<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 000-12477
AMGEN INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3540776
------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Amgen Center Drive, Thousand Oaks, California 91320-1799
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 447-1000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of September 30, 2000, the registrant had 1,032,982,183 shares of Common
Stock, $0.0001 par value, outstanding.
<PAGE>
AMGEN INC.
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.............................. 3
Condensed Consolidated Statements of
Operations - three and nine months
ended September 30, 2000 and 1999....................... 4
Condensed Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999................ 5
Condensed Consolidated Statements of
Cash Flows - nine months
ended September 30, 2000 and 1999....................... 6
Notes to Condensed Consolidated Financial
Statements.............................................. 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................................ 17
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................. 25
Item 6. Exhibits and Reports on Form 8-K.................. 26
Signatures................................................ 27
Index to Exhibits......................................... 28
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The information in this report for the three and nine months ended
September 30, 2000 and 1999 is unaudited but includes all adjustments
(consisting only of normal recurring accruals, unless otherwise indicated) which
Amgen Inc. ("Amgen" or the "Company") considers necessary for a fair
presentation of the results of operations for those periods.
The condensed consolidated financial statements should be read in
conjunction with the Company's financial statements and the notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
Interim results are not necessarily indicative of results for the full
fiscal year.
3
<PAGE>
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 851.0 $ 769.2 $2,355.4 $2,195.4
Corporate partner revenues 51.9 43.6 187.2 119.6
Royalty income 46.6 34.4 135.4 98.2
-------- -------- -------- --------
Total revenues 949.5 847.2 2,678.0 2,413.2
-------- -------- -------- --------
Operating expenses:
Cost of sales 109.5 98.9 296.9 290.1
Research and development 202.9 198.4 595.5 580.5
Selling, general and administrative 202.9 159.9 577.7 450.0
Loss of affiliates, net 4.8 3.3 26.1 15.3
Legal award (73.9) (49.0) (73.9) (49.0)
-------- -------- -------- --------
Total operating expenses 446.2 411.5 1,422.3 1,286.9
-------- -------- -------- --------
Operating income 503.3 435.7 1,255.7 1,126.3
Other income (expense):
Interest and other income 30.7 22.0 110.3 65.0
Interest expense, net (4.1) (4.9) (11.7) (10.4)
-------- -------- -------- --------
Total other income 26.6 17.1 98.6 54.6
-------- -------- -------- --------
Income before income taxes 529.9 452.8 1,354.3 1,180.9
Provision for income taxes 171.0 152.8 426.6 366.1
-------- -------- -------- --------
Net income $ 358.9 $ 300.0 $ 927.7 $ 814.8
======== ======== ======== ========
Earnings per share:
Basic $ 0.35 $ 0.29 $ 0.90 $ 0.80
Diluted $ 0.33 $ 0.28 $ 0.86 $ 0.76
Shares used in calculation of earnings
per share:
Basic 1,032.1 1,021.5 1,027.7 1,022.1
Diluted 1,085.6 1,078.8 1,085.0 1,078.0
</TABLE>
See accompanying notes.
4
<PAGE>
AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ----------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 159.8 $ 130.9
Marketable securities 1,706.9 1,202.1
Trade receivables, net 303.3 412.2
Inventories 293.6 184.3
Other current assets 158.4 135.8
-------- --------
Total current assets 2,622.0 2,065.3
-------- --------
Property, plant and equipment at cost, net 1,715.3 1,553.6
Investments in affiliated companies 120.9 132.8
Other equity investments 289.5 129.7
Other assets 150.1 196.2
-------- --------
$4,897.8 $4,077.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 121.6 $ 83.4
Commercial paper 99.2 99.5
Accrued liabilities 502.3 648.2
-------- --------
Total current liabilities 723.1 831.1
Long-term debt 223.0 223.0
Contingencies
Stockholders' equity:
Preferred stock; $0.0001 par value; 5.0 shares
authorized; none issued or outstanding - -
Common stock and additional paid-in capital;
$0.0001 par value; 2,750.0 shares authorized;
outstanding - 1,033.0 shares in 2000 and
1,017.9 shares in 1999 2,642.9 2,072.3
Retained earnings 1,248.6 966.0
Accumulated other comprehensive income (loss) 60.2 (14.8)
-------- --------
Total stockholders' equity 3,951.7 3,023.5
-------- --------
$4,897.8 $4,077.6
======== ========
</TABLE>
See accompanying notes.
5
<PAGE>
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 927.7 $ 814.8
Depreciation and amortization 156.3 128.6
Tax benefits related to employee stock options 304.5 110.4
Gain on equity investments (30.7) -
Loss of affiliates, net 26.1 15.3
Cash provided by (used in):
Trade receivables, net 108.9 19.5
Inventories (109.3) (36.1)
Other current assets (12.9) 4.6
Accounts payable 38.2 (20.8)
Accrued liabilities (145.9) (41.9)
--------- --------
Net cash provided by operating activities 1,262.9 994.4
--------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment (318.0) (211.3)
Proceeds from maturities of marketable securities - 25.9
Proceeds from sales of marketable securities 868.2 545.4
Purchases of marketable securities (1,359.7) (847.8)
Other (15.0) (3.0)
--------- --------
Net cash used in investing activities (824.5) (490.8)
--------- --------
Cash flows from financing activities:
Net proceeds from issuance of common stock upon the
exercise of employee stock options and in
connection with an employee stock purchase plan 266.1 201.7
Repurchases of common stock (645.1) (672.8)
Other (30.5) (45.3)
--------- --------
Net cash used in financing activities (409.5) (516.4)
--------- --------
Increase (decrease) in cash and cash equivalents 28.9 (12.8)
Cash and cash equivalents at beginning of period 130.9 201.1
--------- --------
Cash and cash equivalents at end of period $ 159.8 $ 188.3
========= ========
</TABLE>
See accompanying notes.
6
<PAGE>
AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000
1. Summary of significant accounting policies
Business
Amgen Inc. ("Amgen" or the "Company") is a global biotechnology company
that discovers, develops, manufactures and markets human therapeutics based on
advances in cellular and molecular biology.
Principles of consolidation
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries as well as affiliated companies for which the
Company has a controlling financial interest and exercises control over their
operations ("majority controlled affiliates"). All material intercompany
transactions and balances have been eliminated in consolidation. Investments in
affiliated companies which are 50% or less owned and where the Company exercises
significant influence over operations are accounted for using the equity method.
