Amgen 2007 Annual Report Download - page 63

quested that Immunex produce documents relating to pricing issues. Further, certain state government entity
plaintiffs in some of these AWP cases are also alleging that companies, including ours, were not reporting their
“best price” to the states under the Medicaid program. These cases and investigations are described in Note 10,
“Contingencies — Average Wholesale Price Litigation” to the Consolidated Financial Statements and are up-
dated as required in subsequent Form 10-Qs. Other states and agencies could initiate investigations of our pricing
practices. A decision adverse to our interests on these actions and/or investigations could result in substantial
economic damages and could have a material adverse effect on our results of operations in the period in which
such liabilities are incurred.
We may be required to defend lawsuits or pay damages for product liability claims.
Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products. We
may face substantial product liability exposure in human clinical trials and for products that we sell after regu-
latory approval. Product liability claims, regardless of their merits, could be costly and divert management’s
attention, and adversely affect our reputation and the demand for our products. Amgen and Immunex have been
named as defendants in product liability actions for certain of our products.
Our revenues may fluctuate and our operating results are subject to fluctuations and these fluctuations
could cause financial results to be below expectations and our stock price is volatile, which could adversely
affect your investment.
Our revenues and operating results may fluctuate from period to period for a number of reasons, some of
which we cannot control. For example, primarily as a result of various regulatory and reimbursement develop-
ments involving ESA products that began in 2007, our anemia product sales, in particular sales of Aranesp®, for
2007 were materially adversely impacted. Even a relatively small revenue shortfall may cause financial results
for a period to be below our expectations or projections as some of our operating expenses are fixed in the short
term and cannot be reduced within a short period of time to offset reductions in revenue. Further, primarily as a
result of the various regulatory and reimbursement developments impacting ESA products, on August 15, 2007,
we announced a plan to restructure our worldwide operations in order to improve our cost structure. We have in-
curred approximately $739 million of the current estimated $775 million to $825 million in charges in connection
with this restructuring plan. Our operating results have and will continue to fluctuate and be adversely impacted
as a result of these restructuring charges. (See “— We may experience difficulties, delays or unexpected costs and
not achieve anticipated cost savings from our recently announced restructuring plan.”) In addition, in the event
that the actual restructuring charges exceed our latest estimate, this may cause our operating results for a period
to be below our expectations or projections. As a result of the above or other challenges, including the upcoming
March 13, 2008 ODAC meeting and continuing label revisions to our ESAs, our revenues and operating results
and, in turn, our stock price may be subject to significant fluctuations. Additionally, our stock price, like that of
other biotechnology companies, is volatile. For example, in the fifty-two weeks prior to December 31, 2007, the
trading price of our common stock has ranged from a high of $75.85 per share to a low of $46.44 per share.
Our revenues, operating results and stock price may be affected by a number of factors, such as:
• adverse developments regarding the safety or efficacy of our products
• changes in the government’s or private payers’ reimbursement policies or prescribing guidelines for our
products
• inability to maintain regulatory approval of marketed products or manufacturing facilities
• actual or anticipated clinical trial results of ours or our licensees, partners or independent investigators
• business development or licensing activities
• product development or other business announcements by us or our competitors
• regulatory matters or actions
51