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Amgen Business ReviewNovember 7, 2008
Strategic OutlookKevin SharerCEO
3Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Safe Harbor StatementThis presentation contains forward-looking statements that are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including estimates of revenues, operating margins, capital expenditures, cash, 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, including those discussed below and more fully described in the Securities and Exchange Commission (SEC) reports filed by Amgen, including Amgen’s most recent annual report on Form 10-K and most recent 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 November 7, 2008 and expressly disclaims any duty to update information contained in this presentation.
No forward-looking statement can be guaranteed and actual results may differ materially from those we project. The Company’s results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign) and difficulties or delays in manufacturing our products. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product. Further, preclinical results do not guarantee safe and effective performance of product candidates in humans. The product candidates discussed in this presentation are not approved by the U.S. Food & Drug Administration (FDA), and only the FDA can determine whether the product candidates are safe and effective for the use(s) being investigated. 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. In addition, sales of our products are affected by reimbursement policies imposed by third-party payers, 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. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. 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. Further, 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. 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 development. 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. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers.
This presentation includes GAAP and non-GAAP financial measures. In accordance with the requirements of SEC Regulation G, reconciliations between these two measures, if these slides are in hard copy, accompany the hard copy presentation or, if these slides are delivered electronically, are available on the Company's website at www.amgen.com within the Investors section.
4Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Today’s Agenda
Roger M. Perlmutter
Sean HarperR&D Overview8:15–9:15
Robert A. BradwayFocus on Value Creation10:15–10:30
George Morrow
Jim Daly
Growing the Base and Commercializing Denosumab
9:15–10:15
AllQ&A10:30–11:30
Strategic Outlook Kevin Sharer8:00–8:15
5Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Our Industry Faces Unprecedented Challenges
Scarcity of new, truly innovative products
Wave of patent expiries
Heightened focus on safety vs efficacy
Increased demand for value over access
New administration in the US with plans for health care system changes
Uncertain global economic conditions
Amgen is positioned to meet these challenges
6Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Have the Right Strategy to Succeed
Invest heavily in R&D with a focus on innovation
Grow our existing products
Launch denosumab with compelling value propositions
Pursue continuous operating efficiency improvements
Diversify into markets outside the US
Look outside for new product and partnering opportunities
Defend our intellectual property
All focused around our mission to serve patients
7Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Have the Right Team and Resources to Deliver on Our Potential
Strong cash flow and balance sheet
R&D is delivering on decisionstaken since 2001
Commercial is exceptionally experienced in launching and marketing diverse product lines
Finance is focused on resource allocation, capital decisions, and value creation
Operations is optimizing our manufacturing base and is ready for our future products
8Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Have Delivered in the Face of Major Overhangs Over the Past 18 Months
Successfully executed denosumab global development program
Delivered earnings without compromising pipeline investment
Resolved critical legal issues: Roche, JNJ
Competed effectively against follow-on biologics in Europe
Navigated effectively through ESA issues
Took decisive actions to reshape the company
ESA = erythropoiesis stimulating agent
9Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
What Are Our Aspirational Goals Over the Next 5 Years?
Deliver for patients and shareholders
Grow revenues and adjusted EPS at industry-leading levels
Invest in our pipeline to innovate at an industry-leading pace
Become more global in all respects
Continuously improve our efficiency
Remain the biotechnology partner of choice
Amgen’s fundamentals are strongand our growth profile is attractive
R&D OverviewRoger M. PerlmutterExecutive Vice President, Research and Development
11Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen R&D Guiding Principles
Seamless Integration
Focus ongrievous illness
Fit the therapeutic modality to the
target
Study the disease in people
12Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Have Invested Significantly Since 2001 to Expand Our R&D Capabilities
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
2001 2002 2003 2004 2005 2006 2007 2008e
$ Billions*
25% 22% 21% 20% 19% 23% 21% 20%% of Sales
*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slideis delivered electronically, see reconciliations available at: www.amgen.com within the Investors section.
13Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
During That Time Frame, We Launched Seven New Products
2001Aranesp®
(darbepoetin alfa)
Kineret®
(anakinra)
2008Nplate™
(romiplostim)
2002Neulasta®
(pegfilgrastim)
Amgen acquired Immunex, including Enbrel® (etanercept)
2005Kepivance®
(palifermin)
2004Sensipar®
(cinacalcet)
2006Vectibix®
(panitumumab)
14Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Much of Our R&D Spend Has Focused on Delivering and Supporting These Products
R&D Spend2001–2008
Research25%
Preclinical12%
Early Development5%
Marketed43%
Registrational15%
15Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Late-Stage Programs, Including Denosumab, Have Also Driven Substantial Investment
R&D Spend2001–2008
Research25%
Preclinical12%
Early Development5%
Marketed43%
Registrational15%
16Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Have Invested Heavily to Expand Our Research Capabilities
R&D Spend2001–2008
Research25%
Preclinical12%
Early Development5%
Marketed43%
Registrational15%
17Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Our Modality Mix Is Advantageous Modality Mix of Amgen NMEs
Entering Preclinical Development 2001–2008e
22%Small Molecules
30%Biotechnology
Approval Success RateProduct Class
Source: Reichert, JM. Nature Biotechnol.2001;19:819-822.
72%
84%
MAbs
45%Phase 2
73%Phase 1
Small Molecules
Cumulative Clinical Success
Early Development
Large Molecules
n = 47
(59%)
Small Molecules
n = 32
(41%)
Source: Tufts CSDD, 2008.Note: Success rate from phase 1 to approval.
NME = new molecular entityMAb = monoclonal antibody
18Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
64
1
9
13
10
13
19
02468
101214161820
Preclinical Phase 1 Phase 2 Phase 3/Marketed
Our Increased Investment in R&D Has More Than Doubled the Size of Our Pipeline
DenosumabMotesanibNplate™
Vectibix®
Kepivance®
Sensipar®
Enbrel®Neulasta®
Aranesp®
Kineret®
Stemgen®
NEUPOGEN®
EPOGEN®
20012008
19Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Aranesp®
Sensipar®
AMG 223Sensipar®
Nephrology
AMG 2222
AMG 221AMG 477
GeneralMedicine
Motesanib4
DenosumabVectibix®
AMG 102AMG 386AMG 479AMG 655rhApo2L/TRAIL1
Motesanib4
Vectibix®
Nplate™
AMG 745AMG 8883
Hematology/Oncology
Denosumab
AMG 7855
Bone
Phase 3
Phase 2
Phase 1
Inflammation
AMG 108AMG 317Denosumab
AMG 191AMG 557AMG 714AMG 761AMG 811AMG 827AMG 853
Our Pipeline Is Filled With Opportunities That Will Leverage Our Existing Franchises
Small/Synthetic Protein/Pb Monoclonal Ab
1Amgen is developing this product in collaboration with Genentech, Inc.2Clinical development is being conducted by Servier through phase 2.3Amgen is developing this product in collaboration with U3 Pharma AG/Daiichi Sankyo.
4Amgen is developing this product in collaboration with Takeda.5Amgen is developing this product in collaboration with UCB.Pb = peptibodyAb = antibodyTRAIL = TNF-related apoptosis-inducing ligand
Pipeline OverviewSean HarperSenior Vice President, Global Development and Corporate Chief Medical Officer
21Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Vectibix® P3(mSCCHN)
AMG 655 P2(Pancreatic, mCRC)
AMG 386 P2(Ovarian, Breast, RCC)
Sensipar®/Mimpara® P3
(EVOLVE)
AMG 479 P2(Pancreatic, Ewing’s
Sarcoma, Breast)
Motesanib P33
(NSCLC)
Denosumab P3(Bone Mets Prevention:
Prostate)
2010
Aranesp® P3(TREAT)
AMG 223 P2(Hyperphosphatemia)
AMG 655 P2(NSCLC and Sarcoma)
AMG 386 P2(Gastric)
AMG 222 P2a2
(Diabetes)
AMG 102 P2(RCC, GBM)
Vectibix® P3(1st and 2nd Line
mCRC)
rhApo2L/TRAIL P21
(NSCLC)
Motesanib P23
(H2H NSCLCand mBC)
2009Denosumab P3
(SREs)
Key Clinical Study Results Anticipated in 2009 and 2010
1Amgen is developing this product in collaboration with Genentech, Inc.2Clinical development is being conducted by Servier through phase 2.3Amgen is developing this product in collaboration with Takeda.Many studies are event-driven and data availability may vary as a result.
SRE = skeletal-related eventH2H = head-to-headNSCLC = non–small-cell lung cancermBC = metastatic breast cancerRCC = renal cell carcinomaGBM = glioblastoma multiforme
mCRC = metastatic colorectal cancerTREAT = Trial to Reduce Cardiovascular Events with Aranesp® TherapyEVOLVE = Evaluation of Cinacalcet Therapy to Lower Cardiovascular EventsmSCCHN = metastatic squamous cell cancer of the head and neck
Oncology Therapeutic AreaBuilding a Comprehensive Program in Therapeutic Oncology
23Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen’sComprehensive
Approach
HGF/SFIGF–1/2
VEGF
AngiogenesisGrowth regulation
Apop
tosi
s
RANK
L
ThrombopoietinErythropoietin
G-CSF
Apo
2L/T
RA
ILEG
F
Hematopoiesis
Bone
met
abol
ism
and
met
asta
ses
Angiopoietin–1/2
A Mechanistic Approach to Targeted Therapy of Cancer
Vectibix®
(panitumumab)
rhApo2L/TRAIL1
AMG 655
Motesanib3
Denosumab
Nplate™ (romiplostim)
AMG 102AMG 479
AMG 386
AMG 8882
1Amgen is developing this product in collaboration with Genentech, Inc.2Amgen is developing this product in collaboration with U3 Pharma AG/Daiichi Sankyo.3Amgen is developing this product in collaboration with Takeda.
24Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 655: Fully Human MAb-Targeting Death Receptors in Cancer Cells
25Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 655: Phase 1 Highlights
Doses up to 20 mg/kg appear to be well tolerated– No DLTs reported in first 28 days of treatment– No drug-related SAEs
PK data support further investigation of Q2W or Q3W intravenous dosing
Antitumor activity seen – Partial response in NSCLC– Metabolic partial response in CRC
DLT = dose-limiting toxicitySAE = serious adverse eventPK = pharmacokineticCRC = colorectal cancerLoRusso, et al. ASCO 2007; Abstract 3534.
26Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 655: Development Program Overview Through 2010
Phase 1 study
Phase 1 study in Japan
Phase 2 with carboplatin + paclitaxel in first line advanced NSCLC
Phase 2 with gemcitabine in first line metastatic pancreatic cancer
Phase 2 with doxorubicin in first line locally advanced or metastatic, unresectable soft tissue sarcoma
Phase 2 with panitumumab in mCRC
Phase 1b with bortezomib or vorinostat in relapsedor refractory lymphoma
Phase 2 with mFOLFOX6 + bevacizumab in first line mCRC
27Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Phase 1b/2 Study of AMG 655 + CP in NSCLC: Tumor Response
65-year-old patient with stage IV NSCLC
Complete response after three cycles of 5 mg/kg AMG 655 + CP
CP = carboplatin + paclitaxelPaz-Ares L, et al. ESMO 2008; Abstract 488.
28Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 386: Inhibiting Angiogenesis Througha Pathway Distinct From VEGF
29Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 386: Phase 1b Highlights
AMG 386 combined well with a variety of chemotherapy and targeted agents– Most common AEs were neutropenia, anemia, dyspnoea,
diarrhea, and hypertension– Classic anti-VEGF toxicities (hypertension, proteinuria,
thromboembolic events) occurred at rates consistent with the underlying VEGF inhibitor
Responders were reported (breast, pancreatic, bladder, RCC) in these small phase 1b studies
AE = adverse eventMita, et al. ECCO 2007; Abstract 708.
30Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 386: Development Program Overview Through 2010
Phase 1 in advanced solid tumors
Phase 1 with VEGF inhibitors in advanced solid tumors
Phase 1b with chemotherapy in advanced solid tumors
Phase 2 with sorafenib in RCC
Phase 2 with paclitaxel in advanced ovarian or primary peritoneal cancer
Phase 2 with cisplatin and capecitabine in metastatic gastric and esophageal cancer
Phase 2 with paclitaxel +/- bevacizumab in her2-negative first line breast cancer
31Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Best Tumor Response by RECIST
Confirmed Partial Response Stable Disease Progressive Disease
Sorafenib Cohort(Renal Cell Carcinoma)
AMG 386: Combined Blockade With VEGF Inhibition Appears Promising
RECIST = response evaluation criteria in solid tumors*Stable disease (0% maximum change; bevacizumab + AMG 386) Hong, et al. ESMO 2008; Abstract 462.
–100–80–60–40–20
020406080
100
Overall response rate: 5 out of 17 enrolled patients (29%)M
axim
um C
hang
e in
Tum
orM
easu
rem
ent F
rom
Bas
elin
e (%
)
32Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Oncology Therapeutics Program*:39 Phase 2 Programs in > 15 Tumor Types
*Ongoing or planned to start in 2008 or Q1 20091Amgen is developing this product in collaboration with Genentech, Inc.; 2Amgen is developing this product in collaboration with Takeda.
SCLCSarcomaRCCProstatePancreaticOvarian recOvarian 1stNSCLC (SCC)NSCLCNHLmCRC othersmCRC 2ndmCRC 1stSCCHN loc advSCCHN rec/metGBMGastricEWSBreast Her+Breast Her-Breast ER+
Vectibix®rhApo2L/TRAIL1AMG 655Motesanib2AMG 479AMG 386AMG 102
EWS = Ewing’s sarcomaNHL = non-Hodgkin lymphomaSCC = squamous cell carcinomaSCLC = small-cell lung cancer
Inflammation Therapeutic AreaBuilding on Our Strength in Inflammation to Address Unmet Needs
34Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
TH2 Cells Orchestrate the AllergicImmune Response
MastCell
AirwayEpithelial
Cells
Airway Smooth Muscle
DC
Mast Cell
IgE
IL-4IL-13IL-5 Eosinophil
Inflammatory Stimuli
CCL17/22
CCR4TH2
IL-4/IL-13IL-5/TNFα
BB
TSLP
IL-5/13PGD2
CCR4TH2
35Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
AMG 761: Developing an Innovative MAb Technology for the Treatment of Inflammatory Diseases
Antibody (mg/mL)
Conventional Ab
AD
CC
Act
ivity
(%)
POTELLIGENT® Ab
0
20
40
60
80
0.001 0.01 1 100.1
ADCC = antibody-dependent cellular cytotoxicityPOTELLIGENT® is a registered trademark of Kyowa Hakko.
36Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
The Promise of AMG 761
Selective and potent depletion of CCR4+ TH2 cells– Effective at 0.001 mg/kg, IV
Prolonged PD suggests infrequent dosing regimen – > 80% inhibition for ~ 1–2 weeks at 0.003 mg/kg, IV– Effects seen beyond 8 weeks
Potential utility in other inflammatory diseases
PD = pharmacodynamics
Bone Therapeutic AreaTargeting Key Regulators of Bone Remodeling
38Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Two Ways to Increase Bone Density
RANKL
BONE
Osteoblasts
Osteoclast
Osteoclast Precursor
RANK
RANKL
RANK
Block Resorption
Increase Formation
Sclerostin (-)
39Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Sclerostin Mutations Lead to Increased Bone Density in Humans
Increased bone mass throughout skeleton
Good quality, fracture-resistant bone
Sclerosteosis/van Buchem’s
Normal
Sclerosteosis
Sclerostin…Is secreted by osteocytesInhibits osteoblast activity likely via antagonism of Wnt pathwayAntagonism leads to bone formation
Program partnered with UCB
40Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Time (day)
0 7 14 21 28 35 42 49 56 63 70 77 84
% C
hang
e fr
om B
asel
ine
(Mea
n ±
SEM
)
-100
-50
0
50
100
150
200
250
Large Anabolic Window Following Single SC Dose ofAMG 785 to Healthy Postmenopausal Women With Low Bone Mass
10 mg/kg(N = 6)
P1NP CTX
P1NP = amino terminal propeptide of type 1 procollagenSC = subcutaneousCTX = C-terminal telopeptide of type 1 collagenAmgen is developing this product in collaboration with UCB.
41Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Two Ways to Increase Bone Density
RANKL
BONE
Osteoblasts
Osteoclast
Osteoclast Precursor
RANK
RANKL
RANK
Block Resorption
Increase Formation
Sclerostin (-)
42Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Denosumab Investigated in an Extensive Clinical Program
~ 7,000 subjects~ 4,500 subjects~ 10,000 subjects
Phase 2: RA(n = 227)
Delay Progression to Bone Metastases, Prostate
(n = 1,435)Bisphosphonate Transition
(n = 504)
Solid Tumor SRE(n = 1,779)
ABCSG-18 Breast(n = 2,800)
Denosumab vs Alendronate (n = 1,189)
Prostate SRE(n = 1,870)
HALT Prostate(n = 1,468)
Prevention of PMO(n = 332)
Breast SRE(n = 2,049)
HALT Breast(n = 252)
Treatment of PMO(n = 7,868)
Osteoporosis/RA Treatment-InducedBone Loss Oncology
RA = rheumatoid arthritisPMO = postmenopausal osteoporosisHALT = Hormone Ablation Bone Loss Trial
ABCSG = Austrian Breast and Colorectal Cancer Study GroupAvailable at: www.clinicaltrials.gov. Accessed January 28, 2008.
43Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Denosumab in Oncology Represents Another Significant Opportunity
Early Cancer Advanced Cancer
Treatment-Induced Bone Loss
Delay Progression to Bone Mets
Treatment of Bone Mets
120 mg QM120 mg QM 60 mg Q6M
103/136/244 Protocols147 Protocol138 (HALT-PC)135 (HALT-BC)
HT = hormone therapySource: Amgen estimates. US + EU5.
44Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Prostate Cancer Highlights Potential Across the Spectrum of Bone Disease
Initial Diagnosis and Therapy
Hormone Therapy Bone
Metastasis
PSA Relapse
SREs
Treatment of Bone
Metastasis
Delay Progression to
Bone Metastasis
Treatment-Induced
Bone Loss
PSA
Lev
el
5 Years 15 Years
PSA = prostate-specific antigen
45Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
A Phase 2 Study of Denosumab in Patients With Bone Metastases Inadequately Controlled With Intravenous Bisphosphonates
Primary endpointProportion of patients with uNTx < 50 at week 13
Key secondary endpointsTime to reduction of uNTx < 50Time to first on-study SRE
n = 37 IV BP Q4W
n = 38 Denosumab 180 mg SC Q4W
n = 36 Denosumab 180 mg SC Q12W Screening/Randomization
Extension/Follow-up
25 weeks of treatment
BP = bisphosphonatesIV = intravenousuNTx = urinary N-telopeptide
46Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Treatment With Denosumab Resulted in Rapid Suppression of Bone Turnover
Fizazi, et al. ASCO 2008; Abstract 3596.
47Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Time to First Skeletal-Related Event
Fizazi, et al. ASCO 2008; Abstract 3596.N/A = not applicable; SREs = skeletal-related events
IV BP Q4W(N = 35)
Denosumab180 mg Q12W
(N = 35)
Denosumab180 mg Q4W
(N = 38)All Denosumab
(N = 73)
Patients With SREs 6 (17%) 4 (11%) 2 (5%) 6 (8%)
Odds Ratio (95% CI) N/A 0.36 (0.08, 1.76) 0.26 (0.05, 1.44) 0.31 (0.08, 1.18)
IV BP Q4WTotal Denosumab
0
5
10
15
20
25
30
0 20 40 60 80 100 120 140 160 180 200
Prop
ortio
n of
Pat
ient
s W
ith a
Firs
t-on-
Stud
ySk
elet
al-R
elat
ed E
vent
Study Day
48Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Denosumab: Treatment of Bone Metastases (Breast SRE Study)
Primary endpoint Time to first on-study SRE (non-inferiority)
Secondary endpointsTime to first on-study SRE (superiority)Time to first and subsequent on-study SRE (superiority)
Study Population:Subjects With Advanced Breast Cancer and Bone Metastases
Denosumab 120 mg SC + placebo IV over 15 minutes
Q4W(n = 1,025)
Placebo SC + zoledronic acid 4 mg IV infusion over 15 minutes
Q4W(n = 1,025)
ENROLLMENT
SCREENI
NG
FOLLOWUP
ENDOFSTUDY
Up to 2 years
49Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Summary
Built R&D capabilities through meaningful investment since 2001
R&D pipeline has more than doubled, while cost of clinical development is competitive and remains in focus
Our pipeline is filled with opportunities across therapeutic areas that will leverage our existing franchises
Oncology represents another potential blockbuster opportunity for denosumab
Growing the Base and Commercializing DenosumabGeorge MorrowExecutive Vice President, Global Commercial OperationsJim DalySenior Vice President, North America Commercial Operations
51Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Growing Our Base Business Is a StrategicImperative as We Prepare to Launch Denosumab
Further modest declines in the global Aranesp® franchise are likely, but longer term growth is achievable
Our maturing products’ growth will be driven primarily by patient and price growth for several years– EPOGEN®, Filgrastim, Enbrel®
Our growth products will benefit from increasing penetration of growing markets, along with some new indications– Sensipar®, Vectibix®, Nplate™
We recognize growth challenges facing our products, and are focused on managing those risks
Denosumab is an extraordinary opportunity to potentially change the practice of medicine in multiple indications
52Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
1,200
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“When Will Aranesp® Sales Bottom Out, and Can It Return to Growth?”
Aranesp®
$ Millions, Quarterly Net Sales
53Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
1,200
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’11
Patient and price growthTREAT outcomes study
New oncology label/REMSShare and price pressuresBiosimilars (Europe)
2006 2007 2008 2009 2010 2011
After Four Quarters of Relative Stability, Aranesp® Is Experiencing Another “Step-Down” in Sales That Should Stabilize in 2009
Aranesp®
$ Millions, Quarterly Net Sales
REMS = Risk Evaluation and Mitigation Strategy
54Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Non-Oncology$0.2
Q3 2008 Aranesp®
Worldwide $0.8
Oncology$0.2
Q3 2008 Aranesp® Sales Snapshot
~ 50%Commercial:~ 50%Medicare/Government:
Note: Rounded to the nearest $50M. Excludes $54M returns reserve adjustment.
Oncology$0.2
Non-Oncology$0.25
Oncology$0.15
Ex-US$0.4
US$0.4
Aranesp®
$ Billions
55Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
58 33 30
4Q ’06 3Q ’07 3Q ’08
US Aranesp® “Step-Down” Sales Declines Driven by Specific Events; Additional Decline of 10–20% Likely
3,000
1,700
Annualized Run-Rate AoC study
Label changeNCD
Label change
REMSContract changesAdditional label changes?
WeeklyRun-Rate
1,600
Aranesp®
$ Millions, Net Sales
AoC = anemia of cancerNCD = National Coverage Determination
56Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
100
200
300
400
500
600
700
800
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“How Is ‘Bundling’ Legislation in 2011 Expected to Affect EPOGEN® Sales?”EPOGEN®
$ Millions, Quarterly Net Sales
57Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
100
200
300
400
500
600
700
800
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’11
Patient and price growth
Phase-in of ESRD composite rate roll-inRestrictions on dose/utilization?New competition?
2006 2007 2008 2009 2010 2011
EPOGEN® Use Has Stabilized Since EMP Implementation in January 2008EPOGEN®
$ Millions, Quarterly Net Sales
ESRD = end-stage renal disease
58Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
ESRD Bundling Proposal Included in the 2008 Medicare Legislation
Single rate for all services and IV drugs involved in treating ESRD patients4-year transition beginning in 2011– In 2011, 25% of payments based on the new bundled rate;
75% based on current reimbursement– Percent under bundle increases by 25% per year– Prior to 2011, facilities will be able to “opt-out” of transition
and be fully bundled at implementation
Quality incentive program will be in place– Up to 2% reimbursement at risk for quality– Quality metrics to be established by CMS
• Must include anemia management
CMS = Centers for Medicare and Medicaid Services
59Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Factors With Potential Impact on EPOGEN® Use
We believe any dose decline would be modest– Move from IV dosing to SC Unlikely in large scale
• EPOGEN® label• Patient preference• MD preference
– Increase iron to reduce EPO dose Modest impact• Majority of patients iron-replete
– Reduce hemoglobin levels Modest impact• Quality metrics
60Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
1,200
1,400
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“Can You Sustain Unit Growth for Neulasta® in the US and What Impact Will Biosimilars Have on Neulasta®/NEUPOGEN® in Europe?”
Neulasta®/NEUPOGEN®
$ Millions, Quarterly Net Sales
61Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
1,200
1,400
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’11
Increase first-cycle usePatient and price growthContinued conversion (Europe)
Less myelosuppressive regimensBiosimilars G-CSF (Europe)
2006 2007 2008 2009 2010 2011
Neulasta®/NEUPOGEN® Continues to Maintain Consistent GrowthNeulasta®/NEUPOGEN®
$ Millions, Quarterly Net Sales
G-CSF = granulocyte colony-stimulating factor
62Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Neulasta® Promotion Focused on Reducing Febrile Neutropenia and Its Consequences
600K patients/year at riskfor FN
Although > 500K patients/year receive a growth factor, only ~ 300K receive it in the first cycle
FN continues to adversely affect patient outcomes
Challenge is for physicians to ID patients most likelyto develop FN
Source: Caggiano V, Weiss RV, Rickert TS, Linde-Zwirble WT. “Incidence, cost and mortality of neutropenia hospitalization associated with chemotherapy. Cancer. 2005; 103 1916-1924.
FN = febrile neutropenia
63Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
200820072006
26%
0%
10%
20%
30%
40%
50%
60%
70%
90%
Granocyte®NEUPOGEN® Neulasta®
56%
Biosimilars Have Affected First Generation Share and Price, But Only Price on Second Generation
80%
–5%
+13%
Filgrastim FranchiseEU Value Segment Share
200820072006
52%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Mircera® Biosimilars/Dynepo™Aranesp® Eprex® NeoRecormon®
Aranesp® NephrologyEU Value Segment Share
64Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“Can Enbrel® Grow in the Face of New Competition?”Enbrel®$ Millions, Quarterly Net Sales
65Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
200
400
600
800
1,000
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’11
Biologic penetration in rheumatology and dermatology with Enbrel®positioned as first line
Competitive pressures– Rheumatology:
Golimumab Cimzia®
Actemra®
– Dermatology:Humira®
Ustekinumab
2006 2007 2008 2009 2010 2011
Established Profile of Enbrel® Has Enabled Growth Despite New CompetitionEnbrel®$ Millions, Quarterly Net Sales
66Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
*Dermatology Awareness and Usage Study, Wave 16, n = 150 dermatologists, data collected in June 2008*ImpactRx, July 2008, syndicated data panel including n = 136 dermatologists nationwide; 3-month rolling averages include May–July 2008 data*Qualified rheumatologist (n = 400); when prescribing a biologic for moderate-to-severe rheumatoid arthritis, which one would you choose for yourself or a family member*What reasons do you have for saying that (BIOLOGIC) is your preferred agent for RA, overall?**Dermatology and Rheumatology Office Manager Awareness and Usage Study, n = 138
Enbrel® Expected to Maintain a Leadership Position as First Line in Both Rheumatology and Dermatology
MDs rate Enbrel® as having best balance of safety and efficacy*
Drive patient requests and acceptance of Enbrel®
Continued effectiveness in minimizing access and reimbursement barriers**
#1 rated program across segments
Unprecedented Enbrel®GA-TV presence
#1 prescribed and recommended across
segments
67Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
40
80
120
160
200
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“Can Sensipar® Be a Blockbuster?”Sensipar®
$ Millions, Quarterly Net Sales
68Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
40
80
120
160
200
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
Strong Sensipar® Performance Due to Patient Penetration
Increased penetration iPTH > 300Price and patient growthADVANCE (2009), EVOLVE (2012)
Sensipar®
$ Millions, Quarterly Net Sales
ADVANCE = Action in Diabetes and Vascular Disease: Preterax and Diamicron MR Controlled Evaluation
69Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
25
50
75
100
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’112006 2007 2008 2009 2010 2011
“What Is the Growth Potentialof Vectibix®?”
