Amgen 2007 Annual Report Download - page 69

In 2006, the EMEA developed and issued final regulatory guidelines related to the development and appro-
val of biosimilar products. The final guidelines included clinical trial guidance for certain biosimilar products
including erythropoietins and G-CSFs, which guidance recommends that applicants seeking approval of such
biosimilar products conduct fairly extensive pharmacodynamic, toxicological, clinical safety studies and a phar-
macovigilance program. In the United States, there currently is no legal approval pathway for the approval of
BLAs for biosimilars. A number of events would need to occur before these products could enter the market, in-
cluding passage of legislation by Congress to create a new approval pathway and, depending on the specific
provisions of any such legislation, promulgation of associated regulations or guidance by the FDA. In 2007, sev-
eral members of Congress expressed interest in the issue, a number of bills were introduced, the House of
Representatives and the Senate held hearings on biosimilars, and the Senate Committee on HELP voted on legis-
lation in June 2007. However, no final legislation was passed in either chamber of Congress. Given the
continuing interest of Congress in the issue, it is possible legislation on biosimilars will also be considered in
2008. It is unknown what type of regulatory framework, what legal provisions, and what timeframes for issuance
of regulations or guidance any final legislation would contain. Until such legislation is created, we cannot predict
when biosimilars could appear in the United States.
Certain of our competitors, including biotechnology and pharmaceutical companies, market products or are
actively engaged in R&D in areas where we have products or where we are developing product candidates or
new indications for existing products. In the future, we expect that our products will compete with new drugs
currently in development, drugs approved for other indications that may be approved for the same indications as
those of our products and drugs approved for other indications that are used off-label. Large pharmaceutical cor-
porations may have greater clinical, research, regulatory, manufacturing, marketing, financial and human
resources than we do. In addition, some of our competitors may have technical or competitive advantages over us
for the development of technologies and processes. These resources may make it difficult for us to compete with
them to successfully discover, develop and market new products and for our current products to compete with
new products or new product indications that these competitors may bring to market. Business combinations
among our competitors may also increase competition and the resources available to our competitors.
We must build the framework for our future growth, and if we fail to execute on our initiatives our business
could be adversely affected.
As a result of developments in 2007 and, in particular the regulatory and reimbursement changes to our ESA
products, on August 15, 2007, we announced a plan to restructure our worldwide operations in order to improve
our cost structure while continuing to make significant R&D investments and build the framework for our future
growth. We face a number of risks, some of which we cannot completely control. For example:
• we will need to manage complexities associated with a large and geographically diverse organization
• we will need to manage and execute large, complex and global clinical trials
• we will need to significantly expand our sales and marketing resources to launch our late-stage product
candidate, denosumab
• we will need to accurately anticipate demand for the products we manufacture and maintain adequate man-
ufacturing capacity for both commercial and clinical supply
• we are implementing an enterprise resource planning system to support our increasingly complex busi-
ness and business processes and such implementation is costly and carries substantial operations risk,
including loss of data or information, unanticipated increases in costs, disruption of operations or business
interruption
Of course, there may be other risks and we cannot guarantee that we will be able to successfully manage
these or other risks. If we fail to execute on our initiatives in these ways or others, such failure could result in a
material adverse effect on our business and results of operations.
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