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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 June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-12477
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.)
1840 Dehavilland Drive, Thousand Oaks, California 91320-1789
----------------------------------------------------------------------
(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 June 30, 1994, the registrant had 133,416,290 shares of
Common Stock, $.0001 par value, outstanding.
AMGEN INC.
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements ......................3
Condensed Consolidated Statements of
Operations - three and six months
ended June 30, 1994 and 1993 ................4 - 5
Condensed Consolidated Balance Sheets -
June 30, 1994 and December 31, 1993 .............6
Condensed Consolidated Statements of
Cash Flows - six months
ended June 30, 1994 and 1993 ................7 - 8
Notes to Condensed Consolidated Financial
Statements ......................................9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations ...............................13
PART II OTHER INFORMATION
Item 1. Legal Proceedings ........................19
Item 4. Submission of Matters to a Vote of
Security Holders..........................21
Item 6. Exhibits and Reports on Form 8-K..........21
Signatures........................................22
Index to Exhibits.................................23
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The information in this report for the six months ended June 30,
1994 and 1993, is unaudited but includes all adjustments (consisting
only of normal recurring accruals) which Amgen Inc. ("Amgen" or the
"Company") considers necessary for a fair presentation of the results
of operations for those periods.
The condensed 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 fiscal
year ended December 31, 1993.
Interim results are not necessarily indicative of results for
the full fiscal year.
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- --------
Revenues:
Product sales........... $388,575 $327,829 $734,306 $623,281
Corporate partner
revenues.............. 18,838 11,415 32,829 22,315
Royalty income.......... 7,272 3,876 11,548 7,767
-------- -------- -------- --------
Total revenues.......... 414,685 343,120 778,683 653,363
-------- -------- -------- --------
Operating expenses:
Cost of sales........... 64,394 53,561 117,677 104,465
Research and development 80,230 64,365 153,955 120,490
Marketing and selling... 59,591 53,050 112,764 99,783
General and
administrative.......... 30,186 28,528 58,494 56,271
Loss of affiliates, net. 8,627 3,348 15,884 5,472
Legal award............. - (13,900) - (13,900)
-------- -------- -------- --------
Total operating expenses 243,028 188,952 458,774 372,581
-------- -------- -------- --------
Operating income........ 171,657 154,168 319,909 280,782
-------- -------- -------- --------
Other income (expense):
Interest and other
income................ 3,724 9,398 9,235 15,267
Interest expense, net... (2,747) (1,516) (5,387) (1,525)
-------- -------- -------- --------
Total other income
(expense)............... 977 7,882 3,848 13,742
-------- -------- -------- --------
Income before income
taxes and cumulative
effect of a change in
accounting principle.. 172,634 162,050 323,757 294,524
Provision for income
taxes................. 65,170 61,826 122,833 113,740
-------- -------- -------- --------
Income before cumulative
effect of a change in
accounting principle.. 107,464 100,224 200,924 180,784
Cumulative effect of a
change in accounting
principle............. - - - 8,738
-------- -------- -------- --------
Net income.............. $107,464 $100,224 $200,924 $189,522
======== ======== ======== ========
See accompanying notes.
(Continued on next page)
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- --------
Earnings per share:
Primary:
Income before cumulative
effect of a change in
accounting principle.. $ .77 $ .70 $ 1.43 $ 1.25
Cumulative effect of a
change in accounting
principle............... - - - .06
-------- -------- -------- --------
Net income.............. $ .77 $ .70 $ 1.43 $ 1.31
======== ======== ======== ========
Fully diluted:
Income before cumulative
effect of a change in
accounting principle.. $ .77 $ .70 $ 1.43 $ 1.25
Cumulative effect of a
change in accounting
principle............. - - - .06
-------- -------- -------- --------
Net income.............. $ .77 $ .70 $ 1.43 $ 1.31
======== ======== ======== ========
Shares used in
calculation of:
Primary earnings per
share................. 139,609 143,677 140,486 144,694
Fully diluted earnings
per share............. 139,631 143,677 140,486 144,694
See accompanying notes.
AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
1994 1993
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents.............. $ 251,563 $ 128,505
Marketable securities, at cost which
approximates market................. 466,846 594,679
Trade receivables, net................. 180,299 164,337
Inventories............................ 79,739 74,712
Deferred tax assets, net............... 55,401 58,937
Other current assets................... 27,411 33,340
---------- ----------
Total current assets............ 1,061,259 1,054,510
Property, plant and equipment at cost, net 615,684 586,912
Investments............................... 91,981 78,778
Other assets.............................. 55,628 45,323
---------- ----------
$1,824,552 $1,765,523
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................ $ 16,991 $ 23,056
Commercial paper........................ 99,734 109,767
Other accrued liabilities............... 264,834 279,438
---------- ----------
Total current liabilities........ 381,559 412,261
Long-term debt............................ 185,888 181,242
Commitments and contingencies
Stockholders' equity:
Common stock, $.0001 par value;
750,000 shares authorized;
outstanding - 133,416 shares in
1994 and 134,214 shares in 1993...... 13 13
Additional paid-in capital............. 670,859 636,217
Retained earnings...................... 586,233 535,790
---------- ----------
Total stockholders' equity....... 1,257,105 1,172,020
---------- ----------
$1,824,552 $1,765,523
========== ==========
See accompanying notes.
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
1994 1993
-------- --------
Cash flows from operating activities:
Net income........................ $200,924 $189,522
Depreciation and amortization..... 36,865 24,703
Cumulative effect of an accounting
change.......................... - (8,738)
Other non-cash expenses........... 2,679 4,614
Deferred income taxes............. 3,536 26,000
Loss of affiliates, net........... 15,884 5,472
Cash provided by (used in):
Trade receivables, net.......... (15,962) (90,663)
Inventories..................... (5,027) (15,247)
Other current assets............ 5,929 7,380
Accounts payable................ (6,065) (11,235)
Accrued liabilities............. (21,396) (31,586)
-------- --------
Net cash provided by
operating activities....... 217,367 100,222
-------- --------
Cash flows from investing activities:
Purchases of property, plant
and equipment................... (65,637) (126,623)
Decrease in marketable securities. 127,833 145,561
Increase in investments........... (17,647) (12,580)
Increase in other assets.......... (10,305) (23,980)
-------- --------
Net cash provided by (used in)
investing activities....... 34,244 (17,622)
-------- -------
See accompanying notes.