Vectibix®
$ Millions, Quarterly Net Sales
70Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
25
50
75
100
Q1 ’06
Q3 ’06
Q1 ’07
Q3 ’07
Q1 '08
Q3 '08
Q1 ’09
Q3 ’09
Q1 ’10
Q3 ’10
Q1 ’11
Q3 ’11
International launchesKRASPositive CRC data(181/203 studies)
2006 2007 2008 2009 2010 2011
Vectibix® Uptake Dependent on New Data in CRC and HNCVectibix®
$ Millions, Quarterly Net Sales
HNC = head and neck cancer
71Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
5
10
15
20
25
30
35
40
AZ AMGN GSK NVS MRK LLY ROCHE PFE ABT DNA GILD
Cumulative Sales of Products Launched Since January 2001
Cum
ulat
ive
Sale
s 20
01–2
007
($ B
illio
ns)
Source: EvaluatePharma Top Drugs 2007; first introduced after 2000Note: Nexium® and Symbicort® included in analysis, US approval 2001; EU introduction 2000
Denosumab PMO Launch Discussion
73Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
For Many Patients, It’s About the Journey
Bisphosphonate clinical trial efficacy
Denosumabclinical trial efficacy
Real-world efficacy
Real-world efficacy
Why?
How?
X
74Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Value Depends on Cost and Real-World Outcomes
Everyone Else
Highly Compliant Generic BP Responders
Treated PMO Population*
*Illustrative example
75Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Top Questions Investors Have for Denosumab in PMO
Q1. What will it take to successfully launch denosumab in PMO?
Q2. Why might doctors prescribe denosumab vs what they are currently using?
Q3. Who are the most likely patient candidates at launch?
Q4. What type of reimbursement might be in place at launch, and how will denosumab be accessed and administered?
Q5. What might the shape of the sales curve look like?
Q6. What will be denosumab’s value proposition vs bisphosphonates?
Q7. How many reps do you need to successfully launch denosumab, and what is your view on partnering opportunities?
76Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q1: What Will It Take to Successfully Launch Denosumab in PMO?
Product that is clinically attractive to many doctors/patients
Product that is easy for doctors to access and administer with manageable financial risk
Product that is easy for patients to access/comply with, without overly burdensome out-of-pocket costs
77Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
This slide has been left blank intentionally
78Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
77% 78%
23% 22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Preference OverallSatisfaction
Injection Tablet
78% 79%
22% 21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Preference OverallSatisfaction
Injection Tablet
Nearly 80% of Patients Preferred 6 Months SC Injection vs Oral Weekly Tablet
Pref
eren
ceA
mon
g Th
ose
Who
Exp
ress
ed P
refe
renc
e
Pref
eren
ceA
mon
g Th
ose
Who
Exp
ress
ed P
refe
renc
e
Patients Previously Treated With Bisphosphonates
†
*p < 0.0001 for injection vs tablet †Pre-specified exploratory endpoint
* *
†
Patients Naïve to Bisphosphonate Therapy
79Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q1: What Will It Take to Successfully Launch Denosumab in PMO?
Product that is clinically attractive to many doctors/patients
Product that is easy for doctors to access and administer with manageable financial risk
Product that is easy for patients to access/comply with, without overly burdensome out-of-pocket costs
80Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q2: Why Might Doctors Prescribe Denosumab vs What They Are Currently Using?
80% of MDs indicated that there remains a need for new products1
Most desirable attributes2
– Prevents fractures– Safety– Good compliance– Strengthens bone (increases BMD)– Good formulary status– Well tolerated
BMD = bone mineral density1US ATU Study Wave 3, Quant Study with GPs and Specialists in US, May 20072Global DMAB PMO ATU, Quant Study with GPs and Specialists in the US and ICO, May 2007
81Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
PTH = parathyroid hormoneSERM = selective estrogen receptor modulatorSource: Estimates calculated through Amgen analysis of multiple secondary data sets, 2008.
Q3: Who Are the Most Likely Patient Candidates at Launch?
7.8
20.9
7.7
3.210.8
5.30.6
0
5
10
15
20
25
30
35
Prevalence Diagnosed Treated
Patie
nts
(in M
illio
ns)
$5.4B/9.1M Patients
Osteopenia
Osteoporosis
37% of Osteopenia;73% of Osteoporosis
Diagnosis Rate: 49%
Treatment Rate: 58%
Patient Share by Treatment Class, 2007
Higher-RiskOsteopenia
Bisphosphonates82%
SERM13%
PTH1%
Calcitonin4%
US PMO Patient Waterfall, 2007
82Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
The Unmet Need With Current PMO Treatments Is Substantial
Of the estimated 5.3 million treated osteoporotic women in the US:
Approximately 3M experience GI symptoms, no gain or declining BMD, or fracture while on treatment
A further 1M have discontinued treatment but remain under care of MD
Treated Osteoporosis Patients in the US(5.3M)
GI Symptoms
No Gain/Declining BMD
Newly Treated With Fracture
All Other
2.4
0.5
2.0
0.4
GI = gastrointestinalSources: Estimated based on Adelphi PMO Chart Audit (2004), IMS MIDAS (2007), Verispan PDDA (2007), Mattson Jack Epidemiology Database (2007), and Medstat Medical Claims data (2005).
83Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
GI Side Effects Are Commonly Reported by BP Users
Woo, et al, 2008; ASBMR Abstract.
Odd
s R
atio
Data from Amgen POSSIBLE US™ Registry
1 1
1.3
1.6
0.0
0.5
1.0
1.5
2.0
New (N = 1,130) Stable (N = 1,632)
No BP Therapy On BP Therapy
New or currently treated oral BP patients have a30–60% probability of GI side effects
84Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
0
25
50
75
100
0 6 12 18 24 30 36
Months Following Therapy Initiation
On
Ther
apy,
%
Discontinuation of Therapy Is a Major Challenge With Oral Bisphosphonates
Adapted from Weycker, et al. OI:2006;17–1645.
30% of patients discontinue BP therapy within the first 6 months, and 50% within 1 year
85Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q4: What Type of Reimbursement Might Be in Place at Launch, and How Will Denosumab Be Accessed and Administered?
Overall– 6 months administration– Prefilled syringe– Cold chain storage required
US– Expect HCP administration– 50–60% Medicare/40–50% commercial payer split– Medicare
• Part B: MACs to determine coverage postlaunch• Part D: Plans to assess coverage and formulary placement postlaunch
– Commercial payers will decide medical and pharmacy benefitEurope
– Expect HCP administration– Retail channel—minimal to no out-of-pocket– In most EU countries there will be a single national coverage
decision that will be known before we launch the drug
Product/market characteristics
HCP = health care professionalMAC = Medicare Administrative Contractor
86Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Reimbursement Will Likely Follow Two General Pathways, With Different Impacts on Patients and Physicians
Medicare Part B Oncology
PMO
Limited restrictions
Requires MD buy and bill, or refer
Low patient OOP; most have supplemental/ annual max
Commercial Medical
OncologyPMO
Limited restrictions
Requires MD buy and bill, refer, or use SPP
Low patient OOP; most have supplemental/ annual max
Medical Benefit Coverage
Medicare Part DPMO
Most utilization restrictions
TieringPrior authorizations
Retail pharmacy only
Highest patient OOP; 100% in donut hole
Commercial Pharmacy
PMO
More utilization restrictions
TieringPrior authorizations
Retail or specialty pharmacy
Higher patient OOP; no annual cap
Pharmacy Benefit Coverage
OOP = out-of-pocketSPP = specialty pharmacy provider
87Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
20%Pays co-insurance
Supplemental pays: 16%
Patient pays: 4%
Patient
80%Bills carrier for: Product: ASP+6%Injection: ~ $15–20
Provides injection
Purchases productMD
US Medicare: Illustrative Example
MD Writes Medical Order
Part DPart B
Buy and Bill
For vast majority
88Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
MD Writes PrescriptionPrior Authorization/Step Edit Option
US Medicare: Illustrative Example
Part DPart B
~ $15–20Bills Part D plan (for injection)
Provides injectionMD
“Donut Hole”
25% co-insurance$30–50Patient
Bills Part D plan (for product)
Provides product to patientRetail Pharmacy
89Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
US Commercial Payer: Illustrative Example
Pharmacy BenefitMedical Benefit
Buy and BillPurchases product
Provides injection
Bills carrier for: Product: ASP- or AWP-based
Injection: ~ $15–20
MD
$0–$50Pays co-insurancePatient For vast majority
MD Writes Medical Order
ASP = average sale priceAWP = average wholesale price
90Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
US Commercial Payer: Illustrative Example
Pharmacy BenefitMedical Benefit
Specialty Pharmacy
~ $15–20Bills health plan (for injection)
Provides injectionMD
~ $50 co-pay/ 20% co-insurance
Pays co-pay/co-insurance
Patient
Bills health plan (for product)
Provides product to patientPharmacy
MD Writes PrescriptionPrior Authorization/Step Edit Option
91Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
In EU, Injectable Distribution and Reimbursement Pathways Are Well Established in Each Country
PharmacyPatients
dispensed syringe
Community nurse at homePatient MD
Pharmacy
Hospital
HCP administersPatients
dispensed syringe
Patient MD
Compliance solutions will be optimized for each country
Distribution ModelCountry
France
Germany
92Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Retail Channel Expected to Dominate and Some Regions May Have Prescribing Restrictions
Physician Limitations and Prescribing RestrictionsCountry
France
Germany
Specialists/PCPs can initiate as first line treatment if prior fracture or high risk
Specialists/PCPs encouraged to use generics as first line treatment
PCP = primary care physician
93Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q5: What Might the Shape of the Sales Curve Look Like?
