Amgen Provides Business Overview Through 2005
FOR IMMEDIATE RELEASE
THOUSAND OAKS, Calif. - February 25, 2003
- Amgen (Nasdaq: AMGN), the world's largest
biotechnology company, provided an overview of sales and earnings
through 2005 and highlights from selected R&D portfolio candidates
at the company's business review meeting for stock analysts and
investors today in Los Angeles. The company's presenters included
Kevin Sharer, Amgen's chairman and chief executive officer; Roger
Perlmutter, executive vice president, research and development;
George Morrow, executive vice president, sales and marketing; Dennis
Fenton, executive vice president, operations; and, Richard Nanula,
executive vice president and chief financial officer.
Amgen told investors today that worldwide product sales could more
than double by year-end 2005 from 2002. The company said it expects
sales to increase at a compound annual growth rate in the 30 to 32
percent range during that period. Amgen also expects adjusted earnings
per share to grow in the 25 to 27 percent range over the next three years.
Adjusted earnings per share, for the full year ended December 31,
2002 and the period from 2002 through 2005, exclude certain expenses
related to the acquisition of Immunex and certain non-recurring
items. These expenses and non-recurring items are itemized in the
reconciliation table below. The company also announced that it anticipates
spending approximately $1 billion on stock repurchases in 2003.
"Since our last business review discussion in November 2000, Amgen
has accomplished much including three major product launches, integrating
the largest biotechnology acquisition ever and significantly improving
our R&D productivity. We've also built a new and talented senior
management team with the experience to ensure Amgen can meet the
challenges of a competitive marketplace," said Kevin Sharer, Amgen's
chairman and chief executive officer. "Looking ahead, Amgen has
blockbuster products in large and fast-growing markets with the
competitive attributes and strong patent positions that will allow
us to more than double sales from 2002 to 2005. At the same time
we plan to double our investment in research and development," Sharer
Market & Product Growth
For the three-year period from 2002
to 2005, on a compound annual basis, Amgen expects combined sales
growth in the low- to mid-20 percent range for Aranesp® (darbepoetin
alfa), its next-generation anemia treatment, and EPOGEN® (Epoetin
alfa), Amgen's anemia therapy for patients on dialysis. Combined
sales growth of Neulasta® (pegfilgrastim), Amgen's once-per-cycle
product for decreasing infections with many types of cancer chemotherapy
treatments, and NEUPOGEN® (Filgrastim), used to decrease the incidence
of infection, are also expected in the low- to mid-20 percent range.
For ENBREL® (etanercept), Amgen's inflammation biologic, the company
sees growth in the mid-90 percent range based on 2002 ENBREL® sales
of $362 million since July of 2002 when Amgen acquired the product.
In a review of market potential in the United States, Amgen said
it expects that the anemia market will grow at a compound annual
rate of 15 to 20 percent in both the oncology and pre-dialysis settings
over the next three years. Amgen also expects the market for white-cell
boosters will grow between 15 and 20 percent from 2002 through 2005.
The company forecasted that the U.S. rheumatoid arthritis biologic
market will grow in a range of 30 to 35 percent for the same period.
In addition to financial guidance, Amgen provided investors
a scientific update on phase 3 clinical trials for late-stage development
products and described two of the company's new product candidates.
Top line preliminary results were presented. Complete efficacy and
safety results from these studies will be presented at major medical
meetings and in peer reviewed publications.
results from recently completed phase 3 studies with ENBREL® were
reviewed including psoriasis, ankylosing spondylitis and long-term
efficacy (up to five years) in rheumatoid arthritis. ENBREL® has
the most extensive long-term safety and efficacy data and labeled
indications of any TNF (tumor necrosis factor) blocking agent. ENBREL®
is currently labeled for adult rheumatoid arthritis, juvenile rheumatoid
arthritis and psoriatic arthritis. Supplemental biologics license
applications have recently been filed for long-term radiographic
data in rheumatoid arthritis (four years), a once-weekly dose option,
ankylosing spondylitis and radiographic data in patients with psoriatic
Psoriasis affects nearly seven million people in the
United States, approximately one million of whom are classed as
moderate to severe. In the first of two pivotal phase 3 clinical
studies involving more than 650 patients with moderate to severe
psoriasis ENBREL® at all doses studied (25 mg once weekly, 25 mg
twice a week and 50 mg twice a week) provided significant improvement
compared to placebo on the primary endpoint (Psoriasis area and
severity index (PASI) 75 at week 12) (p< 0.01). In addition, nearly
half of the patients receiving ENBREL® at 25 mg twice a week and
nearly 60 percent of the patients receiving ENBREL® at 50 mg twice
a week achieved a PASI 75 or greater after 24 weeks of chronic therapy.
For this indication, Amgen expects to file for regulatory approval
Ankylosing spondylitis is a chronic inflammatory condition,
predominantly affecting the spine, producing symptoms of pain and
stiffness. Disease progression can result in partial or complete
fusion of the spine. Currently there is no approved disease-modifying
treatment for this condition. In a phase 3 clinical study involving
more than 270 patients with ankylosing spondylitis, ENBREL® treatment
provided a significant early (at two weeks) and sustained response
for up to six months. Approximately 50 percent of patients, after
only two weeks of treatment, and nearly 60 percent of patients,
after six months of chronic treatment, demonstrated a 20 percent
or more improvement in the primary endpoint of ankylosing spondylitis
assessment score (ASAS 20), compared with approximately 20 percent
of patients receiving placebo, (p< 0.0001). The supplemental Biologics
License Application for use of ENBRELâ to treat ankylosing spondylitis
has been granted priority review status by the U.S. Food & Drug
Building the Pipeline - Late Stage Product Update
Most of the 300,000 patients with end-stage kidney disease undergoing
dialysis in the United States suffer from secondary hyperparathyroidism.
