×

Do you want to link to this External Site and leave Amgen.com?

YOU ARE NOW LEAVING AMGEN'S WEB SITE. Amgen takes no responsibility for, and exercises no control over, the organizations, views, or accuracy of the information contained on this server or site.

×

Do you want to link to this External Site and leave Amgen.com?

YOU ARE NOW LEAVING AMGEN'S WEB SITE. Amgen takes no responsibility for, and exercises no control over, the organizations, views, or accuracy of the information contained on this server or site.

×

Do you want to link to this External Site and leave Amgen.com?

YOU ARE NOW LEAVING AMGEN'S WEB SITE. Amgen takes no responsibility for, and exercises no control over, the organizations, views, or accuracy of the information contained on this server or site.

×

Do you want to link to this External Site and leave Amgen.com?

YOU ARE NOW LEAVING AMGEN'S WEB SITE. Amgen takes no responsibility for, and exercises no control over, the organizations, views, or accuracy of the information contained on this server or site.

Amgen's Third Quarter 2002 Adjusted Earnings Per Share Increase 13% To 34 Cents

AMGEN'S THIRD QUARTER 2002 ADJUSTED EARNINGS

AMGEN'S THIRD QUARTER 2002 ADJUSTED EARNINGS

PER SHARE INCREASE 13% TO 34 CENTS

---

GAAP Loss of $2.10 Per Share Reflects $3 Billion One-Time

Write-Off of In-Process R&D Related to Immunex Acquisition

---

Total Product Sales Increase 53 Percent

From Newly Launched and Acquired Products

---

Product Sales Guidance for 2002 Raised to High 30 Percent

Range on Strength of New Products

---

Third Quarter Sales of Neulasta™ Reach $142 million,

Filgrastim Franchise 2002 Sales Growth Rate

Raised to Low to Mid 30 Percent

---

Third Quarter Sales of Aranesp® Grow to $114 million

FOR IMMEDIATE RELEASE

THOUSAND OAKS, Calif., October 23, 2002 -- Amgen (Nasdaq:AMGN)

announced today that adjusted earnings per share for the third quarter of 2002 was

34 cents versus 30 cents for the third quarter of 2001, an increase of 13 percent.

Adjusted net income was $437 million in the third quarter of 2002 versus $330

million in the third quarter of 2001, a 32 percent increase.

Adjusted earnings per share and adjusted net income for the three months ended

September 30, 2002 exclude certain expenses related to the third quarter 2002

acquisition of Immunex and certain non-recurring items. These expenses and nonrecurring

items are itemized on the reconciliation tables below.

On a reported basis, calculated in accordance with U.S. generally accepted

accounting principles (GAAP), Amgen reported a loss of $2.6 billion or $2.10 per

share for the third quarter of 2002. This loss was principally due to the one-time

write-off of in-process research and development of $3 billion related to the

acquisition of Immunex.

Total revenue increased 49 percent to $1.5 billion in the third quarter.

- MORE -

Third Quarter Adjusted Earnings Per Share of 34 Cents Increases 13%

Page 2

Product Sales Performance and Expenses

Total product sales in the quarter were $1.3 billion, an increase of 53 percent over

the same period last year benefiting from our acquisition and the launch of new

products. Total product sales are expected to grow in the high-30 percent range in

2002.

"The third quarter continues to demonstrate our ability to significantly grow revenue

through the contribution of our new products and strength in our core business," said

Kevin Sharer, Chairman and CEO. "We remain focused on ensuring the continued

success of our product launches, working toward increasing ENBREL® supply and

expanding our pipeline," Sharer said.

Combined sales of EPOGEN„¥ (Epoetin alfa), Amgen's anemia therapy for patients

on dialysis, and Aranesp® (darbepoetin alfa), its next-generation anemia treatment,

for the third quarter increased 29 percent to $672 million from $520 million for the

third quarter of 2001. EPOGEN® sales were $558 million for the third quarter, an

increase of 8 percent over the same quarter last year. EPOGEN® sales growth

was principally driven by demand and wholesaler inventory with equal contribution.

Aranesp® sales for the third quarter were $114 million. The company believes

Aranesp® sales were primarily driven by demand and reflect the newly added

indication for oncology in the US. Amgen continues to expect combined sales of

EPOGEN® and Aranesp® to grow in the low 20 percent range over combined

2001 sales.

