that is equally
true, and one I want to expand upon here without at all
distancing ourselves from the difficult aspects of the year.
At the beginning of 2007, we were still enjoying a long
period of unprecedented growth. From 2001 to early 2007,
we grew adjusted earnings per share (EPS)* and revenue
at compound annual growth rates of 27 and 29 percent,
respectively;** our share price approached an all-time
high; the pipeline expanded dramatically; we successfully
completed and delivered on what was at the time the
industry’s largest acquisition (Immunex) and two other major
acquisitions (Tularik and Abgenix); and the organization grew
to more than 20,000 staff operating in 35 countries.
Then in the first quarter of 2007 a clinical trial, exploring the use
of our anemia medicine Aranesp® in cancer patients with anemia
related to their underlying disease, revealed a new safety
concern in a population not indicated for this medicine. While
this trial properly and appropriately explored an off-label use of
Aranesp®, its results and those of several other off-label studies
led to more restrictive labeling and stricter reimbursement
limits in the U.S. Medicare program.
Amgen responded to new safety data as they became
known to us by making appropriately prompt and transparent
disclosures of the relevant facts to regulatory authorities,
physicians and patients. We put patients first, then dealt
with the business consequences. That’s what shareholders
expect and what we demand of ourselves.
The safety challenges of 2007 drove a dramatic reduction
in planned revenue and profit and changed the financial
trajectory of the company. Amgen quickly adapted to this
Letter to Stockholders
Amgen 2007 Annual Report 1
*See reconciliation on page 6.
**From January 1, 2001, to December 31, 2006.