All other equity investments are accounted for under the cost method. The
caption "Loss of affiliates, net" includes Amgen's equity in the operating
results of affiliated companies and the minority interest others hold in the
operating results of Amgen's majority controlled affiliates.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
in a manner which approximates the first-in, first-out (FIFO) method.
Inventories consist of currently marketed products and product candidates which
the Company expects to commercialize. The inventory balance of such product
candidates totaled $93.1 million and $20.3 million as of September 30, 2000 and
December 31, 1999, respectively. Inventories are shown net of applicable
reserves and allowances. Inventories consist of the following (in millions):
7
<PAGE>
September 30, December 31,
2000 1999
------------- ------------
Raw materials $ 36.9 $ 37.5
Work in process 212.7 96.6
Finished goods 44.0 50.2
------ ------
$293.6 $184.3
====== ======
Product sales
Product sales primarily consist of sales from EPOGEN(R) (Epoetin alfa) and
NEUPOGEN(R) (Filgrastim).
The Company has the exclusive right to sell Epoetin alfa for dialysis,
diagnostics and all non-human uses in the United States. The Company sells
Epoetin alfa under the brand name EPOGEN(R). Amgen has granted to Ortho
Pharmaceutical Corporation (which has assigned its rights under the product
license agreement to Ortho Biotech Products, L.P.), a subsidiary of Johnson &
Johnson ("Johnson & Johnson"), a license relating to Epoetin alfa for sales in
the United States for all human uses except dialysis and diagnostics. Pursuant
to this license, Amgen does not recognize product sales it makes into the
exclusive market of Johnson & Johnson and does recognize the product sales made
by Johnson & Johnson into Amgen's exclusive market. Sales in Amgen's exclusive
market and adjustments thereto are derived from Company shipments and from
third-party data on shipments to end users and their usage (see Note 6,
"Contingencies - Johnson & Johnson arbitrations"). Sales of the Company's other
products are recognized when shipped and title has passed.
Foreign currency transactions
The Company has a program to manage foreign currency risk. As part of this
program, it has purchased foreign currency option and forward contracts to hedge
against possible reductions in values of certain anticipated foreign currency
cash flows generally over the next 12 months, primarily resulting from its sales
in Europe. At September 30, 2000, the Company had option and forward contracts
to exchange foreign currencies for U.S. dollars of $26.3 million and $35.4
million, respectively, all having maturities of six months or less. The option
contracts, which have only nominal intrinsic value at the time of purchase, are
designated as effective hedges of anticipated foreign currency transactions for
financial reporting purposes and accordingly, the net gains on such contracts
are deferred and recognized in the same period as the hedged
8
<PAGE>
transactions. The forward contracts do not qualify as hedges for financial
reporting purposes and accordingly, are marked-to-market. Net gains on option
contracts (including option contracts for hedged transactions whose occurrence
are no longer probable) and changes in market values of forward contracts are
reflected in "Interest and other income". The deferred premiums on option
contracts and fair values of forward contracts are included in "Other current
assets".
The Company has additional foreign currency forward contracts to hedge
exposures to foreign currency fluctuations of certain assets and liabilities
denominated in foreign currencies. At September 30, 2000, the Company had
forward contracts to exchange foreign currencies for U.S. dollars of $38.5
million, all having maturities of less than one month. These contracts are
designated as effective hedges and accordingly, gains and losses on these
forward contracts are recognized in the same period the offsetting gains and
losses of hedged assets and liabilities are realized and recognized. The fair
values of the forward contracts are included in the corresponding captions of
the hedged assets and liabilities. Gains and losses on forward contracts, to
the extent they differ in amount from the hedged assets and liabilities, are
included in "Interest and other income".
Employee stock option and stock purchase plans
The Company's employee stock option and stock purchase plans are accounted
for under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees".
Earnings per share
Basic earnings per share is based upon the weighted-average number of
common shares outstanding. Diluted earnings per share is based upon the
weighted-average number of common shares and dilutive potential common shares
outstanding. Potential common shares are outstanding options under the
Company's employee stock option plans and potential issuances of stock under the
employee stock purchase plan which are included under the treasury stock method.
9
<PAGE>
The following table sets forth the computation for basic and diluted
earnings per share (in millions, except per share information):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Numerator for basic and diluted
earnings per share - net income $ 358.9 $ 300.0 $ 927.7 $ 814.8
======== ======== ======== ========
Denominator:
Denominator for basic earnings
per share - weighted-average shares 1,032.1 1,021.5 1,027.7 1,022.1
Effect of dilutive securities -
employee stock options and stock
issuances under the employee stock
purchase plan 53.5 57.3 57.3 55.9
-------- -------- -------- --------
Denominator for diluted earnings
per share - adjusted weighted -
average shares 1,085.6 1,078.8 1,085.0 1,078.0
======== ======== ======== ========
Basic earnings per share $ 0.35 $ 0.29 $ 0.90 $ 0.80
Diluted earnings per share $ 0.33 $ 0.28 $ 0.86 $ 0.76
</TABLE>
Recent accounting pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities". SFAS 133 establishes
accounting and reporting standards requiring that all derivatives be recorded in
the balance sheet as either an asset or liability measured at fair value and
that changes in fair value be recognized currently in earnings, unless specific
hedge accounting criteria are met. Certain provisions of SFAS 133, including its
required implementation date, were subsequently amended. The Company is now
required to adopt SFAS 133, as amended, in the first quarter of 2001. The
Company believes that foreign currency hedging instruments represent the
majority of its existing derivatives for which the accounting may be impacted by
SFAS 133. The Company currently does not anticipate that the adoption of SFAS
133, as amended, will have a material effect on its results of operations or
financial position.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 provides guidance on applying generally accepted
accounting principles to revenue recognition
10
<PAGE>
issues in financial statements. The Company adopted SAB 101 in the fourth
quarter of 2000 and its adoption has not had a material effect on the Company's
results of operations or financial position.
