Amgen 2002 Annual Report Download - page 37

Page 35
AMGEN 2002 ANNUAL REPORT
required to enter into third-party licenses for the infringed
product or technology, or we could be required to cease
using the technology or product in dispute. In addition, we
cannot guarantee that such licenses will be available on
terms acceptable to us.
Our success depends in part on our ability to obtain and
defend patent rights and other intellectual property rights
that are important to the commercialization of our prod-
ucts and product candidates. We have filed applications for
a number of patents and have been granted patents or
obtained rights relating to erythropoietin, recombinant
G-CSF, darbepoetin alfa, pegfilgrastim, etanercept, and our
other products and potential products. We market our ery-
thropoietin, recombinant G-CSF, darbepoetin alfa, pegfil-
grastim, and etanercept products as EPOGEN
®
, NEUPOGEN
®
,
Aranesp
®
, Neulasta
™
, and ENBREL
®
, respectively. In the
United States, we have been issued or obtained rights to sev-
eral patents relating to erythropoietin that generally cover
DNA and host cells, processes for making erythropoietin,
various product claims to erythropoietin, cells that make
levels of erythropoietin, and pharmaceutical compositions
of erythropoietin. We have also been issued or obtained
rights to U.S. patents relating to G-CSF that cover aspects
of DNA, vectors, cells, processes, polypeptides, methods of
treatment using G-CSF polypeptides, methods of enhanc-
ing bone marrow transplantation and treating burn wounds,
methods for recombinant production of G-CSF, and analogs
of G-CSF. We have been issued or obtained rights to U.S.
and European patents pertaining to pegfilgrastim (pegylated
G-CSF). We also have been granted or obtained rights to
a patent in Europe relating to erythropoietin, a patent in
Europe relating to G-CSF, two patents in Europe relating
to darbepoetin alfa and hyperglycosylated erythropoietic
proteins, and a patent in the United States and a patent in
Europe relating to anakinra. We have been granted or have
obtained rights to patents relating to etanercept in the
United States that generally cover DNA (issued in 1995 and
2000); products (issued in 1999 and 2001); and processes
for using (issued 1997). These patents have varying expi-
ration dates, with the latest United States etanercept related
patent expiring in 2014. We have been granted or have
obtained rights to patents relating to etanercept in Europe.
The latest European patent relating to etanercept expires
in 2011.
Limits on supply for ENBREL
®
may constrain
ENBREL
®
sales.
U.S. and Canadian supply of ENBREL
®
is impacted by many
manufacturing and production variables, such as the tim-
ing and actual number of production runs, production suc-
cess rate, bulk drug yield, and the timing and outcome of
product quality testing. For example, in the second quar-
ter of 2002, Immunex Corporation, (the prior owner of
ENBREL
®
), experienced a brief period where no ENBREL
®
was
available to fill patient prescriptions, primarily due to vari-
ation in the expected production yield from BI Pharma.
Once supply of ENBREL
®
became available, Immunex
resumed filling orders on a first come, first served basis. If
we are at any time unable to provide an uninterrupted sup-
ply of ENBREL
®
to patients, we may lose patients, physi-
cians may elect to prescribe competing therapeutics instead
of ENBREL
®
, our ENBREL
®
sales will be adversely affected,
any of which could materially and adversely affect our results
of operations. See “—We are dependent on third parties for
a significant portion of our supply and the fill and finish
of ENBREL
®
.” and “— Our sources of supply for ENBREL
®
are limited.”
We are dependent on third parties for a significant
portion of our supply and the fill and finish of
ENBREL
®
.
We currently manufacture ENBREL
®
at our Rhode Island
manufacturing facility. However, we also depend on third
parties for a significant portion of our ENBREL
®
supply as
well as for the fill and finish of ENBREL
®
that we manu-
facture. BI Pharma is currently our sole third-party supplier
of ENBREL
®
; accordingly, our U.S. and Canadian supply of
ENBREL
®
is currently significantly dependent on BI Pharma’s
production schedule for ENBREL
®
. We would be unable to
produce ENBREL
®
in sufficient quantities to substantially
offset shortages in BI Pharma’s scheduled production if BI
Pharma or other third-party manufacturers used for ENBREL
®
production were to cease or interrupt production or ser-
vices or otherwise fail to supply materials, products, or ser-
vices to us for any reason, including due to labor shortages
or disputes, due to regulatory requirements or action, or due
to contamination of product lots or product recalls. This in
turn could materially reduce our ability to satisfy demand