Amgen 2004 Annual Report Download - page 33

demand for Neulasta® . Worldwide sales of Neulasta®
increased 39 percent in 2004 primarily driven by
demand, which benefi ted from new clinical data
demonstrating the value of fi rst-cycle use. U.S. sales
growth was impacted by higher incentives earned by
customers attaining higher sales volumes and growth
under performance-based contracts. The decrease in
worldwide NEUPOGEN®
sales was primarily due to
a decline in demand, which refl ects the conversion of
NEUPOGEN® patients to Neulasta® .
ENBREL
®
sales in 2004 increased 46 percent to
$1.9 billion. Sales growth for ENBREL
®
was driven
by demand benefi ting from ENBREL
®
’s competitive
profi le and the signifi cant growth of biologics in
the rheumatology and dermatology markets. In
the dermatology market, ENBREL
®
has grown
signifi cantly since its approval for moderate to severe
psoriasis in April 2004 and has become the number
one prescribed systemic therapy in this market.
Financial performance Amgen’s adjusted earnings
per share rose 26 percent in 2004 to $2.40 from
$1.90 in 2003. Under generally accepted accounting
principles in the United States (GAAP), Amgen’s
reported earnings per share increased 7 percent in
2004 to $1.81 versus $1.69 in 2003. Adjusted earn-
ings per share for 2003 and 2004 exclude certain
expenses related to the acquisitions of Immunex
Corporation and Tularik Inc. These expenses and
other items are itemized on the reconciliation table
that follows this section.
Amgen’s cash fl ow from operations totaled $3.7
billion in 2004. As of December 31,2004, our cash
and short-term marketable securities totaled $5.8
billion. We believe that existing funds, cash generated
from operations, and existing sources of and access to
fi nancing are adequate to satisfy our working capital,
capital expenditure and debt service requirements
for the foreseeable future, as well as to support our
stock repurchase program. However, in order to
provide for greater fi nancial fl exibility and liquidity,
we may raise additional capital from time to time.
In 2004, Amgen raised approximately $2.0 billion
by offering senior notes, $1.0 billion with a fi ve-year
maturity and $1.0 billion with a ten-year maturity.
We intend to use the net proceeds for open market
purchases of shares under our stock repurchase
programs as well as for general corporate purposes.
Investing in our business Our 2004 research
and development (R&D) expenses increased 23
percent to $2.0 billion and were 20 percent of the
year’s total product sales
— an industry-leading
level of investment. The increase in R&D expenses
was primarily driven by higher staff-related costs
including the addition of R&D personnel from
Amgen staff
2004 14,362
2003 12,886
2002 10,118
2001 7,682
2000 7,326
1999 6,355
1998 5,585
1997 5,372
1996 4,709
1995 4,084
95 96 97 98 99 00 01 02 03 04
2004 $1,336
2003 1,357
2002 659
02 03 04
Capital
expenditures
($ in millions )
02 03 04
2004 $3,697
2003 3,567
2002 2,249
Cash fl ow
from operations
($ in millions )
Amgen 2004 Annual Report page 31