In the US, typically 50% of high prescribing MDs will try a new innovative product within 6 months of launch*
MDs frequently discuss treatment options with their patients
Typically, a biologic will have a different adoption curve from an oral product
*IMS data
94Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Successful Early Experience Will Be Key to Expanding Use Over Time
Broader Adoption
Any emerging safety
issues?
Compliance system
working?
Any significant payer
constraints on patient selection?
Included in options MD offers for a broad range of patients
Hassle for office staff?
Early Trial
Trial in a few “most
difficult to treat”
patients
Tolerability issues?
Am I in line with local
experts and peers?
Included in options MD offers for
“unsatisfied”patients
Reimbursement reliable?
Affordable for patient?
95Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Specialists Drive More Volume in EU Than in US
TRx = total prescriptionsTRx data covers the period July 2007 to June 2008 (Fosamax®, generic alendronate, Actonel®, Boniva®, Evista®, Forteo®, and Miacalcin®)Underlying data is IMS Health Confidential and Proprietary. Source: IMS XponentPCPs include GP/FP/FM/IM, Endo includes END/REN, only retail and mail order scripts/sales are considered. Decile 0, Urologists and Oncologists (IMS spec codes: U/UP/GO/RO/SO/PHO/OMO/ON/HO) were excluded.Top five “Other” subcategories by TRx include NP, PA, Cardiologists, Pulmonary Disease Specialists, and Geriatric IM Specialists.
0
10,000
20,000
30,000
40,000
50,000
60,000
UK France Germany Italy Spain
EndocrinologyGeriatricsInternal Medicine
GynecologyOrthopedicsRheumatology
68%
13%13%
4% 2%
PMO TRx by Specialty(% of total)
Other
Rheumatologist
Endocrinologist
OB/GYN
PCP
96Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q6: What Will Be Denosumab’s Value Proposition vs Bisphosphonates?
PMO-related fractures are costly to the health care system
Poor compliance leaves many patients at risk
Real-world fracture reduction may not be realized with oral bisphosphonates
A treatment that provides improved compliance offers the potential to significantly improve treatment outcomes and reduce costs
97Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
PMO-Related Fractures Are Costly to the Health Care System
US Health Care Expenditure for Osteoporotic Fracture*($ Billions)
Type Inpatient Hospital
Emergency Room Outpatient Nursing
Home Total
Hip $7.7 $0.2 $0.2 $3.9 $12.0
Spine* 0.8 0.0 0.0 0.2 1.0
Other 3.4 0.6 0.7 1.3 6.0
Total $11.9 $0.8 $1.0 $5.4 $19.1
Note: Totals may not sum due to rounding*Ray, et al. JBMR. 1997
98Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Poor Compliance Leaves Many Oral Bisphosphonate Patients at Risk
Fracture risk is not reduced unless a minimum compliance rate of 50% is achieved
*Medication Possession Ratio (MPR) measures refill compliance: the percentage of time a medication was availableSiris ES, et al. Mayo Clin Proc. 2006;81:1013–1022.Adapted from Weycker, et al. OI:2006;17–1645.
0.07
0.08
0.09
0.1
0.11
0.12
0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Prob
abili
ty o
f Fra
ctur
e at
24
Mon
ths
Medication Possession Ratio*
99Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Real-World Fracture Reduction May Not Be Realized With Oral Bisphosphonates
Kaiser Northwest: Simulation of FIT Trial Using EMR Data
96%45%Compliance (MPR ≥ 80%)
13.6% vs 18.2%HR = 0.72 (0.58–0.90)
9.8% vs 10.8%HR = 0.91 (0.74–1.12)
Any clinical fracture (treated vs comparison)
FIT randomized trial†N = 2,027
Current EMR study* N = 3,658Variable
†FIT 1 Fracture Invervention TrialEMR = electronic medical recordsHR = hazard ratioMPR = medication possession ratio*Feldstein et al, Bone 2008; †Black et al, 1996, Lancet 1535
100Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Treatment Alternatives
Tolerability issuesPoorly compliantDeclining BMDHigher risk
PMO Patient Characteristics
No tolerability issuesHighly compliantIncreasing BMDLower risk
Realized Value to Payers Will Be Driven by Improved Compliance, Patient Selection, and Relative Price
GenericBPs
BrandedBPs
Improved Outcomes
Value of Dmab
101Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q7: How Many Reps Do You Need to Successfully Launch Denosumab, and What Is Your View on Partnering Opportunities?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 100,000 200,000 300,000
PMO Prescribers in Descending Order of Volume
Cum
ulat
ive
Pres
crip
tion
Volu
me
(% o
f Tot
al)
2008 Prescription Concentration Curve*
*All PMO treatments
102Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q7: How Many Reps Do You Need to Successfully Launch Denosumab, and What Is Your View on Partnering Opportunities?
500–1,000 repsField Resources
100,000 docs = 85% PMO sales
Universe = 400,000 docsPMO Market Characteristics
US
800–1,500 reps
100,000 docs = 50% PMO sales
Universe = 700,000 docs
International*
*International = 27 total countries (excludes Canada)
We are evaluating partnering opportunities that would create value for both parties
103Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Essential Launch Capabilities to Drive Rapid Adoption
Highly trained, experienced reps– Equally skilled in scientific, clinical, reimbursement, and
fulfillment issues– Supported by tools to educate, advocate, and communicate
the value of denosumab to HCPs and office staff
Engaged, knowledgeable opinion leaders eager to help educate PCPs
A hub of services that are easy to access and use– Fulfillment solutions– Reimbursement assistance– Co-pay assistance (US)– Adherence program– Patient information
Denosumab Oncology Launch Discussion
105Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Top Questions Investors Have for Denosumab in Oncology
Q1: How do the study populations translate into real-world populations, and what is the size of these populations?
Q2: Why might oncologists/urologists prescribe denosumab vs current practice?
Q3: What type of reimbursement might be in place at launch and how will denosumab be accessed and administered?
106Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
UntreatedTreated
220K Diagnosed US Patients→ 78% Untreated
50K
170K
Sources: 1. Mattson Jack Cancer Metric; 2. Tandem Cancer Audit; 3. IMS Midas Unit Data;4. Projected from IMS NPA Oncology and Urology TRx
Cancer Treatment-Induced Bone Loss Is an Underdeveloped Market
No currently approved agents
Study dose: 60 mg Q6M
107Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Sources: 1. Mattson Jack Cancer Metric
The Potential to Delay Progression to Bone Metastases in Prostate Cancer Represents a Practice-Changing Opportunity
No currently approved agents
Study dose: 120 mg QM58K 72K
130K Stage 3 US Patients → 45% With Rising PSAs
Rising PSAs Stable PSAs
108Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Sources: 1. Mattson Jack Cancer Metric; 2. Tandem Cancer Audit; 3. IMS Midas Unit Data;
The Treatment of Bone Mets Is a Large Market With Significant Growth Potential
Currently approved agents: Zometa® and pamidronate
Study dose: 120 mg QM142K238K
380K Total US Patients→ 63% Untreated
UntreatedTreated
109Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q2: Why Might Oncologists/Urologists Prescribe Denosumab vs Current Practice?
Despite the availability of IV BPs, 60–65% of patients with bone mets are not being treated– IV administration– ONJ/renal toxicity
Most desirable attributes– Efficacy across all stages of disease– Well tolerated– Safety– SC administration– Potential to prevent/delay bone mets– Convenient for patients
ONJ = osteonecrosis of the jaw
110Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Q3: What Type of Reimbursement Might Be in Place at Launch, and How Will Denosumab Be Accessed and Administered?