(Continued on next page)
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
(Unaudited)
Six Months Ended
June 30,
1994 1993
-------- --------
Cash flows from financing activities:
(Decrease) increase in commercial
paper........................... $(10,033) $ 40,000
Proceeds from issuance of
long-term debt.................. 12,499 25,053
Repayment of long-term debt....... (1,061) (457)
Net proceeds from issuance of
common stock.................... 11,797 9,179
Tax benefit related to
stock options................... 7,400 8,000
Net proceeds from issuance
of warrants..................... 15,330 1,395
Repurchases of common stock....... (150,481) (110,839)
Other............................. (14,004) (10,726)
-------- --------
Net cash used in
financing activities........ (128,553) (38,395)
-------- --------
Increase in cash and cash equivalents 123,058 44,205
Cash and cash equivalents at
beginning of period.............. 128,505 92,048
-------- --------
Cash and cash equivalents at
end of period.................... $251,563 $136,253
======== ========
See accompanying notes.
AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1994
1. Summary of significant accounting policies
Business
Amgen Inc. ("Amgen" or the "Company") is a global biotechnology
company that develops, manufactures and markets human therapeutics
based on advanced 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% owned and/or where the Company exercises
significant influence over operations are accounted for using the
equity method. All other investments are accounted for under the
cost method. 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 are shown net of applicable reserves and
allowances. Inventories consist of the following (in thousands):
June 30, December 31,
1994 1993
------- -------
Raw materials........... $11,236 $ 8,001
Work in process......... 51,564 47,138
Finished goods.......... 16,939 19,573
------- -------
$79,739 $74,712
======= =======
Product sales
Product sales consist of two products, EPOGEN(R) (Epoetin alfa)
and NEUPOGEN(R) (Filgrastim).
As a result of arbitration proceedings involving an agreement
between Amgen and Ortho Pharmaceutical Corporation, a subsidiary of
Johnson & Johnson ("Johnson & Johnson") covering the U.S. market for
the Company's Epoetin alfa product, Amgen does not recognize product
sales it makes into the contractual market of Johnson & Johnson and
does recognize the product sales made by Johnson & Johnson into
Amgen's contractual market. These sales amounts, and adjustments
thereto, are derived from third-party data on shipments to end users
and their usage (see Note 4, "Commitments and contingencies - Johnson
& Johnson arbitration").
Income taxes
Income taxes are accounted for in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109 (Note 3).
Earnings per share
Earnings per share are computed in accordance with the treasury
stock method. Primary and fully diluted earnings per share are based
upon the weighted average number of common shares and dilutive common
stock equivalents during the period in which they were outstanding.
Common stock equivalents include outstanding options under the
Company's stock option plans and outstanding warrants to purchase
shares of the Company's common stock.
Basis of presentation
The financial information for the six months ended June 30, 1994
and 1993, are unaudited but include all adjustments (consisting only
of normal recurring accruals) 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 period amounts have been reclassified to conform
to the current period presentation.
2. Debt
As of June 30, 1994, $99.7 million of commercial paper was
outstanding. These borrowings had maturities of three months or less
and had effective interest rates averaging 4.3%.
During the three months ended June 30, 1994, the Company's
unsecured credit facility (the "credit facility") was extended
through June 1995. As of June 30, 1994, $150 million was available
under the Company's line of credit pursuant to the credit facility
for borrowing and to support the Company's commercial paper program.
Long-term debt consists of the following (in thousands):
June 30, December 31,
1994 1993
-------- --------
Medium Term Notes.............. $113,000 $103,000
Promissory notes............... 68,200 68,200
Other long-term obligations.... 13,209 11,771
-------- --------
194,409 182,971
Less current portion........... (8,521) (1,729)
-------- --------
$185,888 $181,242
======== ========
The Company has registered $200 million of unsecured medium term
debt securities ("Medium Term Notes") of which $113 million were
outstanding at June 30, 1994. During the six months ended June 30,
1994, the Company issued an additional $10 million of Medium Term
Notes with five year maturities at a fixed rate of 5.5%.
3. Income taxes
The provision for income taxes consists of the following (in
thousands):
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- --------
Federal............. $56,026 $51,517 $105,887 $ 94,105
State............... 9,144 10,309 16,946 19,635
------- ------- -------- --------
Total............ $65,170 $61,826 $122,833 $113,740
======= ======= ======== ========
4. Commitments and contingencies
Johnson & Johnson arbitration
In September 1985, the Company granted Johnson & Johnson an
exclusive license under certain patented technology and know how of
the Company to sell erythropoietin throughout the United States for
all human uses except dialysis and diagnostics.
In January 1989, Johnson & Johnson initiated arbitration
proceedings with respect to a number of disputes which had arisen
between Amgen and Johnson & Johnson as to the respective rights and
obligations of the parties under the various agreements between them.
Amgen filed a cross petition for arbitration raising additional
disputes for resolution by the arbitrator. The scope of the
arbitration covers erythropoietin, hepatitis B vaccine, and
interleukin-2.
In April 1990, the arbitrator ruled that Johnson & Johnson must
purchase from Amgen all of Johnson & Johnson's actual United States
sales requirements of recombinant human erythropoietin. In December
1990, the U.S. Food and Drug Administration approved Amgen's
application to name Johnson & Johnson a distributor of Epoetin alfa
under the trademark PROCRIT(R). In January 1991, Johnson & Johnson
began distributing Epoetin alfa.
