Amgen 2012 Annual Report Download - page 29

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biologically derived substances in the manufacture of drugs. We continue to investigate alternatives to certain biological sources
and alternative manufacturing processes that do not require the use of certain biologically derived substances because such raw
materials may be subject to contamination and/or recall. A material shortage, contamination, recall and/or restriction of the use of
certain biologically derived substances or other raw materials that may be sourced from other countries and that are used in the
manufacture of our products could adversely impact or disrupt the commercial manufacturing of our products or could result in
a mandated withdrawal of our products from the market. See Item 1A. Risk Factors — We rely on third-party suppliers for certain
of our raw materials, medical devices and components.
We perform various procedures to assist in authenticating the source of raw materials, including intermediary materials used
in the manufacture of our products, which include verification of the country of origin. These procedures are incorporated into
the manufacturing processes we and our third-party contract manufacturers perform.
Government Regulation
Regulation by government authorities in the United States and other countries is a significant factor in the production and
marketing of our products and our ongoing R&D activities.
In order to clinically test, manufacture and market products for therapeutic use, we must satisfy mandatory procedures and
safety and effectiveness standards established by various regulatory bodies. In the United States, the Public Health Service Act,
the FDCA and the regulations promulgated thereunder, as well as other federal and state statutes and regulations govern, among
other things, the raw materials and components used in the production, research, development, testing, manufacture, quality control,
labeling, storage, record keeping, approval, advertising and promotion, and distribution of our products. Failure to comply with
the applicable regulatory requirements may subject us to a variety of administrative and/or judicially imposed sanctions. The
sanctions could include the FDA’s refusal to approve pending applications, withdrawals of approvals, delay or suspension of
clinical trials, warning letters, product recalls, product seizures, total or partial suspension of our operations, injunctions, fines,
civil penalties and/or criminal prosecution.
Clinical Development. We must conduct extensive clinical trials designed to establish the safety and efficacy of product
candidates in order to file for regulatory approval to market a product. Product development and approval within that regulatory
framework take a number of years and involve our expenditure of substantial resources, and any approval we obtain remains costly
for us to maintain. After laboratory analysis and preclinical testing in animals, we file an Investigational New Drug Application
(IND) with the FDA to begin human testing. The IND automatically becomes effective 30 days after receipt by the FDA, unless
the FDA raises concerns or questions. In such a case, we and the FDA must resolve any outstanding concerns before the clinical
trial can begin.
Typically, we undertake a three-phase human clinical testing program. In phase 1, we conduct small clinical trials to investigate
the safety and proper dose ranges of our product candidates in a small number of human subjects. In phase 2, we conduct clinical
trials to investigate side effect profiles and the efficacy of our product candidates in a larger number of patients who have the
disease or condition under study. In phase 3, we conduct clinical trials to investigate the safety and efficacy of our product candidates
in a large number of patients who have the disease or condition under study. The time and expense required for us to perform this
clinical testing are substantial and may vary by product. For example, the phase 3 ongoing clinical trials for AMG 145 are large
and require substantial time and resources to recruit patients and significant expense to execute. Foreign studies performed under
an IND must meet the same requirements that apply to U.S. studies. The FDA will accept a foreign clinical study not conducted
under an IND only if the study is well-designed, well-conducted, performed by qualified investigators and conforms to good
clinical practice. Phase 1, 2 and 3 testing may not be completed successfully within any specified time period, if at all. (See
Item 1A. Risk Factors — We may not be able to develop commercial products.) The FDA monitors the progress of each trial
conducted under an IND and may, at its discretion, re-evaluate, alter, suspend or terminate the testing based on the data accumulated
to that point and the FDA’ s risk/benefit assessment with regard to the patients enrolled in the trial. See Item 1A. Risk Factors — We
must conduct clinical trials in humans before we can commercialize and sell any of our product candidates or existing products
for new indications.
Applications. The results of preclinical and clinical trials are submitted to the FDA in the form of a BLA for biologic products
subject to the Public Health Service Act or an NDA for drugs subject to the approval provisions of the FDCA. Submission of the
application is no guarantee that the FDA will find it complete and accept it for filing. If an application is accepted for filing,
following the FDA’s review, the FDA may grant marketing approval, request additional information or deny the application if it
determines that the application does not provide an adequate basis for approval. We cannot take any action to market any new
drug or biologic product in the United States until our appropriate marketing application has been approved by the FDA.
Post-approval Phase. After we have obtained approval to market our products, we monitor adverse events from the use of
our products and report such events to regulatory agencies, along with information from post marketing surveillance or studies.
We may utilize other research approaches to learn or confirm information about our marketed products, including observational