View:
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 March 31, 1997
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 March 31, 1997, the registrant had 264,872,827 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 months
ended March 31, 1997 and 1996 ...................4
Condensed Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 ............5
Condensed Consolidated Statements of
Cash Flows - three months
ended March 31, 1997 and 1996 ...............6 - 7
Notes to Condensed Consolidated Financial
Statements ......................................8
Item 2.Management's Discussion and Analysis
of Financial Condition and Results of
Operations ................................15
PART II OTHER INFORMATION
Item 1.Legal Proceedings .........................20
Item 5.Other Information .........................22
Item 6.Exhibits and Reports on Form 8-K ..........22
Signatures........................................23
Index to Exhibits.................................24
PAGE 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The information in this report for the three months ended
March 31, 1997 and 1996 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 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, 1996.
Interim results are not necessarily indicative of results for
the full fiscal year.
PAGE 3
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Revenues:
Product sales .................... $536.0 $476.9
Corporate partner revenues ....... 27.4 21.8
Royalty income ................... 12.1 9.2
------ ------
Total revenues ............... 575.5 507.9
------ ------
Operating expenses:
Cost of sales .................... 72.0 66.9
Research and development ......... 147.7 130.6
Marketing and selling ............ 68.1 67.6
General and administrative ....... 44.4 39.2
Loss of affiliates, net .......... 8.5 13.3
------ ------
Total operating expenses ..... 340.7 317.6
------ ------
Operating income .................. 234.8 190.3
------ ------
Other income (expense):
Interest and other income ........ 15.9 19.0
Interest expense, net ............ (0.3) (2.3)
------ ------
Total other income (expense) . 15.6 16.7
------ ------
Income before income taxes ........ 250.4 207.0
Provision for income taxes ........ 70.1 63.4
------ ------
Net income ........................ $180.3 $143.6
====== ======
Earnings per share:
Primary earnings per share ....... $0.65 $0.51
Fully diluted earnings per share . $0.65 $0.51
Shares used in calculation of:
Primary earnings per share ....... 278.1 283.6
Fully diluted earnings per share . 278.1 283.6
See accompanying notes.
PAGE 4
AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
March 31, December 31,
1997 1996
--------- -----------
ASSETS
Current assets:
Cash and cash equivalents ............... $ 264.8 $ 169.3
Marketable securities ................... 779.5 907.7
Trade receivables, net .................. 206.5 225.4
Inventories ............................. 100.4 97.4
Other current assets .................... 86.0 102.8
-------- --------
Total current assets................. 1,437.2 1,502.6
Property, plant and equipment at cost, net 981.6 910.5
Investments in affiliated companies....... 113.0 109.6
Other assets.............................. 241.3 242.9
-------- --------
$2,773.1 $2,765.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................ $ 76.6 $ 75.0
Accrued liabilities ..................... 422.3 449.7
Current portion of long-term debt ....... 40.0 118.2
-------- --------
Total current liabilities............ 538.9 642.9
Long-term debt............................ 59.0 59.0
Put warrants.............................. 157.4 157.4
Commitments and contingencies
Stockholders' equity:
Common stock, and additional paid-in
capital; $.0001 par value; 750 shares
authorized; outstanding - 264.9
shares in 1997 and 264.7 shares in
1996................................. 1,059.8 1,026.9
Retained earnings ....................... 958.0 879.4
-------- --------
Total stockholders' equity........... 2,017.8 1,906.3
-------- --------
$2,773.1 $2,765.6
======== ========
See accompanying notes.
PAGE 5
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Cash flows from operating activities:
Net income ............................... $180.3 $143.6
Depreciation and amortization ............ 36.4 27.9
Loss of affiliates, net .................. 8.5 13.3
Cash provided by (used in):
Trade receivables, net .................. 18.9 (13.7)
Inventories ............................. (3.0) (1.4)
Other current assets .................... 16.8 1.0
Accounts payable ........................ 1.6 (22.4)
Accrued liabilities ..................... (27.4) (55.0)
------ ------
Net cash provided by operating
activities .......................... 232.1 93.3
------ ------
Cash flows from investing activities:
Purchases of property, plant and
equipment .............................. (102.5) (42.5)
Proceeds from maturities of marketable
securities ............................. 149.3 84.9
Proceeds from sales of marketable
securities ............................. 184.6 383.5
Purchases of marketable securities ....... (205.7) (358.1)
Increase in investments in affiliated
companies .............................. - (2.0)
Increase in other assets ................. (3.4) (17.9)
------ ------
Net cash provided by investing
activities ......................... 22.3 47.9
------ ------
See accompanying notes.
(Continued on next page)
PAGE 6
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------- -------
Cash flows from financing activities:
Decrease in commercial paper ............. $ - $(69.7)
Repayment of long-term debt .............. (78.2) -
Net proceeds from issuance of common
stock upon the exercise of stock
options ................................ 24.3 33.4
Tax benefits related to stock options .... 8.6 8.6
Repurchases of common stock .............. (101.7) (104.5)
Other .................................... (11.9) (13.3)
------ ------
Net cash used in financing activities .. (158.9) (145.5)
------ ------
Increase (decrease) in cash and cash
equivalents ............................. 95.5 (4.3)
Cash and cash equivalents at beginning of
period .................................. 169.3 66.7
------ ------
Cash and cash equivalents at end of period $264.8 $ 62.4
====== ======
See accompanying notes.
PAGE 7
AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
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 are shown net of applicable reserves and
allowances. Inventories consist of the following (in millions):
March 31, December 31,
1997 1996
------ -------
Raw materials ...... $ 14.2 $15.9
Work in process .... 54.7 56.2
Finished goods ..... 31.5 25.3
------ -----
$100.4 $97.4
====== =====
Product sales
Product sales consist of two products, EPOGEN(R) (Epoetin alfa)
and NEUPOGEN(R) (Filgrastim).
