Amgen 2011 Annual Report and Financial Summary

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Amgen 2011 Annual Report and Financial Summary Amgen 2011 Annual Report and Financial Summary 40838_cvr.indd 1 3/15/12 9:01 AM Our Mission: To Serve Patients About Amgen Amgen Values Products Amgen discovers, develops, manufactures, and delivers innovative Be science-based Aranesp® (darbepoetin alfa) human therapeutics. A biotechnology pioneer since 1980, Amgen was Compete intensely and win Enbrel® (etanercept) one of the first companies to realize the new science’s promise by Create value for patients, EPOGEN® (epoetin alfa) bringing safe, effective medicines from lab to manufacturing plant to staff, and stockholders Neulasta® (pegfi lgrastim) patient. Amgen therapeutics have changed the practice of medicine, Be ethical NEUPOGEN® (Filgrastim) helping millions of people around the world in the fight against Trust and respect each other Nplate® (romiplostim) cancer, kidney disease, rheumatoid arthritis, bone disease, and other Ensure quality Prolia® (denosumab) serious illnesses. With a deep and broad pipeline of potential new Work in teams Sensipar®/Mimpara® (cinacalcet) medicines, Amgen remains committed to advancing science to Collaborate, communicate, Vectibix® (panitumumab) dramatically improve people’s lives. and be accountable XGEVA® (denosumab) 2011 $15,582 2011 $3,116 2011 $5,119 2011 $5.33 2010 15,053 2010 2,773 2010 5,787 2010 5.21 2009 14,642 2009 2,739 2009 6,336 2009 4.91 2008 15,003 2008 2,910 2008 5,988 2008 4.55 2007 14,771 2007 3,064 2007 5,401 2007 4.29 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 Total revenues ($ in millions) “Adjusted” research and development (R&D) Cash fl ow from operations ($ in millions) “Adjusted” earnings per share (EPS)* expenses* ($ in millions) * “Adjusted” earnings per share and “adjusted” R&D expenses are non-GAAP fi nancial measures. See page 12 for reconciliations to U.S. generally accepted accounting principles (GAAP). 40838_cvr.indd 2 3/15/12 9:02 AM Amgen 2011 Annual Report 1 Letter to Stockholders Kevin W. Sharer, Chairman and Chief Executive Officer Robert A. Bradway, President and Chief Operating Officer Dear Stockholders, We’re proud of what Amgen accomplished in Neulasta®/NEUPOGEN®, the strength of new Our Strategic Approach 2011—a solid year—and the outlook for 2012 is products Prolia® and XGEVA®, and the success even stronger. In the fi rst half of 2011, we outlined of Nplate®, Sensipar®/Mimpara®, and Vectibix®. • Bring medicines to market that advance our strategy and long-term growth objectives That growth was partially offset by the decline treatment of serious illness at our business review meeting with investors. in sales of Aranesp® and EPOGEN®. We also discussed our plans designed to return • Make signifi cant and sustained investment signifi cant capital to you, our stockholders. Through We were very pleased to receive marketing approval in R&D and participate in a wide range of strong execution in 2011, Amgen delivered solid for XGEVA® in the European Union in 2011. We therapeutic areas operating performance for the year and made entered the market with a novel therapy to treat good progress toward our objectives. an important medical need—the prevention of • Reliably manufacture products with the skeletal-related events in adults with bone metastases highest quality and lowest cost Despite another challenging year for our industry, from solid tumors—and we have seen growth we grew revenues 4 percent and increased in the number of patients being treated in the • Expand our operating footprint into emerging adjusted earnings per share* 2 percent, and we European Union as well as in the United States. markets and Japan had approximately $5.1 billion in operating cash We continue to seek new approvals and indications fl ow. We ended 2011 energized by our momentum for this important medicine. • Manage our cost structure to grow earnings and confi dent that 2012 will be a year to accelerate ahead of revenues Amgen’s growth. This is also a time of planned Also in 2011, we recorded our first full year of transition as a new generation of leaders prepares sales of Prolia®, which achieved signifi cant growth. • Use capital wisely, maintain a strong balance to take Amgen forward. Combined sales of Prolia® and XGEVA® exceeded sheet, and return signifi cant capital to stockholders $500 million in 2011. Amgen will continue working We know it won’t be easy to deliver on our mission to ensure that these innovative medicines reach • Sustain a strong social architecture that to serve patients: We still face global macroeconomic the right patients. attracts the best staff and enables them to pressures and new regulatory and reimbursement perform at the highest levels challenges. However, Amgen is uniquely well Our Pipeline Is Advancing equipped to meet those challenges and provide We are committed to making critical investments innovative therapies for more patients. in Amgen’s pipeline—one of the best in our industry. We’re focused on advancing six later-stage (phase 2 We Delivered in 2011 and 3) programs for the treatment of serious illnesses Amgen’s 4 percent revenue increase in 2011 was such as melanoma, ovarian cancer, pancreatic driven by the solid performance of Enbrel® and cancer, psoriasis, asthma, cardiovascular disease, * “Adjusted” earnings per share is a non-GAAP fi nancial measure. See page 12 for reconciliations to U.S. generally accepted accounting principles (GAAP). 