Amgen 2002 Annual Report Download - page 36

Page 34
AMGEN 2002 ANNUAL REPORT
1997, CMS instituted a reimbursement change for EPOGEN
®
which materially and adversely affected our EPOGEN
®
sales
until the policies were revised.
Our current products and products in development
cannot be sold if we do not obtain and maintain
regulatory approval.
We conduct research, preclinical testing, and clinical tri-
als and we manufacture and contract manufacture our
product candidates. We also manufacture and contract
manufacture, price, sell, distribute, and market or co-mar-
ket our products for their approved indications. These activ-
ities are subject to extensive regulation by numerous state
and federal governmental authorities in the United States,
such as the FDA and CMS, as well as in foreign countries,
including Europe. Currently, we are required in the United
States and in foreign countries to obtain approval from
those countries’ regulatory authorities before we can mar-
ket and sell our products in those countries. In our experi-
ence, obtaining regulatory approval is costly and takes many
years, and after it is obtained, it remains costly to maintain.
The FDA and other U.S. and foreign regulatory agencies
have substantial discretion to terminate clinical trials,
require additional testing, delay or withhold registration and
marketing approval, require changes in labeling of our
products and mandate product withdrawals. All of our mar-
keted products are currently approved in the United States
and most are approved in Europe and in other foreign coun-
tries for specific uses. We currently manufacture and mar-
ket all our approved products, and we plan to manufacture
and market many of our potential products. Even though
we have obtained regulatory approval for our marketed
products, these products and our manufacturing processes
are subject to continued review by the FDA and other reg-
ulatory authorities. In addition, ENBREL
®
is manufactured
both by us at our Rhode Island manufacturing facility and
by a third-party contract manufacturer, BI Pharma, and
fill and finish of bulk product produced at our Rhode Island
manufacturing facility is done by third-party service pro-
viders. BI Pharma and these third-party service providers
are subject to FDA regulatory authority. See “— Our sources
of supply for ENBREL
®
are limited.” In addition, later dis-
covery of unknown problems with our products or manu-
facturing processes or those of our contract manufacturers
or third-party service providers could result in restrictions
on such products or manufacturing processes, including
potential withdrawal of the products from the market. If
regulatory authorities determine that we or our contract
manufacturers or third-party service providers have vio-
lated regulations or if they restrict, suspend, or revoke our
prior approvals, they could prohibit us from manufactur-
ing or selling our marketed products until we or our con-
tract manufacturers or third-party service providers comply
or indefinitely. In addition, if regulatory authorities deter-
mine that we have not complied with regulations in the
research and development of a product candidate, then
they may not approve the product candidate and we will
not be able to market and sell it. If we are unable to mar-
ket and sell our products or product candidates, our busi-
ness and results of operations would be materially and
adversely affected.
If our intellectual property positions are challenged,
invalidated or circumvented, or if we fail to prevail
in present and future intellectual property litigation,
our business could be adversely affected.
The patent positions of pharmaceutical and biotechnology
companies can be highly uncertain and often involve com-
plex legal, scientific, and factual questions. To date, there
has emerged no consistent policy regarding breadth of
claims allowed in such companies’ patents. Third parties may
challenge, invalidate, or circumvent our patents and patent
applications relating to our products, product candidates,
and technologies. In addition, our patent positions might
not protect us against competitors with similar products or
technologies because competing products or technologies
may not infringe our patents. For certain of our product
candidates, there are third parties who have patents or
pending patents that they may claim prevent us from
commercializing these product candidates in certain terri-
tories. Patent disputes are frequent, costly and can preclude
commercialization of products. We are currently, and in
the future may be, involved in patent litigation. For exam-
ple, we are involved in ongoing patent infringement law-
suits against Transkaryotic Therapies, Inc. (“TKT”) and
Aventis with respect to our erythropoietin patents. If we ulti-
mately lose these or other litigations we could be subject
to competition and/or significant liabilities, we could be