Quarterly NEUPOGEN(R) sales volume in the United States is
influenced by a number of factors including underlying demand and
PAGE 8
wholesaler inventory management practices. Wholesaler inventory
reductions tend to reduce domestic NEUPOGEN(R) sales in the first
quarter each year. In addition, the discretionary aspects of some
cancer chemotherapy administration has had a slight seasonal effect
on NEUPOGEN(R) sales.
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, 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. These sales amounts, and
adjustments thereto, are derived from third-party data on shipments
to end users and their usage (see Note 4, "Contingencies - Johnson &
Johnson arbitrations").
Income taxes
Income taxes are accounted for in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109 (Note 3).
Stock option and purchase plans
The Company's stock options and purchase plans are accounted for
under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees".
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 are outstanding options under the Company's
stock option plans. Put warrants on the Company's common stock may
also be dilutive under the reverse treasury stock method.
In February 1997, SFAS No. 128, "Earnings Per Share" was issued
and is required to be adopted on December 31, 1997. At that time,
the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under
the new requirements, primary and fully diluted earnings per share
will be replaced with basic and diluted earnings per share. Basic
earnings per share excludes the dilutive effect of stock options and
will therefore be higher than primary earnings per share. Basic
earnings per share for the three months ended March 31, 1997 and 1996
was $.68 and $.54, respectively. Diluted earnings per share under
the new standard is expected to be essentially the same as primary
earnings per share amounts calculated under principles currently
used.
PAGE 9
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 months ended March 31,
1997 and 1996 is unaudited but includes 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.
2. Debt
During the three months ended March 31, 1997, the Company paid
off $78.2 million of maturing debt consisting of $28.2 million of
promissory notes and $50 million of debt securities.
Long-term debt consists of the following (in millions):
March 31, December 31,
1997 1996
-------- --------
Promissory notes .......... $ 40.0 $ 68.2
Debt securities ........... 59.0 109.0
------ ------
99.0 177.2
Less current portion ...... (40.0) (118.2)
------ ------
$ 59.0 $ 59.0
====== ======
The Company has registered $213 million of unsecured debt
securities of which $59 million were outstanding and $100 million
were available for issuance at March 31, 1997. The debt securities
outstanding at March 31, 1997 bear interest at fixed rates averaging
5.8% and mature in approximately one to six years.
In April 1997, the Company issued $100 million of debt
securities under its shelf registration which bear interest at a
fixed rate of 8.1% and mature on April 1, 2097. These securities may
be redeemed in whole or in part at the Company's option at any time
for a redemption price equal to the greater of the principal amount
to be redeemed or the sum of the present values of the principal and
remaining interest payments discounted at a determined rate plus, in
each case, accrued interest. These securities place limitations on
liens and sale/leaseback transactions.
PAGE 10
As of March 31, 1997, $150 million was available under the
Company's line of credit for borrowing and to support the Company's
commercial paper program. No borrowings on this line of credit were
outstanding at March 31, 1997.
3. Income taxes
The provision for income taxes consists of the following (in
millions):
Three Months Ended
March 31,
1997 1996
------ ------
Federal(including U.S. possessions) . $65.1 $57.3
State ............................... 5.0 6.1
----- -----
$70.1 $63.4
===== =====
The decrease in the effective tax rate in the current year is
the result of a favorable ruling received in the third quarter of
1996 from the Puerto Rican government with respect to tollgate taxes
applicable to earnings in Puerto Rico.
4. Contingencies
Johnson & Johnson arbitrations
In September 1985, the Company granted Johnson & Johnson 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. Johnson & Johnson
sells Epoetin alfa under the brand name PROCRIT(R).
A number of disputes have arisen 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"). These disputes have been the
subject of arbitration proceedings before Judicial Arbitration and
Mediation Services, Inc. in Chicago, Illinois commencing in January
1989. A dispute that has not yet been resolved and is the subject of
the current arbitration proceeding relates to the audit methodology
currently employed by the Company for Epoetin alfa sales. The
Company and Johnson & Johnson are required to compensate each other
for Epoetin alfa sales which either party makes into the other
party's exclusive market. The Company has established and is
employing an audit methodology to assign the proceeds of sales of
EPOGEN and PROCRIT in Amgen's and Johnson & Johnson's respective
exclusive markets. Based upon this audit methodology, the Company is
seeking payment of approximately $12.6 million (excluding interest)
from Johnson & Johnson for the period 1991 through 1994. Johnson &
PAGE 11
Johnson has disputed this methodology and is proposing an alternative
methodology for adoption by the arbitrator pursuant to which it is
seeking payment of approximately $423 million (including interest
through December 1996) for the period 1989 through 1994. If as a
result of the arbitration proceeding, a methodology different from
that currently employed by the Company is instituted to assign the
proceeds of sales between the parties, it may yield results that are
different from the results of the audit 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
sales than is 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. While it is impossible to predict
accurately or determine the outcome of these proceedings, based
primarily upon the merits of its claims and based upon certain
liabilities established due to the inherent uncertainty of any
arbitrated result, the Company believes that the outcome of these
proceedings will not have a material adverse effect on its financial
statements. A trial commenced in March 1996, regarding the audit
methodologies and compensation for sales by Johnson & Johnson into
Amgen's exclusive market and sales by Amgen into Johnson & Johnson's
exclusive market. In December 1996, testimony in the arbitration
ended. Final argument before the arbitrator on the parties'
respective audit methodologies and claims is scheduled for May 19,
1997, whereafter the matter will be fully briefed and submitted to
the arbitrator for decision.
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. A hearing on this
demand will be scheduled following the adjudication of the audit
methodologies for Epoetin alfa sales.
On October 2, 1995, Johnson & Johnson filed a demand for a
separate arbitration proceeding against the Company before the
American Arbitration Association ("AAA") in Chicago, Illinois.
