Amgen 2002 Annual Report Download - page 38

Page 36
AMGEN 2002 ANNUAL REPORT
for ENBREL
®
, which could materially and adversely affect
our operating results. Factors that will affect our actual
supply of ENBREL
®
at any time include, without limitation,
the following:
•BI Pharma does not produce ENBREL
®
continuously;
rather, it produces the drug through a series of periodic
campaigns throughout the year. The amount of com-
mercial inventory available to us at any time depends on
a variety of factors, including the timing and actual num-
ber of BI Pharma’s production runs, level of production
yields and success rates, timing and outcome of product
quality testing, and the amount of vialing capacity.
•BI Pharma schedules the vialing production runs for
ENBREL
®
in advance, based on the expected timing and
yield of bulk drug production runs. Therefore, if BI
Pharma realizes production yields beyond expected lev-
els, or provides additional manufacturing capacity of
ENBREL
®
, it may not have sufficient vialing capacity
for all of the ENBREL
®
bulk drug that it produces. As
a result, even if we are able to increase our supply of
ENBREL
®
bulk drug, BI Pharma may not be able to fill
and finish the extra bulk drug in time to prevent any
supply interruptions.
In addition, we are dependent on third parties for fill
and finish of ENBREL
®
bulk drug manufactured at our
Rhode Island facility. If third-party fill and finish service
providers are unable to provide sufficient capacity or oth-
erwise unable to provide services to us, then supply of
ENBREL
®
could be adversely affected. See “—Limits on sup-
ply for ENBREL
®
may constrain ENBREL
®
sales.” and “— Our
sources of supply for ENBREL
®
are limited.”
Our sources of supply for ENBREL
®
are limited.
ENBREL
®
supply for the United States and Canada is pro-
duced by us at our Rhode Island facility and by BI Pharma,
currently our sole source third-party supplier. See “—We
are dependent on third parties for a significant portion of
our supply and the fill and finish of ENBREL
®
.” In addi-
tion, our current plan includes construction of a new large-
scale cell culture commercial manufacturing facility at the
site of the current Rhode Island manufacturing facility.
We have entered into a manufacturing agreement with
Genentech, Inc. (“Genentech”) to produce ENBREL
®
at
Genentech’s manufacturing facility in South San Francisco,
California. The manufacturing facility is subject to FDA
approval, which the parties hope to obtain in 2004. Under
the terms of the agreement, Genentech will produce
ENBREL
®
through 2005, with an extension through 2006
by mutual agreement. In addition, Wyeth is constructing
a new manufacturing facility in Ireland, which is expected
to increase the U.S. and Canadian supply of ENBREL
®
. If
additional manufacturing capacity at the Rhode Island site,
or pursuant to the Genentech agreement, or if the Ireland
manufacturing facility is not completed, or if these manu-
facturing facilities do not receive FDA approval before we
encounter supply constraints, our ENBREL
®
sales would be
restricted which could have a material adverse effect on our
results of operations.
We face substantial competition, and others may
discover, develop, acquire or commercialize products
before or more successfully than we do.
We operate in a highly competitive environment. Our
products compete with other products or treatments
for diseases for which our products may be indicated.
For example, ENBREL
®
competes in certain circumstances
with rheumatoid arthritis products marketed by Abbott
Laboratories/Knoll, Centocor Inc./Johnson & Johnson,
Aventis, Pharmacia, and Merck as well as the generic drug
methotrexate and may face competition from potential ther-
apies being developed by Biogen, among others. Further,
we believe that some of our newly approved products and
late stage product candidates may face competition when
and as they are approved and marketed. For example, in the
United States, Aranesp
®
competes with an Epoetin alfa
product marketed by Johnson & Johnson in certain anemia
markets and Kineret
®
competes in certain circumstances
with rheumatoid arthritis products marketed by Abbott
Laboratories/Knoll, Centocor Inc./Johnson & Johnson and
others. Additionally, some of our competitors, including
biotechnology and pharmaceutical companies, market prod-
ucts or are actively engaged in research and development
in areas where we are developing product candidates. Large
pharmaceutical corporations may have greater clinical,
research, regulatory, manufacturing, and marketing resources
than we do. In addition, some of our competitors may have
technical or competitive advantages over us for the devel-
opment of technologies and processes. These resources may