Amgen 2009 Annual Report Download - page 61

York and New Jersey. The federal subpoenas have been issued pursuant to the Health Insurance Portability and
Accountability Act of 1996 (18 U.S.C. 3486), and by a federal grand jury, while the Attorneys General sub-
poenas have been issued pursuant to state specific statutes relating to consumer fraud laws and state false claims
acts. In general, the subpoenas request documents relating to the sales and marketing of our products, and our
collection and dissemination of information reflecting clinical research as to the safety and efficacy of our ESAs.
Based on representations in a U.S. government filing that became public in May 2009 relating to the Massachu-
setts Qui Tam Action, we now believe the subpoenas we received from the U.S. Attorney’s Offices for the
Eastern District of New York and the Western District of Washington also relate to nine additional Qui Tam Ac-
tions which are purportedly pending against Amgen, including eight pending in the U.S. District Court for the
Eastern District of New York and one pending in the U.S. District Court for the Western District of Washington.
The U.S. government filing further alleges that a large number of states are involved in the Qui Tam inves-
tigations, led by the State of New York. These investigations are represented to be joint criminal and civil
investigations. On October 30, 2009 fourteen states and the District of Columbia’s state attorneys’ general filed
an amended complaint in intervention against Amgen alleging violations of the federal Anti-Kickback Statute
and various state false claims acts. Additionally, the U.S. government may seek to intervene in the lawsuit filed
by the states at any time.
Although we cannot predict whether additional proceedings may be initiated against us, or predict when
these matters may be resolved, it is not unusual for investigations such as these to continue for a considerable pe-
riod of time and to require management’s attention and significant legal expense. A determination that we are in
violation of the various federal and state laws that govern the sales and marketing of our products could result in
federal criminal liability and/or federal or state civil or administrative liability, and thus could result in sub-
stantial financial damages or criminal penalties and possible exclusion from future participation in the Medicare
and Medicaid programs. In addition, we may see new governmental investigations of or actions against us citing
novel theories of recovery. Any of these results could have a material adverse effect on our results of operations,
financial position or cash flows in the period in which such liabilities are incurred.
Our stock price is volatile.
Our stock price, like that of our peers in the biotechnology industry, is volatile. Our revenues and operating
results may fluctuate from period to period for a number of reasons. Events such as a delay in product develop-
ment or even a relatively small revenue shortfall may cause financial results for a period to be below our
expectations or projections. As a result, our revenues and operating results and, in turn, our stock price may be
subject to significant fluctuations.
The capital and credit markets have experienced extreme volatility and disruption which has led to un-
certainty and liquidity issues for both borrowers and investors. Historically, we have occasionally and
opportunistically accessed the capital markets to support certain business activities including acquisitions,
in-licensing activities, share repurchases and to refinance existing debt. In the event of adverse capital and credit
market conditions, we may not be able to obtain capital market financing on similar favorable terms, or at all,
which could have a material adverse effect on our business and results of operations. Changes in credit ratings is-
sued by nationally recognized credit rating agencies could adversely affect our cost of financing and have an
adverse effect on the market price of our securities.
Current economic conditions may magnify certain risks that affect our business.
Our operations and performance have been, and may continue to be, affected by economic conditions. Sales
of our principal products are dependent, in part, on the availability and extent of reimbursement from third-party
payers, including government programs such as Medicare and Medicaid and private payer healthcare and in-
surance programs. (See “— Our sales depend on coverage and reimbursement from third-party payers.”) As a
result of the current global economic downturn, our third-party payers may delay or be unable to satisfy their re-
imbursement obligations. A reduction in the availability or extent of reimbursement from government and/or
private payer healthcare programs could have a material adverse affect on the sales of our products, our business
and results of operations.
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