Amgen 2012 Annual Report Download - page 58

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various provisions take effect over an 18-month period. The Act changes the current “first-to-invent” system to a system that
awards a patent to the “first-inventor-to-file” for an application for a patentable invention. This change alters the pool of available
materials that can be used to challenge patents and eliminates the ability to rely on prior research work in order to lay claim to
patent rights. Disputes as to whether the first filer is in fact the true inventor will be resolved through newly implemented derivation
proceedings. The Act also creates mechanisms to allow challenges to newly issued patents in the patent office in post-grant
proceedings and new inter partes reexamination proceedings. Although many of the changes bring U.S. law into closer harmony
with European and other national patent laws, the new bases and procedures may make it easier for competitors to challenge our
patents, which could result in increased competition and have a material adverse effect on our product sales, business and results
of operations. The changes may also make it harder to challenge third-party patents and place greater importance on being the
first inventor to file a patent application on an invention.
Our stock price is volatile.
Our stock price, like that of our peers in the biotechnology and pharmaceutical industries, is volatile. Our revenues and
operating results may fluctuate from period to period for a number of reasons. Events such as a delay in product development or
even a relatively small revenue shortfall may cause financial results for a period to be below our expectations or projections. As
a result, our revenues and operating results and, in turn, our stock price may be subject to significant fluctuations.
We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.
The capital and credit markets may experience extreme volatility and disruption which may lead to uncertainty and liquidity
issues for both borrowers and investors. We may access the capital markets to supplement our existing funds and cash generated
from operations in satisfying our needs for working capital; capital expenditure and debt service requirements; our plans to pay
dividends and repurchase stock; and other business initiatives we plan to strategically pursue, including acquisitions and licensing
activities. In the event of adverse capital and credit market conditions, we may be unable to obtain capital market financing on
similar favorable terms, or at all, which could have a material adverse effect on our business and results of operations. Changes
in credit ratings issued by nationally recognized credit rating agencies could adversely affect our cost of financing and have an
adverse effect on the market price of our securities.
Guidelines and recommendations published by various organizations can reduce the use of our products.
Government agencies promulgate regulations and guidelines directly applicable to us and to our products. However,
professional societies, HTA organizations, practice management groups, insurance carriers, physicians, private health/science
foundations and organizations involved in various diseases from time to time may also publish guidelines or recommendations to
healthcare providers, administrators and payers, and patient communities. Recommendations by government agencies or those
other groups/organizations may relate to such matters as usage, dosage, route of administration and use of related therapies as
well as reimbursement of our products by government and private payers. Recommendations or guidelines that are followed by
patients, healthcare providers and payers could result in decreased use and/or dosage of our products. Some examples of agency
and organizational guidelines include:
• In August 2012, the Kidney Disease: Improving Global Outcomes group (KDIGO), a not-for-profit foundation managed
by the National Kidney Foundation (NKF), published its updated global anemia guidelines in light of new study results,
particularly the data from the TREAT trial, which had become available since the NKF-Kidney Disease Outcomes
Quality Initiative (KDOQI™) clinical practice guidelines and clinical practice recommendations for anemia in CKD
were released in 2007. The new guidelines recommend, among other things, that ESAs not be used to maintain Hb
concentrations above 11.5 g/dL in adult patients with CKD. KDOQI has announced that it is preparing a U.S. commentary
on the KDIGO global anemia guidelines which is expected to be released in 2013.
• In April 2012, the American Society of Clinical Oncology (ASCO) published a review in which it identified the top five
opportunities to improve the quality and value of cancer care by curbing use of common tests and treatments that are
not supported by clinical evidence. Among ASCO's suggestions in this review was that oncologists should avoid
administering white blood cell stimulating factors (such as NEUPOGEN® and Neulasta®) to patients who have a very
low risk for febrile neutropenia, a position consistent with ASCO's existing guidelines for the use of white blood cell
stimulating factors.
In addition, HTA organizations, such as NICE in the UK and the Canadian Agency for Drugs and Technologies in Health,
make reimbursement recommendations to payers in their jurisdictions based on the clinical effectiveness, cost-effectiveness and
service impact of new, emerging and existing medicines and treatments.