Amgen 2007 Annual Report Download - page 65

Also, certain of the raw materials required in the commercial manufacturing and the formulation of our prod-
ucts are derived from biological sources, including mammalian tissues, bovine serum and HSA. We are
investigating alternatives to certain biological sources and alternative manufacturing processes that do not require
the use of certain biologically-sourced raw materials as such raw materials may be subject to contamination and/
or recall. Also, some countries in which we market our products may restrict the use of certain biologically de-
rived substances in the manufacture of drugs. A material shortage, contamination, recall and/or restriction of the
use of certain biologically derived substances in the manufacture of our products could adversely impact or dis-
rupt our commercial manufacturing of our products or could result in a mandated withdrawal of our products
from the market. This could adversely affect our ability to satisfy demand for our products, which could ad-
versely affect our product sales and operating results materially. Further, any disruptions or delays by us or by
third-party suppliers or partners in converting to alternatives to certain biological sources and alternative manu-
facturing processes or our ability to gain regulatory approval for the alternative materials and manufacturing
processes could increase our associated costs or result in the recognition of an impairment in the carrying value
of certain related assets, which could have a material and adverse affect on our results of operations.
Difficulties, disruptions or delays in manufacturing or failure to comply with manufacturing regulations
may limit supply of our products and limit our product sales.
We currently manufacture and market all our principal products, and we plan to manufacture and market
many of our product candidates. Manufacturing biologic human therapeutic products is difficult, complex and
highly regulated. (See “— 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 additional 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.”) We currently manufacture our products and product candi-
dates at our manufacturing facilities located in Thousand Oaks and Fremont, California; Boulder and Longmont,
Colorado; West Greenwich, Rhode Island; Bothell, Washington and Juncos, Puerto Rico. (See “— We manu-
facture and formulate, fill and finish substantially all our products at our Puerto Rico manufacturing facility; if
significant natural disasters or production failures occur at this facility, we may not be able to supply these
products.”) Additionally, we currently use third-party contract manufacturers to produce or assist in the pro-
duction of ENBREL and Sensipar®/Mimpara®and in the formulation, fill and finish of VectibixTM and plan to
use contract manufacturers to produce a number of our late-stage product candidates. (See “— We are dependent
on third parties for a significant portion of our bulk supply and the formulation, fill and finish of ENBREL.”) Our
ability to adequately and timely manufacture and supply our products is dependent on the uninterrupted and effi-
cient operation of our facilities which is impacted by many manufacturing variables including:
• availability or contamination of raw materials and components used in the manufacturing process, partic-
ularly those for which we have no other source or supplier
• facility capacity of our facilities or those of our contract manufacturers
• facility contamination by microorganisms or viruses
• labor disputes or shortages, including the effects of an avian or pandemic flu outbreak, or otherwise
• compliance with regulatory requirements
• changes in forecasts of future demand
• timing and actual number of production runs
• production success rates and bulk drug yields
• timing and outcome of product quality testing
If we have problems in one or more of these or other manufacturing variables, we may experience delayed
shipments, supply constraints, stock-outs and/or recalls of our products. For example, in the second quarter of
2002, the prior co-marketers with respect to ENBREL experienced a brief period where no ENBREL was avail-
able to fill patient prescriptions, primarily due to variation in the expected production yield from BI Pharma. If
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