Amgen Outlines Long-Term Strategy
Amgen Emphasizes Pipeline, International Expansion and Biosimilars as Growth
Pivotal Data from Eight Late-Stage Programs Anticipated Between 2013 and 2016
NEW YORK, Feb. 7, 2013
NEW YORK, Feb. 7, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today outlined the
company's long-term strategy during a Business Review meeting with analysts
and investors in New York City.
Robert A. Bradway, chairman and chief executive officer at Amgen, opened the
meeting by affirming the company's core strategy will continue to focus on
innovation, discovery and development of breakthrough molecules to address
significant unmet medical needs, and manufacturing of high-quality biologics.
Bradway highlighted how certain elements of the company's strategy have
oResearch and Development (R&D): A more selective approach to R&D,
embracing a "pick the winners" strategy with greater focus on human
genetics to identify and validate targets, and a strong commitment to
return on capital;
oCommercial: Transformation of the commercial model with an emphasis on
expanded access and value to payers, increased presence in key new and
emerging markets, investment in new growth opportunities, including
biosimilars, and greater product differentiation through drug delivery
oManufacturing: Emphasis on new manufacturing processes and technologies,
driving expanded throughput and flexibility and lower capital needs.
"Amgen is in a unique position to capitalize on major advances in drug
discovery and biologics manufacturing," said Bradway. "We are making strategic
investments to drive long-term growth and deliver for both patients and
More Strategic Approach to R&D
Sean E. Harper, M.D., executive vice president of Research and Development at
Amgen, discussed Amgen's new strategic approach to R&D and provided highlights
of the company's ongoing clinical programs.
The company's R&D approach will continue to focus on innovations that address
significant unmet needs for patients with serious illnesses, but will follow
four strategic priorities:
oDemonstrating the value of our medicines;
oFollowing a "biology first" approach;
oIdentifying and validating targets through human genetics; and
oDriving improvements in operational efficiency.
Amgen will continue to be opportunistic about acquiring external innovation to
complement internal capabilities and programs.
"Amgen is uniquely positioned to shape the future of biotechnology," said
Harper. "Our new R&D strategy embraces a 'pick the winners' approach, which
takes advantage of the knowledge we've gained from decades of experience and
our industry-leading position in human genetics that has resulted from our
acquisition of deCODE."
Harper said Amgen's late-stage pipeline is advancing with data expected from
eight pivotal programs by 2016. Highlights include:
oAMG 145: The AMG 145 Phase 3 program will enroll more than 26,000 patients
across seven studies, including the treatment of hyperlipidemia with AMG
o1,700 patients at risk for cardiovascular disease who are on statin
o300 patients who cannot tolerate statins;
o600 patients as monotherapy; and
o300 patients with heterozygous familial hypercholesterolemia.
Results from these four Phase 3 trials are expected in 2014.Additionally, a
long-term Phase 3 outcomes trial is evaluating treatment with AMG 145 in
combination with statins in 22,500 patients at high cardiovascular risk with
results expected in 2018.
oRomosozumab (AMG 785): The romosozumab program will enroll approximately
10,000 postmenopausal osteoporosis patients in two pivotal Phase 3
oA pivotal placebo-controlled trial that will evaluate incidence of
new vertebral fractures at 12 and 24 months in 6,000 patients; and
oAn active-controlled trial versus alendronate that will evaluate the
incidence of clinical fracture and new vertebral fracture at 12 and
24 months in 4,000 patients.
oBrodalumab (AMG 827): In Phase 3 for psoriasis. Results expected in 2014.
oAMG 416: In Phase 2 for secondary hyperparathyroidism. Results expected
oTalimogene laherparepvec: In Phase 3 for melanoma. Results expected in
oTrebananib (AMG 386): In Phase 3 for ovarian cancer. Results expected
beginning in 2013.
oBlinatumomab (AMG 103): In Phase 2 for acute lymphocytic leukemia. Results
expected in 2014.
oRilotumomab (AMG 102): In Phase 3 for gastric cancer. Results expected in
Harper also discussed AMG 334, a calcitonin gene-related peptide (CGRP)
receptor antagonist monoclonal antibody, as an example of Amgen's innovative
approach to R&D.