In June 1991, the arbitrator issued an opinion awarding Johnson
& Johnson $164 million on its claims regarding erythropoietin. In
September 1992, the arbitrator found that Johnson & Johnson had
breached its obligations regarding hepatitis B vaccine and
interleukin-2, and in January 1993 awarded the Company approximately
$90 million in damages against Johnson & Johnson. In January 1993,
the Company paid Johnson & Johnson the sum of $82.4 million,
representing the difference between the damages awarded Johnson &
Johnson as a result of its erythropoietin claims, less the amounts
awarded Amgen against Johnson & Johnson as a result of its hepatitis
B vaccine and interleukin-2 claims, plus interest. Johnson & Johnson
returned to the Company the rights to develop and market hepatitis B
vaccine and interleukin-2 in March 1991.
The Company and Johnson & Johnson are required to compensate
each other for Epoetin alfa sales which either party makes into the
other party's contractual market. The Company has established and is
employing an accounting methodology to allocate the proceeds of sales
of EPOGEN(R) and PROCRIT(R) in Amgen's and Johnson & Johnson's
respective contractual markets. The Company has made payments to
Johnson & Johnson based upon the results of the Company's accounting
methodology. Johnson & Johnson has disputed the methodology employed
by the Company and is proposing an alternative methodology for
adoption by the arbitrator. If, as a result of the arbitration
proceeding, a methodology different than that currently employed by
the Company is instituted to allocate the proceeds of sales between
the parties, it may yield results that are different from the results
of the accounting methodology currently employed by the Company. As
a result of the arbitration, it is possible that the Company would
recognize a different level of EPOGEN(R) sales than are currently
being recognized. As a result of the arbitration, the Company may be
required to pay additional compensation to Johnson & Johnson for
sales during prior periods, or Johnson & Johnson may be required to
pay compensation to the Company for such prior period sales. Due to
the uncertainties of any arbitrated result, the Company has
established net liabilities that exceed the amounts paid to Johnson &
Johnson.
A trial date has been set for May 1, 1995 before the arbitrator
regarding the accounting methodologies and compensation for sales by
Johnson & Johnson into Amgen's contractual market and sales by Amgen
into Johnson & Johnson's contractual market. Discovery as to these
issues is in progress.
While it is not possible to predict accurately or determine the
eventual outcome of this matter, the Company believes that the
outcome of this legal proceeding will not have a material adverse
effect on the operations or financial position of the Company.
Other litigation
The Company is engaged in various other legal proceedings
including patent disputes. While it is not possible to predict
accurately or 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 operations or financial position of
the Company.
5. Stockholders' equity
During the six months ended June 30, 1994, the Company acquired
3.5 million shares of its common stock at a total cost of $150.5
million under its common stock repurchase program. At June 30, 1994,
$181.2 million of the amount approved by the Board of Directors
remained available for repurchase through December 31, 1994. Stock
repurchased under the program is retired and such repurchases offset
the dilutive effects of the Company's employee benefit stock option
and stock purchase plans.
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 $718.4 million at June 30, 1994, compared with $723.2 million at
December 31, 1993. Cash provided by operating activities has been
and is expected to continue to be the Company's primary source of
funds. During the six months ended June 30, 1994, operations
provided $217.4 million of cash compared with $100.2 million of cash
for the same period last year. The amount in the prior year period
reflects a payment of $82.4 million to Johnson & Johnson in
settlement of an obligation resulting from an arbitration proceeding
(see "Legal Matters - Johnson & Johnson arbitration") and an increase
in trade accounts receivable due to a temporary extension of payment
terms to EPOGEN(R) customers.
Capital expenditures totaled $65.6 million for the six months
ended June 30, 1994, compared with $126.6 million for the same period
a year ago. The reduction in capital expenditures is due to the
completion of several facilities in 1993, including the Puerto Rico
finish and fill facility. Over the next few years, the Company
expects to spend approximately $100 million to $200 million per year
on capital projects. These expenditures will be used primarily to
expand the Company's operations.
The Company has an ongoing common stock repurchase program to
offset dilutive effects of its employee benefit stock option and
stock purchase plans. Since its inception in 1992 through June 30,
1994, the Company has repurchased 9.9 million shares of its common
stock at a total cost of $443.8 million, and is authorized to
purchase up to an additional $181.2 million through December 31,
1994. During the six months ended June 30, 1994, the Company
repurchased 3.5 million shares of common stock at a cost of $150.5
million.
To provide for financial flexibility and increased liquidity,
the Company has established several sources of debt financing. The
Company has filed a shelf registration statement with the Securities
and Exchange Commission under which it could issue up to $200 million
of Medium Term Notes. At June 30, 1994, $113 million of Medium Term
Notes were outstanding which mature in three to nine years. The
Company has a commercial paper program which provides for short-term
borrowings up to an aggregate of $200 million. At June 30, 1994,
$99.7 million of commercial paper was outstanding with maturities of
three months or less. As individual issuances under this program
mature, the Company may issue new debt either in the form of
commercial paper or Medium Term Notes depending on interest rates and
other market factors. The Company also has a $150 million revolving
line of credit, principally to support the Company's commercial paper
program. No borrowings on this line of credit were outstanding at
June 30, 1994.
The Company hedges certain portions of its exposure to
anticipated foreign currency cash flows through the use of forward
and option foreign exchange contracts. At June 30, 1994, the Company
had forward and option foreign exchange contracts of approximately
$261 million and $14 million, respectively, all having maturities of
less than one year. The Company's net economic exposure is
substantially less than the absolute dollar value of these contracts.
Cash is invested in accordance with a policy objective that
seeks to ensure both liquidity and safety of principal. Investments
are made to achieve the highest rate of return to the Company,
consistent with the policy objectives. The policy limits investments
to certain types of instruments issued by institutions with strong
investment grade credit ratings, and places restrictions on their
terms and concentration by type and issuer. The Company's
investments are subject to the risk of market interest rate
fluctuations and risks associated with the ability of the issuers to
perform their obligations under the instruments.
The Company believes that existing funds, cash generated from
operations, and existing sources of external financing should be
adequate to satisfy its working capital and capital expenditure
requirements and to support its common stock repurchase program for
the foreseeable future. However, the Company may take advantage of
favorable conditions in the capital markets to raise additional
capital from time to time.
