Amgen 2015 Annual Report Download - page 34

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For example, since 2006, when adverse safety results involving ESAs were observed, ESAs continue to be the subject of
ongoing review and scrutiny. Reviews by regulatory authorities of the risk-benefit profile of ESAs has resulted in, and may continue
to result in, changes to ESA labeling, our ESA REMS and usage in both the oncology and nephrology clinical settings.
In addition to our innovative products, we are working to develop and commercialize biosimilar versions of nine products
currently manufactured, marketed and sold by other pharmaceutical companies. In many markets there is not yet a legislative or
regulatory pathway for the approval of biosimilars. In the United States, the ACA provided for such a pathway; while the FDA
continues to implement it, significant questions remain as to how products will be approved under the pathway. (See We currently
face competition from biosimilars and expect to face increasing competition in the future.) Delays or uncertainties in the
development of such pathways could result in delays or difficulties in getting our products approved by regulatory authorities,
subject us to unanticipated development costs or otherwise reduce the value of the investments we have made in the biosimilars
area.
We may not be able to develop commercial products despite significant investments in R&D.
Amgen invests heavily in R&D. Successful product development in the biotechnology industry is highly uncertain, and very
few R&D projects produce a commercial product. Product candidates (including biosimilar product candidates) or new indications
for existing products (collectively, “product candidates”) that appear promising in the early phases of development may fail to
reach the market for a number of reasons, such as:
• the product candidate did not demonstrate acceptable clinical trial results even though it demonstrated positive preclinical
trial results, for reasons that could include changes in the standard of care of medicine;
• the product candidate was not effective or more effective than currently available therapies in treating a specified condition
or illness;
• 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;
• the biosimilar product candidate fails to demonstrate the requisite biosimilarity to the applicable reference product, or is
otherwise determined to be unacceptable for purposes of safety or efficacy, to gain approval;
• 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 pathway to regulatory approval or reimbursement for product candidates is uncertain or not well-defined.
A number of our product candidates have failed or been discontinued at various stages in the product development process.
For example, in May 2015, we terminated our participation in the co-development and commercialization of brodalumab with
AstraZeneca. The decision was based on events of suicidal ideation and behavior in the brodalumab program, which we believe
likely would necessitate restrictive labeling that would limit the appropriate patient population. Inability to bring a product to
market or a significant delay in the expected approval and related launch date of a new product for any of the reasons discussed
could potentially have a negative impact on our product sales and earnings and could result in a significant impairment of in-
process research and development (IPR&D) or other intangible assets.
We must conduct clinical trials in humans before we can commercialize and sell any of our product candidates or existing
products for new indications.
Before we can sell any products, we must conduct clinical trials to demonstrate that our product candidates are safe and
effective for use in humans. The results of those clinical trials are used as the basis to obtain approval from regulatory authorities
such as the FDA and EMA. (See Our current products and products in development cannot be sold without regulatory approval.)
We are required to conduct clinical trials using an appropriate number of trial sites and patients to support the product label claims.
The length of time, number of trial sites and patients required for clinical trials vary substantially and therefore, we may spend
several years and incur substantial expense in completing certain clinical trials. In addition, we may have difficulty finding a
sufficient number of clinical trial sites and subjects to participate in our clinical trials, particularly if competitors are conducting
clinical trials in similar patient populations. Delays in planned clinical trials can result in increased development costs, associated
delays in regulatory approvals and in product candidates reaching the market and revisions to existing product labels.