Transforming the Commercial Model to Drive Revenue Growth
During the meeting, Anthony C. Hooper, executive vice president of Global
Commercial Operations at Amgen, reviewed how Amgen is transforming its
commercial model to build on its existing strengths and to enable new
opportunities. He outlined several growth opportunities, including
significantly expanding Amgen's geographic footprint, leveraging strong
specialty market experience, continuing to build competitive biologic primary
care competencies, and creating an integrated commercial model for payers,
prescribers and patients.
oGrowth and Differentiation of In-Market Products:
oEnbrel^® (etanercept), the leading biologic in value terms within the
fast-growing rheumatology and dermatology segments, continues to be
the leading choice for new-to-biologic rheumatoid arthritis patients.
oProlia^® and XGEVA^® (denosumab) combined delivered $1.2 billion in
sales in 2012. This franchise is expected to exceed $3 billion in
revenues over time.
oGrowth-phase products Sensipar^® (cinacalcet), Vectibix^®
(panitumumab), and Nplate^® (romiplostim) have strong momentum and
have opportunities for continued growth.
oNew Product Launches: Amgen reviewed the commercial opportunities for
both AMG 145 and romosozumab.
oBiosimilars: Amgen outlined plans to launch a portfolio of six new
biosimilars beginning in 2017, and noted that biosimilars represent a
multi-billion dollar growth opportunity for Amgen.
oNew and Emerging Markets: Amgen expects to deliver over $1 billion in
sales in new and emerging markets by 2015 and plans to expand its
operating footprint in key markets, including Japan and China. Currently,
the company is exploring a partnership opportunity in Japan that will
provide a stand-alone, fully-scaled subsidiary by 2020. Amgen also expects
to launch its first products in the Japanese market by 2016. The company
has a multi-pronged strategy for China that includes establishing an R&D
presence and local manufacturing when needed, and is exploring
partnerships and acquisitions to accelerate its commercial presence. Amgen
also expects to launch its first products in the Chinese market by 2015.
Strong Execution Supports Continued Financial Success
Jonathan M. Peacock, executive vice president and chief financial officer at
Amgen, reviewed Amgen's results over the past 12 months, and the strategic
priorities that will allow the company to successfully execute plans for
broad-based growth in 2013 and into the future.
For 2013, Amgen now expects to deliver adjusted EPS of $7.05 to $7.35 and an
adjusted tax rate of between 12 percent and 13 percent, including the benefit
of the Puerto Rico Excise Tax Credit. This update to our guidance is due to
federal tax settlements for prior years that resulted in an adjustment to the
tax charge for those years that will be recorded in the first quarter.
Peacock confirmed that the revenues and capital expenditures guidance for 2013
Peacock highlighted strong commercial execution, continued pipeline progress,
increased focus on operational excellence and return on investment, recent
acquisitions, and capital allocation strategy.
Peacock said Amgen expects to deliver approximately $800 million of operating
income benefit in 2014 to shareholders from the transition of the Enbrel
profit share to a royalty payment. Shareholders will realize a further
increase of approximately 10 percent of Enbrel sales in 2017 as a result of
the termination of the royalty payment. In addition, Amgen will reallocate
approximately $1 billion in operational efficiencies over the next three years
towards strategic initiatives that support the company's growth and
Peacock detailed that Amgen has continued to execute on its capital allocation
strategy focused on returning, on average, more than 60 percent of adjusted
net income to shareholders through dividend growth and share repurchases.
Since the April 2011 Business Review, this strategy has led to significant
returns to shareholders and an improved return on equity.
A webcast of the Amgen Business Review meeting with presentation slides and
video is available through www.amgen.com. The webcast will be archived and
available for replay at least 30 days after the event.
Amgen discovers, develops, manufactures and delivers innovative human
therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first
companies to realize the new science's promise by bringing safe and effective
medicines from lab, to manufacturing plant, to patient. Amgen therapeutics
have changed the practice of medicine, helping millions of people around the
world in the fight against cancer, kidney disease, rheumatoid arthritis, bone
disease and other serious illnesses. With a deep and broad pipeline of
potential new medicines, Amgen remains committed to advancing science to
dramatically improve people's lives. To learn more about our pioneering
science and our vital medicines, visit www.amgen.com. Follow us on
Forward Looking Statements
This news release contains forward-looking statements that are based on
management's current expectations and beliefs. All statements, other than
statements of historical fact, are statements that could be deemed
forward-looking statements, including statements regarding: the Company's
commercial, operational, capital allocation, biosimilars, geographic
expansion, planned research and product development or other strategies;
estimates of revenues, operating margins, capital expenditures, cash, dividend
distributions, stock repurchases, tax rates, earnings per share or other
financial metrics; expected legal, arbitration, political, regulatory or
clinical results or practices; customer and prescriber patterns or practices;
reimbursement activities and outcomes and other such estimates and results.
Forward-looking statements involve significant risks and uncertainties that
could cause actual results to differ materially from those described,
including those risks discussed below and more fully described in our Form
10-K for the year ended Dec. 31, 2011, and in our periodic reports on Form
10-Q and Form 8-K. Please refer to Amgen's most recent Forms 10-K, 10-Q and
8-K for additional information on the uncertainties and risk factors related
to our business. Unless otherwise noted, Amgen is providing this information
as of the date of this news release and does not undertake any obligation to
update any forward-looking statements contained in this news release as a
result of new information, future events or otherwise.