In July 2000, the Emerging Issues Task Force ("EITF") issued EITF 00-15,
"Classification in the Statement of Cash Flows of the Income Tax Benefit
Realized by a Company upon Employee Exercise of a Nonqualified Stock Option",
which requires companies to classify the income tax benefits related to employee
exercises of nonqualified stock options as an operating activity on the
statement of cash flows for both current and prior periods. Prior to the
adoption of EITF 00-15 in the third quarter of 2000, Amgen had classified these
amounts in financing activities on the statement of cash flows. In addition,
the Company has included the income tax benefits related to disqualifying
dispositions of incentive stock options within this reclassification. The
adoption of EITF 00-15 has not had a material effect on the Company's results of
operations or financial position.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
Basis of presentation
The financial information for the three and nine months ended September 30,
2000 and 1999 is unaudited but includes all adjustments (consisting only of
normal recurring accruals, unless otherwise indicated) which the Company
considers necessary for a fair presentation of the results of operations for
these periods. Interim results are not necessarily indicative of results for
the full fiscal year.
Reclassification
Certain prior year amounts have been reclassified to conform to the current
year presentation.
2. Debt
As of September 30, 2000, the Company had $223 million of unsecured long-
term debt securities outstanding. These unsecured long-term debt securities
consisted of: 1) $100 million of debt
11
<PAGE>
securities that bear interest at a fixed rate of 6.5% and mature in 2007 that
were issued in December 1997 under a $500 million debt shelf registration (the
"Shelf"), 2) $100 million of debt securities that bear interest at a fixed rate
of 8.1% and mature in 2097 and 3) $23 million of debt securities that bear
interest at a fixed rate of 6.2% and mature in 2003. Under the Shelf, all of the
remaining $400 million of debt securities available for issuance may be offered
under the Company's medium-term note program from time to time with terms to be
determined by market conditions.
The Company has a commercial paper program which provides for unsecured
short-term borrowings up to an aggregate of $200 million. As of September 30,
2000, commercial paper with a face amount of $100 million was outstanding.
These borrowings had maturities of less than three months and had effective
interest rates averaging 6.6%.
The Company also has an unsecured $150 million credit facility that expires
on May 28, 2003. This credit facility supports the Company's commercial paper
program. As of September 30, 2000, no amounts were outstanding under this line
of credit.
3. Income taxes
The provision for income taxes consists of the following (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
------ ------ ------ ------
Federal (including U.S. possessions) $157.8 $142.3 $392.7 $338.9
State 13.2 10.5 33.9 27.2
------ ------ ------ ------
$171.0 $152.8 $426.6 $366.1
====== ====== ====== ======
The Company's effective tax rate for the three and nine months ended
September 30, 2000 was 32.3% and 31.5%, respectively, compared with 33.7% and
31.0% for the same periods last year. During the third quarter of both 1999 and
2000, the effective tax rates increased primarily due to an increase in the
expected pretax income for the full year without corresponding increases in the
tax benefits associated with the Company's Puerto Rico operations and research
and experimentation credits. The expected pretax income for 2000 increased
primarily due to the benefit of the $73.9 million legal award recorded in the
third quarter of 2000 (see Note 6, "Contingencies - Johnson & Johnson
arbitrations"). The expected
12
<PAGE>
pretax income for 1999 increased primarily due to expected additional product
sales in the fourth quarter of 1999 as a result of Year 2000 contingency
planning (see "Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Results of Operations - Product sales")
and the benefit of the $49.0 million legal award recorded in the third quarter
of 1999 (see Note 6, "Contingencies - Johnson & Johnson arbitrations").
4. Stockholders' equity
During the nine months ended September 30, 2000, the Company repurchased
9.9 million shares of its common stock at a total cost of $645.1 million under
its common stock repurchase program. In October 1999, the Board of Directors
authorized the Company to repurchase up to $2 billion of common stock through
December 31, 2000, replacing the remaining amount authorized in October 1998.
The amount the Company spends on and the number of shares repurchased each
quarter varies based on a variety of factors, including the stock price and
blackout periods in which the Company is restricted from repurchasing shares.
At September 30, 2000, $1,003.1 million of this authorization remained. Stock
repurchased under the program is retired.
5. Comprehensive income
During the three and nine months ended September 30, 2000, total
comprehensive income was $393.5 million and $1,002.7 million, respectively.
During the three and nine months ended September 30, 1999, total comprehensive
income was $298.5 million and $793.9 million, respectively. The Company's other
comprehensive income/loss is comprised of unrealized gains and losses on the
Company's available-for-sale securities and foreign currency translation
adjustments.
6. Contingencies
Johnson & Johnson arbitrations
In September 1985, the Company granted Johnson & Johnson's affiliate, Ortho
Pharmaceutical Corporation, a license relating to certain patented technology
and know-how of the Company to sell a genetically engineered form of recombinant
human erythropoietin, called Epoetin alfa, throughout the United States for all
human uses except dialysis and diagnostics. A number of disputes have arisen
13
<PAGE>
between Amgen and Johnson & Johnson as to their respective rights and
obligations under the various agreements between them, including the agreement
granting the license (the "License Agreement").
A dispute between Amgen and Johnson & Johnson that has been the subject of
an arbitration proceeding relates to the audit methodology currently employed by
the Company to account for Epoetin alfa sales. The Company and Johnson & Johnson
are required to compensate each other for Epoetin alfa sales that either party
makes into the other party's exclusive market, sometimes described as
"spillover" sales. The Company has established and is employing an audit
methodology to measure each party's spillover sales and to allocate the net
profits from those sales to the appropriate party. The arbitrator in this matter
(the "Arbitrator") issued an opinion adopting the Company's audit methodology
with certain adjustments and, subsequently, issued his final order confirming
that the Company was the successful party in the arbitration. Pursuant to the
final order in the arbitration, an independent panel was formed principally (i)
to address ongoing challenges to the survey results for the years 1995 through
1999 and (ii) to refine the procedures for measuring the erythropoietin market
as may be necessary. Johnson & Johnson has brought challenges under this
procedure to certain survey results for certain periods. As a result of
decisions made by this independent panel regarding certain of these challenges
as well as other reduced uncertainties, the Company has reduced amounts
previously provided for potential spillover liabilities by $49 million in the
third quarter of 1999 and $23 million in the fourth quarter of 1998.