40838_txt.indd 1 3/19/12 9:06 AM 2 Amgen 2011 Annual Report and postmenopausal osteoporosis. At a time when stock by way of a modifi ed Dutch auction tender fast-growing markets—and we are making plans others in the industry have chosen to reduce their offer. We intend to buy back the remaining to enter Japan and South Korea. In Brazil, we investment in research and development (R&D), $5 billion under our board authorization through acquired Bergamo, our largest international we have affi rmed that we will continue investing open-market purchases. In 2012, we plan to acquisition to date, and we now have commercial, at approximately 18 to 20 percent of sales and continue aggressively returning capital to manufacturing, and clinical development expect to be at the upper end of that range this stockholders while retaining signifi cant strategic operations there. year. The strength of our pipeline is recognized by fl exibility to grow our business. others: In 2011 we received the Prix Galien USA Amgen also took important steps to capitalize on Award for Best Biotechnology Product—for Strategic Plans for Higher Growth the developing biosimilars market. In December denosumab (Prolia®/XGEVA®)—and the Best Our growth strategy includes more emphasis on 2011, we announced an agreement with Watson Biotechnology Pipeline ranking from both adding innovative medicines through business Pharmaceuticals to work on several cancer R&D Directions and Med Ad News magazines. development initiatives. In 2011, Amgen acquired antibody biosimilar products, which we expect BioVex for its molecule in development for to sell under a joint label. The pairing of Amgen’s Delivering More Stockholder Value malignant melanoma, a condition for which there 30 years of experience in biologics together with In April 2011, during a comprehensive business is a large unmet medical need. In January 2012, Watson’s substantial generics and specialty review where we shared our strategy, growth we announced plans to acquire biotechnology pharmaceutical experience and complementary objectives, and capital allocation plans, we outlined company Micromet, including the worldwide commercial and distribution capabilities represents our specifi c approach for increasing stockholder rights to blinatumomab, a promising new therapy great potential for worldwide patient access to value. This included implementing our fi rst-ever in phase 2 clinical trials for patients with relapsed these medicines. dividend—with the intent to increase it meaningfully or treatment-refractory acute lymphoblastic over time—and continuing our stock repurchase leukemia (ALL), a group that has exhausted all We continue expanding our competitive advantage program. We paid our fi rst quarterly dividend of other therapeutic options. Through this acquisition, in manufacturing by embracing new technologies $0.28 per share in September and in December Amgen will also gain Micromet’s talented R&D that will help grow and sustain our brands as we announced an increase in the dividend by 29 percent staff and its R&D facility in Munich, Germany, as face new competition. to $0.36. In October, the Board of Directors well as the proprietary bispecifi c T-cell engager authorized an increase in the Company’s stock (BiTE®) technology, which has been clinically Our Next Generation of Leadership repurchase program to $10 billion, and we validated through the blinatumomab program Late last year, we announced changes to certain announced our intent to accelerate repurchases of and provides an innovative platform for future executive roles—including our own—as part our stock. This reflected our confidence in the clinical research. of a broader transition to Amgen’s next generation long-term value of the Company and the attractive of leadership. Roger Perlmutter, executive vice interest rate environment. In December, we In addition, Amgen took steps to develop a presence president, R&D, retired in February 2012, and completed the repurchase of $5 billion of our in Brazil, China, Russia, and Turkey—all of them Sean Harper became the new head of R&D. Roger Perlmutter Retires “Roger Perlmutter has been a superb head of R&D. It’s hard to imagine Amgen without him, and we are profoundly grateful to have had him as a partner, colleague, and friend. His contributions have been enormous, and millions of patients have benefi ted—and will continue benefi ting—from the work he led with his colleagues in R&D. In our view, Roger is the best head of R&D in his generation.
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