Johnson & Johnson alleges in this demand that the Company has
breached the License Agreement. The demand also includes allegations
of various antitrust violations. In this demand, Johnson & Johnson
seeks an injunction, declaratory relief, unspecified compensatory
damages, punitive damages and costs. On October 27, 1995, the
Company filed a complaint in the Circuit Court of Cook County,
Illinois, which is now pending in the United States District Court
for the Northern District of Illinois, seeking an order compelling
Johnson & Johnson to arbitrate the Company's claim for termination
before the arbitrator and any related counterclaims asserted in
Johnson & Johnson's October 2, 1995 arbitration demand filed with the
AAA. The Company is unable to predict at this time the outcome of
the demand for termination or when it will be resolved. The Company
has filed a motion to stay the AAA arbitration pending the outcome of
the existing arbitration proceedings before Judicial Arbitration and
Mediation Services, Inc. discussed above. The Company has also filed
an answer and counterclaim denying that AAA has jurisdiction to hear
PAGE 12
or decide the claims stated in the demand, denying the allegations in
the demand and counter claiming for certain unpaid invoices.
Synergen ANTRIL(TM) litigation
Lawsuits have been filed against the Company's wholly-owned
subsidiary, Amgen Boulder Inc. (formerly Synergen, Inc.), alleging
misrepresentations in connection with Synergen's research and
development of ANTRIL(TM) for the treatment of sepsis. One suit,
filed by a limited partner of the partnership with which Amgen
Boulder Inc. is affiliated, has been certified as a class action.
That suit seeks rescission of certain payments made by the limited
partners to the partnership (or unspecified damages not less than $52
million) and treble damages based on a variety of allegations
relating to state and federal law claims. The plaintiffs in that
suit also have filed a second amended complaint alleging violations
of federal securities laws. In August and September 1996, the
parties filed cross-motions for summary judgement. The Court heard
argument on November 1, 1996. Since then, the parties'
representatives have reached a tentative settlement agreement which
is subject to final approval by the Court and the approval of the
limited partners of the partnership. Under its terms, the
plaintiffs, who include present limited partners of the partnership,
will receive $14.5 million in exchange for the transfer of ownership
of their units; the suit will be dismissed with prejudice and the
parties will exchange mutual releases. In a separate matter, two
broker dealers who acted as market makers in Synergen, Inc. options
have also filed a suit claiming in excess of $3.2 million in trading
losses.
FoxMeyer Health Corporation
On January 10, 1997, FoxMeyer Health Corporation ("FMHC") filed
suit (the "FoxMeyer Lawsuit") alleging that defendant McKesson
Corporation defrauded FMHC, misused confidential information received
from FMHC about subsidiaries of FMHC (FoxMeyer Corporation and
FoxMeyer Drug Corporation, collectively the "FoxMeyer Subsidiaries"),
and attempted to monopolize the market for pharmaceutical and health
care product distribution by attempting to injure or destroy the
FoxMeyer Subsidiaries. The Company is named as one of twelve
"Manufacturer Defendants" alleged to have conspired with McKesson
Corporation in doing, among other things, the above and (i) inducing
FMHC to refrain from seeking other suitable purchasers for the
FoxMeyer Subsidiaries and (ii) causing FMHC to believe that McKesson
Corporation was serious about purchasing FMHC's assets at fair value,
when, in fact, McKesson Corporation was not. The Manufacturer
Defendants and McKesson Corporation are also alleged to have
intentionally and tortiously interfered with a number of business
expectancies and opportunities. The complaint seeks from the
Manufacturer Defendants and McKesson Corporation compensatory damages
of at least $400 million and punitive damages in an unspecified
amount, as well as FMHC's costs and attorney's fees. On January 31,
1997, the Company filed an answer denying FMHC's allegations. On
February 4, 1997, a notice of removal was filed in the Federal
District Court for Dallas, Texas (the "District Court"), which was
referred by the District Court to the Federal Bankruptcy Court in
PAGE 13
Dallas, Texas. Subsequently, on February 7, 1997, a motion to
transfer venue was filed in the Federal Bankruptcy Court in Dallas,
Texas, requesting that this matter be transferred to the Federal
Bankruptcy Court in Delaware, where the FoxMeyer Subsidiaries'
Chapter XI bankruptcy action is pending. The Company is a creditor
in such bankruptcy proceeding. On March 18, 1997, the Manufacturer
Defendants filed in the Delaware bankruptcy court a motion to
intervene in the creditors committee (the "Chapter XI Committee")
action that asserted that the Delaware bankruptcy court should enjoin
the FoxMeyer Lawsuit. Also on March 18, 1997, the Delaware
bankruptcy court converted the FoxMeyer Subsidiaries' Chapter XI
bankruptcy action to a liquidation proceeding under Chapter VII. The
order converting the FoxMeyer Subsidiaries' bankruptcy to a Chapter
VII proceeding also stayed all adversary proceedings and other
proceedings filed in the bankruptcy until a permanent trustee is
elected. As such, no substantive resolution of the motions filed in
the Delaware bankruptcy court is expected until after election of the
permanent trustee. Similarly, on April 1, 1997, the Delaware
bankruptcy court ordered that the litigants in the FoxMeyer Lawsuit
be stayed from any further litigation until election of the permanent
trustee. Accordingly, no substantial resolution of any motions
currently pending in the FoxMeyer Litigation is expected until after
election of the permanent trustee.
False Claims Act matter
Amgen has been advised that it and certain purchasers of its
products have been named as defendants in a civil lawsuit initiated
by a former employee of Amgen in the United States District Court for
the Eastern District of Pennsylvania. This suit was filed under the
qui tam provisions of the Federal False Claims Act (the "Act") which
permit an individual to bring suit in the name of the United States
and share in any recovery. The suit alleges, among other things,
that Amgen individually and in conspiracy with some of its customers
violated the Act as a result of certain of its sales and reporting
practices relating to its products. Under the law, the government
must investigate the allegations and determine whether it wishes to
intervene and take responsibility for the lawsuit. The lawsuit will
remain under seal until the government completes its investigation
and determines whether to intervene. However, permission from the
Court has been obtained by Amgen to make the disclosures contained
herein. The Complaint seeks an order requiring Amgen to cease and
desist from such allegedly improper practices, as well as treble
damages in an unspecified amount plus a civil penalty of not less
than $5,000 and not more than $10,000 for each alleged violation of
the Act. If the government does not intervene, the plaintiff has the
right to continue to pursue the claim on the government's behalf.