Combined sales of NEUPOGEN„¥ (Filgrastim), used to decrease the incidence of

infection during many types of cancer-related chemotherapy, and Neulasta

(pegfilgrastim), Amgen's recently introduced once-per-cycle product for decreasing

infections, increased 32 percent, to $474 million from $360 million for

NEUPOGEN® alone in the third quarter of 2001. NEUPOGEN® sales were $332

million for the third quarter of 2002. Neulasta™ sales were $142 million in the third

quarter. Amgen believes that sales growth for the Filgrastim franchise was driven by

demand. For the full year 2002, Amgen expects the combined

NEUPOGEN/Neulasta growth rate to be in the low to mid-30 percent range

versus the company's previous guidance of mid-20 percent growth.

ENBREL® (etanercept), Amgen's inflammation biologic, recorded third quarter

sales of $158 million, and reflect sales generated after the close of the acquisition

of Immunex on July 15, 2002. Amgen previously expected ENBREL® sales to

range between $350 and $400 million for the period of 2002 in which Amgen

owned the product and $800-$850 million for the full year 2002.

- MORE -

Third Quarter Adjusted Earnings Per Share of 34 Cents Increases 13%

Page 3

The company now expects sales to be at, or slightly below the low end of these

ranges due to continuing supply considerations. Amgen announced that the U.S.

Food & Drug Administration (FDA) has notified the Company of their intention to

inspect the new ENBREL® manufacturing and fill and finish facilities in November.

A successful inspection is expected to alleviate the current ENBREL® supply

constraints in first quarter of 2003.

Expenses on an adjusted basis were as follows:

Cost of sales increased to $201 million from $103 million during the third quarter

of 2001 primarily due to increased sales and the incremental cost of newly

acquired products. Cost of sales as a percent of sales has increased from 12%

in the third quarter of 2001 to 15% in the third quarter of 2002, which principally

reflects ENBREL®'s higher manufacturing costs and higher royalty expense.

„h In the third quarter R&D expense was $304 million and reflects the inclusion of

newly acquired products and product candidates, versus $217 million in the third

quarter of 2001.

„h SG&A expense was $377 million in the third quarter of 2002 reflecting the

inclusion of newly acquired products, the Wyeth profit share related to

ENBREL® and additional spending in support of new products, versus $222

million for the prior year.

For 2002, adjusted EPS is expected to grow at a mid-teens rate. Amgen

announced that it would provide financial guidance for 2003 at its Business Review

Meeting to be held on November 21, 2002

Pipeline Update

As announced previously, during the third quarter Amgen received regulatory

approval from the FDA for Aranesp® for the treatment of anemia associated with

chemotherapy in patients with nonmyeloid malignancies. Approvals were also

received from the European Commission to market both Neulasta™ for reducing

the risk of neutropenia and Aranesp® for the treatment of anemia, respectively, in

cancer patients receiving chemotherapy. Aranesp® was also approved in Canada

for the treatment of anemia associated with chronic renal failure.

- MORE -

Third Quarter Adjusted Earnings Per Share of 34 Cents Increases 13%

Page 4

During the fourth quarter, new clinical developments will be presented at the

American College of Rheumatology meeting in New Orleans related to ENBREL®

and Kineret® (anakinra). Abstracts on ENBREL® would include 5-year safety and

efficacy data from rheumatoid arthritis patients, 4-year early RA

data and 3-year quality of life data. Kineret® data will include abstracts on the use

of Kineret® in pediatric RA patients and data on ability to inhibit bone and joint

destruction. A study of Kineret® used in combination with ENBREL® will also be

presented. In this single evaluation Kineret® treatment did not provide a statistically

significant benefit to patients who were also receiving ENBREL®. These data

reinforce our recommendation that Kineret® and ENBREL® not be used in

combination.

Forward-Looking Statements

This news release contains forward-looking statements that involve significant risks

and uncertainties, including those discussed below and more fully described in the

Securities and Exchange Commission reports filed by Amgen, including our most

recent Form 10-Q. Amgen conducts research in the biotechnology/pharmaceutical

field where 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.

Furthermore, our testing, pricing, marketing and other operations are subject to

extensive regulation by domestic and foreign government regulatory authorities. In

addition, sales of our products are affected by reimbursement policies

imposed by third party payors, including governments, private insurance plans and

managed care providers. These government regulations and reimbursement

policies may affect the development, usage and pricing of our products.

In addition, while we routinely obtain patents for our products and technology, the

protection offered by our patents and patent applications may be challenged,

invalidated or circumvented by our competitors.

Also, we may not realize all of the anticipated benefits of the merger, including

synergies, cost savings, sales and growth opportunities. Furthermore, the limits on

our current supply ENBREL® constrain ENBREL® sales and our sources of supply

for ENBREL® are limited and dependent on third party manufacturers. Additionally,

the adjustments related to the merger are based on a preliminary allocation of the

purchase price and estimates of anticipated expenses, and the final determination

of such allocation and expenses may differ significantly.

