Amgen 2009 Annual Report Download - page 169

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
State Derivative Litigation
Larson v. Sharer, et al.
The three state shareholder derivative complaints filed against Amgen Inc., Kevin W. Sharer, George J. Mor-
row, Dennis M. Fenton, Brian M. McNamee, Roger M. Perlmutter, David Baltimore, Gilbert S. Omenn, Judith C.
Pelham, Frederick W. Gluck, Jerry D. Choate, J. Paul Reason, Frank J. Biondi, Jr., Leonard D. Schaeffer, Frank
C. Herringer, Richard D. Nanula, Willard H. Dere, Edward V. Fritzky, Franklin P. Johnson, Jr. and Donald B.
Rice as defendants (the “State Defendants”) on May 1, 2007 (Larson v. Sharer, et al.,&Anderson v. Sharer, et
al.), and August 13, 2007 (Weil v. Sharer, et al.) in the Superior Court of the State of California, Ventura County
(the “Superior Court”) were consolidated by the Superior Court under one action captioned Larson v. Sharer, et
al. The consolidated complaint was filed on July 5, 2007. The complaint alleges that the State Defendants
breached their fiduciary duties, wasted corporate assets, were unjustly enriched and violated the California
Corporations Code. Plaintiffs allege that the State Defendants failed to disclose and/or misrepresented results of
Aranesp®clinical studies, marketed both Aranesp®and EPOGEN®for off-label uses and that these actions or
inactions caused shareholders to suffer damages. The complaints also allege insider trading by the State Defend-
ants. The plaintiffs seek treble damages based on various causes of action, reformed corporate governance,
equitable and/or injunctive relief, restitution, disgorgement of profits, benefits and other compensation, and legal
costs.
An amended consolidated complaint was filed on March 13, 2008, adding Anthony Gringeri as a defendant
and removing the causes of action for insider selling and misappropriation of information, violation of California
Corporations Code Section 25402 and violation of California Corporations Code Section 25403. On July 14,
2008, the Superior Court dismissed without prejudice the consolidated state derivative class action. The judge al-
so ordered a stay of any re-filing of an amended complaint until the federal court has determined whether any
securities fraud occurred.
Birch v. Sharer, et al.
On January 23, 2009, a shareholder derivative lawsuit titled Birch v. Sharer, et al. was filed in Los Angeles
County Superior Court naming Amgen Inc., Kevin W. Sharer, David Baltimore, Frank J. Biondi, Jr., Jerry D.
Choate, Vance D. Coffman, Frederick W. Gluck, Frank C. Herringer, Gilbert S. Omenn, Judith C. Pelham, J.
Paul Reason, Leonard D. Schaeffer and Tom Zindrick as defendants. The complaint alleges derivative claims for
breach of fiduciary duty based on a purported failure to implement adequate internal controls and to oversee the
Company’s operations, which plaintiff claims resulted in numerous lawsuits and investigations over a number of
years. Plaintiff seeks damages on behalf of Amgen, including costs and expenses, allegedly incurred, among oth-
er things, in connection with wrongful termination lawsuits and potential violations of the Health Insurance
Portability and Accountability Act (“HIPPA”). On February 25, 2009, the case was reassigned to a judge in the
Complex Department of the Los Angeles County Superior Court and the initial status conference has been
scheduled for May 13, 2009. Amgen and the individual defendants filed motions to dismiss on June 23, 2009.
Oral argument on Amgen and the individual defendants’ motions to dismiss were heard on September 25,
2009 before the Los Angeles County Superior Court and the court granted the motions to dismiss but allowed the
plaintiff an opportunity to amend her complaint by October 21, 2009. Plaintiff filed a request for dismissal with-
out prejudice with the court on October 23, 2009. On October 29, 2009, Amgen received from plaintiff Birch a
stockholder demand on the Board of Directors to take action to remedy breaches of fiduciary duties by the direc-
tors and certain executive officers of the Company. The stockholder alleged that the directors and certain
executive officers violated their core fiduciary principles, causing Amgen to suffer damages. The stockholder
demanded that the Board of Directors take action against each of the officers and directors to recover damages
and to correct deficiencies in the Company’s internal controls that allowed the misconduct to occur. The Board of
Directors is currently undertaking an investigation into the allegations made by the stockholder.
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