Amgen is fully cooperating with the government's investigation and is
engaged in ongoing discussions with it regarding the allegations.
Amgen has advised the government that it disputes and will vigorously
contest the allegations in the Complaint. Although it is too early
in this action for Amgen to fully assess this matter or reliably
predict its outcome, an unfavorable result in this matter could have
a material adverse effect on the Company's results of operations in
that period.
PAGE 14
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,
except with respect to the False Claims Act matter, the Company
believes that the outcome of these proceedings will not have a
material adverse effect on its financial statements.
5. Stockholders' equity
During the three months ended March 31, 1997, the Company
repurchased 1.7 million shares of its common stock at a total cost of
$101.7 million under its common stock repurchase program. The Board
of Directors has authorized the Company to repurchase up to $450
million of shares during 1997. Stock repurchased under the program
is retired.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Cash provided by operating activities has been and is expected
to continue to be the Company's primary source of funds. During the
three months ended March 31, 1997, operations provided $232.1 million
of cash compared with $93.3 million during the same period last year.
The Company had cash, cash equivalents and marketable securities of
$1,044.3 million at March 31, 1997, compared with $1,077 million at
December 31, 1996.
Capital expenditures totaled $102.5 million for the three months
ended March 31, 1997, compared with $42.5 million for the same period
a year ago. Over the next few years, the Company expects to spend
approximately $350 million per year on capital projects and equipment
to expand the Company's global operations.
The Company receives cash from the exercise of employee stock
options. During the three months ended March 31, 1997, stock options
and their related tax benefits provided $32.9 million of cash
compared with $42 million for the same period last year. Proceeds
from the exercise of stock options and their related tax benefits
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 to offset the
dilutive effect of its employee benefit stock option and stock
purchase plans. During the three months ended March 31, 1997, the
Company purchased 1.7 million shares of its common stock at a cost of
$101.7 million compared with 1.8 million shares purchased at a cost
of $104.5 million during the same period last year. The Company
expects to repurchase up to $450 million of its stock under the
program in 1997.
PAGE 15
To provide for financial flexibility and increased liquidity,
the Company has established several sources of debt financing. The
Company had a shelf registration under which it could issue up to
$213 million of debt securities. During the three months ended
March 31, 1997, $50 million of maturing debt securities under this
shelf registration were repaid. The $59 million of debt securities
outstanding at March 31, 1997 mature in approximately one to six
years. In April 1997, the Company issued the remaining $100 million
of debt securities under the shelf registration which bear interest
at a fixed rate of 8.1% and mature on April 1, 2097. These debt
securities were issued to refinance a portion of debt that has
matured or will mature in 1997 (see Note 2 to the Condensed
Consolidated Financial Statements). The Company also repaid $28.2
million of promissory notes during the three months ended March 31,
1997. The Company has a commercial paper program which provides for
short-term borrowings up to an aggregate face amount of $200 million.
As of March 31, 1997, the Company had no outstanding commercial
paper. The Company also has a $150 million revolving line of credit.
No borrowings on this line of credit were outstanding at March 31,
1997.
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 excess 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 to take advantage of favorable conditions in the markets or
in connection with the Company's corporate development activities.
Results of Operations
Product sales
Product sales increased $59.1 million or 12% for the three
months ended March 31, 1997, compared with the same period last year.
NEUPOGEN(R) (Filgrastim)
Worldwide NEUPOGEN(R) sales were $244.4 million for the three
months ended March 31, 1997, an increase of $11.6 million or 5% over
the same period last year. This increase is primarily due to demand
growth in domestic and, to a lesser extent, international markets.
Unfavorable foreign currency effects reduced worldwide NEUPOGEN(R)
sales growth by approximately three percentage points. In addition,
PAGE 16
tight European governmental budgets have reduced the sales growth
rate.
Quarterly NEUPOGEN(R) sales volume in the United States is
influenced by a number of factors including underlying demand and
wholesaler inventory management practices. Wholesaler inventory
reductions tend to reduce domestic NEUPOGEN(R) sales in the first
quarter each year. In addition, the discretionary aspects of some
cancer chemotherapy administration has had a slight seasonal effect
on NEUPOGEN(R) sales.
Cost containment pressures in the health care marketplace have
contributed to the slowing of growth in domestic NEUPOGEN(R) usage
over the past several years. These pressures are expected to
continue to influence such growth for the foreseeable future.
The growth of the colony stimulating factor ("CSF") market in
the EU in which NEUPOGEN (R) competes has slowed, and is expected to
continue to slow, principally due to governmental budget issues and
cost controls in EU countries. Despite these market factors, as well
as competition from another granulocyte CSF product, the Company
experienced slightly positive NEUPOGEN(R) sales growth, measured in
local currencies, in the EU in 1996 and in the current period.
Although the Company's CSF market share in the EU has remained
relatively constant over the last several quarters, the Company does
not expect the competitive intensity to subside in the near future.
EPOGEN(R) (Epoetin alfa)
EPOGEN(R) sales were $291.6 million for the three months ended
March 31, 1997, an increase of $47.5 million or 19% over the same
period last year. This increase is primarily due to a continued
increase in the U.S. dialysis patient population and the
administration of higher doses.
Cost of sales
Cost of sales as a percentage of product sales was 13.4% and
14.0% for the three months ended March 31, 1997 and 1996,
respectively. In 1997, cost of sales as a percentage of product
sales is expected to range from 13%-14% reflecting continuing
efficiencies of the Puerto Rican operations.
