Amgen 2009 Annual Report Download - page 89

any incremental R&D expenses. Panitumumab was Abgenix’s fully human monoclonal antibody which, at acquis-
ition, was in phase 2/3 clinical trials for the treatment of certain types of cancer. The incremental R&D expenses
assumed to be incurred to obtain necessary regulatory approvals for the various indications of panitumumab were
estimated at the time of acquisition at approximately $300 million and would be incurred through 2011 and there
have been no significant changes in these estimates.
At the date of acquisition, we intended to develop panitumumab for treatment of various types of cancer. In
2006, panitumumab received FDA approval for the treatment of mCRC after disease progression on, or follow-
ing, fluoropyrimidine-, oxaliplatin- and irinotecan- containing chemotherapy regimens and is marketed under the
trademark Vectibix®. In December 2007, the European Commission granted a conditional marketing author-
ization for Vectibix®as monotherapy for the treatment of patients with EGFr expressing mCRC with
non-mutated (wild-type) KRAS genes after failure of standard chemotherapy regimens. This conditional approval
is reviewed annually by the CHMP, and in December 2008 we agreed as a condition of the renewal of approval
to conduct an additional clinical trial in the existing approved indication. The conditional approval was granted
again in December 2009. We are continuing to develop or are evaluating plans to develop Vectibix®in all of the
remaining indications we had intended at the date of acquisition. However, since the acquisition, there have been
several events that have affected the development plans for Vectibix®and because of these developments, our
expected time to obtain regulatory approvals for the remaining indications has been delayed and the expected
cost to obtain necessary approvals has increased compared to our original expectations. See “Item 1. Business –
Marketed Products and Selected Product Candidates” and “Item 1. Business – Research and Development and
Selected Product Candidates” for developments related to Vectibix®and denosumab.
Other charges
As discussed in Note 9, “Restructuring” to the Consolidated Financial Statements, 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. Subsequently, we identi-
fied certain additional initiatives designed to further assist in improving our cost structure. As a result of these
restructuring and related charges, we recorded in “Other charges” in 2009, 2008 and 2007 expenses for staff
separation costs of $30 million, $7 million and $209 million, respectively, asset impairments of $36 million and
$366 million in 2008 and 2007, respectively, and charges of $4 million, $49 million and $119 million, re-
spectively, primarily related to the loss accruals for leases for certain facilities that will not be used in our
business.
Also, in 2009, the Company recorded in “Other charges” loss accruals for settlements of certain legal pro-
ceedings aggregating $33 million. Also, in 2008, the Company recorded in “Other charges” loss accruals for
settlements of certain commercial legal proceedings aggregating $288 million, principally related to the settle-
ment of the Ortho Biotech antitrust suit. In addition, in 2007, the Company recorded a $34 million loss accrual
for an ongoing commercial legal proceeding.
Interest expense, net
For the years ended December 31, 2009, 2008 and 2007, interest expense, net was $578 million, $551 mil-
lion and $496 million, respectively. Included in interest expense, net for the years ended December 31, 2009,
2008 and 2007, is the impact of non-cash interest expense of $250 million, $235 million and $168 million, re-
spectively, resulting from the adoption of the new accounting standard that changed the method of accounting for
our convertible debt. (See Note 2, “Change in method of accounting for convertible debt instruments” to the
Consolidated Financial Statements for further discussion.)
Interest and other income, net
Interest and other income, net decreased 22% for the year ended December 31, 2009 compared to 2008.
This decline is primarily due to lower interest income of $45 million, principally due to lower portfolio invest-
ment returns; lower net gains on sales of investments of $28 million; and higher losses on certain leased facilities
that will no longer be used in our operations of $31 million; partially offset by higher foreign currency exchange
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