Amgen 2002 Annual Report Download - page 34

Page 32
AMGEN 2002 ANNUAL REPORT
neutropenia in patients with cytotoxic chemotherapy for
malignancy. In January 2003, the Company commenced
launching Neulasta
™
in Europe on a country-by-country
basis as reimbursement has been established.
NEUPOGEN
®
is approved in the United States to:
decrease the incidence of infection, as manifested by febrile
neutropenia, in chemotherapy patients with non-myeloid
malignancies (the same use for which Neulasta
™
is approved);
to reduce the duration of neutropenia for patients under-
going myeloablative therapy followed by bone marrow
transplantation; to reduce the incidence and duration of
neutropenia-related consequences in patients with severe
chronic neutropenia; for use in mobilization of peripheral
blood progenitor cells for stem cell transplantation; and to
reduce the recovery time of neutrophils and the duration
of fever following chemotherapy treatment in patients being
treated for acute myelogenous leukemia. NEUPOGEN
®
is
approved in Europe, Canada, and Australia for these same
indications as well as for the treatment of neutropenia in
HIV patients receiving antiviral and/or other myelosup-
pressive medications.
The Company believes future NEUPOGEN
®
and
Neulasta
™
sales growth will depend on penetration of exist-
ing markets, the conversion of NEUPOGEN
®
patients to
Neulasta
™
, patient population growth, price increases, the
effects of competitive products or therapies, the develop-
ment of new treatments for cancer, and changes in foreign
currency exchange rates. In addition, future worldwide sales
growth may be affected by cost containment pressures from
governments and private insurers on health care providers,
as well as the availability of reimbursement by third-party
payors, including governments and private insurance plans.
Further, chemotherapy treatments that are less myelo-
suppressive may require less NEUPOGEN
®
/Neulasta
™
.
NEUPOGEN
®
competes with Neulasta
™
in the United States
and Europe. The Company believes that U.S. NEUPOGEN
®
sales have and will continue to be adversely impacted by the
launch of Neulasta
™
, however the Company cannot accu-
rately predict the extent to which healthcare providers will
use Neulasta
™
instead of NEUPOGEN
®
or the timing of
this conversion.
ENBREL
®
As a result of the Immunex acquisition in July
2002, the Company acquired the rights to ENBREL
®
in the
United States and Canada. ENBREL
®
is approved in the
United States for: the reduction of the signs and symptoms
in patients with moderately to severely active rheumatoid
arthritis (“RA”); treating moderately to severely active poly-
articular-course juvenile RA in patients who have had an
inadequate response to one or more disease modifying
antirheumatic drugs; inhibiting the progression of struc-
tural damage in patients with moderately to severely active
RA; and for reducing the signs and symptoms of active
arthritis in patients with psoriatic arthritis. The Company
believes that future sales of ENBREL
®
will depend on: lim-
its on the current supply of and sources of ENBREL
®
, pene-
tration of existing and new market opportunities, the
availability and extent of reimbursement by third-party
payors, the effects of competing products or therapies, and
any potential adverse developments discovered with respect
to ENBREL
®
’s safety.
ENBREL
®
is currently marketed in the United States and
Canada under a co-promotion agreement with Wyeth and,
accordingly, Wyeth receives a share of the profits from sales
of ENBREL
®
. In late December 2002, the FDA approved
the manufacturing facility and the related third-party fill
and finish facilities. Because of these plant approvals, addi-
tional supply of ENBREL
®
is available to patients.
Trends expected to impact future operations
Future operating results of the Company may be impacted
by a number of factors. The following trends in our busi-
ness are expected to impact our future liquidity and results
of operations:
•combined NEUPOGEN
®
and Neulasta
™
sales are expected
to increase; however, U.S. NEUPOGEN
®
sales are expected
to continue to decrease due to conversion of patients to
Neulasta
™
•cost of sales as a percentage of product sales is expected
to continue to increase due to higher manufacturing and
royalty expense for ENBREL
®
•SG&A expenses are expected to continue to be impacted
by seasonal trends in the fourth quarter that increase
expenses over the three prior quarters
•non-cash amortization expense of acquired identifiable
intangible assets, principally related to ENBREL
®
, will be
approximately $340 million, pre-tax, on an annual basis