Results of Operations
Product sales
Product sales increased 19% and 18% for the three and six months
ended June 30, 1994, respectively, compared with the same periods
last year.
NEUPOGEN(R) (Filgrastim)
The Company's worldwide NEUPOGEN(R) sales were $212 million and
$393.7 million for the three and six months ended June 30, 1994,
respectively.
Domestic sales of NEUPOGEN(R) were $158.4 million and $290.4
million for the three and six months ended June 30, 1994,
respectively. These amounts represent increases of $20 million and
$32.3 million, or 14% and 13% respectively, over the same periods
last year. These increases were primarily due to increased
penetration of the potential colony-stimulating factor market.
Sales of NEUPOGEN(R) outside the United States, primarily in
Europe, were $53.6 million and $103.3 million for the three and six
months ended June 30, 1994, respectively. These amounts represent
increases of $4.2 million and $15.2 million over the same periods
last year, respectively. Local sales volumes increased by
approximately 13% and 24% during the three and six months ended June
30, 1994, respectively, compared with the same periods last year due
to increased market penetration by NEUPOGEN(R). However, when
measured in U.S. dollars, reported sales increases for the three and
six months ended June 30, 1994 were 9% and 17%, respectively, due to
fluctuations in foreign currency exchange rates.
During the first quarter of 1994, Rhone-Poulenc-Rorer and Chugai
Pharmaceutical Co., Ltd. began jointly marketing a G-CSF product in
the European Union ("EU" - formerly known as the European Community).
Although there has been no significant effect on the Company's
worldwide NEUPOGEN(R) sales, it is not possible to predict the
ultimate impact this competitive product will have on future EU
NEUPOGEN(R) sales.
Quarterly NEUPOGEN(R) sales volumes in both the United States
and Europe are influenced by a number of factors including underlying
demand, seasonality of cancer chemotherapy administration, and
wholesaler inventory management practices. The Company's experience
has shown that reduced chemotherapy usage occurs in the third
calendar quarter in Europe and in the fourth calendar quarter in the
United States. The corresponding effects on the Company's sales have
occurred in the third calendar quarter in Europe, and have been
delayed until the first calendar quarter in the United States.
The Company believes that NEUPOGEN(R) sales in 1994 will exceed
the 1993 level, but that the growth rate of NEUPOGEN(R) sales in the
future will be lower than the growth rate in 1993. NEUPOGEN(R) sales
increases are dependent upon further penetration of existing markets,
the timing and nature of additional indications for which the product
may be approved, and the effects of competitive products. In
addition, international NEUPOGEN(R) sales revenues are subject to
fluctuations in foreign currency exchange rates and increased
competition from other G-CSF products.
EPOGEN(R) (Epoetin alfa)
EPOGEN(R) sales were $176.5 million and $340.6 million for the
three and six months ended June 30, 1994. These amounts represent
increases of $36.5 million and $63.6 million, or 26% and 23%,
respectively, over the same periods last year. These increases were
primarily due to an increase in the U.S. dialysis patient population
and the administration of higher doses of EPOGEN(R) per patient. The
Company anticipates that increases in the U.S. dialysis patient
population, currently estimated to grow at an annual rate of 8% -
10%, and increases in dose per patient will continue to drive the
growth of EPOGEN(R) sales in the current year. However, the annual
growth rate for the second half of 1994 is expected to be lower than
the growth rate realized in the first half of the current year.
The federal government enacted legislation effective January 1,
1994 to lower reimbursement provided to facilities that administer
EPOGEN(R) from $11 per thousand units administered to $10 per
thousand units administered. During the six months ended June 30,
1994, the change in reimbursement did not have a material adverse
effect on EPOGEN(R) sales.
Cost of sales
Cost of sales as a percentage of product sales were 16.6% and
16% for the three and six months ended June 30, 1994, respectively,
compared with 16.3% and 16.8% for the same periods last year. Cost
of sales as a percentage of product sales is not expected to vary
significantly for the foreseeable future except for a slight decline
anticipated to occur as the Puerto Rico manufacturing plant becomes
fully operational.
Research and development
During the three and six months ended June 30, 1994, research
and development expenses increased $15.9 million and $33.5 million,
or 25% and 28%, respectively, compared with the same periods last
year. These increases were primarily due to expansion of the
Company's research and development staffs. Annual research and
development expenses for 1994 and 1995 are expected to increase at a
rate exceeding the anticipated annual product sales growth rate due
to planned increases in internal efforts on new product discovery and
development and increases in external research collaboration costs,
including acquisitions of product and technology rights.
Marketing and selling
Marketing and selling expenses increased $6.5 million and $13
million, or 12% and 13%, respectively, during the three and six
months ended June 30, 1994 compared with the same periods last year.
These increases were primarily due to: 1) domestic and international
marketing expenses to support continued NEUPOGEN(R) market
penetration and, 2) to support EPOGEN(R) marketing efforts focused on
educating users on the importance of maintaining patients within the
target hematocrit range. The future growth rate of marketing and
selling expenses is not expected to exceed the anticipated annual
product sales growth rate.
General and administrative
General and administrative expenses increased $1.7 million and
$2.2 million, or 6% and 4%, respectively, during the three and six
months ended June 30, 1994 compared with the same periods last year.
The future growth rate of general and administrative expenses is
expected to be less than the anticipated annual product sales growth
rate.
Income taxes
The Company's effective tax rate for the three and six months
ended June 30, 1994 was 37.8% and 37.9% compared to 38.2% and 38.6%,
respectively, for the same periods last year. These decreases in the
tax rate were primarily due to a reduction in state taxes which
resulted from changes in the apportionment of taxable income among
states.
In the future, the Company expects to receive tax benefits from
manufacturing products at its facility in Puerto Rico, which is
currently awaiting licensure by regulatory bodies. Realization of
these tax benefits is expected to result in an annualized effective
tax rate of 32%-34% once a substantial portion of domestic product
sales are supplied by product manufactured at this plant.
