Amgen 2012 Annual Report Download - page 57

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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 and adversely affect our product sales, business 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.)
Our intellectual property positions may be challenged, invalidated, circumvented or expire, or we may fail to prevail in
present and future intellectual property litigation.
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 have been in the past, and may be in the future, involved in patent litigation.
A determination made by a court, agency or tribunal concerning infringement, validity, enforceability, injunctive or economic
remedy, or the right to patent protection, for example, are typically subject to appellate or administrative review. Upon review,
such initial determinations may be afforded little or no deference by the reviewing tribunal and may be affirmed, reversed, or
made the subject of reconsideration through further proceedings. 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, until the Pennsylvania District Court entered final judgment and a permanent injunction against Teva on July 15, 2011
pursuant to a joint stipulation and settlement agreement between the parties, Teva had announced that it intended 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, our products approved by the FDA under the FDCA may be the subject of patent
litigation with generic competitors before expiry of the five year period of data exclusivity provided for under the Hatch-Waxman
Act and prior to the expiration of the patents listed for the product. Likewise, our innovative biologic products may be the subject
of patent litigation prior to the expiration of our patents and, with respect to competitors seeking approval as a biosimilar or
interchangeable version of our products, prior to the twelve year exclusivity period provided under the Biologics Price Competition
and Innovation Act of 2009.
Over the next several years, certain of the existing patents on our principal products will 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 have a material adverse effect on our product sales, business and results of operations. (See Item
7A. Management's Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition, Liquidity
and Capital Resources.) We have received, and we continue to seek, additional patent protection relating to our products, including
patents on our products, specific processes for making our products, formulations and particular uses of our products. However,
competitors may be able to invalidate, design around or otherwise circumvent our patents and sell competing products. For example,
there are a number of competing therapies currently on the market and more in clinical development that are different from
ENBREL but are used to treat the same inflammatory diseases treated by ENBREL. Although we continue to develop new
products, and obtain patent protection for these new product candidates, we may not be able to replace the revenue lost upon the
expiration of the patents on our current products.
From time to time, U.S. and other policymakers have proposed reforming the patent laws and regulations of their countries.
In September 2011, after years of Congressional debate regarding patent reform legislation, President Obama signed into law the
America Invents Act (the Act) considered by many to be the most substantial revision of U.S. patent law since 1952. The Act's