Research and development
During the three months ended March 31, 1997, research and
development expenses increased $17.1 million or 13% compared with the
same period last year. This increase is primarily due to staff-
related expenses for clinical and preclinical activities necessary to
support ongoing product development activities. In 1997, annual
research and development expenses are expected to increase at a rate
exceeding the Company's product sales growth rate. Increases are
planned for internal efforts on development of product candidates,
for discovery, and for licensing efforts.
PAGE 17
Marketing and selling/General and administrative
Marketing and selling expenses increased $0.5 million or 1%
during the three months ended March 31, 1997 compared with the same
period last year. This increase was relatively small because higher
staff-related costs and higher outside marketing expenses were
substantially offset by lower European marketing expenses resulting
from the favorable effects of foreign currency exchange rates and
lower expenses related to the Johnson & Johnson arbitration.
General and administrative expenses increased $5.2 million or
13% during the three months ended March 31, 1997 compared with the
same period last year. This increase is primarily due to higher
legal and staff-related expenses.
In 1997, marketing and selling expenses combined with general
and administrative expenses are expected to have an aggregate annual
growth rate lower than the anticipated annual product sales growth
rate due in part to the favorable impact of foreign currency exchange
rates on European expenses and reduced expenses related to the
Johnson & Johnson arbitration.
Interest and other income
Interest and other income decreased $3.1 million or 16% during
the three months ended March 31, 1997 compared with the same period
last year. This decrease is primarily due to capital gains realized
in the prior year period which did not reoccur in the current year
period. Interest and other income is expected to fluctuate from
period to period primarily due to changes in cash balances and
interest rates.
Income taxes
The Company's effective tax rate for the three months ended
March 31, 1997 was 28.0% compared with 30.6% for the same period last
year. The decrease in the tax rate is the result of a favorable
ruling received in the third quarter of 1996 from the Puerto Rican
government with respect to tollgate taxes applicable to earnings in
Puerto Rico.
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 six 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
March 31, 1997, outstanding foreign currency option and forward
contracts totaled $34.6 million and $107.2 million, respectively.
PAGE 18
Financial Outlook
Worldwide NEUPOGEN(R) (Filgrastim) sales for 1997 are expected
to grow at a rate lower than the 1996 growth rate. Future
NEUPOGEN(R) sales increases are dependent primarily 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. Although not approved or promoted for use in
the United States, the Company believes that approximately 15%-20% of
its domestic NEUPOGEN(R) sales are from off-label use as a supportive
therapy for various AIDS-related treatments. Changes in AIDS
therapies, including therapies that may be less myelosuppressive, may
affect such sales. NEUPOGEN(R) usage is expected to continue to be
affected by cost containment pressures on health care providers
worldwide. In addition, international NEUPOGEN(R) sales will
continue to be subject to changes in foreign currency exchange rates.
EPOGEN(R) (Epoetin alfa) sales for 1997 are expected to remain
strong but grow at a rate lower than the 1996 growth rate. The
Company anticipates that increases in both the U.S. dialysis patient
population and dosing will continue to drive EPOGEN(R) sales. The
Company believes that as more dialysis patients' hematocrits reach
target levels, the contribution of dosing to sales increases will
diminish. 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 the basis for reimbursement
by the federal government. On February 12, 1997, the Health Care
Finance Administration ("HCFA") issued an Electronic Program
Memorandum to their Fiscal Intermediaries and Carriers (as
defined by HCFA) regarding the institution of a ninety day rolling
hematocrit edit when hematocrits exceed 36%. The new method of
calculation is referred to as the hematocrit measurement audit
(HMA). The HMA allows reimbursement for patients who temporarily
exceed 36% through the averaging of submitted claims for the
previous 90 days. The HMA eliminates reimbursement for the
last submitted claim if an average hematocrit of 36.5% is exceeded
for the previous 90 days and also eliminates medical justification
for hematocrits being kept over 36%. Fiscal Intermediaries and
Carriers must implement this change by July 1, 1997.
The Company anticipates that total product sales and earnings
will grow at double digit rates in 1997, but these growth rates are
expected to be lower than 1996 growth rates. Estimates of future
product sales and earnings, however, 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. For
reasons stated, or for various unanticipated reasons, actual results
may differ materially. 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 matters which
may affect the Company's stock price may be affected by a number of
factors, certain of which are discussed elsewhere herein and are
discussed in the sections appearing under the heading "Management's
PAGE 19
Discussion and Analysis of Financial Condition and Results of
Operations--Factors That May Affect Future Results" in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996,
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 and various other legal proceedings. For a discussion
of these matters, see Note 4 to the Condensed Consolidated Financial
Statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is engaged in arbitration proceedings with one of
its licensees. For a complete discussion of these matters see Note 4
to the Condensed Consolidated Financial Statements - "Contingencies -
Johnson & Johnson arbitrations". Other legal proceedings are also
reported in Note 4 to the Condensed Consolidated Financial Statements
and in the Company's Form 10-K for the year ended December 31, 1996,
with material developments since that report described below. While
it is not possible to predict accurately or to determine the eventual
outcome of these matters, except with respect to the False Claims Act
matter, the Company believes that the outcome of these legal
proceedings will not have a material adverse effect on the financial
statements of the Company.
Transkaryotic Therapies and Hoechst litigation
On April 15, 1997, Amgen filed suit in the United States
District Court in Boston Massachusetts against Transkaryotic
Therapies Inc. and Hoechst Marion Roussel alleging infringement of
several U.S. patents owned by Amgen that claim an erythropoietin
product and processes for making erythropoietin. The suit seeks an
injunction preventing the defendants from making, importing, using or
selling erythropoietin in the U.S.