Elevated levels of parathyroid hormone, calcium and phosphorus are
associated with lower survival rates in patients with secondary
hyperparathyroidism. Cinacalcet HCl is an oral-acting modulator
of the parathryroid gland calcium-sensing receptor that enables
targeted control of secondary hyperparathyroidism in end-stage kidney
disease patients. Three phase 3 studies of Cinacalcet HCl treatment
are nearly complete and Amgen expects to file for regulatory approval
in the second half of 2003.
Amgen also reviewed preliminary results from a phase
3 study in which recombinant keratinocyte growth factor (rHu-KGF)
was administered to patients with oral mucositis in the hematologic
transplant setting. Oral mucositis is a painful and debilitating
condition caused by anti-tumor treatments such as radiation and
chemotherapy. Patients experience severe oral mucosa ulcerations
that make swallowing difficult or impossible. The phase 3 study
was conducted in 212 patients with hematologic malignancies (such
as lymphoma, multiple myeloma and leukemia) who received chemotherapy
and radiation therapy with bone marrow transplantation. rHu-KGF
decreased the duration of severe oral mucositis by over 60 percent
compared to patients receiving placebo (p<0.001). Amgen plans
to file for regulatory approval in 2004. In addition, development
will continue in the solid tumor setting.
Expanding the Portfolio of New Product Candidates
Amgen highlighted its commitment to new
product candidates and the balance of the portfolio in different
therapeutic areas and molecules of multiple modalities (proteins,
antibodies and small molecules). A small molecule, AMG548, a p38
MAP kinase inhibitor used to interdict the inflammation cascade,
was discussed. Early results highlighted the pharmacodynamic activity
of AMG548 in humans as measured by significant and durable inhibition
of TNF release following single dose administration when compared
to placebo. Further clinical evaluation is underway.
neurotrophic factor, or GDNF, was also reviewed. Dramatic preliminary
data demonstrate potential benefit in a small number of patients
with Parkinson's disease. Phase 2 evaluation is ongoing.
Supplemental Long-Term Financial Guidance, 2002-2005
|Cost of Sales
||Increasing as a percent of sales
||Decreasing as a percent of sales; doubling R&D
expenditures from 2002 to 2005
|Selling, General & Administrative Costs
||Decreasing as a percent of sales; leverage the
recent build-up in sales and marketing infrastructure
||Will trend lower than 2002, but may fluctuate
based on product sales mix
Amgen is a global biotechnology
company that discovers, develops, manufactures and markets important
human therapeutics based on advances in cellular and molecular biology.
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, and actual results could 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 sales, growth rates, earning per share, revenues, operation margins,
tax rate, expenditures and other financial metrics, expected regulatory
or clinical results, and other future estimates and results. 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 research, 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.
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 February 25, 2003, and expressly disclaims any duty to update
information contained in this press release.
CONTACT: Amgen, Thousand Oaks
GAAP net loss .......................... $(1,391.9)
Adjustments to arrive at "adjusted"
Write-off of acquired in-process
research and development ........... 2,991.8 (1)
Amortization of acquired
intangible assets .................. 155.2 (1)
Other merger related expenses ....... 87.2 (1)
Legal award ......................... (151.2)
Amgen Foundation contribution ....... 50.0
Termination of collaboration
agreements ......................... (40.1)
Tax effects of the above
adjustments ........................ (39.2)
"Adjusted" net income .................. $1,661.8
Adjustment for interest expense
on convertible notes, net of
taxes .............................. 17.1 (2)
Numerator for "adjusted" earnings per
share ................................. $1,678.9
Shared used in the calculation of
earnings (loss) per share:
GAAP .............................. 1,153.5 (3)
Earnings (loss) per share
GAAP .............................. $(1.21)
"Adjusted"......................... $ 1.39
GAAP EPS CAGR .......................... N/A (4)
"Adjusted" EPS CAGR (Guidance).......... 25% - 27%
CAGR -- Compound Annual Growth Rate
(1) Incurred in connection with the
Immunex acquisition in July 2002
(2) Pursuant to the "if-converted"
method of calculating EPS, the numerator for "Adjusted"
EPS in 2002 reflects the avoidance of interest expense incurred,
net of tax, related to the assumed conversion of the convertible
notes. The conversion of such debt and the avoidance of interest
expense is not assumed for calculating the GAAP EPS because it's
impact is anti-dilutive due to the GAAP loss in 2002.
(3) Due to the GAAP net loss in 2002,
shares used in calculating the GAAP loss per share exclude the impact
of stock options and convertible notes because their impact would
be anti-dilutive. Shares used in calculating the "adjusted"
earnings per share for 2002 include the impact of dilutive stock
options (27.1 million shares) and convertible notes (29.3 million
shares) under the treasury stock and "if-converted" methods,
(4) Due to the GAAP loss per share
of ($1.21) in 2002, a GAAP EPS CAGR for the 2002-2005 period cannot
be calculated. GAAP earnings per share for 2003 is expected to be
lower than "adjusted" earnings per share by $0.19 due
to the amortization of acquired intangible assets and other merger
related expenses. The $0.19 adjustment excludes an anticipated one-time
gain related to the reimbursement of costs and expenses related
to a dispute with J&J because the final amount of the reimbursement
has not yet been determined by the Arbitrator. GAAP earnings per
share for 2004 and 2005 are expected to be lower than "adjusted"
earnings per share by $0.18 and $0.16, respectively, due to the
amortization of acquired intangible assets (2004 and 2005) and other
merger related expenses (2004 only).
# # #
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