Legal Matters
Johnson & Johnson arbitration
In September 1985, the Company granted Johnson & Johnson an
exclusive license under certain patented technology and know how of
the Company to sell erythropoietin throughout the United States for
all human uses except dialysis and diagnostics.
In January 1989, Johnson & Johnson initiated arbitration
proceedings with respect to a number of disputes which had arisen
between Amgen and Johnson & Johnson as to the respective rights and
obligations of the parties under the various agreements between them.
Amgen filed a cross petition for arbitration raising additional
disputes for resolution by the arbitrator. The scope of the
arbitration covers erythropoietin, hepatitis B vaccine, and
interleukin-2.
In April 1990, the arbitrator ruled that Johnson & Johnson must
purchase from Amgen all of Johnson & Johnson's actual United States
sales requirements of recombinant human erythropoietin. In December
1990, the U.S. Food and Drug Administration approved Amgen's
application to name Johnson & Johnson a distributor of Epoetin alfa
under the trademark PROCRIT(R). In January 1991, Johnson & Johnson
began distributing Epoetin alfa.
In June 1991, the arbitrator issued an opinion awarding Johnson
& Johnson $164 million on its claims regarding erythropoietin. In
September 1992, the arbitrator found that Johnson & Johnson had
breached its obligations regarding hepatitis B vaccine and
interleukin-2, and in January 1993 awarded the Company approximately
$90 million in damages against Johnson & Johnson. In January 1993,
the Company paid Johnson & Johnson the sum of $82.4 million,
representing the difference between the damages awarded Johnson &
Johnson as a result of its erythropoietin claims, less the amounts
awarded Amgen against Johnson & Johnson as a result of its hepatitis
B vaccine and interleukin-2 claims, plus interest. Johnson & Johnson
returned to the Company the rights to develop and market hepatitis B
vaccine and interleukin-2 in March 1991.
The Company and Johnson & Johnson are required to compensate
each other for Epoetin alfa sales which either party makes into the
other party's contractual market. The Company has established and is
employing an accounting methodology to allocate the proceeds of sales
of EPOGEN(R) and PROCRIT(R) in Amgen's and Johnson & Johnson's
respective contractual markets. The Company has made payments to
Johnson & Johnson based upon the results of the Company's accounting
methodology. Johnson & Johnson has disputed the methodology employed
by the Company and is proposing an alternative methodology for
adoption by the arbitrator. If, as a result of the arbitration
proceeding, a methodology different than that currently employed by
the Company is instituted to allocate the proceeds of sales between
the parties, it may yield results that are different from the results
of the accounting methodology currently employed by the Company. As
a result of the arbitration, it is possible that the Company would
recognize a different level of EPOGEN(R) sales than are currently
being recognized. As a result of the arbitration, the Company may be
required to pay additional compensation to Johnson & Johnson for
sales during prior periods, or Johnson & Johnson may be required to
pay compensation to the Company for such prior period sales. Due to
the uncertainties of any arbitrated result, the Company has
established net liabilities that exceed the amounts paid to Johnson &
Johnson.
A trial date has been set for May 1, 1995 before the arbitrator
regarding the accounting methodologies and compensation for sales by
Johnson & Johnson into Amgen's contractual market and sales by Amgen
into Johnson & Johnson's contractual market. Discovery as to these
issues is in progress.
While it is not possible to predict accurately or determine the
eventual outcome of this matter, the Company believes that the
outcome of this legal proceeding will not have a material adverse
effect on the operations or financial position of the Company.
Other litigation
The Company is engaged in various other legal proceedings
including patent disputes. While it is not possible to predict
accurately or 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 operations or financial position of
the Company.
Outlook
The Company obtained approval on July 7, 1994 from the U.S. Food
and Drug Administration ("FDA") for a labeling change expanding the
target hematocrit range for patients with chronic renal failure
receiving Epoetin alfa from the current range of 30 to 33 percent to
a range of 30 to 36 percent. The labeling change also includes
clarified dose titration guidelines allowing for ease of hematocrit
stabilization within the target range as well as self-administration
guidelines, updated safety data, and quality of life information.
The Company also received approval from the FDA on June 21, 1994
for a product license amendment to expand the approved uses of
NEUPOGEN(R) to include a reduction in the duration of neutropenia for
patients undergoing myeloablative therapy followed by bone marrow
transplantation.
In February 1994, the FDA completed the prelicensure inspection
of the Puerto Rico manufacturing facility. It is anticipated that
licensure may occur in 1994.
Operating in rapidly changing health care policy arenas and
market environments presents many significant and unique challenges.
While the federal government continues to formulate legislation for
health care reform, it is impossible to predict the content of
eventual legislation or even whether the Congress will pass and the
President will sign any substantial health care legislation. It is
probable that any such legislation will have an adverse impact on
Amgen. In addition, the Company is adapting to market-driven forces
in the United States and legislative mandates in foreign markets.
Market forces are changing the economics of health care in the United
States through voluntary limits on price increases by the
pharmaceutical industry, increases in the purchasing power of large
buying groups, and increased influence on medical care and treatment
decisions by managed care organizations.
The Company is adapting to this changing health care environment
through programs that work to optimize the use of its products in the
treatment of patients and clinical trials designed to evaluate cost
and quality-of-life parameters as well as clinical safety and
efficacy.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is engaged in arbitration proceedings with Ortho
Pharmaceutical Corporation, a subsidiary of Johnson & Johnson. For a
complete discussion of this matter see Part I, Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Legal Matters." Other legal proceedings are discussed
below.
Elanex Pharmaceuticals litigation
In October of 1993, the Company filed a complaint for patent
infringement against defendants Elanex Pharmaceuticals, Inc.
("Elanex"), Laboratorios Elanex De Costa Rica, S. A., Bio Sidus S.A.,
Merckle GmbH, Biosintetica S. A. and other unknown defendants. The
complaint, filed in the United States District Court for the Western
District of Washington at Seattle, seeks injunctive relief and
damages for Elanex's infringement of the Company's patent for DNA
sequences and host cells useful in producing recombinant
erythropoietin. The complaint also alleges that the foreign
defendants entered into agreements with Elanex relating to the
production or sale of recombinant erythropoietin and thereby have
induced Elanex's infringement.