Genentech litigation
On October 16, 1996, Genentech, Inc. filed suit in the United
States District Court for the Northern District of California seeking
an unspecified amount of compensatory damages, treble damages and
injunctive relief on its U.S. Patents 4,704,362, 5,221,619 and
4,342,832 (the "`362, `619 and `832 Patents"), relating to vectors
for expressing cloned genes and the methods for such expression.
Genentech, Inc. alleges that Amgen has infringed its patents by
manufacturing and selling NEUPOGEN(R). On December 2, 1996, Amgen
was served with this lawsuit. On January 21, 1997, the Company
answered the complaint and asserted counterclaims relating to
invalidity and non-infringement of the patents-in-suit. On February
10, 1997, Genentech, Inc. served Amgen with a reply to the
PAGE 20
counterclaim and an additional counterclaim asserting U.S. Patent
5,583,013 (the "`013 Patent"), issued December 10, 1996, seeking
relief similar to that sought for the `362, `619 and `832 Patents.
On March 31, 1997, Amgen answered this pleading and asserted
counterclaims relating to invalidity and non-infringement of the `013
Patent.
FoxMeyer Health Corporation
On January 10, 1997, FoxMeyer Health Corporation ("FMHC") filed
suit (the "FoxMeyer Lawsuit") in the District Court of Dallas County,
Dallas, Texas, alleging that defendant McKesson Corporation defrauded
FMHC, misused confidential information received from FMHC about
subsidiaries of FMHC (FoxMeyer Corporation and FoxMeyer Drug
Corporation, collectively the "FoxMeyer Subsidiaries"), and attempted
to monopolize the market for pharmaceutical and health care product
distribution by attempting to injure or destroy the FoxMeyer
Subsidiaries. The Company is named as one of twelve "Manufacturer
Defendants" alleged to have conspired with McKesson Corporation in
doing, among other things, the above and (i) inducing FMHC to refrain
from seeking other suitable purchasers for the FoxMeyer Subsidiaries
and (ii) causing FMHC to believe that McKesson Corporation was
serious about purchasing FMHC's assets at fair value, when, in fact,
McKesson Corporation was not. The Manufacturer Defendants and
McKesson Corporation are also alleged to have intentionally and
tortiously interfered with a number of business expectancies and
opportunities. The complaint seeks from the Manufacturer Defendants
and McKesson Corporation compensatory damages of at least $400
million and punitive damages in an unspecified amount, as well as
FMHC's costs and attorney's fees. On January 31, 1997, the Company
filed an answer denying FMHC's allegations. On February 4, 1997, a
notice of removal was filed in the Federal District Court for Dallas,
Texas (the "District Court"), which was referred by the District
Court to the Federal Bankruptcy Court in Dallas, Texas.
Subsequently, on February 7, 1997, a motion to transfer venue was
filed in the Federal Bankruptcy Court in Dallas, Texas, requesting
that this matter be transferred to the Federal Bankruptcy Court in
Delaware, where the FoxMeyer Subsidiaries' Chapter XI bankruptcy
action is pending. The Company is a creditor in such bankruptcy
proceeding. On March 18, 1997, the Manufacturer Defendants filed in
the Delaware bankruptcy court a motion to intervene in the creditors
committee (the "Chapter XI Committee") action that asserted that the
Delaware bankruptcy court should enjoin the FoxMeyer Lawsuit. Also
on March 18, 1997, the Delaware bankruptcy court converted the
FoxMeyer Subsidiaries' Chapter XI bankruptcy action to a liquidation
proceeding under Chapter VII. The order converting the FoxMeyer
Subsidiaries' bankruptcy to a Chapter VII proceeding also stayed all
adversary proceedings and other proceedings filed in the bankruptcy
until a permanent trustee is elected. As such, no substantive
resolution of the motions filed in the Delaware bankruptcy court is
expected until after election of the permanent trustee. Similarly,
on April 1, 1997, the Delaware bankruptcy court ordered that the
litigants in the FoxMeyer Lawsuit be stayed from any further
litigation until election of the permanent trustee. Accordingly, no
substantial resolution of any motions currently pending in the
PAGE 21
FoxMeyer Litigation is expected until after election of the permanent
trustee.
Consensus interferon litigation
On December 3, 1996, Schering Corporation filed suit in the U.S.
District Court for the District of Delaware against the Company
alleging infringement of U.S. Patent No. 4,530,901 (the "`901
Patent") by the manufacture and use of the Company's consensus
interferon product. The complaint seeks unspecified damages and
injunctive relief. The Company filed a motion to dismiss (the
"Motion to Dismiss") the action on January 24, 1997. On January 22,
1997, the Company filed an action for declaratory relief in the
United States District Court for the Central District of California
in Los Angeles naming Biogen Inc. and Schering Corporation as
parties. The action seeks a declaration that the `901 Patent is not
infringed by the Company's use of Infergen(R) and/or that the `901
Patent is invalid. By agreement between the parties, the Motion to
Dismiss was withdrawn and a motion to transfer the case to California
was filed on March 10, 1997.
Item 5. Other Information
The Company's 1998 Annual Meeting of Stockholders will be held
on May 7, 1998, at 10:30 A.M., PDT, at the Regent Beverly Wilshire,
9500 Wilshire Boulevard, Los Angeles, California, 90212.
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
The Company filed three Current Reports on Form 8-K each
reporting events under Item 5 thereof during the three months ended
March 31, 1997. The report filed on February 26, 1997 contains a
press release reporting the Company's results of operations for the
year ended December 31, 1996 and a discussion of various legal
matters involving the Company. The report filed on February 28, 1997
contains information regarding the Company's new Stockholder Rights
Plan and redemption of rights under the then existing rights plan.
The report filed on March 14, 1997 contains a press release reporting
the Company's clinical progress and new research programs and the
first supplemental indenture to the indenture providing for issuance
of the Company's debt securities.