Product characteristics– 120 mg vial and 60 mg prefilled syringe
Payers: US cancer-induced bone disease1
– Oncology payer mix: 45% Medicare/53% commercial/2% Medicaid
– CMS will address Part B postlaunch– PDPs will address Part D formulary placement in normal
review cycle– Commercial payers will decide medical and/or pharmacy
benefitEU cancer-induced bone disease treatment patterns– Similar treatment dynamics with ~ 140K patients treated of
320K with bone mets2
PDP = prescription drug plan1IMS NDTI data2Mattson Jack CancerMetric and Tandem Cancer Audit
111Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Critical Success Factors
PMO– Provide HCPs with a simple, flexible approach to access and
administer the product– Provide patients with a convenient, effective program to
optimize compliance
Oncology– Demonstrate robust efficacy across all stages of disease– Deliver these benefits with a well-tolerated, SC-administered
product with favorable risk/benefit profile
Both markets– Engage payers constructively to deliver a credible value
proposition based on unique product benefits
A Focus on Value CreationRobert A. BradwayExecutive Vice President and CFO
113Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Driving Value Growth
Grow Earnings and Cash Flows
Optimize Our Capital Structure
Financial Objectives
Return Excess Capital to Our Shareholders
MaintainStrategic Flexibility
114Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
8.4
10.6
12.4
14.314.8
2003 2004 2005 2006 2007 2008 (est)
1.90
2.40
3.20
3.90
4.29
2003 2004 2005 2006 2007 2008 (est)
A Strong Track Record of Revenues and EPS Growth
14.9–15.25-year CAGR ~ 12%
Revenues($ billions)
4.45–4.555-year CAGR ~ 19%
Adjusted EPS*
($/share)
*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slideis delivered electronically, see reconciliations available at: www.amgen.com within the Investors section.
115Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
*Net cash provided by operating activities as presented or derived from our public filings.**Cash flow from operations less capital expenditures.***Last 12 months ending September 30, 2008.†Based on 2003–2007.
A Strong Track Record of Cash Flow Growth
3.6 3.7
4.9
5.4 5.4
2003 2004 2005 2006 2007 LTM***
6.14-year CAGR†
~ 11%
Cash Flow From Operations*
($ billions)
2.22.4
4.04.2 4.1
2003 2004 2005 2006 2007 LTM***
5.4
4-year CAGR†
~ 17%
Free Cash Flow**
($ billions)
116Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Demonstrated Ability to Adapt Quickly and Deliver on Restructuring
Reduced headcount by ~ 13%
Rationalized facilities and slowed expansion plans
Reduced planned 2007–2008 capital expenditures by $2.4B
Partnered key pipeline molecules in Japan with Takeda
$1.0B–$1.3B of annual pre-tax savings by 2008 versus plan~ $2.5B increase in planned cash flow through 2008
117Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Despite a $1 Billion Decline in ESA Sales Since 2006, Our Operating Margins Have Held Up
3.9
5.0
6.6 6.15.7 5.6**
10%
20%
30%
40%
50%
2003 2004 2005 2006 2007 2008$0
$2
$4
$6
$8
Operating Margin*
ESA Sales$ Billions
OperatingMargin*
*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slideis delivered electronically, see reconciliations available at: www.amgen.com within the Investors section.
**2008 ESA Sales Based on Analyst Estimates; Source: Thomson Financial.
ESA SalesESA = erythropoiesis stimulating agent
118Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Remain Focused on Our Cost Structure and Continue to Pursue Efficiencies
Cost of sales– Push for process improvements and lower manufacturing costs– Seek opportunities to rationalize manufacturing facilities– Continue to seek tax efficient manufacturing
R&D– Continue to invest (~ 20% of sales)
SG&A– Will reflect investment in launch of denosumab
Wyeth co-promotion agreement– Co-promotion agreement expires in November 2013– Profit share replaced by smaller residual royalties at decreasing
rates for 3 years– Amgen will then have full rights in North America
119Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
1.0 1.0
0.0
2.5
0.0
2.5
1.0
0.0 0.0
1.10.5
1.6
Q4 08
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Thereafte
r
We Are Focused on Managing Our Capital Structure
Credit rating provides financial flexibility
Balanced debt maturity profile
Debt is 68% fixed and 32% floating*
– Relatively high proportion of fixed-rate debt reflects long-term nature of assets
$2.3 billion credit facility that matures in 2012
A/F1FitchA+/A1S&PA3/P2Moody’s
$B
0.48x11.27.2
2007 Q3 2008$B
0.54xCFO:Debt11.2Debt9.8Cash
Positive trends in cash and CFO:debt
*As of September 30, 2008.CFO = 12-month trailing cash flow from operations
120Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Actively Manage Our Foreign Exchange Risk
International sales represented ~ 23% of total sales in Q3 2008
Our revenue exposure is partially offset by expenses incurred outside the US
We hedge our net foreign exchange exposure over a rolling 3-year horizon
Our largest currency exposure is to the Euro
121Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
We Manage Our Investment Portfolio Conservatively
US Treasury and Agencies
Asset-Backed Securities
Commercial Paper and Repurchase
Agreements*
Corporate Bonds
Money Market Funds**
*Repurchase agreements are 102% collateralized by US Treasury and Agency securities.**Primarily invested in funds whose underlying securities are US Treasuries and Agencies.CDO = collateralized debt obligationSIV = structured investment vehicleData as of September 30, 2008.
We have no portfolio exposure to subprime mortgages, CDOs, SIVs, auction rate securities, or similar instruments
122Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Overview of Amgen Acquisitions and Select In-Licensing Deals
September 2003MetabolismBiovitrum
October 2005NeuroscienceMemory
July 2006NephrologyProStrakan
October 2006OncologyTetraLogic
January 2007CardiovascularCytokinetics
DateTherapeutic AreaPartner Licensing
Genmab
Predix/Epix
Kyowa Hakko
Inflammation
Inflammation
Inflammation/Oncology March 2008
June 2003
July 2006
123Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
$4.9 billion of authorization remaining
0
1,000
2,000
3,000
4,000
5,000
6,000
2003 2004 2005 2006 2007 2008 YTD*
We’re Committed to Returning Capital to Our Shareholders
($ Millions)
*Through September 30, 2008.
124Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
An Opportunity to Accelerate Growth
Maturing products’ growth will be driven primarily by patient and price growth for several years
Growth products will benefit from increasing penetration of growing markets, along with some new indications
Contribution of new products will be incremental
No near-term major patent expirations
Continue to focus on managing our cost structure
Capital decisions being optimized
Aspire to grow revenues and adjusted EPS at industry-leading levels
Reconciliations
126Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Condensed Consolidated Statements of Income andReconciliation of GAAP Earnings to "Adjusted" Earnings (In millions, except per share data)(Unaudited)
Year Ended Year Ended
GAAP "Adjusted" GAAP "Adjusted" Revenues:
Product sales............................................................... 14,311$ -$ 14,311$ 13,858$ -$ 13,858$ Other revenues............................................................ 460 - 460 410 - 410
Total revenues........................................................ 14,771 - 14,771 14,268 - 14,268
Operating expenses:Cost of sales (excludes amortization of
acquired intangible assets presented below).......... 2,548 (16) (a) 2,255 2,095 (9) (a) 2,080 (150) (b) (6) (i)
(90) (h)(7) (i)
(30) (j)Research and development.......................................... 3,266 (83) (a) 3,064 3,366 (104) (a) 3,191
(19) (b) (48) (c)(71) (c) (19) (d)(29) (d) (4) (i)
Selling, general and administrative............................... 3,361 (82) (a) 3,382 3,366 (120) (a) 3,234 124 (b) (12) (d)(21) (e)
Write-off of acquired in-process R&D........................... 590 (590) (k) - 1,231 (1,231) (k) - Amortization of intangible assets.................................. 298 (295) (f) - 370 (321) (f) -
(3) (l) (49) (l)Other items.................................................................. 728 (694) (b) - - - -
(34) (g)Total operating expenses....................................... 10,791 (2,090) 8,701 10,428 (1,923) 8,505
Operating income.............................................................. 3,980 2,090 6,070 3,840 1,923 5,763
Interest and other income and (expense), net................... (19) 51 (m) 32 180 - 180
Income before income taxes............................................. 3,961 2,141 6,102 4,020 1,923 5,943
Provision for income taxes................................................ 795 92 (n) 1,298 1,070 253 (p) 1,323 411 (o)
Net income........................................................................ 3,166$ 1,638$ 4,804$ 2,950$ 1,670$ 4,620$
Earnings per share:Basic ........................................................................... 2.83$ 4.30$ 2.51$ 3.93$ Diluted (q) ................................................................... 2.82$ 4.29$ (a) 2.48$ 3.90$ (a)
Average shares used in calculationof earnings per share:Basic ........................................................................... 1,117 1,117 1,176 1,176 Diluted (q) ................................................................... 1,123 1,121 (a) 1,190 1,186 (a)
(a) - (q) See explanatory notes on following pages. 4.290098127 3.8998
December 31, 2007 December 31, 2006Adjustments Adjustments
127Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Condensed Consolidated Statements of Operations andReconciliation of GAAP Earnings to "Adjusted" Earnings(In millions, except per share data)(Unaudited)
Year Ended Year Ended
GAAP Adjustments "Adjusted" GAAP Adjustments "Adjusted"Revenues:
Product sales................................................................ 12,022$ -$ 12,022$ 9,977$ -$ 9,977$ Other revenues............................................................. 408 - 408 573 - 573
Total revenues......................................................... 12,430 - 12,430 10,550 - 10,550
Operating expenses:Cost of sales (excludes amortization of
acquired intangible assets presented below)........... 2,082 (47) (v) 2,035 1,731 (2) (z) 1,729 Research and development........................................... 2,314 (12) (r) 2,302 2,028 (16) (r) 1,996
(16) (z)Selling, general and administrative................................ 2,790 2 (s) 2,792 2,556 (11) (r) 2,548
(8) (z)11 (s)
Write-off of acquired in-process R&D............................ - - - 554 (554) (aa) - Amortization of intangible assets................................... 347 (347) (t) - 333 (333) (t) - Legal settlements.......................................................... 49 (49) (w) - - - -
Total operating expenses........................................ 7,582 (453) 7,129 7,202 (929) 6,273
Operating income............................................................... 4,848 453 5,301 3,348 929 4,277
Interest and other income, net........................................... 20 (20) (x) 20 47 - 47 20 (y)
Income before income taxes.............................................. 4,868 453 5,321 3,395 929 4,324
Provision for income taxes................................................. 1,194 (43) (u) 1,298 1,032 144 (bb) 1,176 147 (bb)
Net income......................................................................... 3,674$ 349$ 4,023$ 2,363$ 785$ 3,148$
Earnings per share:Basic ............................................................................ 2.97$ 3.25$ 1.86$ 2.48$ Diluted (cc) ................................................................... 2.93$ 3.20$ 1.81$ 2.40$
Shares used in calculation of earnings per share:Basic ............................................................................ 1,236 1,236 1,271 1,271 Diluted (cc) ................................................................... 1,258 1,258 1,320 1,320
(r) - (cc) See explanatory notes on following pages.
