Amgen 2007 Annual Report Download - page 39

Manufacturing and Raw Materials
Manufacturing
Our manufacturing operations consist of bulk manufacturing, formulation, fill and finish activities which
produce Aranesp®, Epoetin alfa, Neulasta®, NEUPOGEN®, ENBREL, Vectibix™ and other products and prod-
uct candidates for both commercial and clinical purposes. Bulk manufacturing includes fermentation and cell
culture, which are the processes in which our proteins are produced. The proteins are purified to a high quality
and then formulated into a stable form. The fill process puts the formulated bulk protein into the vials or syringes
used by patients or those that administer treatment to patients. Finally, in the finish process, our products are
packaged for distribution. We operate commercial and clinical manufacturing facilities in several locations
throughout the United States, Puerto Rico and the Netherlands (see “Item 2. Properties”). Manufacturing of
Sensipar®, our small molecule product, is performed entirely by third-party contractors.
We actively manage our inventory supply produced at our manufacturing facilities and the supply produced
by our third-party contract manufacturers. We expect to continue to use third-party contract manufacturers to
produce or assist in the production of certain of our existing products and a number of our late-stage product
candidates. (See “Item 1A. Risk Factors — We must build the framework for our future growth, and if we fail to
execute on our initiatives our business could be adversely affected.”)
Commercial Bulk Manufacturing
We operate commercial bulk manufacturing facilities in several locations throughout the United States and
in Puerto Rico (see “Item 2. Properties”). Other than for ENBREL, we perform all of the commercial bulk manu-
facturing for our proteins.
In addition to commercial quantities of bulk ENBREL produced at our Rhode Island facility, the Company
and Wyeth also have a contract manufacturing agreement with Boehringer Ingelheim Pharma KG (“BI Pharma”)
for the production of additional supply of ENBREL. We also have a global supply agreement with Wyeth related
to the manufacture, supply, inventory and allocation of bulk supplies of ENBREL. Under this agreement, the
Company and Wyeth share the total worldwide bulk supply of ENBREL produced by Amgen’s Rhode Island
manufacturing facility, BI Pharma’s manufacturing facility in Germany and Wyeth’s manufacturing facility in
Ireland.
Our supply of ENBREL is significantly dependent on product manufactured by BI Pharma, and, accord-
ingly, we have made significant purchase commitments to BI Pharma. Under our supply agreements, BI Pharma
has reserved a specified level of production capacity for ENBREL, and we are committed to using at least that
level of capacity. We are required to submit a rolling three-year forecast for manufacturing the bulk drug for
ENBREL and a rolling forecast for a shorter period for the number of finished vials of ENBREL. We will be re-
sponsible for substantial payments to BI Pharma if we fail to use the minimum production capacity that BI
Pharma has reserved for ENBREL each calendar year or if the BI Pharma supply agreement is terminated pre-
maturely under specified conditions. (See Note 9, “Commitments” to the Consolidated Financial Statements.)
In addition to producing our own commercial quantities of Epoetin alfa, we also supply Epoetin alfa in the
United States to J&J under a supply agreement (see “Joint Ventures and Business Relationships — Johnson &
Johnson”).
Commercial Formulation, Fill and Finish
We operate a commercial formulation, fill and finish manufacturing facility in Puerto Rico and conduct cer-
tain finish activities in the Netherlands (see “Item 2. Properties”). Other than for ENBREL, Vectibix™ and
certain less significant marketed products, we perform substantially all of the formulation, fill and finish activ-
ities for our proteins. In addition to the formulation, fill and finish of ENBREL performed by us in Puerto Rico or
by BI Pharma for the ENBREL they manufacture and supply to us, fill and finish of a certain portion of EN-
BREL is also performed by other third-party contract manufacturers.
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