PAGE 22
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: 5/12/97 By:/s/ Robert S. Attiyeh
------------------ ------------------------------------
Robert S. Attiyeh
Senior Vice President, Finance
and Corporate Development, and
Chief Financial Officer
Date: 5/12/97 By:/s/ Larry A. May
------------------ ------------------------------------
Larry A. May
Vice President, Corporate
Controller and Chief
Accounting Officer
PAGE 23
AMGEN INC.
INDEX TO EXHIBITS
Exhibit No. Description
*3.1 Restated Certificate of Incorporation as amended.
3.2 Amended and Restated Bylaws. (21)
4.1 Indenture dated January 1, 1992 between the Company and
Citibank N.A., as trustee. (11)
4.2 Forms of Commercial Paper Master Note Certificates. (14)
4.3 First Supplement to Indenture, dated February 26, 1997
between the Company and Citibank N.A., as trustee. (24)
4.4 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."
(26)
4.5 8-1/8% Debentures due April 1, 2097. (26)
*4.6 Form of stock certificate for the common stock, par
value $.0001 of the Company.
10.1 Company's Amended and Restated 1991 Equity Incentive
Plan. (25)
10.2 Company's Amended and Restated 1984 Stock Option Plan.
(22)
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 Amended and Restated Employee Stock Purchase
Plan. (22)
10.8 Research, Development Technology Disclosure and License
Agreement PPO, dated January 20, 1986, by and between
the Company and Kirin Brewery Co., Ltd. (4)
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). (5)
PAGE 24
10.10 Assignment and License Agreement, dated October 16,
1986, between the Company and Kirin-Amgen, Inc. (with
certain confidential information deleted therefrom). (5)
10.11 G-CSF European License Agreement, dated December 30,
1986, between Kirin-Amgen, Inc. and the Company (with
certain confidential information deleted therefrom). (5)
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). (5)
10.13 Company's Amended and Restated 1987 Directors' Stock
Option Plan. (25)
10.14 Company's Amended and Restated 1988 Stock Option Plan.
(22)
10.15 Company's Amended and Restated Retirement and Savings
Plan. (22)
10.16 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. (6)
10.17 Agreement on G-CSF in the EU, dated September 26, 1988,
between Amgen Inc. and F. Hoffmann-La Roche & Co.
Limited Company (with certain confidential information
deleted therefrom). (8)
10.18 Supplementary Agreement to Agreement dated January 4,
1989 to Agreement on G-CSF in the EU, dated September
26, 1988, between the Company and F. Hoffmann-La Roche &
Co. Limited Company, (with certain confidential
information deleted therefrom). (8)
10.19 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). (8)
10.20 Rights Agreement, dated January 24, 1989, between Amgen
Inc. and American Stock Transfer and Trust Company,
Rights Agent. (7)
10.21 First Amendment to Rights Agreement, dated January 22,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (9)
10.22 Second Amendment to Rights Agreement, dated April 2,
1991, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (10)
10.23 Agency Agreement, dated November 21, 1991, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (12)
10.24 Agency Agreement, dated May 21, 1992, between Amgen
Manufacturing, Inc. and Citicorp Financial Services
Corporation. (12)
10.25 Guaranty, dated July 29, 1992, by the Company in favor
of Merck Sharp & Dohme Quimica de Puerto Rico, Inc. (13)
10.26 936 Promissory Note No. 01, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (12)
10.27 936 Promissory Note No. 02, dated December 11, 1991,
issued by Amgen Manufacturing, Inc. (12)
10.28 936 Promissory Note No. 001, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (12)
PAGE 25
10.29 936 Promissory Note No. 002, dated July 29, 1992, issued
by Amgen Manufacturing, Inc. (12)
10.30 Guaranty, dated November 21, 1991, by the Company in
favor of Citicorp Financial Services Corporation. (12)
10.31 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. (13)
10.32 Amgen Supplemental Retirement Plan dated June 1, 1993.
(15)
10.33 Promissory Note of Mr. Kevin W. Sharer, dated June 4,
1993. (15)
10.34 Promissory Note of Mr. Larry A. May, dated February 24,
1993. (16)
10.35 Amgen Performance Based Management Incentive Plan. (25)
10.36 Agreement and Plan of Merger, dated as of November 17,
1994, among Amgen Inc., Amgen Acquisition Subsidiary,
Inc. and Synergen, Inc. (17)
10.37 Third Amendment to Rights Agreement, dated as of
February 21, 1995, between Amgen Inc. and American Stock
Transfer Trust and Trust Company (18)
10.38 Credit Agreement, dated as of June 23, 1995, among Amgen
Inc., the Borrowing Subsidiaries named therein, the
Banks named therein, Swiss Bank Corporation and ABN AMRO
Bank N.V., as Issuing Banks, and Swiss Bank Corporation,
as Administrative Agent. (19)
10.39 Promissory Note of Mr. George A. Vandeman, dated
December 15, 1995. (20)
10.40 Promissory Note of Mr. George A. Vandeman, dated
December 15, 1995. (20)
10.41 Promissory Note of Mr. Stan Benson, dated March 19,
1996. (20)
10.42 Amendment No. 1 to the Company's Amended and Restated
Retirement and Savings Plan. (22)
10.43 Amendment Number 5 to the Company's Amended and Restated
Retirement and Savings Plan dated January 1, 1993. (25)
10.44 Amendment Number 2 to the Company's Amended and Restated
Retirement and Savings Plan dated April 1, 1996. (25)
10.45 First Amendment to Credit Agreement, dated as of
December 12, 1996, among Amgen Inc., the Borrowing
Subsidiaries named therein, and Swiss Bank Corporation
as Administrative Agent. (25)
10.46 Fourth Amendment to Rights Agreement, dated February 18,
1997 between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (23)
10.47 Preferred Share Rights Agreement, dated February 18,
1997, between Amgen Inc. and American Stock Transfer and
Trust Company, Rights Agent. (23)
10.48 Consulting Agreement, dated November 15, 1996, between
the Company and Daniel Vapnek. (25)
10.49 Agreement, dated May 30, 1995, between the Company and
George A. Vandeman. (25)
*11 Computation of per share earnings.