Because the Arbitrator ruled that the Company was the successful party in
the arbitration, Johnson & Johnson was ordered to pay to the Company all costs
and expenses, including reasonable attorneys' fees, that the Company incurred in
the arbitration as well as one-half of the audit costs. The Company submitted a
bill for such costs and expenses incurred over an eight-year period in the
amount of approximately $110 million. Johnson & Johnson contested substantially
all such costs and expenses. In addition, on October 26, 1998, Johnson &
Johnson filed a petition in the Circuit Court of Cook County, Illinois (the
"Illinois Lawsuit") seeking to vacate or modify the Arbitrator's award to the
Company of all costs and expenses, including reasonable attorney's fees and
costs, that the Company incurred in the arbitration. On January 26, 2000, the
Arbitrator ruled that the Company is entitled to recover approximately $78
million of its costs and expenses from Johnson & Johnson. On July 5, 2000, the
Company and Johnson & Johnson entered into a Settlement Agreement and Mutual
Release which provided that (i) the Company, as the successful party in the
arbitration, would
14
<PAGE>
receive from Johnson & Johnson approximately $78 million for costs and expenses,
including reasonable attorneys' fees, that the Company incurred in the
arbitration as well as one-half of the audit costs, (ii) the Company would pay
to Johnson & Johnson $10 million in full and final satisfaction of a dispute as
to the remaining amount due to Johnson & Johnson for the 1991-1994 spillover
award and (iii) Johnson & Johnson would voluntarily dismiss with prejudice the
Illinois Lawsuit. On July 17, 2000, the Arbitrator issued a final order awarding
the Company approximately $78 million in costs and expenses, including
reasonable attorneys' fees, that the Company incurred in the arbitration as well
as one-half of the audit costs. On July 24, 2000, the Illinois Lawsuit was
dismissed with prejudice.
The Company has filed a demand in the arbitration to terminate Johnson &
Johnson's rights under the License Agreement and to recover damages for breach
of the License Agreement based on the Company's claim that Johnson & Johnson has
intentionally sold PROCRIT(R) (the brand name under which Johnson & Johnson
sells Epoetin alfa) into the Company's exclusive dialysis market. Pursuant to
the Arbitrator's ruling, discovery has commenced. Both the Company and Johnson
& Johnson filed motions for summary judgment which were argued in January 2000.
On March 10, 2000, the Arbitrator denied both motions for summary judgment. The
trial date previously set for February 2001 has been continued to September
2001. The Company is unable to predict at this time the outcome of its demand
for termination of the License Agreement or when it will be resolved.
While it is not possible to predict accurately or determine the eventual
outcome of the above described legal matters or various other legal proceedings
(including patent disputes) involving Amgen, the Company believes that the
outcome of these proceedings will not have a material adverse effect on its
annual financial statements.
In the third quarter of 2000, the Company recorded a $73.9 million legal
award, which includes the amount awarded to the Company in the Arbitrator's July
17, 2000 final order referred to above reduced by minor amounts related to other
miscellaneous disputes with Johnson & Johnson.
7. Subsequent event
On October 16, 2000, Amgen announced that it had signed an agreement to
acquire Kinetix Pharmaceuticals, Inc. ("Kinetix"), a privately held Medford,
Massachusetts company with approximately 40
15
<PAGE>
employees and expertise in the discovery of small molecule drugs in the field of
protein kinase inhibition.
Amgen will pay approximately $170 million in stock for all of the
outstanding shares of Kinetix in a tax free exchange. This acquisition will be
accounted for under the purchase method of accounting and is expected to result
in a non-recurring after-tax charge of approximately $30 million, or $0.03 per
share, to write off acquired in-process research and development. The ongoing
financial impact of this transaction is expected to be minimal. The boards of
directors of both companies have approved the merger, which remains subject to
approval by the Kinetix stockholders, the satisfaction of regulatory
requirements, and other closing conditions. The acquisition is expected to be
completed by the end of 2000.
16
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Company had cash, cash equivalents and marketable securities of
$1,866.7 million at September 30, 2000, compared with $1,333.0 million at
December 31, 1999. Cash provided by operating activities has been and is
expected to continue to be the Company's primary source of funds. During the
nine months ended September 30, 2000, operations provided $1,262.9 million of
cash compared with $994.4 million during the same period last year.
Capital expenditures totaled $318.0 million for the nine months ended
September 30, 2000, compared with $211.3 million for the same period a year ago.
The Company anticipates spending approximately $450 million to $500 million in
2000 on capital projects and equipment to expand the Company's global
operations.
The Company receives cash from the exercise of employee stock options and
proceeds from the sale of stock by Amgen pursuant to the employee stock purchase
plan. During the nine months ended September 30, 2000, employee stock option
exercises and proceeds from the sale of stock by Amgen pursuant to the employee
stock purchase plan provided $266.1 million of cash compared with $201.7 million
for the same period last year. Proceeds from the exercise of employee stock
options will vary from period to period based upon, among other factors,
fluctuations in the market value of the Company's stock relative to the exercise
price of such options.
The Company has a stock repurchase program primarily to reduce the dilutive
effect of its employee stock option and stock purchase plans. During the nine
months ended September 30, 2000, the Company purchased 9.9 million shares of its
common stock at a cost of $645.1 million compared with 19.0 million shares
purchased at a cost of $672.8 million during the same period last year. In
October 1999, the Board of Directors authorized the Company to repurchase up to
$2 billion of common stock through December 31, 2000, replacing the remaining
amount authorized in October 1998. The amount the Company spends on and the
number of shares repurchased each quarter varies based on a variety of factors,
including the stock price and blackout periods in which the Company is
restricted from repurchasing shares. As of September 30, 2000, $1,003.1 million
was available for stock repurchases.
To provide for financial flexibility and increased liquidity, the Company
has established several sources of debt financing. As of
17
<PAGE>
September 30, 2000, the Company had $223 million of unsecured long-term debt
securities outstanding. These unsecured long-term debt securities consisted of:
1) $100 million of debt securities that bear interest at a fixed rate of 6.5%
and mature in 2007 that were issued in December 1997 under a $500 million debt
shelf registration (the "Shelf"), 2) $100 million of debt securities that bear
interest at a fixed rate of 8.1% and mature in 2097 and 3) $23 million of debt
securities that bear interest at a fixed rate of 6.2% and mature in 2003. Under
the Shelf, all of the remaining $400 million of debt securities available for
issuance may be offered under the Company's medium-term note program from time
to time with terms to be determined by market conditions.
The Company's sources of debt financing also include a commercial paper
program which provides for unsecured short-term borrowings up to an aggregate
face amount of $200 million. As of September 30, 2000, commercial paper with a
face amount of $100 million was outstanding. These borrowings had maturities of
less than three months and had effective interest rates averaging 6.6%. In
addition, the Company has an unsecured $150 million credit facility that expires
on May 28, 2003. This credit facility supports the Company's commercial paper
program. As of September 30, 2000, no amounts were outstanding under this line
of credit.