December 31, 2005 December 31, 2004
128Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
(In millions, except per share data)(Unaudited)
Year Ended
GAAP Adjustments "Adjusted"Revenues:
Product sales................................................................ 7,868$ -$ 7,868$ Other revenues............................................................. 488 - 488
Total revenues........................................................ 8,356 - 8,356
Operating expenses:Cost of sales (excludes amortization of
acquired intangible assets presented below).......... 1,341 (19) (dd) 1,322 Research and development.......................................... 1,655 (34) (dd) 1,621 Selling, general and administrative............................... 1,957 (17) (dd) 1,893
(47) (gg)Amortization of intangible assets.................................. 336 (336) (ee) - Other items................................................................... (24) 74 (hh) -
(50) (ff)Total operating expenses........................................ 5,265 (429) 4,836
Operating income............................................................... 3,091 429 3,520
Interest and other income, net............................................ 82 - 82
Income before income taxes.............................................. 3,173 429 3,602
Provision for income taxes................................................. 914 149 (ii) 1,063
Net income......................................................................... 2,259$ 280$ 2,539$
20.8 20.8Earnings per share:
Basic ........................................................................... 1.75$ 1.97$ Diluted (jj) .................................................................... 1.69$ 1.90$
Shares used in calculation of earnings per share:Basic ........................................................................... 1,288 1,288 Diluted (jj) .................................................................... 1,346 1,346
(dd) - (jj) See explanatory notes on following pages.
December 31, 2003
129Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings (In millions, except per share data)(Unaudited)
(a) To exclude the impact of stock option expense recorded in accordance with Statement of Financial Accounting Standards ("SFAS") No. 123R. For the years ended December 31, 2007 and 2006, the total pre-tax expense for employee stock optionsin accordance with SFAS No. 123R was $181 million and $233 million, respectively.
"Adjusted" diluted EPS including the impact of stock option expense for the years ended December 31, 2007 and 2006 was as follows:
2007 2006
"Adjusted" diluted EPS, excluding stock option expense........................... 4.29$ 3.90$ Impact of stock option expense........................................................... (0.12) (0.14)
"Adjusted" diluted EPS, including stock option expense............................ 4.17$ 3.76$
(b) The following table summarizes the (expense)/income amounts related to the restructuring plan:
Cost of sales (excluding amortization of intangible$ 1 $ (4) $ (147) $ - $ (150) 19 (38) - - (19) 11 - (1) 114 124 (209) (366) - (119) (694)$ (178) $ (408) $ (148) $ (5) $ (739)
(1) To exclude severance and other separation costs partially offset by the reversal of previously accrued expenses for bonuses and stock-based compensation awards, which were forfeited as a result of the employees' termination.
(2) To exclude asset impairment charges incurred in connection with the rationalization of our worldwide manufacturing operationsin order to gain cost efficiencies and, to a lesser degree, the moderation of the expansion of our research facilities.
(3) To exclude accelerated depreciation primarily resulting from our decision to accelerate the closure of one of our ENBREL commercial bulk production operations in connection with the rationalization of our worldwide network of manufacturing facilities. The decision to accelerate the closure of this manufacturing operation was principally based on a thorough review of the supply plan for bulk ENBREL inventory across its worldwide manufacturing network, including consideration of expected increases in manufacturing yields, and the determination that the related assets had no future uses in the Company's operations. The amount included in the table above represents the excess of accelerated depreciation expense over the depreciation that would otherwise have been recorded if there were no plans to accelerate the closure of this manufacturing operation.
(4) To exclude from SG&A the cost recoveries for certain restructuring expenses, principally with respect to accelerated depreciation,in connection with our co-promotion agreement with Wyeth. Also, to exclude from Other items charges principally related to loss accruals for leases for certain research and development facilities that will not be used in our business.
(c) To exclude, for the applicable periods, the ongoing, non-cash amortization of the R&D technology intangible assets acquired with the acquisition of Abgenix, Inc. ("Abgenix"), effective April 1, 2006, and Avidia, Inc. ("Avidia"), effective October 24, 2006.
(d) To exclude, for the applicable periods, merger related expenses incurred due to the Alantos Pharmaceutical Holding, Inc. ("Alantos"), Ilypsa, Inc. ("Ilypsa"), Avidia, Abgenix and Tularik Inc. ("Tularik") acquisitions, primarily related to incremental costs associated with retention and/or integration. Substantially all related amounts have been incurred.
(e) To exclude severance related expenses incurred in connection with our acquisition of the remaining 51 percent ownership interest ofDompe Biotec, S.p.A. ("Dompe").
Year Ended
Accelerated Depreciation
(3)Separation Costs (1)
Asset Impairment
(2) Other (4)
December 31,
Total
Other items..................................................................
assets)..................................................................
Year Ended December 31, 2007
Research and development (R&D)...............................Selling, general and administrative (SG&A).................
130Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings (In millions, except per share data)(Unaudited)
(f) To exclude the ongoing, non-cash amortization of acquired product technology rights, primarily ENBREL, related to the Immunex Corporation ("Immunex") acquisition.
(g) To exclude a loss accrual for an ongoing commercial legal proceeding.
(h) To exclude the write-off of inventory principally due to changing regulatory and reimbursement environments.
(i) To exclude merger related expenses incurred due to the Abgenix acquisition, primarily related to incremental costs associatedwith recording inventory acquired at fair value which is in excess of our manufacturing cost.
(j) To exclude the impact of writing-off the cost of a semi-completed manufacturing asset that will not be used due to a change in manufacturing strategy.
(k) To exclude for the applicable periods the non-cash expense associated with writing-off the acquired in-process research and development ("IPR&D") related to the acquisitions of Abgenix and Avidia in 2006 and Alantos and Ilypsa in 2007.
(l) To exclude the impairment of a non-ENBREL related intangible asset previously acquired in the Immunex acquisition.
(m) To exclude the pro rata portion of the deferred financing and related costs that were immediately charged to interest expense as a result of certain holders of the convertible notes due in 2032 exercising their March 1, 2007 put option and the related convertiblenotes being repaid in cash.
(n) To exclude the income tax benefit recognized as the result of resolving certain non-routine transfer pricing issues with the Internal Revenue Service ("IRS") for prior periods.
(o) To reflect the tax effect of the above adjustments for 2007, excluding for the applicable periods: (1) certain of the restructuring charges (see (b) above), (2) certain components of the write-off of inventory (see (h) above), (3) the write-off of the acquired IPR&D related to the Alantos and Ilypsa acquisitions (see (k) above), (4) the write-off of the cost of a semi-completed manufacturing asset (see (j) above), and (5) the tax benefit recognized as a result of resolving certain non-routine transfer pricing issues with the IRS (see (n) above).
(p) To reflect the tax effect of the above adjustments for 2006, excluding for the applicable periods the write-off of the acquired IPR&D related to the Abgenix and Avidia acquisitions (see (k) above).
