Amgen 2007 Annual Report Download - page 67

For example, this facility in Puerto Rico has experienced manufacturing component shortages and there was
evidence of adverse trends in the microbial bioburden of the production environment that reduced the production
output. Although these experiences in Puerto Rico have not impacted our ability to supply product in the past, the
same or other problems may result in our being unable to supply these products, which could adversely affect our
product sales and operating results materially. Although we have obtained limited insurance to protect against
certain business interruption losses, there can be no assurance that such coverage will be adequate or that such
coverage will continue to remain available on acceptable terms, if at all. The extent of the coverage of our in-
surance could limit our ability to mitigate for lost sales and could result in such losses adversely affecting our
product sales and operating results materially. (See “— Difficulties, disruptions or delays in manufacturing or
failure to comply with manufacturing regulations may limit supply of our products and limit our product sales.”)
We are dependent on third parties for a significant portion of our bulk supply and the formulation, fill and
finish of ENBREL.
Under a collaboration and global supply agreement, we and Wyeth share the total worldwide bulk supply of
ENBREL produced by our Rhode Island manufacturing facility, BI Pharma’s manufacturing facility in Germany
and Wyeth’s manufacturing facility in Ireland. Our ENBREL supply forecasts rely on certain assumptions of
how much ENBREL each of these manufacturing facilities is expected to produce. If any of these manufacturing
facilities are unable to produce in accordance with our or Wyeth’s expectations, the worldwide supply of EN-
BREL could be adversely affected materially. In such cases, we may be required to allocate supply for Wyeth’s
benefit. To the extent that there is a shortfall in worldwide production, our supply of ENBREL could be ad-
versely affected. Additionally, the costs associated with a shortfall or failure in production of ENBREL would be
borne by both parties.
We currently produce a substantial portion of the annual ENBREL supply at our Rhode Island manufactur-
ing facility. However, we also depend on third parties for a significant portion of our ENBREL bulk supply as
well as for some of the formulation, fill and finish of ENBREL that we manufacture. BI Pharma is our third-party
contract manufacturer of ENBREL bulk drug; accordingly, our U.S. and Canadian supply of ENBREL is cur-
rently significantly dependent on BI Pharma’s production schedule for ENBREL. We would be unable to
produce ENBREL in sufficient quantities to substantially offset shortages in BI Pharma’s scheduled production if
BI Pharma or other third-party contract manufacturers used for the formulation, fill and finish of ENBREL bulk
drug were to cease or interrupt production or services or otherwise fail to supply materials, products or services
to us for any reason, including due to labor shortages or disputes, regulatory requirements or action or con-
tamination of product lots or product recalls. For example, in the second quarter of 2002, the prior co-marketers
with respect to ENBREL experienced a brief period where no ENBREL was available to fill patient pre-
scriptions, primarily due to variation in the expected production yield from BI Pharma. We cannot guarantee that
an alternative third-party contract manufacturer would be available on a timely basis or at all. This in turn could
materially reduce our ability to satisfy demand for ENBREL, which could materially and adversely affect our
operating results.
Among the factors that could affect our actual supply of ENBREL at any time include, without limitation,
BI Pharma’s and our Rhode Island facility’s bulk drug production scheduling. For example, BI Pharma does not
produce ENBREL continuously; rather, it produces the bulk drug substance through a series of periodic cam-
paigns throughout the year. Our Rhode Island manufacturing facility is currently dedicated to ENBREL
production. The amount of commercial inventory available to us at any time depends on a variety of factors, in-
cluding the timing and actual number of BI Pharma’s production runs, the actual number of runs at our Rhode
Island manufacturing facility, and, for either the Rhode Island or BI Pharma facilities, the level of production
yields and success rates, the timing and outcome of product quality testing and the amount of formulation, fill
and finish capacity. We are also dependent on third-parties for some formulation, fill and finish of ENBREL bulk
drug substance manufactured at our Rhode Island facility. If third-party formulation, fill and finish manufacturers
are unable to provide sufficient capacity or are otherwise unable to provide services to us, the supply of ENBREL
could be adversely affected materially.
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