The primary objectives for the Company's investment portfolio are liquidity
and safety of principal. Investments are made to achieve the highest rate of
return to the Company, consistent with these two objectives. The Company's
investment policy limits investments to certain types of instruments issued by
institutions with investment grade credit ratings and places restrictions on
maturities and concentration by type and issuer. The Company invests its cash
in securities with varying maturities to meet projected cash needs.
The Company believes that existing funds, cash generated from operations
and existing sources of debt financing are adequate to satisfy its working
capital and capital expenditure requirements for the foreseeable future, as well
as to support its stock repurchase program. However, the Company may raise
additional capital from time to time.
18
<PAGE>
Results of Operations
Product sales
Product sales were $851.0 million and $2,355.4 million during the three and
nine months ended September 30, 2000, respectively. These amounts represent
increases of $81.8 million and $160.0 million or 11% and 7%, respectively, over
the same periods last year. Quarterly product sales are influenced by a number
of factors, including underlying demand, wholesaler inventory management
practices and foreign exchange effects.
EPOGEN(R) (Epoetin alfa)
EPOGEN(R) sales were $496.1 million and $1,429.5 million for the three and
nine months ended September 30, 2000, respectively. These amounts represent
increases of $47.4 million and $157.9 million or 11% and 12%, respectively, over
the same periods last year. These increases were primarily due to higher
demand, principally driven by growth in the U.S. dialysis patient population.
Sales during the first nine months of 2000 were adversely impacted by Year 2000-
related sales to wholesalers in the fourth quarter of 1999 for which the Company
provided extended payment terms and, the Company believes, by dialysis provider
inventory drawdowns in 2000 of additional 1999 year-end stockpiling. The
Company also believes that some of this dialysis provider stockpiling may have
been due to Year 2000 concerns and year-end contract expirations.
NEUPOGEN(R) (Filgrastim)
Worldwide NEUPOGEN(R) sales were $352.8 million and $912.5 million for the
three and nine months ended September 30, 2000, respectively. These amounts
represent increases of $39.5 million and $8.7 million or 13% and 1%,
respectively, over the same periods last year. During the third quarter of
2000, NEUPOGEN(R) sales increased primarily due to a significant increase in
inventory levels at major wholesalers and higher demand, which includes the
effect of higher prices in the U.S. These increases were partially offset by
adverse foreign exchange effects. The Company believes that demand grew at a
mid-single digit rate during the third quarter of 2000. NEUPOGEN(R) sales
during the first nine months of 2000 increased primarily due to higher demand,
which includes the effect of higher prices in the U.S. This increase was
substantially offset by adverse foreign exchange effects and the adverse impact
of Year 2000-related sales to wholesalers in the fourth quarter of 1999 for
which the Company provided extended payment terms.
19
<PAGE>
Other product sales
Other product sales primarily consist of INFERGEN(R) (Interferon alfacon-
1). INFERGEN(R) sales were $2.0 million and $12.7 million for the three and
nine months ended September 30, 2000, respectively. These amounts represent
decreases of $4.8 million and $6.7 million or 71% and 35%, respectively, from
the same periods last year. INFERGEN(R) was launched in October 1997 for the
treatment of chronic hepatitis C virus infection. There are existing
treatments, including combination therapy, for this infection against which
INFERGEN(R) competes. The Company cannot predict the extent to which it will
maintain its share or further penetrate this market.
Corporate partner revenues
During the three and nine months ended September 30, 2000, corporate
partner revenues increased $8.3 million and $67.6 million, or 19% and 57%,
respectively, compared with the same periods last year. These increases were
primarily due to amounts earned from Kirin-Amgen, Inc. related to the
development program for ARANESP(TM) (darbepoetin alfa), the Company's novel
erythropoiesis stimulating protein.
Cost of sales
Cost of sales as a percentage of product sales was 12.9% and 12.6% for the
three and nine months ended September 30, 2000, respectively, compared with
12.9% and 13.2% for the same periods last year. During the first nine months of
2000, cost of sales as a percentage of product sales decreased due in part to
increased manufacturing efficiencies.
Research and development
During the three and nine months ended September 30, 2000, research and
development expenses increased $4.5 million and $15.0 million, or 2% and 3%,
respectively, compared with the same periods last year. Research and
development expenses increased primarily due to higher staff-related costs
necessary to support ongoing product development activities and higher clinical
trial costs. These increases were substantially offset by a reduction in
clinical manufacturing and product licensing costs.
20
<PAGE>
Selling, general and administrative
During the three and nine months ended September 30, 2000, selling, general
and administrative ("SG&A") expenses increased $43.0 million and $127.7 million,
or 27% and 28%, respectively, compared with the same periods last year. SG&A
expenses increased primarily due to higher staff-related costs and outside
marketing expenses as the Company continues to support its existing products and
prepares for anticipated new product launches.
Legal award
Included in the third quarter of 2000 was a benefit of $73.9 million
primarily from an award for certain costs and expenses, including attorneys'
fees, associated with the spillover arbitration with Johnson & Johnson.
Included in the third quarter of 1999 was a benefit of $49.0 million, which
reflected reduced uncertainty for the Company's potential spillover liabilities
to Johnson & Johnson. See Note 6 to the Condensed Consolidated Financial
Statements, "Contingencies - Johnson & Johnson arbitrations".
Interest and other income
During the three and nine months ended September 30, 2000, interest and
other income increased $8.7 million and $45.3 million, or 40% and 70%,
respectively, compared with the same periods last year. The increase in the
third quarter of 2000 was primarily due to higher interest income generated from
the Company's investment portfolio as a result of higher average cash balances
and higher interest rates. The increase in the first nine months of 2000 was
primarily due to gains realized on the sale of certain equity securities in the
Company's portfolio and to a lesser extent, higher interest income generated
from the Company's investment portfolio as a result of higher average cash
balances and higher interest rates.
Income taxes
The Company's effective tax rate for the three and nine months ended
September 30, 2000 was 32.3% and 31.5%, respectively, compared with 33.7% and
31.0% for the same periods last year. During the third quarter of both 1999 and
2000, the effective tax rates increased primarily due to an increase in the
expected pretax income for the full year without corresponding increases in the
tax benefits associated with the Company's Puerto Rico operations and research
and experimentation credits. The expected pretax income for 2000 increased
primarily due to the benefit of the $73.9 million legal award recorded in the
third quarter of 2000 (see "- Legal award").
