Amgen 2009 Annual Report Download - page 38

Fresenius Medical Care North America
In October 2006, we entered into a five-year sole sourcing and supply agreement with an affiliate of Frese-
nius Medical Care North America (“Fresenius North America”) (a wholly owned subsidiary of Fresenius
Medical Care), on its behalf and on behalf of certain of its affiliates, whereby they have agreed to purchase, and
we have agreed to supply, all of Fresenius North America’s commercial requirements for ESAs for use in manag-
ing the anemia of its hemodialysis patients in the United States and Puerto Rico, based on forecasts provided by
Fresenius and subject to the terms and conditions of the agreement.
Government Regulation
Regulation by governmental authorities in the United States and other countries is a significant factor in the
production and marketing of our products and our ongoing R&D activities.
In order to clinically test, manufacture and market products for therapeutic use, we must satisfy mandatory
procedures and safety and effectiveness standards established by various regulatory bodies. In the United States,
the Public Health Service Act, the Federal Food, Drug and Cosmetic Act (“FDCA”) and the regulations promul-
gated thereunder, and other federal and state statutes and regulations govern, among other things, the raw
materials and components used in the production of, research, development, testing, manufacture, quality control,
labeling, storage, record keeping, approval, advertising and promotion, and distribution of our products on a
product-by-product basis. The failure to comply with the applicable regulatory requirements may subject us to a
variety of administrative and/or judicially imposed sanctions. These sanctions could include the FDA’s refusal to
approve pending applications, withdrawals of approvals, delay or suspension of clinical trials, warning letters,
product recalls, product seizures, total or partial suspension of our operations, injunctions, fines, civil penalties
and/or criminal prosecution.
Clinical Development. We must conduct extensive clinical trials designed to establish the safety and effi-
cacy of product candidates in order to file for regulatory approval to market a product. Product development and
approval within this regulatory framework takes a number of years and involves our expenditure of substantial
resources, and any approval we obtain remains costly for us to maintain. After laboratory analysis and preclinical
testing in animals, we file an investigational new drug (“IND”) application with the FDA to begin human testing.
The IND application automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises
concerns or questions. In such a case, we and the FDA must resolve any outstanding concerns before the clinical
trial can begin.
Typically, we undertake a three-phase human clinical testing program. In phase 1, we conduct small clinical
trials to investigate the safety and proper dose ranges of our product candidates in a small number of human sub-
jects. In phase 2, we conduct clinical trials to investigate side effect profiles and efficacy of our product
candidates in a larger number of patients who have the disease or condition under study. In phase 3, we conduct
clinical trials to investigate the safety and efficacy of our product candidates in a large number of patients who
have the disease or condition under study. The time and expense required for us to perform this clinical testing is
substantial and may vary by product. For example, the clinical trials for the BLA for ProliaTM were large and re-
quired substantial time and resources to recruit patients and significant expense to execute. Historically, our
products have required smaller, shorter trials. Foreign studies performed under an IND must meet the same re-
quirements that apply to U.S. studies. The FDA will accept a foreign clinical study not conducted under an IND
only if the study is well-designed, well-conducted, performed by qualified investigators, and conforms to good
clinical practice. Phase 1, 2 and 3 testing may not be completed successfully within any specified time period, if
at all. (See “Item 1A. Risk Factors — We may not be able to develop commercial products.”) The FDA monitors
the progress of each trial conducted under an IND and may, at its discretion, re-evaluate, alter, suspend, or termi-
nate the testing based upon the data accumulated to that point and the FDA’s risk/benefit assessment with regard
to the patients enrolled in the trial. (See “Item 1A. Risk Factors — We must conduct clinical trials in humans be-
fore we can commercialize and sell any of our product candidates or existing products for new indications.”)
Applications. The results of preclinical and clinical trials are submitted to the FDA in the form of a BLA for
biologic products subject to the Public Health Service Act or a new drug application (“NDA”) for drugs subject
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