- MORE -

Third Quarter Adjusted Earnings Per Share of 34 Cents Increases 13%

Page 5

Because forward-looking statements involve risks and uncertainties, actual results

may differ materially from current results expected by Amgen. Amgen is providing

this information as of October 23, 2002 and expressly disclaims any duty to update

information contained in this press release.

Amgen is a global biotechnology company that discovers, develops, manufactures

and markets important human therapeutics based on advances in cellular and

molecular biology.

CONTACT: Amgen, Thousand Oaks

Jeff Richardson, 805/447-3227 (Media)

Cary Rosansky, 805/447-4634 (investors)

# # #

EDITOR'S NOTE: An electronic version of this news release may be accessed via

our web site at www.amgen.com. Visit the Corporate Center and click on Amgen

News. Journalists and media representatives may sign up to receive all news

releases electronically at time of announcement by filling out a short form in the

Amgen News section of the web site.

- MORE -

Page 6

Amgen Inc.

Condensed Consolidated Statements of Operations and

Reconciliation of "Adjusted" Earnings to GAAP Earnings

(In millions, except per share data)

(Unaudited)

Three Months Ended

September 30, 2002

Three Months Ended

September 30, 2001*

"Adjusted" Adjustments GAAP

Revenues

Product sales ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 1,345.8 $ - $ 1,345.8 $ 879.6

Corporate partner revenues ¡K¡K¡K¡K¡K. 62.8 - 62.8 60.6

Royalty income ¡K¡K¡K¡K¡K¡K.¡K¡K¡K.. 90.7 - 90.7 62.9

Total revenues ¡K¡K¡K¡K¡K¡K¡K¡K. 1,499.3 - 1,499.3 1,003.1

Operating Expenses

Cost of sales ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 200.7 22.2 (1) 226.4 102.7

3.5 (2)

Research and development ¡K¡K¡K¡K¡K.. 304.1 8.5 (2) 312.6 216.9

Selling, general and administrative¡K¡K.. 376.9 9.9 (2) 394.9 221.8

8.1 (3)

Write off of acquired in-process R&D ¡K - 2,991.8 (4) 2991.8 -

Amortization of intangible assets ¡K¡K¡K - 70.6 (5) 70.6 -

(Earnings) loss of affiliates, net ¡K¡K¡K.. (3.4) - (3.4) 5.5

Other items, net ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K - (35.5) (6) (35.5) -

Total operating expenses ¡K¡K¡K¡K. 878.3 3,079.1 3,957.4 546.9

Operating income (loss) ¡K¡K¡K¡K¡K¡K¡K¡K.. 621.0 (3,079.1) (2,458.1) 456.2

Other income (expense):

Interest and other income, net ¡K¡K¡K¡K. 23.7 - 23.7 44.4

Interest expense, net ¡K¡K¡K¡K¡K¡K¡K¡K (11.6) - (11.6) (2.3)

Total other income ¡K¡K¡K¡K¡K¡K. 12.1 - 12.1 42.1

Income (loss) before income taxes ¡K¡K¡K¡K. 633.1 (3,079.1) (2,446.0) 498.3

Provision for income taxes ¡K¡K¡K¡K¡K¡K¡K.. 196.3 (40.7) (7) 155.6 168.4

Net income (loss)¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. $ 436.8 $(3,038.4) $(2,601.6) $ 329.9

Earnings (loss) per share:

Basic ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 0.35 $ (2.10) $ 0.31

Diluted ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 0.34 $ (2.10) $ 0.30

Shares used in calculation of earnings (loss) per share:

Basic ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,241.7 1,241.7 1,048.3

Diluted ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,302.7 1,241.7 1,084.6

(1) - (7) See explanatory notes on Page 8

* GAAP and Adjusted results of operations are the same

- MORE -

Page 7

Amgen Inc.

Condensed Consolidated Statements of Operations and

Reconciliation of "Adjusted" Earnings to GAAP Earnings

(In millions, except per share data)

(Unaudited)

Nine Months Ended

September 30, 2002

Nine Months Ended

September 30, 2001*

"Adjusted" Adjustments GAAP

Revenues

Product sales ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 3,369.6 $ - $ 3,369.6 $ 2,536.9

Corporate partner revenues ¡K¡K¡K¡K¡K. 148.2 - 148.2 182.0

Royalty income ¡K¡K¡K¡K¡K¡K.¡K¡K¡K.. 239.1 - 239.1 172.5

Total revenues ¡K¡K¡K¡K¡K¡K¡K¡K. 3,756.9 - 3,756.9 2,891.4

Operating Expenses

Cost of sales ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 436.2 22.2 (1) 461.9 290.5

3.5 (2)

