Amgen 2009 Annual Report Download - page 65

In the past, the Puerto Rico facility has experienced manufacturing component shortages and there was evi-
dence of adverse trends in the microbial bioburden of the production environment that reduced the production
output. The same or other problems may result in our being unable to supply these products, which could ad-
versely 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 insurance could limit our ability to mitigate for lost sales and such losses could materially adversely affect
our product sales and operating results. Our Puerto Rico facility is also subject to the same difficulties, dis-
ruptions or delays in manufacturing experienced in our other manufacturing facilities. For example, the limited
number of lots of ENBREL voluntarily recalled in September 2009 were manufactured at our Puerto Rico facility
and we have made commitments to the FDA to address the causes behind the recall. In future inspections, our
failure to adequately address the FDA’s expectations could lead to further inspections of the facility or regulatory
actions. (See “— Manufacturing difficulties, disruptions or delays could limit supply of our products and limit
our product sales.”)
Our marketed products face substantial competition.
We operate in a highly competitive environment. Our products compete with other products or treatments
for diseases for which our products may be indicated. Our competitors market products or are actively engaged in
R&D in areas where we have products, where we are developing product candidates or new indications for exist-
ing products. In the future, we expect that our products will compete with new drugs currently in development,
drugs currently approved for other indications that may later be approved for the same indications as those of our
products and drugs approved for other indications that are used off-label. Large pharmaceutical companies and
generic manufacturers of pharmaceutical products are expanding into the biotechnology field with increasing
frequency. These companies may have greater 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 re-
sources 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 com-
petitors may bring to market. As a result, our products may compete against products that have lower prices,
equivalent or superior performance, are easier to administer or that are otherwise competitive with our products.
We expect to face increasing competition from biosimilar products which could impact our profitability.
We currently face competition in Europe from biosimilar products, and we expect to face increasing com-
petition from biosimilars in the future. Lawmakers in the United States have proposed bills to create a regulatory
pathway for the abbreviated approval of biosimilars, and the EU has already created such a regulatory pathway.
To the extent that governments adopt more permissive approval frameworks and competitors are able to obtain
broader marketing approval for biosimilars, our products will become subject to increased competition. Expira-
tion or successful challenge of applicable patent rights could trigger such competition, and we could face more
litigation regarding the validity and/or scope of our patents.
In the EU, the European Commission has granted marketing authorizations for several biosimilars pursuant
to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years.
In 2006, the EMA developed and issued final regulatory guidelines related to the development and approval of
biosimilar products. The final guidelines included clinical trial guidance for certain biosimilar products, includ-
ing erythropoietins and G-CSFs, recommending that applicants seeking approval of such biosimilar products
conduct pharmacodynamic, toxicological and clinical safety studies as well as a pharmacovigilance program.
Some companies have received and other companies are seeking approval to market erythropoietin and G-CSF
biosimilars in the EU, presenting additional competition for our products. (See “— Our marketed products face
substantial competition.”) For example, following the expiration of the principal European patent relating to re-
combinant G-CSF in August 2006, the European Commission issued marketing authorizations for the first
G-CSF biosimilar products and the product was launched in certain EU countries in 2008 and 2009. There are
several G-CSF biosimilars available in the EU marketed by different companies and these G-CSF biosimilar
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