In December 1993, Elanex responded to the complaint denying the
material allegations thereof, and filed a counterclaim seeking a
declaratory judgment that the Company's patent is invalid and that
Elanex's recombinant erythropoietin technology does not infringe any
valid claims of the Company's patent. The counterclaim also seeks an
award of reasonable attorneys' fees and other costs of defense.
While it is not possible to predict accurately or to determine
the eventual outcome of this matter, the Company believes that the
outcome of this legal proceeding will not have a material adverse
effect on the operations or financial position of the Company.
Erythropoietin patent litigation
Amgen has been engaged in litigation (the "Amgen suit") with
Genetics Institute, Inc. ("Genetics Institute") and its commercial
partner, Chugai Pharmaceutical Co., Ltd., regarding the infringement
of Amgen's patent on the DNA sequence used in the production of
erythropoietin (the "Amgen Patent") and the infringement by Amgen's
erythropoietin product of a patent held by Genetics Institute.
Genetics Institute and the Company announced on May 11, 1993
that they agreed to settle all outstanding patent disputes between
them regarding erythropoietin in the United States. As part of the
settlement, Genetics Institute paid the Company $13.9 million during
the quarter ended September 30, 1993. An additional $2 million may
be paid to the Company contingent upon the outcome of certain future
events. As a result of the settlement of the litigation, Amgen
expects to receive patents on the process for producing recombinant
erythropoietin and on the recombinant erythropoietin product.
In August 1991, Johnson & Johnson, together with eleven of
Johnson & Johnson's Cilag European subsidiaries, filed a suit in the
United States District Court for the District of Massachusetts in
Boston, the site of the Amgen suit against Genetics Institute (the
"Boston Court"), seeking damages from Genetics Institute for
infringement of the Amgen Patent (the "Johnson & Johnson suit") and
moved to consolidate the Johnson & Johnson suit with the original
suit filed by Amgen. The two suits were consolidated by the Boston
Court. Amgen was allowed to intervene in the Johnson & Johnson suit
for the limited purpose of seeking a summary judgment dismissing the
Johnson & Johnson suit. In December 1992, the Boston Court
determined that Johnson & Johnson had no standing to sue Genetics
Institute and entered judgment and dismissed the Johnson & Johnson
suit. Also, in December 1992, the Boston Court denied motions by
Johnson & Johnson to intervene in the Amgen suit for the limited
purpose of seeking a summary judgment limiting Amgen's damages
against Genetics Institute. Johnson & Johnson has appealed the
Boston Court's December 1992 rulings. The appeal by Johnson &
Johnson, together with eleven of its Cilag European subsidiaries, is
pending.
While it is not possible to predict accurately or determine the
eventual outcome of this matter, the Company believes that the
outcome of the appeal by Johnson & Johnson will not have a material
adverse effect on the operations or financial position of the
Company.
Genetics Institute litigation
On June 21, 1994, Genetics Institute filed suit in the United
States District Court for the District of Delaware in Wilmington,
against Johnson & Johnson, a licensee of the Company, seeking damages
for the alleged infringement of the newly issued U.S. Patent
5,322,837 relating to Johnson & Johnson's manufacture, use, and sale
of erythropoietin.
While it is not possible to predict accurately or to determine
the eventual outcome of this matter, the Company believes that the
outcome of this legal proceeding will not have a material adverse
effect on the operations or financial position of the Company.
Consensus Interferon
On June 15, 1994, Biogen Inc. filed suit in the Tokyo District
Court in Japan, against Amgen K.K., a subsidiary of the Company,
seeking injunctive relief for the alleged infringement of two
Japanese patent applications relating to alpha-interferon.
While it is not possible to predict accurately or to determine
the eventual outcome of this matter, the Company believes that the
outcome of this legal proceeding will not have a material adverse
effect on the operations or financial position of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on April 26,
1994. The three matters voted upon at the meeting were to elect
three directors to hold office until the 1997 Annual Meeting of
Stockholders, to approve the material terms of the Company's
performance based Management Incentive Plan, and to ratify the
selection of Ernst & Young as the independent auditors of the Company
for its fiscal year ending December 31, 1994.
The following votes were cast for or were withheld with respect
to each of the nominees: Dr. Raymond F. Baddour: 115,149,445 votes
for and 900,955 votes withheld; Mr. Gordon M. Binder: 115,172,591
votes for and 877,809 votes withheld; and Mr. Franklin P. Johnson,
Jr.: 115,182,497 votes for and 867,903 votes withheld. All nominees
were declared to have been elected as directors to hold office until
the 1997 Annual Meeting of Stockholders. No abstentions or broker
non votes were cast in the election of directors.
With respect to the proposal to approve the material terms of
the Company's performance based Management Incentive Plan,
102,712,490 votes were cast for the proposal, 3,767,033 votes were
cast against the proposal and 763,049 votes abstained. No broker non
votes were cast in connection with the proposal. The material terms
of the Company's performance based Management Incentive Plan were
declared to have been approved.
With respect to the proposal to ratify the selection of Ernst &
Young as the Company's independent auditors, 115,365,405 votes were
cast for the proposal, 393,610 votes were cast against the proposal
and 291,385 votes abstained. No broker non votes were cast in
connection with the proposal. The selection of Ernst & Young as the
Company's independent auditors for the fiscal year ending December
31, 1994 was declared to have been ratified.
Item 6. Exhibits and Reports on Form 8-K
(a) Reference is made to the Index to Exhibits included herein.
(b) No reports on Form 8-K were filed during the three months
ended June 30, 1994.
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: 8/08/94 By:/s/ Gordon M. Binder
------------------ -----------------------------
Gordon M. Binder
Chairman of the Board and
Chief Executive Officer
Date: 8/08/94 By:/s/ Larry A. May
------------------ -----------------------------
Larry A. May
Vice President, Corporate
Controller and Chief
Accounting Officer
AMGEN INC.
