Amgen 2015 Annual Report Download - page 4

Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1799
www.amgen.com © 2016 Amgen Inc. All rights reserved.
Forward-Looking Statements: This communication contains forward-looking statements that are based on Amgen management’s current expectations and beliefs. These
statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described. All statements, other than
statements of historical fact, are statements that could be deemed forward-looking statements, including estimates of revenues, operating margins, capital expenditures, cash,
other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and
outcomes and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described
in the Securities and Exchange Commission reports filed by Amgen, including our Amgen’s annual report on Form 10-K for the year ended December 31, 2015 (provided with this
communication) and any subsequent periodic reports on Form 10-Q and Form 8-K. Unless otherwise noted, Amgen is providing this information as of March 23, 2016, and does
not undertake any obligation to update any forward-looking statements contained in this communication as a result of new information, future events or otherwise. No forward-
looking statement can be guaranteed and actual results may differ materially from those we project. Discovery or identification of new product candidates or development of new
indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product
candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, preclinical results do not guarantee safe and
effective performance of product candidates in humans. The complexity of the human body cannot be perfectly, or sometimes, even adequately modeled by computer or cell
culture systems or animal models. The length of time that it takes for us to complete clinical trials and obtain regulatory approval for product marketing has in the past varied and
we expect similar variability in the future. Even when clinical trials are successful, regulatory authorities may question the sufficiency for approval of the trial endpoints we have
selected. We develop product candidates internally and through licensing collaborations, partnerships and joint ventures. Product candidates that are derived from relationships
may be subject to disputes between the parties or may prove to be not as effective or as safe as we may have believed at the time of entering into such relationship. Also, we or
others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our results may be affected by our ability to successfully
market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently
launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of
our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance
plans and managed care providers, and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and
healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government
regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by
government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax
liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the US government, we could become subject to significant sanctions.
Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or
circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing
activities at a few key facilities and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current
products and product candidate development. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and
development of new products. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. The discovery of
significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products
and on our business and results of operations. Our efforts to acquire other companies or products and to integrate the operations of companies we have acquired may not be
successful. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all. We are increasingly dependent on information technology
systems, infrastructure and data security. Our stock price is volatile and may be affected by a number of events. Our business performance could affect or limit the ability of our
Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.
Reconciliation of Future GAAP to Adjusted Financial Measures
Management has presented herein certain forward-looking statements about the Company’s future financial performance that include non-GAAP (or “as-adjusted”) operating
margin and net income for various years through December 31, 2018. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income, from
the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures are a
matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to
present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial
measure because management cannot reliably predict all of the necessary components of such GAAP measures. Historically, management has excluded the following items from
these non-GAAP financial measures, and such items may also be excluded in future periods and could be significant:
• Expenses related to the acquisition of businesses, including amortization and / or impairment of acquired intangible assets, including in-process research and development,
adjustments to contingent consideration, integration costs, severance and retention costs and transaction costs;
• Charges associated with restructuring or cost-saving initiatives, including but not limited to asset impairments, accelerated depreciation, severance costs and lease
abandonment charges;
• Legal settlements or awards;
• The tax effect of the above items; and
• Non-routine settlements with tax authorities.