Amgen 2009 Annual Report Download - page 35

Other
In addition to the manufacturing and distribution activities noted above, our operations in the United States,
Puerto Rico and the Netherlands perform key manufacturing support functions, including quality control, process
development, procurement, distribution and production scheduling. Certain of these manufacturing and dis-
tribution activities are highly regulated by the FDA and other international regulatory agencies (see “Government
Regulation — FDA Regulation of Manufacturing Standards”).
In preparation for the anticipated launch of Prolia™, we have performed bulk manufacturing at our Boulder,
Colorado manufacturing facility and formulation, fill and finish manufacturing activities in Puerto Rico. We also
have an agreement with a third-party contract manufacturer that allows us to supplement, if necessary, our own
bulk manufacturing activities of denosumab. In addition, in order to assist in meeting anticipated future demand,
we are expanding our Puerto Rico bulk protein facilities to manufacture denosumab, as discussed below.
Manufacturing Initiatives
We have certain key ongoing initiatives to assist in meeting our future manufacturing needs. To maintain
supply, mitigate risks associated with the majority of our formulation, fill and finish operations being performed
in a single facility, and to satisfy anticipated future demand for a number of our late-stage product candidates, in
particular denosumab, we are completing the construction and qualification of a new formulation and filling fa-
cility at our Puerto Rico site and the expansion and qualification of our existing bulk protein facilities at our
Puerto Rico site. Upon completion, these facilities will require licensure by the various regulatory authorities. In
addition to these projects, we have initiatives designed to operate our facilities at appropriate production capacity
over the next few years, optimize manufacturing asset utilization, continue our use of third-party contract manu-
facturers and maintain a state of regulatory compliance. (See “Item 1A. Risk Factors — Manufacturing
difficulties, disruptions or delays could limit supply of our products and limit our product sales.”)
Raw Materials and Medical Devices
Certain raw materials necessary for the commercial and clinical manufacturing of our products are provided
by single-source unaffiliated third-party suppliers. Also, certain medical devices and components necessary for
the formulation, fill and finish of our products are provided by single-source unaffiliated third-party suppliers.
Certain of these raw materials, medical devices and components are the proprietary products of these unaffiliated
third-party suppliers and, in some cases, such proprietary products are specifically cited in our drug application
with regulatory agencies so that they must be obtained from the specific sole source and could not be obtained
from another supplier unless and until the regulatory agency approved such supplier. We currently attempt to
manage the risk associated with such sole-sourced suppliers by inventory management, relationship management
and evaluating alternate sources when feasible. We also monitor the financial condition of certain suppliers, their
ability to supply our needs and the market conditions for these items.
Also, certain of the raw materials required in the commercial and clinical manufacturing of our products are
sourced from other countries and/or derived from biological sources, including mammalian tissues. In addition,
one of our marketed products also includes bovine serum and human serum albumin (“HSA”). We continue to
investigate alternatives to biological sources and alternative manufacturing processes that do not require the use
of 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 derived substances in
the manufacture of drugs. A material shortage, contamination, recall and/or restriction of the use of certain bio-
logically derived substances or other raw materials, which may be sourced from other countries, used in the
manufacture of our products could adversely impact or disrupt the commercial manufacturing of our products or
could result in a mandated withdrawal of our products from the market. (See “Item 1A. Risk Factors — We rely
on single-source third-party suppliers for certain of our raw materials, medical devices and components.”)
We perform various procedures to assist in authenticating the source of raw materials, including interme-
diary materials used in the manufacture of our products, which include verification of the country of origin.
These procedures are incorporated into the manufacturing processes performed by us and our third-party contract
manufacturers.
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