INDEX TO EXHIBITS
Exhibit No. Description
4.1 Warrant Agreement, dated September 1, 1990, between the
Company, Paine Webber R&D Partners, L.P. and American
Stock Transfer and Trust Company as Warrant Agent. (13)
4.2 Warrant Agreement, dated November 26, 1991, between the
Company and American Stock Transfer and Trust Company as
Warrant Agent. (15)
4.3 Indenture dated January 1, 1992 between the Company and
Citibank N.A., as trustee. (14)
4.4 Forms of Commercial Paper Master Note Certificates. (18)
10.1* Company's 1991 Equity Incentive Plan, as amended. (15)
10.2* Company's 1984 Stock Option Plan, as amended, and forms
of Incentive Stock Option Grant and Nonqualified Stock
Option Grant used in connection therewith. (15)
10.3 Shareholder's Agreement of Kirin-Amgen, Inc., dated May
11, 1984, between the Company and Kirin Brewery Company,
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 (with certain confidential information deleted
therefrom). (3)
10.5 Product License Agreement, dated September 30, 1985, and
Technology License Agreement, dated, September 30, 1985
between the Company and Ortho Pharmaceutical Corporation
(with certain confidential information deleted
therefrom). (2)
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 (with certain confidential information
deleted therefrom). (3)
10.7* Company's Employee Stock Purchase Plan, amended April 1,
1992. (16)
10.8 Agreement, dated February 12, 1986, between the Company
and Sloan-Kettering Institute for Cancer Research (with
certain confidential information deleted therefrom). (4)
10.9 Amendment No. 2, dated November 13, 1990, to Agreement,
dated February 12, 1986, between the Company and Sloan-
Kettering Institute for Cancer Research (with certain
confidential information deleted therefrom). (13)
10.10 Research, Development Technology Disclosure and License
Agreement PPO, dated January 20, 1986, by and between
the Company and Kirin Brewery Co., Ltd. (4)
10.11 Research Collaboration Agreement, dated August 31, 1990,
between Amgen Inc. and Regeneron Pharmaceuticals, Inc.
(with certain confidential information deleted
therefrom). (13)
10.12 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). (5)
10.13 Assignment and License Agreement, dated October 16,
1986, between the Company and Kirin-Amgen, Inc. (with
certain confidential information deleted therefrom). (5)
10.14 G-CSF European License Agreement, dated December 30,
1986, between Kirin-Amgen, Inc. and the Company (with
certain confidential information deleted therefrom). (5)
10.15 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). (5)
10.16* Company's 1987 Directors' Stock Option Plan, as amended.
(13)
10.17 Cross License Agreement, dated June 1, 1987, between
Amgen Inc. and Amgen Clinical Partners, L.P. (6)
10.18 Development Agreement, dated June 1, 1987, between Amgen
Inc. and Amgen Clinical Partners, L.P. (6)
10.19 Joint Venture Agreement, dated June 1, 1987, between
Amgen Inc. and Amgen Clinical Partners, L.P. (6)
10.20 Partnership Purchase Option Agreement, dated June 1,
1987, between Amgen Inc. and Amgen Clinical Partners,
L.P. (6)
10.21* Company's 1988 Stock Option Plan, as amended. (15)
10.22* Company's Retirement and Savings Plan, amended and
restated as of January 1, 1993. (16)
10.23 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. (7)
10.24 Amending Agreement, dated June 30, 1988, to Development
Agreement, Partner Purchase Option Agreement, Cross
License Agreement and Joint Venture Agreement, dated
June 1, 1987, between the Company and Amgen Clinical
Partners, L.P. (7)
10.25 Agreement on G-CSF in the EC, dated September 26, 1988,
between Amgen Inc. and F. Hoffmann-La Roche & Co.
Limited Company (with certain confidential information
deleted therefrom). (9)
10.26 Supplementary Agreement to Agreement dated January 4,
1989 to Agreement on G-CSF in the EC, dated September
26, 1988, between the Company and F. Hoffmann-La Roche &
Co. Limited Company, (with certain confidential
information deleted therefrom). (9)
10.27 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). (9)
10.28 Rights Agreement, dated January 24, 1989, between Amgen
Inc. and American Stock Transfer and Trust Company,
Rights Agent. (8)
10.29 First Amendment to Rights Agreement, dated January 22,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (11)
10.30 Second Amendment to Rights Agreement, dated April 2,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (12)
10.31 Credit Agreement, dated as of November 15, 1991, among
Amgen Inc., The Borrowing Subsidiaries therein named,
the Banks therein named, Swiss Bank Corporation, as
issuing Bank and Swiss Bank Corporation and Citicorp
USA, Inc., as Co-Agents. (16)
10.32 Deed of Trust and Security Agreement, dated June 1,
1989, between the Company and UNUM Life Insurance
Company of America. (10)
10.33 Note, dated June 1, 1989, between the Company and UNUM
Life Insurance Company of America. (10)
10.34 Agency Agreement, dated November 21, 1991, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (16)
10.35 Agency Agreement, dated May 21, 1992, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (16)
10.36 Guaranty, dated July 29, 1992, by the Company in favor
of Merck Sharp & Dohme Quimica de Puerto Rico, Inc. (16)
10.37 936 Promissory Note No. 01, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (16)
10.38 936 Promissory Note No. 02, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (16)
10.39 936 Promissory Note No. 001, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (16)
10.40 936 Promissory Note No. 002, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (16)
10.41 Guaranty, dated November 21, 1991, by the Company in
favor of Citicorp Financial Services Corporation. (16)
10.42 First Amendment, dated as of June 16, 1992, to the
Credit Agreement, dated as of November 15, 1991, among
Amgen Inc., The Borrowing Subsidiaries therein named,
the Banks therein named, Swiss Bank Corporation, as
issuing Bank and Swiss Bank Corporation and Citicorp
USA, Inc., as Co-Agents. (16)
10.43 Second Amendment, dated as of November 6, 1992, to the
Credit Agreement, dated as of November 15, 1991, among
Amgen Inc., The Borrowing Subsidiaries therein named,
the Banks therein named, Swiss Bank Corporation, as
issuing Bank and Swiss Bank Corporation and Citicorp
USA, Inc., as Co-Agents. (16)
10.44 Lease and Agreement relating to Lease, dated March 27,
1986 and April 1, 1986, respectively, for 2003 Oak
Terrace Lane between 2001 Hillcrest Partnership and the
Company. (19)
10.45 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. (17)
10.46* Amgen Supplemental Retirement Plan dated June 1, 1993.
