Amgen 2010 Annual Report Download - page 70

• failures to comply with regulatory requirements, including those of the FDA
In the past, the Puerto Rico facility has experienced manufacturing component shortages and there was
evidence 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 adversely
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, disruptions or
delays in manufacturing experienced in our other manufacturing facilities. For example, the limited number of lots
of ENBREL and EPOGEN»voluntarily recalled in 2009 and 2010 were manufactured at our Puerto Rico facility. 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.)
If our intellectual property positions are challenged, invalidated, circumvented or expire, or if we fail to
prevail in present and future intellectual property litigation, our business could be adversely affected.
Our success depends in part on our ability to obtain and defend patent rights and other intellectual property
rights that are important to the commercialization of our products and product candidates. The patent positions of
pharmaceutical and biotechnology companies can be highly uncertain and often involve complex legal, scientific
and factual questions. Third parties may challenge, invalidate or circumvent our patents and patent applications
relating to our products, product candidates and technologies. In addition, our patent positions might not protect us
against competitors with similar products or technologies because competing products or technologies may not
infringe our patents. For certain of our product candidates, there are third parties who have patents or pending patent
applications that they may claim necessitate payment of a royalty or prevent us from commercializing these product
candidates in certain territories. Patent disputes are frequent, costly and can preclude, delay or increase the cost of
commercialization of products. We are currently, and in the future may be, involved in patent litigation. (See
Note 19,Contingencies and commitments in the notes to our consolidated financial statements in our annual report.)
A patent dispute or litigation may not discourage a potential violator from bringing the product that is alleged to
infringe to market prior to a final resolution of the dispute or litigation. For example, despite the ongoing litigation,
Teva has stated that it intends to sell its filgrastim product, upon approval from the FDA, in the United States without
a license from us and prior to the expiration of our G-CSF patents. The period of time from inception until resolution
of a patent dispute or litigation is subject to the availability and schedule of the court, agency or tribunal before
which the dispute or litigation is pending. We may be subject to competition during this period and may not be able
to fully recover for the losses, damages, and harms we incur from infringement by the competitor product even if we
prevail. Moreover, if we lose or settle current or future litigations at certain stages or entirely, we could be subject to
competition and/or significant liabilities, be required to enter into third-party licenses for the infringed product or
technology or be required to cease using the technology or product in dispute. In addition, we cannot guarantee that
such licenses will be available on terms acceptable to us, or at all.
Further, under the Hatch-Waxman Act, products approved by the FDA under a NDA may be the subject of
patent litigation with generic competitors before the five year period of data exclusivity provided for under the
Hatch-Waxman Act has expired and prior to the expiration of the patents listed for the product.
Over the next several years, the existing patents on our principal products will begin to expire. (See Item 1.
Business — Marketed Products.) As our patents expire, competitors may be able to legally produce and market
similar products or technologies, including biosimilars, which may result in a reduction in the use and sales of our
products. While we have, and we continue to seek, additional patent protection on certain of our products, including
for specific processes for making our products, formulations and particular uses of our products, competitors may
be able to design around or otherwise circumvent any such additional patents and sell competing products.
Although we continue to develop and obtain patent protection for new product candidates, we may not be able to
replace the revenue lost upon the expiration of the patents on our current products.
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