Amgen 2002 Annual Report Download - page 40

Page 38
AMGEN 2002 ANNUAL REPORT
varying interpretations by scientists, medical personnel,
regulatory personnel, statisticians, and others which may
delay, limit, or prevent further clinical development or reg-
ulatory approvals of a product candidate. Also, the length
of time that it takes for us to complete clinical trials and
obtain regulatory approval for product marketing has in
the past varied by product and by the intended use of a
product. We expect that this will likely be the case with
future product candidates and we cannot predict the length
of time to complete necessary clinical trials and obtain reg-
ulatory approval. See “— Our current products and prod-
ucts in development cannot be sold if we do not obtain and
maintain regulatory approval.”
We may be required to perform additional clinical
trials or change the labeling of our products if we or
others identify side effects after our products are on
the market.
If we or others identify side effects after any of our prod-
ucts are on the market, or if manufacturing problems occur,
regulatory approval may be withdrawn and reformulation
of our products, additional clinical trials, changes in label-
ing of our products, and changes to or re-approvals of our
manufacturing facilities may be required, any of which
could have a material adverse effect on sales of the affected
products and on our business and results of operations.
For example, because ENBREL
®
has only been marketed
since 1998, its long-term effects on the development or
course of serious infection, malignancy, and autoimmune
disease are largely unknown and more rarely occurring
side effects may not be known. In May 1999, Immunex
announced an update to the package insert for ENBREL
®
to
advise doctors not to start using ENBREL
®
in patients who
have an active infection, and for doctors to exercise caution
when considering using ENBREL
®
in patients with a history
of recurring infections or with underlying conditions that
may predispose patients to infections. In October 2000,
Immunex again revised the package insert for ENBREL
®
in
response to spontaneous adverse events reported to Immunex,
including rare cases of hematologic and central nervous
system disorders. The causal relationship between these
adverse events and therapy with ENBREL
®
remains unclear.
In January 2001, Immunex revised the package insert for
ENBREL
®
to advise doctors that rare cases of central nervous
system disorders, including seizures, and rare cases of tuber-
culosis have also been reported in patients using ENBREL
®
.
It is possible that additional spontaneous adverse events
will be reported to us as experience with ENBREL
®
contin-
ues. If we or others identify new adverse events for patients
treated with ENBREL
®
, additional precautions, warnings,
or other changes in the label for ENBREL
®
may be required.
We may be required to defend lawsuits or pay
damages for product liability claims.
Product liability is a major risk in testing and marketing
biotechnology and pharmaceutical products. We face sub-
stantial product liability exposure in human clinical trials
and for products that we sell after regulatory approval.
Product liability claims, regardless of their merits, could be
costly and divert management’s attention, and adversely
affect our reputation and the demand for our products.
Our operating results may fluctuate, and this
fluctuation could cause financial results to be below
expectations.
Our operating results may fluctuate from period to period
for a number of reasons. In budgeting our operating expenses,
we assume that revenues will continue to grow; however,
some of our operating expenses are fixed in the short term.
Because of this, even a relatively small revenue shortfall
may cause a period’s results to be below our expectations
or projections. A revenue shortfall could arise from any
number of factors, some of which we cannot control. For
example, we may face:
•lower than expected demand for our products
•inability to provide adequate supply of our products
•changes in the government’s or private payors’ reim-
bursement policies for our products
•changes in wholesaler buying patterns
•increased competition from new or existing products
•fluctuations in foreign currency exchange rates
•changes in our product pricing strategies
Of these, we would only have control over changes in
our product pricing strategies and, of course, there may be
other factors that affect our revenues in any given period.