Amgen 2013 Annual Report Download - page 14


Manufacturing
The products we manufacture include both biologics and small molecule drugs. The majority of our products are biologics which are produced in
living systems and are inherently complex due to naturally-occurring molecular variations. Highly specialized knowledge and extensive process and product
characterization are required to transform laboratory-scale processes into reproducible commercial manufacturing processes. For additional information
regarding manufacturing facilities, see Item 2. Properties.
We perform most of our bulk manufacturing, formulation, fill and finish activities in our Puerto Rico facility and also conduct finish activities in the
Netherlands. We also utilize third-party contract manufacturers:
•to manufacture Sensipar®/Mimpara®, except for certain fill and finish activities performed by us in Puerto Rico;
•to supplement commercial bulk manufacturing, as needed, for ENBREL, Prolia ®, XGEVA® and Vectibix®;
•to fill and finish certain portions of ENBREL; and
•to formulate, fill and finish Nplate®.
In addition, we utilize single-source third-party contract manufacturers for Kyprolis ®.
Clinical bulk, formulation, fill and finish manufacturing facilities are operated primarily in our Thousand Oaks, California, location. We also utilize
third-party contract manufacturers for certain clinical products.
See Item 1A. Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our
products.
Distribution
We operate distribution centers in the United States — principally in Kentucky and California — and the Netherlands for worldwide distribution of
the majority of our commercial and clinical products. We also use third-party distributors to supplement distribution of our products in certain areas of the
world.
Other
In addition to the manufacturing and distribution activities noted above, our operations in the United States, Puerto Rico and the Netherlands include
key manufacturing support functions, including quality control, process development, procurement, production scheduling and warehousing. Certain of
those manufacturing and distribution activities are highly regulated by the FDA as well as other international regulatory agencies. See Government
Regulation — Regulation of Manufacturing Standards .
Manufacturing Initiatives
We have multiple ongoing initiatives that are designed to optimize our manufacturing network and/or mitigate manufacturing risks while continuing to
ensure adequate supply of our commercial products. The facilities impacted by these initiatives will require qualification and licensure by various regulatory
authorities. These initiatives include the construction of a formulation and fill facility at our Puerto Rico site; and as part of a risk mitigation strategy, we plan
modification and expansion of our acquired formulation, fill and finish site in Ireland to manufacture our products.
In 2013, Amgen announced a planned expansion in Singapore. The facility will initially focus on expanding Amgen’s capability to manufacture
monoclonal antibodies while bringing new technology and innovation. Once completed, the facility will be fully reconfigurable, providing efficient
manufacturing capabilities that will help ensure supply of our products to patients worldwide.
In addition to these initiatives, we have projects designed to operate our facilities at appropriate production capacity over the next few years, to further
optimize manufacturing asset utilization, to continue our use of third-party contract manufacturers and to 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, medical devices and components necessary for the commercial and/or clinical manufacturing of our products are provided by
and are the proprietary products of unaffiliated third-party suppliers, certain of which may be our only sources for such materials. We currently attempt to
manage the risk associated with such suppliers by inventory management,
8