No forward-looking statement can be guaranteed and actual results may differ
materially from those we project. Discovery or identification of new product
candidates or development of new indications for existing products cannot be
guaranteed and movement from concept to product is uncertain; consequently,
there can be no guarantee that any particular product candidate or development
of a new indication for an existing product will be successful and become a
commercial product. Further, preclinical results do not guarantee safe and
effective performance of product candidates in humans. The complexity of the
human body cannot be perfectly, or sometimes, even adequately modeled by
computer or cell culture systems or animal models. The length of time that it
takes for us to complete clinical trials and obtain regulatory approval for
product marketing has in the past varied and we expect similar variability in
the future. We develop product candidates internally and through licensing
collaborations, partnerships and joint ventures. Product candidates that are
derived from relationships may be subject to disputes between the parties or
may prove to be not as effective or as safe as we may have believed at the
time of entering into such relationship. Also, we or others could identify
safety, side effects or manufacturing problems with our products after they
are on the market. Our business may be impacted by government investigations,
litigation and products liability claims. If we fail to meet the compliance
obligations in the corporate integrity agreement between us and the U.S.
government, we could become subject to significant sanctions. We depend on
third parties for a significant portion of our manufacturing capacity for the
supply of certain of our current and future products and limits on supply may
constrain sales of certain of our current products and product candidate
In addition, sales of our products are affected by the reimbursement policies
imposed by third-party payors, including governments, private insurance plans
and managed care providers and may be affected by regulatory, clinical and
guideline developments and domestic and international trends toward managed
care and healthcare cost containment as well as U.S. legislation affecting
pharmaceutical pricing and reimbursement. Government and others' regulations
and reimbursement policies may affect the development, usage and pricing of
our products. In addition, we compete with other companies with respect to
some of our marketed products as well as for the discovery and development of
new products. We believe that some of our newer products, product candidates
or new indications for existing products, may face competition when and as
they are approved and marketed. Our products may compete against products that
have lower prices, established reimbursement, superior performance, are easier
to administer, or that are otherwise competitive with our products. In
addition, while we routinely obtain patents for our products and technology,
the protection offered by our patents and patent applications may be
challenged, invalidated or circumvented by our competitors and there can be no
guarantee of our ability to obtain or maintain patent protection for our
products or product candidates. We cannot guarantee that we will be able to
produce commercially successful products or maintain the commercial success of
our existing products. Our stock price may be affected by actual or perceived
market opportunity, competitive position, and success or failure of our
products or product candidates. Further, the discovery of significant
problems with a product similar to one of our products that implicate an
entire class of products could have a material adverse effect on sales of the
affected products and on our business and results of operations. Our business
performance could affect or limit the ability of our Board of Directors to
declare a dividend or our ability to pay a dividend or repurchase our common
The scientific information discussed in this news release related to our
product candidates is preliminary and investigative. Such product candidates
are not approved by the U.S. Food and Drug Administration (FDA), and no
conclusions can or should be drawn regarding the safety or effectiveness of
the product candidates. Only the FDA can determine whether the product
candidates are safe and effective for the use(s) being investigated. Further,
the scientific information discussed in this news release relating to new
indications for our products is preliminary and investigative and is not part
of the labeling approved by the U.S. Food and Drug Administration (FDA) for
the products. The products are not approved for theinvestigational use(s)
discussed in this news release, and no conclusions can or should be drawn
regarding the safety or effectiveness of the products for theseuses. Only
the FDA can determine whether the products are safe and effective for these
uses. Healthcareprofessionals shouldrefer to and rely upon the FDA-approved
labeling for the products, and not the information discussed in this news
Reconciliation of GAAP EPS Guidance to
EPS Guidance for the Year Ending
December 31, 2013
GAAP EPS (diluted) guidance $ 6.71 - $ 7.01
Known adjustments to arrive at
Amortization of acquired (a) 0.51
Stock option expense (b) 0.05
Non-cash interest expense
associated with our convertible (c) 0.02
Tax impact (d) (0.24)
"Adjusted" EPS (diluted) guidance $ 7.05 - $ 7.35
(a) To exclude the non-cash amortization of intangible assets acquired in
prior year business combinations.
(b) To exclude stock option expense.
(c) To exclude the non-cash interest expense associated with our convertible
(d) To exclude tax impact of above items and tax impact of certain prior
period items excluded from "Adjusted" earnings.
Reconciliation of GAAP Tax Rate
Guidance to "Adjusted"
Tax Rate Guidance for the Year Ending
December 31, 2013
GAAP tax rate guidance* 9.7% - 10.8%
Tax rate effect of known 2.3% - 2.2%
"Adjusted" tax rate guidance* 12.0% - 13.0%
* Includes Puerto Rico excise tax
CONTACT: Amgen, Thousand Oaks
Ashleigh Koss, 805-559-0746 (media)
Arvind Sood, 805-447-1060 (investors)
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