Amgen 2011 Annual Report Download - page 69

• the product candidate is not cost effective in light of existing therapeutics;
• the product candidate had harmful side effects in humans or animals;
• the necessary regulatory bodies, such as the FDA or EMA, did not approve our product candidate for an
intended use;
• the product candidate was not economical for us to manufacture and commercialize;
• other parties have or may have proprietary rights relating to our product candidate, such as patent rights,
and will not let us sell it on reasonable terms, or at all;
• we and certain of our licensees, partners or independent investigators may fail to effectively conduct
clinical development or clinical manufacturing activities; and
• the regulatory pathway to approval for product candidates is uncertain or not well-defined.
Several of our product candidates have failed or been discontinued at various stages in the product
development process. For example, in June 2004, we announced that the phase 2 study of Glial Cell Lined-
Derived Neurotrophic Factor (GDNF) for the treatment of advanced Parkinson’s disease did not meet the primary
study endpoint upon completion of nine months of the double-blind treatment phase of the study. The conclusion
was reached even though a small phase 1 pilot investigator-initiated open-label study over a three-year period
appeared to result in improvements for advanced Parkinson’s disease patients. Subsequently, we discontinued
clinical development of GDNF in patients with advanced Parkinson’s disease.
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
existing 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 generics manufacturers of pharmaceutical products are expanding into the biotechnology field
with increasing frequency, and some pharmaceutical companies and generics manufacturers have formed
partnerships to pursue biosimilar products. 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 resources 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 competitors may bring to market. As a result, our products may compete against
products that have lower prices, equivalent or superior performance, better safety profile, are easier to administer
or that are otherwise competitive with our products.
Concentration of sales at certain of our wholesaler distributors and consolidation of free-standing dialysis
clinic businesses may negatively impact our bargaining power and profit margins.
The substantial majority of our U.S. product sales are made to three pharmaceutical product wholesaler
distributors, AmerisourceBergen Corporation, Cardinal Health, Inc. and McKesson Corporation. These
distributors, in turn, sell our products to their customers, which include physicians or their clinics, dialysis
centers, hospitals and pharmacies. In addition, one of our products, EPOGEN®, is sold primarily to free-standing
dialysis clinics, which have experienced significant consolidation. Two organizations, DaVita and Fresenius
Medical Care North America, own or manage a large number of the outpatient dialysis facilities located in the
United States and account for a substantial majority of all EPOGEN®sales in the free-standing dialysis clinic
setting. Due to this concentration, these entities have substantial purchasing leverage, which may put pressure on
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