(q) The following table presents the computations for GAAP and "Adjusted" diluted earnings per share, computed under the treasurystock method. "Adjusted" earnings per share presented below excludes stock option expense:
GAAP "Adjusted" GAAP "Adjusted" Income (Numerator):
Net income for basic and diluted EPS.................... 3,166$ 4,804$ 2,950$ 4,620$
Shares (Denominator): Weighted-average shares for basic EPS............... 1,117 1,117 1,176 1,176 Effect of dilutive securities..................................... 6 4 ( ) 14 10 ( )Weighted-average shares for diluted EPS............. 1,123 1,121 1,190 1,186
Diluted earnings per share........................................... 2.82$ 4.29$ 2.48$ 3.90$
( ) Dilutive securities used to compute "Adjusted" diluted earnings per share for the years ended December 31, 2007 and 2006were computed exclusive of the methodology used to determine dilutive securities under SFAS No. 123R.
December 31, 2007 December 31, 2006Year Ended Year Ended
131Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings(In millions, except per share data)(Unaudited)
(r) To exclude the incremental compensation provided to certain Tularik employees principally related to non-cashcompensation expense associated with stock options assumed in connection with the acquisition and amounts payable under the Tularik short-term retention plan.
(s) To exclude the impact to the Company of its share of the third-party reimbursements received by Kirin-Amgen, Inc. ("KA")related to the Genentech, Inc. ("Genentech") legal settlement in August 2003.
(t) To exclude the ongoing, non-cash amortization of acquired intangible assets, primarily ENBREL, related to the Immunexacquisition.
(u) To exclude the tax liability incurred as a result of repatriating certain foreign earnings under the American Jobs Act of 2004.
(v) To exclude the impact of writing off the cost of a semi-completed manufacturing asset that will not be used due to a change in manufacturing strategy.
(w) To exclude the impact of legal settlements incurred, net of amounts previously accrued, primarily related to settling a patent legal proceeding.
(x) To exclude the net gain realized on the termination of a manufacturing agreement with Genentech for the production of ENBREL at Genentech's manufacturing facility in San Francisco, California.
(y) To exclude the pro rata portion of the debt issuance costs that were immediately charged to interest expense, as a result of certain holders of the convertible notes exercising their March 1, 2005 put option and the related convertible notes beingrepaid in cash.
(z) To exclude the incremental compensation payable to certain Immunex employees principally under the Immunex short-term retention plan. All amounts have been incurred under this plan.
(aa) To exclude the non-cash expense associated with writing off the acquired in-process research and development relatedto the Tularik acquisition.
(bb) To reflect the tax effect of the above adjustments, except for the tax liability incurred as a result of repatriating certain foreign
earnings (see (u) above), the write-off of the cost of a semi-completed manufacturing asset (see (v) above), and the
write-off of acquired in-process R&D (see (aa) above).
(cc) The following table presents the computations for GAAP and "Adjusted" diluted earnings per share (EPS) computed underthe treasury stock and the "if-converted" methods:
GAAP "Adjusted" GAAP "Adjusted"Income (Numerator):
Net income for basic EPS ............................................ 3,674$ 4,023$ 2,363$ 3,148$ Adjustment for interest expense on
convertible notes, net of tax .................................... 6 (φ) 6 (φ) 21 21 Net income for diluted EPS, after assumed
conversion of convertible notes ............................... 3,680$ 4,029$ 2,384$ 3,169$
Shares (Denominator): Weighted-average shares for basic EPS ..................... 1,236 1,236 1,271 1,271 Effect of dilutive securities ........................................... 12 12 14 14 Effect of convertible notes, after assumed
conversion .............................................................. 10 (φ) 10 (φ) 35 35 Weighted-average shares for diluted EPS ................... 1,258 1,258 1,320 1,320
Diluted earnings per share ............................................... 2.93$ 3.20$ 1.81$ 2.40$
(φ) On May 6, 2005 and August 17, 2005, in connection with an exchange offer, we modified the terms of approximately 99 percent of our convertible notes then outstanding (the "Modified Convertible Notes"). As a result of certain of these modifications, if converted, the Modified Convertible Notes would be settled in 1) cash equal to the lesser of the accreted value of the Modified Convertible Notes at the conversion date or the conversion value, as defined, and 2) shares of common stock, if any, to the extent the conversion value exceeds the accreted value. Accordingly, the Modified Convertible Notes do not impact diluted earnings per share under the "if-converted" method but rather, they impact diluted earnings per share under the treasury stock method, and only to the extent that the conversion value exceeds the accreted value during any reporting period, requiring such difference, if any, to be potentially settled in shares of common stock.
December 31, 2005 December 31, 2004Year Ended Year Ended
132Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings(In millions, except per share data)(Unaudited)
(dd) To exclude the incremental compensation payable to certain Immunex employees principally under the Immunex short-term retention plan.
(ee) To exclude the ongoing, non-cash amortization of acquired intangible assets, primarily ENBREL®, related to the Immunex acquisition.
(ff) To exclude a cash contribution to the Amgen Foundation.
(gg) To exclude the impact to the Company of a legal settlement paid to Genentech in connection with settling a patentlitigation matter relating to the Company's processes for producing NEUPOGEN® and Neulasta®. Pursuant to the terms of a license agreement between the Company and KA, an entity 50% owned by the Company, KA was obligated to indemnify the Company for the payment made to Genentech. The Company accounts for its ownership interest in KA under the equity method.
(hh) To exclude a benefit for the recovery of costs and expenses associated with a legal award related to an arbitrationproceeding with Johnson & Johnson.
(ii) To reflect the tax effect of the above adjustments.
(jj) The following tables present the computations for GAAP and "Adjusted" diluted earnings per share computed under
the treasury stock and the "if-converted" methods:
GAAP "Adjusted"Income (Numerator):
Net income for basic EPS .......................................................... 2,259$ 2,539$ Adjustment for interest expense on
Convertible Notes, net of tax ................................................. 21 21 Net income for diluted EPS, after assumed
conversion of Convertible Notes ........................................... 2,280$ 2,560$
Shares (Denominator): Weighted-average shares for basic EPS ................................... 1,288 1,288 Effect of Dilutive Securities ........................................................ 23 23 Effect of Convertible Notes, after assumed
conversion of Convertible Notes ........................................... 35 35 Weighted-average shares for diluted EPS ................................. 1,346 1,346
Diluted earnings per share .............................................................. 1.69$ 1.90$
December 31, 2003Year Ended
133Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Reconciliation of GAAP Research and Development Expense to "Adjusted" Research and Development Expense(In millions)(Unaudited)
2001 (a) 2002GAAP research and development expense................................................................... $865 $1,117Adjustments to GAAP research and development expense:.......................................
Other merger-related expense..................................................................................... - (18) (b)"Adjusted" research and development expense.......................................................... $865 $1,099
(a) GAAP research and development expense was the same as "Adjusted" research and development expensefor the year ended December 31, 2001.
(b) To exclude the incremental compensation payable to certain Immunex employees principally under the Immunex short-term retention plan.
Year Ended December 31,
134Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Reconciliation of "Adjusted" Earnings Per Share Guidance to GAAPEarnings Per Share Guidance for the Year Ending December 31, 2008(Unaudited)
"Adjusted" earnings per share guidance...........................................................................................................… 4.45$ - 4.55$
Known adjustments to arrive at GAAP earnings:Legal settlements................................................................................................................................................. (a) (0.19)Amortization of acquired intangible assets, product technology rights.................................................................. (b) (0.17)Stock option expense........................................................................................................................................... (c) (0.06) - (0.08)Write-off of inventory............................................................................................................................................ (d) (0.06)Restructuring costs............................................................................................................................................... (e) (0.03) - (0.05)Amortization of acquired intangible assets, R&D technology rights...................................................................... (f) (0.04)Loss on sale of less significant marketed products............................................................................................... (g) (0.01)
GAAP earnings per share guidance ....................................................................................................................... 3.85$ - 3.99$
(a) To exclude loss accruals for settlements of certain commercial legal proceedings.
(b) To exclude the ongoing, non-cash amortization of acquired product technology rights, primarily ENBREL, related to the Immunex acquisition.
(c) To exclude stock option expense associated with SFAS No. 123R.
(d) To exclude the write-off of inventory resulting from a strategic decision to change manufacturing processes.
(e) To exclude restructuring related costs.
(f) To exclude the ongoing, non-cash amortization of the R&D technology intangible assets acquired with the Abgenix and Avidia acquisitions.
(g) To exclude the loss accrual on the sale of certain less significant marketed products and related assets.
2008
135Provided November 7, 2008 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update.
Amgen Inc.Reconciliation of Free cash flow(In billions)(Unaudited)
2003 2004 2005 2006 2007Cash flow from operations (a)......................................... $3.6 $3.7 $4.9 $5.4 $5.4Less: Capital expenditures.............................................. (1.4) (1.3) (0.9) (1.2) (1.3)Free cash flow................................................................. $2.2 $2.4 $4.0 $4.2 $4.1
Three Months Ended Nine Months EndedLTM***
Cash flow from operations (a)......................................... $6.1Less: Capital expenditures.............................................. (0.7)Free cash flow................................................................. $5.4
(a) Net cash provided by operating activities as presented in or derived from our public filings.
*** Last twelve months ending September 30, 2008
(0.2)$1.3
$4.6(0.5)$4.1
Year Ended December 31,
December 31, 2007 September 30, 2008$1.5
Amgen Business ReviewNovember 7, 2008