Amgen 2015 Annual Report Download - page 38

30
Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales.
Manufacturing biologic human therapeutic products is difficult, complex and highly regulated. We currently are involved in
the manufacture of many of our products and plan to manufacture many of our product candidates. In addition, we currently use
third-party contract manufacturers to produce, or assist in the production of, a number of our products, and are using contract
manufacturers to produce, or assist in the production of, a number of our late-stage product candidates and drug delivery devices.
(See Item 1. Business—Manufacturing, Distribution and Raw Materials—Manufacturing.) Our ability to adequately and timely
manufacture and supply our products and product candidates is dependent on the uninterrupted and efficient operation of our
facilities and those of our third-party contract manufacturers, which may be impacted by:
• capacity of manufacturing facilities;
• contamination by microorganisms or viruses, or foreign particles from the manufacturing process;
• natural or other disasters, including hurricanes, earthquakes, volcanoes or fires;
• labor disputes or shortages, including the effects of health emergencies, natural disasters, or otherwise;
• compliance with regulatory requirements;
• changes in forecasts of future demand;
• timing and actual number of production runs and production success rates and yields;
• updates of manufacturing specifications;
• contractual disputes with our suppliers and contract manufacturers;
• timing and outcome of product quality testing;
• power failures and/or other utility failures; and/or
• breakdown, failure or substandard performance or improper installation or operation of equipment.
If the efficient manufacture and supply of our products or product candidates is interrupted, we may experience delayed
shipments, delays in our clinical trials, supply constraints, stock-outs, adverse event trends, contract disputes and/or recalls of our
products. From time to time we have initiated voluntary recalls of certain lots of our products. For example, in July 2014, we
initiated a voluntary recall of an Aranesp® lot distributed in the EU after particles were detected in a quality control sample following
distribution of that lot. If we are at any time unable to provide an uninterrupted supply of our products to patients, we may lose
patients and physicians may elect to prescribe competing therapeutics instead of our products, which could have a material adverse
effect on our product sales, business and results of operations.
Our manufacturing processes and those of our third-party contract manufacturers must undergo regulatory approval processes
and are subject to continued review by the FDA and other regulatory authorities. It can take longer than five years to build, validate
and license a new manufacturing plant and it can take longer than three years to qualify and license a new contract manufacturer.
In 2015, we initiated the drug substance conformance campaign to facilitate licensure at our monoclonal antibody manufacturing
facility in Singapore. This Singapore facility will utilize a novel manufacturing technology that has not been previously approved
by the FDA or other regulatory authorities. We have also begun construction on an additional new facility at the site in Singapore
to enable the manufacture of the active pharmaceutical ingredient for Kyprolis®. These facilities in Singapore will require licensure
by various regulatory authorities. If we are unable to obtain needed licenses for either of these facilities on a timely basis, it could
adversely affect our ability to achieve our planned risk mitigation and cost reductions which, as a result, could have a material
adverse effect our product sales, business and results of operations.
If regulatory authorities determine that we or our third-party contract manufacturers or certain of our third-party service
providers have violated regulations or if they restrict, suspend or revoke our prior approvals, they could prohibit us from
manufacturing our products or conducting clinical trials or selling our marketed products until we or the affected third-party
contract manufacturers or third-party service providers comply, or indefinitely. Such issues may also delay the approval of product
candidates we have submitted for regulatory review, even if such product candidates are not directly related to the products, devices
or processes at issue with regulators. Because our third-party contract manufacturers and certain of our third-party service providers
are subject to the FDA and foreign regulatory authorities, alternative qualified third-party contract manufacturers and third-party
service providers may not be available on a timely basis or at all. If we or our third-party contract manufacturers or third-party
service providers cease or interrupt production or if our third-party contract manufacturers and third-party service providers fail
to supply materials, products or services to us, we may experience delayed shipments, supply constraints, stock-outs and/or recalls
of our products. Additionally, we distribute a substantial volume of our commercial products through our primary distribution
centers in Louisville, Kentucky for the United States and in Breda, the Netherlands for Europe and much of the rest of the world.
We also conduct all the labeling and packaging of our products distributed in Europe and much of the rest of the world in Breda.