Amgen 2012 Annual Report Download - page 1

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Dear Shareholders,
2012 was an exceptional year for Amgen.
We delivered for shareholders, positioned
the company for long-term growth, and
continued to fulfill our mission to serve
patients. Revenues rose 11 percent to
$17.3 billion. Adjusted earnings per share
increased 22 percent to $6.51.* Total
shareholder return in 2012 was 36 percent,
outperforming the S&P 500 and our peer
group. Our performance in 2012 reflects
strength across our product portfolio, effective
commercial execution, commitment to
operational efficiency, dedication of staff, and
sound capital allocation decisions. Building on
this success, we entered 2013 with momentum
and confidence in our ability to execute our
long-term strategy of reaching more patients
in more markets around the world.
Delivering for Shareholders
More than a year ago, we made a commitment
to return significant capital to shareholders
in the form of dividends and share buybacks,
and we have delivered on that promise. In
early 2013, we completed the $10-billion
stock repurchase program announced in
October 2011. Since January 2011, we have
repurchased more than 20 percent of our
outstanding shares. In addition, since the
initiation of our first dividend in July 2011,
we have raised the dividend twice over the
previous quarterly amount by an average of
30 percent.
Continued Product Momentum
Amgen’s product sales grew 9 percent in
2012. Sales growth was led by Enbrel®
(etanercept), with solid contributions from
Prolia® (denosumab), XGEVA® (denosumab),
Sensipar® (cinacalcet), Nplate® (romiplostim),
and Vectibix® (panitumumab). In 2012, two of
our products achieved more than $4 billion in
sales; three other products achieved more
than $1 billion in sales, as did our recently
launched denosumab franchise. We also saw
our European business continue to grow in a
challenging economic environment.
Our products continue to show strong
opportunities for growth. In terms of value,
ENBREL remains the leading biologic in the
fast-growing rheumatology and dermatology
segments, with a proven track record. In addition,
by the end of 2013, the profit share we have in
place with Pfizer Inc. for ENBREL transitions to
a significantly lower royalty. As a result, the
contributions to Amgen’s profitability from ENBREL
will grow substantially starting in 2014.
There are also continued unmet medical needs
that can be addressed by Neulasta®
(pegfilgrastim)/NEUPOGEN® (Filgrastim), including
many breast cancer patients undergoing
myelosuppressive therapy associated with a
clinically significant risk of febrile neutropenia.
We continue to launch XGEVA® in Europe and
expand access for Prolia® in the U.S. We expect
that EPOGEN® (epoetin alfa) and Aranesp®
(darbepoetin alfa) will remain important therapies
due to a long history of use by physicians in the
treatment of anemia. Sensipar®/Mimpara®,
indicated for the treatment of secondary
hyperparathyroidism in patients with chronic
kidney disease who are on dialysis, is on track
to exceed $1 billion in sales in 2013.
Emerging Late-Stage Pipeline
In 2012, we made clear progress in advancing
our pipeline. Our pipeline focuses on innovative,
biological targets and molecules that address
serious illnesses and areas of high unmet medical
need; and this reflects our strategic focus of
unlocking the potential of biology for patients. At
Amgen, we take a “biology first” approach, which
means that we examine the fundamental
mechanisms of human biology to unravel the
complexities of disease in order to interdict them
with our medicines. From 2013 to 2016, we
expect to generate pivotal data for eight of our
pipeline molecules. As of early 2013, we have
six investigational molecules in phase 3 trials
and five investigational molecules in phase 2 trials
to treat diseases in areas including cardiovascular
disease, bone disease, inflammation, nephrology,
oncology, and neuroscience.
AMG 145 is one of many therapies in our pipeline
that shows great promise. Consistent with
Amgen’s strategic focus on combating serious
Letter to
Shareholders
*“Adjusted” earnings per share is a non-GAAP financial measure. See back page for reconciliation to U.S. generally accepted accounting principles (GAAP).
Robert A. Bradway, Chairman and Chief Executive Officer, Amgen Inc.

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