Research and development ¡K¡K¡K¡K¡K.. 741.1 8.5 (2) 749.6 632.4

Selling, general and administrative¡K¡K.. 943.2 9.9 (2) 961.2 644.5

8.1 (3)

Write off of acquired in-process R&D ¡K - 2,991.8 (4) 2991.8 -

Amortization of intangible assets ¡K¡K¡K - 70.6 (5) 70.6 -

(Earnings) loss of affiliates, net ¡K¡K¡K.. (6.8) - (6.8) 1.9

Other items, net ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K - (35.5) (6) (35.5) -

Total operating expenses ¡K¡K¡K¡K. 2,113.7 3,079.1 5,192.8 1,569.3

Operating income (loss) ¡K¡K¡K¡K¡K¡K¡K¡K.. 1,643.2 (3,079.1) (1,435.9) 1,322.1

Other income (expense):

Interest and other income, net ¡K¡K¡K¡K. 112.9 - 112.9 133.2

Interest expense, net ¡K¡K¡K¡K¡K¡K¡K¡K (31.3) - (31.3) (10.2)

Total other income ¡K¡K¡K¡K¡K¡K. 81.6 - 81.6 123.0

Income (loss) before income taxes ¡K¡K¡K¡K. 1,724.8 (3,079.1) (1,354.3) 1,445.1

Provision for income taxes ¡K¡K¡K¡K¡K¡K¡K.. 534.7 (40.7) (7) 494.0 488.4

Net income (loss) ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. $ 1,190.1 $(3,038.4) $(1,848.3) $ 956.7

Earnings (loss) per share:

Basic ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 1.08 $ (1.67) $ 0.92

Diluted ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 1.03 $ (1.67) $ 0.88

Shares used in calculation of earnings (loss) per share:

Basic ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,105.5 1,105.5 1,044.9

Diluted ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,160.1 1,105.5 1,085.4

(1) - (7) See explanatory notes on Page 8

* GAAP and Adjusted results of operations are the same

- MORE -

Page 8

Amgen Inc.

Notes to Reconciliation of "Adjusted" Earnings to GAAP Earnings

(In millions)

(Unaudited)

(1) To include the non-cash expense related to valuing the inventory acquired from Immunex at fair value. The total

estimated remaining non-cash charge associated with revaluing acquired inventory is approximately $20 million,

pre-tax, and will be substantially incurred in the quarter ending December 31, 2002.

(2) To include the incremental compensation payable to certain Immunex employees principally under the Immunex

short-term retention plan. The total estimated remaining costs of such retention benefits is approximately $120

million, pre-tax, and will be incurred through the quarter ending June 30, 2004.

(3) To include external, incremental consulting and systems integration costs directly associated with the

integration of Immunex. The total estimated remaining consulting and systems integration costs is approximately

$10 million, pre-tax, and will be substantially incurred in the quarter ending December 31, 2002.

(4) To include the one-time, non-cash expense associated with writing off the acquired in-process research and

development related to the Immunex acquisition.

(5) To include the ongoing non-cash amortization of acquired intangible assets, primarily Enbrel®, related to the

Immunex acquisition. This charge will be recognized over the useful lives of the assets currently estimated to be

15 years. The total annual non-cash charge is currently estimated to be approximately $340 million, pre-tax.

(6) To include a one-time benefit primarily related to the recovery of certain amounts expensed in the fourth quarter

of 2001. This benefit is primarily in connection with terminating collaboration agreements with various third

parties, principally Praecis Pharmaceuticals.

(7) To reflect the tax effect of the above adjustments, excluding the write-off of acquired in-process R&D.

Page 9

Amgen Inc.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

September 30,

2002

December 31,

2001

Assets

Current assets:

Cash and marketable securities ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K $ 4,042.2 $ 2,662.2

Trade receivables, net ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K.. 622.2 497.2

Inventories ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 526.5 355.6

Other current assets ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 633.5 343.6

Total current assets ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K... 5,824.4 3,858.6

Property, plant, and equipment, net ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 2,666.2 1,946.1

Intangible assets, net ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K.. 4,904.6 34.1

Goodwill ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 9,817.2 97.2

Other assets ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 528.7 507.1

Total assets ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K.. $ 23,741.1 $ 6,443.1

Liabilities and Stockholders' Equity

Current liabilities ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K.. $ 1,471.0 $ 1,002.9

Deferred tax liabilities¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,565.6 -

Long-term debt ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 3,039.7 223.0

Stockholders' equity ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K. 17,664.8 5,217.2

Total liabilities and stockholders' equity ¡K¡K¡K¡K¡K¡K $ 23,741.1 $ 6,443.1

Shares outstanding ¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K¡K 1,282.3 1,045.8