Amgen 2007 Annual Report Download - page 43

motesanib diphosphate (AMG 706). Each party has the right to participate in the commercialization of motesanib
diphosphate in the other party’s territory. In connection with these agreements, Takeda has agreed to acquire our
subsidiary in Japan, Amgen K.K.
Government Regulation
Regulation by governmental authorities in the United States and other countries is a significant factor in the
production and marketing of our products and our ongoing R&D activities.
In order to clinically test, manufacture and market products for therapeutic use, we must satisfy mandatory
procedures and safety and effectiveness standards established by various regulatory bodies. In the United States,
the Public Health Service Act and the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder, and other federal and state statutes and regulations govern, among other things, the raw
materials and components used in the production of, research, development, testing, manufacture, quality control,
labeling, storage, record keeping, approval, advertising and promotion, and distribution of our products on a
product-by-product basis. The failure to comply with the applicable regulatory requirements may subject a com-
pany to a variety of administrative or judicially imposed sanctions. These sanctions could include the FDA’s
refusal to approve pending applications, withdrawals of approvals, delay or suspension of clinical trials, warning
letters, product recalls, product seizures, total or partial suspension of our operations, injunctions, fines, civil
penalties or criminal prosecution.
Clinical Development. Product development and approval within this regulatory framework takes a number
of years and involves our expenditure of substantial resources and, after approval, such approval remains costly
for us to maintain (see “Item 1A. Risk Factors — Our current products and products in development cannot be
sold if we do not gain or maintain regulatory approval of our products and we may be required to perform addi-
tional clinical trials or change the labeling of our products or take other potentially limiting or costly actions if
we or others identify side effects after our products are on the market.”, “— Before we commercialize and sell
any of our product candidates, we must conduct clinical trials in humans; if we fail to adequately manage these
trials we may not be able to sell future products and our sales could be adversely affected.”, “— We may not be
able to develop commercial products.” and “— If our intellectual property positions are challenged, invalidated,
circumvented or expire, or if we fail to prevail in present and future intellectual property litigation, our business
could be adversely affected.”). After laboratory analysis and preclinical testing in animals, we file an investiga-
tional new drug (“IND”) application with the FDA to begin human testing. The IND application automatically
becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions. In such a case,
the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.
Typically, we undertake a three-phase human clinical testing program. In phase 1, we conduct small clinical
trials to investigate the safety and proper dose ranges of our product candidates in a small number of human sub-
jects. In phase 2, we conduct clinical trials to investigate side effect profiles and efficacy of our product
candidates in a larger number of patients who have the disease or condition under study. In phase 3, we conduct
clinical trials to investigate the safety and efficacy of our product candidates in a large number of patients who
have the disease or condition under study. The time and expense required for us to perform this clinical testing
can vary and is substantial. For example, denosumab, one of our late-stage product candidates, requires large tri-
als that require substantial time and resources to recruit patients and significant expense to execute. Historically,
our products have required smaller, shorter trials. Foreign studies performed under an IND must meet the same
requirements that apply to U.S. studies. The FDA will accept a foreign clinical study not conducted under an IND
only if the study is well-designed, well-conducted, performed by qualified investigators, and conforms to the eth-
ical principles contained in the Declaration of Helsinki (as embodied in FDA regulations) and applicable laws
and regulations of the country in which the research was conducted. Phase 1, 2, and 3 testing may not be com-
pleted successfully within any specified time period, if at all. (See “Item 1A. Risk Factors — We may not be able
to develop commercial products.”) The FDA monitors the progress of each trial conducted under an IND and
may, at its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to that
point and the FDA’s risk/benefit assessment with regard to the patients enrolled in the trial. (See “Item 1A. Risk
Factors — Before we commercialize and sell any of our product candidates, we must conduct clinical trials in
31