21
<PAGE>
The expected pretax income for 1999 increased primarily due to expected
additional product sales in the fourth quarter of 1999 as a result of Year 2000
contingency planning (see "- Product sales") and the benefit of the $49.0
million legal award recorded in the third quarter of 1999 (see "- Legal award").
Foreign currency transactions
The Company has a program to manage certain portions of its exposure to
fluctuations in foreign currency exchange rates arising from international
operations. The Company generally hedges the receivables and payables with
foreign currency forward contracts, which typically mature within one to three
months. The Company uses foreign currency option and forward contracts which
generally expire within 12 months to hedge certain anticipated future sales and
expenses. At September 30, 2000, outstanding foreign currency option and
forward contracts totaled $26.3 million and $73.9 million, respectively.
Financial Outlook
Because Amgen's expectation for EPOGEN(R) demand growth has moderated
somewhat, the Company now expects the EPOGEN(R) sales growth rate in 2000 to be
in the low double digits, down from its previous guidance of growth in the low
teens. The Company believes that the average EPOGEN(R) weekly dose and the
average hematocrit level for dialysis patients have remained relatively constant
for the past five quarters. Patients receiving treatment for end stage renal
disease are covered primarily under medical programs provided by the federal
government. Therefore, EPOGEN(R) sales may also be affected by future changes in
reimbursement rates or a change in the basis for reimbursement by the federal
government.
In December 1999 and early 2000, the Company filed regulatory submissions
for the use of ARANESP(TM) in patients with chronic renal insufficiency and
chronic renal failure in the U.S., the European Union, Canada, Australia and New
Zealand. The Company anticipates selling ARANESP(TM), if approved, in most of
these markets beginning in 2001. Because the Company is unable to predict the
timing and the extent to which health care providers in the U.S. may transition
from administering EPOGEN(R) to ARANESP(TM), 2001 sales guidance for EPOGEN(R)
and ARANESP(TM) will be provided on a combined basis. The Company expects the
percentage increase of 2001 sales of EPOGEN(R) and ARANESP(TM) combined over
2000 EPOGEN(R) sales to be in the range of high teens to low twenties.
22
<PAGE>
Because Amgen's expectation for NEUPOGEN(R) demand growth has softened
somewhat and, to a lesser extent, because the U.S. dollar has continued to
strengthen relative to the euro, the Company now expects NEUPOGEN(R) sales in
2000 to be slightly less than in 1999, down from its previous guidance for sales
to be approximately the same as in 1999. In 2001, the NEUPOGEN(R) sales growth
rate is expected to be in the high single digits. The Company believes that
there is a trend in some cancer settings towards the use of chemotherapy
treatments that are less myelosuppressive. Chemotherapy treatments that are
less myelosuppressive may require less NEUPOGEN(R). Future NEUPOGEN(R) demand
growth is dependent primarily upon further penetration of existing markets and
the effects of competitive products. NEUPOGEN(R) usage is expected to continue
to be affected by cost containment pressures from governments and private
insurers on health care providers worldwide. In addition, reported NEUPOGEN(R)
sales will continue to be affected by changes in foreign currency exchange
rates. In both domestic and foreign markets, sales of NEUPOGEN(R) are
dependent, in part, on the availability of reimbursement from third party payors
such as governments (for example, Medicare and Medicaid programs in the U.S.)
and private insurance plans. Therefore, NEUPOGEN(R) sales may also be affected
by future changes in reimbursement rates or changes in the bases for
reimbursement.
INFERGEN(R) (Interferon alfacon-1) was launched in October 1997 for the
treatment of chronic hepatitis C virus infection. There are existing
treatments, including combination therapy, for this infection against which
INFERGEN(R) competes. The Company cannot predict the extent to which it will
maintain its share or further penetrate this market.
For 2000, corporate partner revenues are expected to be in a range of $240
to $250 million, research and development expenses are expected to be in the
range of $825 to $875 million and SG&A expenses are expected to be in the range
of $800 to $850 million. Excluding the effect of the legal award recorded in
the third quarter of 2000 and the acquired in-process research and development
charge expected to be recorded in the fourth quarter of 2000 (see Notes 6 and 7,
respectively, to the Condensed Consolidated Financial Statements), the Company
expects the effective tax rate for 2000 to be approximately 31% and earnings per
share for 2000 to be at the low end of its previous guidance of $1.06 to $1.08.
For 2001, total product sales are expected to grow in the mid to high
teens, cost of sales is expected to be in the range of 11.5% to 12.5% of total
product sales, research and development expenses and SG&A expenses are each
estimated to be in the range of 25% to
23
<PAGE>
27% of total product sales, and the effective tax rate is expected to be
approximately 34%. Excluding the effect of the legal award and the acquired in-
process research and development charge referred to above, 2001 earnings per
share is expected to grow in the mid teens.
Estimates of future product sales, operating expenses and earnings per
share are necessarily speculative in nature and are difficult to predict with
accuracy.
Except for the historical information contained herein, the matters
discussed herein are by their nature forward-looking. Investors are cautioned
that forward-looking statements or projections made by the Company, including
those made in this document, are subject to risks and uncertainties that may
cause actual results to differ materially from those projected. Reference is
made in particular to forward-looking statements regarding product sales,
earnings per share and expenses. Amgen operates in a rapidly changing
environment that involves a number of risks, some of which are beyond the
Company's control. Future operating results and the Company's stock price may
be affected by a number of factors, including, without limitation: (i) the
results of preclinical and clinical trials; (ii) regulatory approvals of product
candidates, new indications and manufacturing facilities; (iii) reimbursement
for Amgen's products by governments and private payors; (iv) health care
guidelines and policies relating to Amgen's products; (v) intellectual property
matters (patents) and the results of litigation; (vi) competition; (vii)
fluctuations in operating results and (viii) rapid growth of the Company. These
factors and others are discussed herein and in the sections appearing in "Item
1. Business - Factors That May Affect Amgen" in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 which sections are incorporated
herein by reference and filed as an exhibit hereto.
Legal Matters
The Company is engaged in arbitration proceedings with one of its
licensees. For a discussion of these matters, see Note 6 to the Condensed
Consolidated Financial Statements.
24
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Legal proceedings are reported in the Company's Annual Report on Form 10-K
for the year ended December 31, 1999, with material developments since that
report described in the Company's Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and below. While it is not possible to predict accurately
or to determine the eventual outcome of these matters, the Company believes that
the outcome of these proceedings will not have a material adverse effect on the
annual financial statements of the Company.
