LETTER TO SHAREHOLDERS 2017 LETTER TO SHAREHOLDERS Robert A. Bradway, Chairman and Chief Executive Officer, Amgen Inc. To My Fellow Shareholders, Amgen had another successful year in 2017, serving Today, we are seeing intensifying competition across patients around the world with innovative medicines and our business from large, well-established players and enabling them to live longer, healthier lives. smaller, nimble newcomers. We see a policy and access environment around the world that is increasingly With revenues of $22.8 billion, we achieved record challenging to innovation. And we are seeing traditional non-GAAP earnings per share of $12.58,1 up 8% from roles in the healthcare ecosystem blur as companies the prior year, a record non-GAAP operating margin of enter into unconventional partnerships in an attempt 53.5%,1 and record free cash flow of $10.5 billion.1 to find new ways to succeed. Consistent with our belief in the long-term value of innovation, we invested $3.5 billion1 in research and At a time when so much is changing, it is critical to have 2017 RESULTS development in support of a very promising pipeline a clearly articulated mission, a meaningful aspiration, a of new medicines. Amgen delivered a one-year total well-defined set of values, and a carefully considered $22.8 billion shareholder return of 22% and a five-year return of strategy. Amgen has all of these things, and I’m convinced REVENUE 125%, outperforming the one- and five-year average these will enable us not just to survive but to thrive in total shareholder return of our peer group of 10% and the years ahead. $12.58 101%, respectively. NON-GAAP EARNINGS PER SHARE1 OUR MISSION A Dynamic Environment Amgen’s mission is to serve patients—in particular, 53.5% Amgen was founded in 1980. For most of our history, patients suffering from serious illnesses like NON-GAAP OPERATING MARGIN1 we competed in a handful of specialty therapeutic cardiovascular disease and cancer. We have never categories in which there was relatively little competition. wavered from this mission, and it has never been more $10.5 billion The healthcare ecosystem was fundamentally stable, necessary or urgent. Why? FREE CASH FLOW1 with clearly defined roles for those operating within it. Innovators like Amgen discovered and developed new First and foremost, the world is rapidly aging. For treatments. Physicians and hospitals provided those example, in Amgen’s largest market, the United States, treatments to patients. Governments and insurers paid people over the age of 65 represent the fastest growing for those treatments. segment of the population. It is estimated that an average of 10,000 people will reach the age of 65 every That world no longer exists. day for the next 20 years. Globally, the percentage of people over the age of 65 will roughly double between 1 This is a non-GAAP financial measure. See reconciliation to U.S. generally accepted accounting principles (GAAP) accompanying this letter. 2 now and 2050. For many diseases associated with the Our current portfolio of medicines addresses some of aging process—like cancer, cardiovascular disease, and the world’s leading causes of death. We are passionate Alzheimer’s disease—better, more effective therapies about bringing transformational, not incremental, are needed. innovation to patients in these areas. Innovative new medicines that can prevent disease offer the prospect Even as the world is growing older, approximately 160 of a better future for patients and society. million additional people join the global middle class every year. With this trend, we can unfortunately expect OUR ASPIRATION to see growth in diseases such as diabetes, obesity, Our aspiration is to be the world’s best human and kidney disease, which are more prevalent among therapeutics company. To be the best, we need to first-world countries, and respiratory diseases, which aim high and take on the tough challenges. As an arise with increased urbanization. example, we have seen a number of our peers abandon This growing global burden of disease takes an their efforts to develop new treatments for neurological enormous human toll, of course, but also creates a huge disorders such as Alzheimer’s, a disease that afflicts financial burden on society. To give just one example, 1 in 10 people age 65 and older. Without a doubt, cardiovascular disease now claims a staggering 17.7 Alzheimer’s has proven to be an incredibly difficult million lives a year globally and costs nearly $600 billion target. Nonetheless, we remain in the fight. We are a year in the U.S. alone. working on a variety of mechanisms in Alzheimer’s disease, including a molecule being tested in patients No one company can solve these massive health with a very high genetic risk for Alzheimer’s who have challenges single-handedly, but Amgen is committed yet to develop cognitive symptoms of the disease—a to being an important part of the solution. We have promising new approach. been at the forefront in implementing