Amgen 2000 Annual Report Download - page 23

Financial Outlook
In December 1999 and early 2000, the Company filed regulatory
submissions for the use of ARANESPTM in patients with chronic renal
insufficiency and chronic renal failure in the U.S., the European
Union, Canada, Australia and New Zealand. The Company antici-
pates selling ARANESPTM, if approved, in most of these markets
beginning in 2001. Because the Company is unable to predict the
timing and the extent to which health care providers in the U.S.
may transition from administering EPOGEN®to ARANESPTM, 2001
sales guidance for EPOGEN®and ARANESPTM will be provided on a
combined basis. The Company expects the percentage increase
of 2001 sales of EPOGEN®and ARANESPTM combined over 2000
EPOGEN®sales to be in the range of high teens to low twenties.
Patients receiving treatment for end stage renal disease are cov-
ered primarily under medical programs provided by the federal
government. Therefore, EPOGEN®sales may also be affected by
future changes in reimbursement rates or a change in the basis for
reimbursement by the federal government. In addition, ARANESPTM
sales will be affected by government and private payor reimburse-
ment policies.
In 2001, the Company expects the NEUPOGEN®sales growth rate
to be in the high single digits. The Company believes that there is
a trend in some cancer settings towards the use of chemotherapy
treatments that are less myelosuppressive. Chemotherapy treat-
ments that are less myelosuppressive may require less NEUPOGEN®.
Future NEUPOGEN®demand is dependent primarily upon penetra-
tion of existing markets and the effects of competitive products.
NEUPOGEN®usage is expected to continue to be affected by cost
containment pressures from governments and private insurers on
health care providers worldwide. In addition, reported NEUPOGEN®
sales will continue to be affected by changes in foreign currency
exchange rates. In both domestic and foreign markets, sales of
NEUPOGEN®are dependent, in part, on the availability of reim-
bursement from third party payors such as governments (for
example, Medicare and Medicaid programs in the U.S.) and private
insurance plans. Therefore, NEUPOGEN®sales may also be affect-
ed by future changes in reimbursement rates or changes in the
bases for reimbursement.
INFERGEN®(Interferon alfacon-1) was launched in October 1997
for the treatment of chronic hepatitis C virus infection. There are
other treatments, including combination therapy, for this infection
against which INFERGEN®competes. The Company cannot predict
the extent to which it will maintain its share or further penetrate
this market.
For 2001, total product sales are expected to grow in the mid to
high teens, cost of sales is expected to be in the range of 11.5%
to 12.5% of total product sales, corporate partner revenues are
expected to be approximately the same as in 2000, research and
development expenses and SG&A expenses are each estimated to
be in the range of 25% to 27% of total product sales, the effective
tax rate is expected to be approximately 34%, and earnings per
share is expected to grow in the mid teens.
Estimates of future product sales, operating expenses and earn-
ings per share are necessarily speculative in nature and are difficult
to predict with accuracy.
Except for the historical information contained herein, the matters
discussed herein are by their nature forward-looking. Investors are
cautioned that forward-looking statements or projections made by
the Company, including those made in this document, are subject to
risks and uncertainties that may cause actual results to differ mate-
rially from those projected. Reference is made in particular to for-
ward-looking statements regarding product sales, earnings per
share and expenses. Amgen operates in a rapidly changing environ-
ment that involves a number of risks, some of which are beyond the
Company’s control. Future operating results and the Company’s
stock price may be affected by a number of factors, including,
without limitation: (i) the results of preclinical and clinical trials; (ii)
regulatory approvals of product candidates, new indications and
manufacturing facilities; (iii) reimbursement for Amgen’s products
by governments and private payors; (iv) health care guidelines and
policies relating to Amgen’s products; (v) intellectual property mat-
ters (patents) and the results of litigation; (vi) competition; (vii) fluc-
tuations in operating results and (viii) rapid growth of the Company.
These factors and others are discussed herein and in the sections
appearing under the heading “ Business - Factors That May Affect
Amgen” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2000, which sections are incorporated
herein by reference.
26
Management’s Discussion and Analysis
of Financial Condition and Results of Operations