Transkaryotic Therapies and Aventis S.A. litigation
On September 8, 2000, the trial concluded in the United States District
Court in Boston, Massachusetts and the Company is now awaiting a decision in the
case.
Biogen litigation
On October 12, 2000, the United States District Court for the District of
Massachusetts (the "Massachusetts District Court") entered an Order for Judgment
in favor of the Company on the basis of no infringement, literally or under the
doctrine of equivalents with respect to the Company's manufacture and sale of
NEUPOGEN(R). Biogen, Inc. ("Biogen") disputes the finality of the Judgment and
the correctness of the Order. The parties will be briefing these issues before
the Massachusetts District Court. The remaining calendar of scheduled items
that were pending before the court, including trial, has been eliminated and the
Company's motion for lack of standing was dismissed as moot. The Company's
motion for summary judgment of invalidity on the basis of prior public use was
denied.
The stay of proceedings remains for the action filed by Biogen pertaining
to the Company's manufacture of INFERGEN(R).
Genentech litigation
On October 12, 2000, the United States District Court for the Northern
District of California entered Final Judgment in the Company's favor on the
basis of no infringement.
25
<PAGE>
Johnson & Johnson arbitrations
The Company is engaged in arbitration proceedings with one of its
licensees. See Note 6 to the Condensed Consolidated Financial Statements,
"Contingencies-Johnson & Johnson arbitrations".
Item 6. Exhibits and Reports on Form 8-K
(a) Reference is made to the Index to Exhibits included herein.
(b) Reports on Form 8-K - none
26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Amgen Inc.
(Registrant)
Date: 11/13/00 By: /s/ Kathryn E. Falberg
---------------- ---------------------------------
Kathryn E. Falberg
Senior Vice President, Finance
and Corporate Development,
and Chief Financial Officer
Date: 11/13/00 By: /s/ Barry D. Schehr
------------------ -------------------------------
Barry D. Schehr
Vice President, Financial Operations, and
Chief Accounting Officer
27
<PAGE>
AMGEN INC.
INDEX TO EXHIBITS
Exhibit No. Description
3.1 Restated Certificate of Incorporation as amended. (13)
3.2* Amended and Restated Bylaws of Amgen Inc. (as amended October 24,
2000).
3.3 Certificate of Amendment of Restated Certificate of Incorporation.
(24)
3.4 Certificate of Amendment of Certificate of Designations of Series A
Junior Participating Preferred Stock. (24)
4.1 Indenture dated January 1, 1992 between the Company and Citibank
N.A., as trustee. (6)
4.2 First Supplement to Indenture, dated February 26, 1997 between the
Company and Citibank N.A., as trustee. (10)
4.3 Officer's Certificate pursuant to Sections 2.1 and 2.3 of the
Indenture, as supplemented, establishing a series of securities "8-
1/8% Debentures due April 1, 2097." (12)
4.4 8-1/8% Debentures due April 1, 2097. (12)
4.5 Form of stock certificate for the common stock, par value $.0001 of
the Company. (13)
4.6 Officer's Certificate pursuant to Sections 2.1 and 2.3 of the
Indenture, dated as of January 1, 1992, as supplemented by the First
supplemental Indenture, dated as of February 26, 1997, each between
the Company and Citibank, N.A., as Trustee, establishing a series of
securities entitled "6.50% Notes Due December 1, 2007". (15)
4.7 6.50% Notes Due December 1, 2007 described in Exhibit 4.6. (15)
4.8 Corporate Commercial Paper - Master Note between and among Amgen
Inc., as Issuer, Cede & Co., as nominee of The Depository Trust
Company and Citibank, N.A. as Paying Agent. (18)
10.1 Company's Amended and Restated 1991 Equity Incentive Plan. (21)
10.2 Sixth Amendment to the Company's Amended and Restated Retirement and
Savings Plan as amended and restated April 1, 1996. (20)
10.3 Shareholder's Agreement of Kirin-Amgen, Inc., dated May 11, 1984,
between the Company and Kirin Brewery Company,
28
<PAGE>
Limited (with certain confidential information deleted therefrom).
(1)
10.4 Amendment Nos. 1, 2, and 3, dated March 19, 1985, July 29, 1985 and
December 19, 1985, respectively, to the Shareholder's Agreement of
Kirin-Amgen, Inc., dated May 11, 1984. (24)
10.5 Product License Agreement, dated September 30, 1985, and Technology
License Agreement, dated, September 30, 1985 between the Company and
Ortho Pharmaceutical Corporation. (24)
10.6 Product License Agreement, dated September 30, 1985, and Technology
License Agreement, dated September 30, 1985 between Kirin-Amgen,
Inc. and Ortho Pharmaceutical Corporation. (24)
10.7 Company's Amended and Restated Employee Stock Purchase Plan. (24)
10.8 Research, Development Technology Disclosure and License Agreement
PPO, dated January 20, 1986, by and between the Company and Kirin
Brewery Co., Ltd. (2)
10.9 Amendment Nos. 4 and 5, dated October 16, 1986 (effective July 1,
1986) and December 6, 1986 (effective July 1, 1986), respectively,
to the Shareholders Agreement of Kirin-Amgen, Inc. dated May 11,
1984 (with certain confidential information deleted therefrom). (3)
10.10 Assignment and License Agreement, dated October 16, 1986, between
the Company and Kirin-Amgen, Inc. (with certain confidential
information deleted therefrom). (3)
10.11 G-CSF European License Agreement, dated December 30, 1986, between
Kirin-Amgen, Inc. and the Company (with certain confidential
information deleted therefrom). (3)
10.12 Research and Development Technology Disclosure and License
Agreement: GM-CSF, dated March 31, 1987, between Kirin Brewery
Company, Limited and the Company (with certain confidential
information deleted therefrom). (3)
10.13 Company's Amended and Restated 1988 Stock Option Plan. (8)
10.14 Company's Amended and Restated Retirement and Savings Plan. (8)
10.15 Amendment, dated June 30, 1988, to Research, Development, Technology
Disclosure and License Agreement: GM-CSF dated March 31, 1987,
between Kirin Brewery Company, Limited and the Company. (4)
10.16 Agreement on G-CSF in Certain European Countries, dated January 1,
1989, between Amgen Inc. and F. Hoffmann-La Roche & Co. Limited
Company (with certain confidential information deleted therefrom).