(20)
10.47 Promissory Note of Mr. Kevin W. Sharer, dated June 4,
1993. (20)
10.48 Amendment No. 3 dated June 25, 1993 to the Credit
Agreement, dated November 15, 1991, among the Company,
The Borrowing Subsidiaries therein named, the Banks
therein named, the Swiss Bank Corporation, as issuing
Bank and Swiss Bank Corporation and Citicorp USA, Inc.,
as Co-Agents. (20)
10.49 Promissory Note of Mr. Larry A. May, dated February 24,
1993. (21)
10.50* First Amendment dated October 26, 1993 to the Company's
Retirement and Savings Plan. (21)
10.51* Amgen Performance Based Management Incentive Plan. (21)
11 Computation of earnings per share.
-------------
* Management contract or compensatory plan or arrangement.
(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 Quarterly Report on Form 10-Q for the
quarter ended September 30, 1985 on November 14, 1985 and
incorporated herein by reference.
(3) Filed as an exhibit to Quarterly Report on Form 10-Q for the
quarter ended December 31, 1985 on February 3, 1986 and
incorporated herein by reference.
(4) 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.
(5) 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.
(6) Filed as an exhibit to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1987 on August 12, 1987 and incorporated
herein by reference.
(7) 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.
(8) Filed as an exhibit to the Form 8-K Current Report dated January
24, 1989 and incorporated herein by reference.
(9) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended March 31, 1989 on June 28, 1989 and incorporated
herein by reference.
(10) Filed as an exhibit to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1989 on August 14, 1989 and incorporated
herein by reference.
(11) Filed as an exhibit to the Form 8-K Current Report dated January
22, 1991 and incorporated herein by reference.
(12) Filed as an exhibit to the Form 8-K Current Report dated April
12, 1991 and incorporated herein by reference.
(13) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended March 31, 1991 on July 1, 1991 and incorporated
herein by reference.
(14) Filed as an exhibit to Form S-3 Registration Statement dated
December 19, 1991 and incorporated herein by reference.
(15) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1991 on March 30, 1992 and incorporated
herein by reference.
(16) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1992 on March 30, 1993 and incorporated
herein by reference.
(17) Filed as an exhibit to the Form 8-A dated March 31, 1993 and
incorporated herein by reference.
(18) Filed as an exhibit to the Form 10-Q for the quarter ended March
31, 1993 on May 17, 1993 and incorporated herein by reference.
(19) Filed as an exhibit to the Form 10-Q for the quarter ended June
30, 1993 on August 16, 1993 and incorporated herein by
reference.
(20) Filed as an exhibit to the Form 10-Q for the quarter ended
September 30, 1993 on November 12, 1993 and incorporated herein
by reference.
(21) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1993 on March 25, 1994 and incorporated
herein by reference.
EXHIBIT 11
AMGEN INC.
COMPUTATION OF PER SHARE EARNINGS
PRIMARY COMPUTATION
(In thousands except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- --------
Income before cumulative
effect of a change in
accounting principle... $107,464 $100,224 $200,924 $180,784
Cumulative effect of a
change in accounting
principle.............. - - - 8,738
-------- -------- -------- --------
Net income............... $107,464 $100,224 $200,924 $189,522
======== ======== ======== ========
Applicable common and
common stock equivalent
shares:
Weighted average shares
of common stock
outstanding during
the period............. 132,947 135,765 133,452 136,076
Incremental number of
shares outstanding
during the period
resulting from the
assumed exercises of
stock options and
warrants............... 6,662 7,912 7,034 8,618
-------- -------- -------- --------
Weighted average shares
of common stock and
common stock
equivalents outstanding
during the period....... 139,609 143,677 140,486 144,694
======== ======== ======== ========
Earnings per common share
primary:
Income before cumulative
effect of a change
in accounting
principle............... $ .77 $ .70 $ 1.43 $ 1.25
Cumulative effect of a
change in accounting
principle............... - - - .06
-------- -------- -------- --------
Net income................ $ .77 $ .70 $ 1.43 $ 1.31
======== ======== ======== ========
EXHIBIT 11
AMGEN INC.
COMPUTATION OF PER SHARE EARNINGS
FULLY DILUTED COMPUTATION
(In thousands except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
-------- -------- -------- --------
Income before cumulative
effect of a change in
accounting principle... $107,464 $100,224 $200,924 $180,784
Cumulative effect of a
change in accounting
principle.............. - - - 8,738
-------- -------- -------- --------
Net income............... $107,464 $100,224 $200,924 $189,522
======== ======== ======== ========
Applicable common and
common stock equivalent
shares:
Weighted average shares
of common stock
outstanding during
the period............. 132,947 135,765 133,452 136,076
Incremental number of
shares outstanding
during the period
resulting from the
assumed exercises of
stock options and
warrants............... 6,684 7,912 7,034 8,618
-------- -------- -------- --------
Weighted average shares
of common stock and
common stock
equivalents outstanding
during the period...... 139,631 143,677 140,486 144,694
======== ======== ======== ========
Earnings per common share
fully diluted:
Income before cumulative
effect of a change
in accounting
principle.............. $ .77 $ .70 $ 1.43 $ 1.25
Cumulative effect of a
change in accounting
principle.............. - - - .06
-------- -------- -------- --------
Net income............... $ .77 $ .70 $ 1.43 $ 1.31
======== ======== ======== ========