innovative value- based contracts with insurers to share accountability OUR VALUES for health results and link the price of our medicines to THE AMGEN VALUES The Amgen Values were formalized more than 20 years their performance. For example, our partnership with ago to preserve the entrepreneurial spirit, energy, and Be Science-Based Harvard Pilgrim Health Care provides them a rebate high ethical standards that characterized the early of the cost of Repatha®, our medicine to reduce heart Compete Intensely startup years at our company. These values continue attacks and strokes, for eligible patients who have and Win to guide the way we do business today, and they keep us such events. grounded and unified, especially during turbulent times. Create Value for In addition, Amgen remains deeply committed to long- Patients, Staff, For example, one of our values is to “trust and respect standing patient support programs in the U.S., such as and Stockholders each other.” It sounds obvious, perhaps, but far too the Amgen Safety Net Foundation, that help patients many companies recently have failed to create an Be Ethical with no or limited drug coverage access our medicines. environment in which people from diverse backgrounds For eligible patients unable to afford their prescribed can work together comfortably and collaboratively to Trust and Respect Amgen medicines, we provide our medicines at no cost. achieve great things. Each Other We also support compassionate use and expanded access to our medicines for qualified patients globally. Amgen’s first product, EPOGEN®, was discovered in Ensure Quality 1983 by a team led by a young Taiwanese immigrant Finally, we are also applying our biomanufacturing Work in Teams to the U.S. named Fu-Kuen Lin, so we have long expertise to the development of high-quality, branded understood the importance of harnessing diversity Collaborate, biosimilars, which offer the promise of improved supply to make a difference for patients. Today, more than Communicate, and affordability for certain biologic medicines whose and Be Accountable patents have expired. 3 50% of our employees globally are women, and Bringing Innovative Medicines to Patients 35% of our employees in the U.S. are minorities. We Innovative medicines are the heart and soul of our have approximately 4,000 staff members globally business. If we don’t advance innovative medicines, participating in nine employee resource groups— manufacture them to a high quality standard, and including the Amgen Veterans Employee Network, get them into the hands of patients who need them, shown below observing Veterans Day—that are nothing else we do matters. In 2017, we secured 80 dedicated to supporting their members, our business, approvals for new medicines and new indications in over and the community. 30 countries around the world, continuing a significant shift in our portfolio on two important dimensions. First, the balance of our portfolio is shifting to newer products with very favorable long-term growth potential. For example, three of our currently marketed products— Repatha®, Prolia®, and KYPROLIS®—can benefit significantly more patients than they do today. Together, these three products generated more than $3 billion in sales in 2017 and collectively grew by over 25% year-over-year. • Repatha is our LDL cholesterol treatment to reduce heart attacks and strokes in patients with established cardiovascular disease. Sales of Repatha increased 126% in 2017. In the U.S., someone has a heart attack or stroke every 40 seconds, and nearly In 2017, Amgen received a perfect score on the one in three of these patients will have another event. Corporate Equality Index, which rates corporate policies In December, the U.S. Food and Drug Administration and practices related to LGBTQ workplace equality. (FDA) approved the inclusion of our cardiovascular In early 2018, Amgen ranked among the top 100 on outcomes data in the label for Repatha. With this Forbes magazine’s inaugural list of “America’s Best approval, Repatha became the first PCSK9 inhibitor Employers for Diversity.” We see our commitment to proven to reduce the risk of heart attack (by 27%), diversity as a strength to build upon as we serve an stroke (by 21%), and coronary revascularization increasingly diverse patient population. (by 22%) in adults with established cardiovascular OUR STRATEGY disease. Since receiving the expanded label, we’ve redoubled our efforts to work with large insurers and At Amgen, our strategy is the integrated set of actions pharmacy benefit managers to help patients who are Six therapeutic areas we are taking to grow our company and strengthen our prescribed Repatha by their doctors get it. form the core of our long-term competitive position. Six therapeutic areas form the core of our business: cardiovascular, oncology/ • Prolia is our medicine to reduce the risk of fracture business: cardiovascular, hematology, neuroscience, inflammation, nephrology, in postmenopausal women with osteoporosis.