(5)
29
<PAGE>
10.17 Partnership Purchase Agreement, dated March 12, 1993, between the
Company, Amgen Clinical Partners, L.P., Amgen Development
Corporation, the Class A limited partners and the Class B limited
partner. (7)
10.18 Amgen Inc. Supplemental Retirement Plan (As Amended and Restated
Effective November 1, 1999). (22)
10.19 First Amendment to Amgen Inc. Change of Control Severance Plan. (24)
10.20 Amended and Restated Amgen Performance Based Management Incentive
Plan. (21)
10.21 Credit Agreement, dated as of May 28, 1998, among Amgen Inc., the
Borrowing Subsidiaries named therein, the Banks named therein,
Citibank, N.A., as Issuing Bank, and Citicorp USA, Inc., as
Administrative Agent. (19)
10.22 Agreement between Amgen Inc. and Dr. N. Kirby Alton, dated October
11, 1999. (22)
10.23 Amendment No. 1 to the Company's Amended and Restated Retirement and
Savings Plan. (8)
10.24 Seventh Amendment to the Amgen Retirement and Savings Plan as
Amended and Restated effective April 1, 1996. (21)
10.25 Amendment Number 2 to the Company's Amended and Restated Retirement
and Savings Plan dated April 1, 1996. (11)
10.26 Amgen Inc. Change of Control Severance Plan effective as of October
20, 1998. (20)
10.27 Preferred Share Rights Agreement, dated February 18, 1997, between
Amgen Inc. and American Stock Transfer and Trust Company, Rights
Agent. (9)
10.28 First Amendment, effective January 1, 1998, to the Company's Amended
and Restated Employee Stock Purchase Plan. (14)
10.29 Third Amendment, effective January 1, 1997, to the Company's Amended
and Restated Retirement and Savings Plan dated April 1, 1996. (14)
10.30 Agreement between Amgen Inc. and Dr. Fabrizio Bonanni, dated March
3, 1999. (22)
10.31 Promissory Note of Ms. Kathryn E. Falberg, dated April 7, 1995. (16)
10.32 Promissory Note of Mr. Edward F. Garnett, dated July 18, 1997. (16)
10.33 Fourth Amendment to the Company's Amended and Restated Retirement
and Savings Plan as amended and restated effective April 1, 1996.
(16)
10.34 Fifth Amendment to the Company's Amended and Restated Retirement and
Savings Plan as amended and restated effective April 1, 1996. (16)
30
<PAGE>
10.35 Company's Amended and Restated 1987 Directors' Stock Option Plan.
(11)
10.36 Amended and Restated Agreement on G-CSF in the EU between Amgen Inc.
and F. Hoffmann-La Roche Ltd (with certain confidential information
deleted therefrom). (18)
10.37 Collaboration and License Agreement, dated December 15, 1997,
between the Company, GPI NIL Holdings, Inc. and Guilford
Pharmaceuticals Inc. (with certain confidential information deleted
therefrom). (17)
10.38 Promissory Note of Dr. Fabrizio Bonanni, dated August 7, 1999. (22)
10.39 Promissory Note of Dr. Fabrizio Bonanni, dated October 29, 1999.
(22)
10.40 Agreement between Amgen Inc. and Dr. Lawrence M. Souza, Ph.D., dated
March 6, 2000. (23)
10.41 Agreement between Amgen Inc. and Mr. Gordon M. Binder, dated May 10,
2000. (24)
27* Financial Data Schedule.
99* Sections appearing under the heading "Item 1. Business - Factors
That May Affect Amgen" in the Company's Annual Report on Form 10-K
for the year ended December 31, 1999.
----------------
* Filed herewith.
(1) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
March 31, 1984 on June 26, 1984 and incorporated herein by reference.
(2) Filed as an exhibit to Amendment No. 1 to Form S-1 Registration Statement
(Registration No. 33-3069) on March 11, 1986 and incorporated herein by
reference.
(3) Filed as an exhibit to the Form 10-K Annual Report for the year ended March
31, 1987 on May 18, 1987 and incorporated herein by reference.
(4) Filed as an exhibit to Form 8 amending the Quarterly Report on Form 10-Q
for the quarter ended June 30, 1988 on August 25, 1988 and incorporated
herein by reference.
(5) Filed as an exhibit to the Form 8 dated November 8, 1989, amending the
Annual Report on Form 10-K for the year ended March 31, 1989 on June 28,
1989 and incorporated herein by reference.
(6) Filed as an exhibit to Form S-3 Registration Statement dated December 19,
1991 and incorporated herein by reference.
(7) Filed as an exhibit to the Form 8-A dated March 31, 1993 and incorporated
herein by reference.
31
<PAGE>
(8) Filed as an exhibit to the Form 10-Q for the quarter ended September 30,
1996 on November 5, 1996 and incorporated herein by reference.
(9) Filed as an exhibit to the Form 8-K Current Report dated February 18, 1997
on February 28, 1997 and incorporated herein by reference.
(10) Filed as an exhibit to the Form 8-K Current Report dated March 14, 1997 on
March 14, 1997 and incorporated herein by reference.
(11) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1996 on March 24, 1997 and incorporated herein by reference.
(12) Filed as an exhibit to the Form 8-K Current Report dated April 8, 1997 on
April 8, 1997 and incorporated herein by reference.
(13) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1997
on May 13, 1997 and incorporated herein by reference.
(14) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1997 on
August 12, 1997 and incorporated herein by reference.
(15) Filed as an exhibit to the Form 8-K Current Report dated and filed on
December 5, 1997 and incorporated herein by reference.
(16) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1997 on March 24, 1998 and incorporated herein by reference.
(17) Filed as Exhibit 10.40 to the Guilford Pharmaceuticals Inc. Form 10-K for
the year ended December 31, 1997 on March 27, 1998 and incorporated herein
by reference.
(18) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1998
on May 13, 1998 and incorporated herein by reference.
(19) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1998 on
August 14, 1998 and incorporated herein by reference.
(20) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1998 on March 16, 1999 and incorporated herein by reference.
(21) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1999 on
August 3, 1999 and incorporated herein by reference.
(22) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1999 on March 7, 2000 and incorporated herein by reference.
(23) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 2000
on April 27, 2000 and incorporated herein by reference.
32
<PAGE>
(24) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 2000 on
August 1, 2000 and incorporated herein by reference.
33
