Amgen 2002 Annual Report Download - page 29

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Page 27
AMGEN 2002 ANNUAL REPORT
sales for Neulasta
™
and NEUPOGEN
®
for 2002 was pri-
marily driven by demand for Neulasta
™
, which reflects
the conversion of NEUPOGEN
®
patients to Neulasta
™
and
patient population growth. Combined sales also benefited,
to a lesser extent, from wholesaler inventory changes and
higher NEUPOGEN
®
prices in the United States.
Neulasta
™
sales in 2002 were $463.5 million.
Worldwide NEUPOGEN
®
sales in 2002 were $1,379.6 mil-
lion, an increase of $33.2 million or 2% over the prior year
NEUPOGEN
®
sales. In 2002, U.S. NEUPOGEN
®
sales were
$1,041.7 million, a decrease of $8.9 million or 1% over 2001
sales. This decrease was primarily due to lower U.S.
NEUPOGEN
®
demand, partially offset by favorable whole-
saler inventory changes. The
Company believes that
U.S. NEUPOGEN
®
demand
declined at a mid-single
digit rate from 2001. The
decrease in U.S. demand was
primarily impacted by the
conversion of NEUPOGEN
®
patients to Neulasta
™
, par-
tially offset by higher
NEUPOGEN
®
prices in the
United States. The Company
believes that, as demand for
Neulasta
™
increased subse-
quent to its U.S. launch,
U.S. NEUPOGEN
®
demand decreased at an accelerated rate
due to the conversion of patients to Neulasta
™
. In the fourth
quarter of 2002, combined Neulasta
™
and worldwide
NEUPOGEN
®
sales were $514.0 million, an increase of
53% over worldwide NEUPOGEN
®
only sales in the prior
year period. The Company believes this increase in com-
bined sales was negatively impacted by a decline in U.S.
NEUPOGEN
®
demand in the low-20% range, driven by
conversion of patients to Neulasta
™
(see “Financial Outlook
—Trends expected to impact future operations”).
Worldwide NEUPOGEN
®
sales in 2001 were $1,346.4
million, an increase of $122.7 million or 10% over the
prior year. This increase was primarily due to worldwide
demand growth, which includes the effect of higher prices
in the United States.
ENBREL
®
The Company began recording ENBREL
®
sales
on July 16, 2002, subsequent to the close of the Immunex
acquisition. For the period from July 16, 2002 through
December 31, 2002, ENBREL
®
sales were $362.1 million. In
2002, ENBREL
®
sales were impacted by supply constraints.
Corporate partner revenues
Corporate partner revenues were $200.3 million in 2002,
a decrease of $51.7 million or 21% over the prior year.
Corporate partner revenues include $174.6 million related
to amounts earned from Kirin-Amgen, Inc. (“Kirin-Amgen”)
in 2002. The overall decrease in corporate partner revenues
was primarily due to lower revenues earned from Kirin-
Amgen, and to a lesser extent, lower revenues earned under
other collaboration agreements.
In 2001, corporate partner revenues were $252.0 mil-
lion, an increase of $5.8 million or 2% over the prior year.
Corporate partner revenues include $210.1 million related
to amounts earned from Kirin-Amgen in 2001. The over-
all increase in corporate partner revenues was due to slightly
higher revenues, primarily related to INFERGEN
®
, substan-
tially offset by lower amounts earned from Kirin-Amgen.
Royalty income
Substantially all royalty income earned by Amgen relates
to amounts received from sales of Epoetin alfa by Johnson
& Johnson in the United States for use in non-dialysis
settings. Royalty income was $331.5 million in 2002, an
increase of $78.8 million or 31% over the prior year. This
increase was principally due to higher royalties earned from
Johnson & Johnson relating to its sales of Epoetin alfa.
In 2001, royalty income was $252.7 million, an increase
of $71.7 million or 40% over the prior year. This increase
was primarily due to higher royalties from Johnson &
Johnson relating to its sales of Epoetin alfa.
Cost of sales
Cost of sales as a percentage of product sales was 14.7%,
12.6%, and 12.8% for 2002, 2001, and 2000, respectively.
The increase in 2002 was principally due to the impact of
higher manufacturing costs and royalty expense related to
ENBREL
®
compared to Amgen’s other products. In addition,
during 2002 the Company recorded the inventory acquired
from Immunex at its estimated fair market value (see
NEUPOGEN®/Neulasta™ Sales
($ in millions)
2002
2001
2000
1999
1998
98 99 00 01 02
$1,843.1
1,346.4
1,223.7
1,256.6
1,116.6