*27 Financial Data Schedule.
*99 Sections appearing under the heading "Management's
Discussion and Analysis of Financial Condition and
Results of Operations-Factors That May Affect Future
Results" in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
----------------
PAGE 26
* 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 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 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.
(7) Filed as an exhibit to the Form 8-K Current Report dated January
24, 1989 and incorporated herein by reference.
(8) 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.
(9) Filed as an exhibit to the Form 8-K Current Report dated January
22, 1991 and incorporated herein by reference.
(10) Filed as an exhibit to the Form 8-K Current Report dated April
12, 1991 and incorporated herein by reference.
(11) Filed as an exhibit to Form S-3 Registration Statement dated
December 19, 1991 and incorporated herein by reference.
(12) 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.
(13) Filed as an exhibit to the Form 8-A dated March 31, 1993 and
incorporated herein by reference.
(14) 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.
(15) 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.
(16) 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.
(17) Filed as an exhibit to the Form 8-K Current Report dated
November 18, 1994 on December 2, 1994 and incorporated herein by
reference.
(18) Filed as an exhibit to the Form 8-K Current Report dated
February 21, 1995 on March 7, 1995 and incorporated herein by
reference.
PAGE 27
(19) Filed as an exhibit to the Form 10-Q for the quarter ended
June 30, 1995 on August 11, 1995 and incorporated herein by
reference.
(20) Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1995 on March 29, 1996 and incorporated
herein by reference.
(21) Filed as an exhibit to the Form 10-Q for the quarter ended
June 30, 1996 on August 12, 1996 and incorporated herein by
reference.
(22) 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.
(23) Filed as an exhibit to the Form 8-K Current Report dated
February 18, 1997 on February 28, 1997 and incorporated herein
by reference.
(24) Filed as an exhibit to the Form 8-K Current Report dated March
14, 1997 on March 14, 1997 and incorporated herein by reference.
(25) 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.
(26) Filed as an exhibit to the Form 8-K Current Report dated April
8, 1997 on April 8, 1997 and incorporated herein by reference.
PAGE 28
EXHIBIT 11
AMGEN INC.
COMPUTATION OF PER SHARE EARNINGS
PRIMARY COMPUTATION
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------ ------
Net income ................................. $180.3 $143.6
====== ======
Applicable common and common stock
equivalent shares:
Weighted average shares of common stock
outstanding during the period ........... 265.2 266.0
Incremental number of shares outstanding
during the period resulting from the
assumed exercises of stock options ...... 12.9 17.6
------ ------
Weighted average shares of common stock and
common stock equivalents outstanding during
the period ................................. 278.1 283.6
====== ======
Earnings per common share primary ........... $ .65 $ .51
====== ======
EXHIBIT 11
AMGEN INC.
COMPUTATION OF PER SHARE EARNINGS
FULLY DILUTED COMPUTATION
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1996
------ ------
Net income ................................. $180.3 $143.6
====== ======
Applicable common and common stock
equivalent shares:
Weighted average shares of common stock
outstanding during the period ........... 265.2 266.0
Incremental number of shares outstanding
during the period resulting from the
assumed exercises of stock options ...... 12.9 17.6
------ ------
Weighted average shares of common stock and
common stock equivalents outstanding during
the period ................................. 278.1 283.6
====== ======
Earnings per common share fully diluted ..... $ .65 $ .51
====== ======
EXHIBIT 3.1
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
AMGEN INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Amgen Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution
was adopted by the Board of Directors of the Corporation as required
by Section 151 of the General Corporation Law at a meeting duly
called and held on February 18, 1997.
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance with
the provisions of the Certificate of Incorporation, the Board of
Directors hereby creates a series of Preferred Stock, par value
$.0001 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the
relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" (the "Series A Preferred Stock") and the number of
shares constituting the Series A Preferred Stock shall be 750,000.
Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series A
Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series A Preferred Stock with respect
to dividends, the holders of shares of Series A Preferred Stock,
in preference to the holders of Common Stock, par value $.0001
per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash
on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per
share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction
of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section 2 immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock
shall have received $1,000 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2)
to the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Corporation's
Preferred Stock, except to the extent that any such other series
specifically provides that it shall rank on a parity with or junior
to the Series A Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Series A Preferred Stock, voting together
as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board
and attested by its Secretary this 9th day of April, 1997.
/s/ Gordon M. Binder
---------------------
Chairman of the Board
Gordon M. Binder
Attest:
/s/ George A. Vandeman
----------------------
Secretary
George A. Vandeman
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
AMGEN INC.
AMGEN INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify:
FIRST: That a resolution was duly adopted by the Board of
Directors of the Corporation setting forth a proposed amendment to
the Restated Certificate of Incorporation of the Corporation, and
declaring said amendment to be advisable and recommended for approval
by the stockholders of the Corporation. The resolution setting forth
the proposed amendment is as follows:
NOW, THEREFORE, BE IT RESOLVED, that the first
paragraph of the Fourth Article of the restated Certificate
of Incorporation of the Corporation be, and it hereby is,
amended to read in full as follows:
"FOURTH: This corporation is authorized to issue
two (2) classes of stock to be designated, respectively,
"Preferred Stock" and "Common Stock." The total number of
shares which this corporation is authorized to issue is
Seven Hundred Fifty-Five Million (755,000,000) shares, of
which Five Million (5,000,000) shares shall be Preferred
Stock and Seven Hundred Fifty Million (750,000,000) shares
shall be Common Stock, all with a par value of $.000l."
SECOND: That, thereafter, pursuant to a resolution of the
Board of Directors, the officers of the Corporation solicited the
vote of the stockholders thereof at the Annual Meeting of
Stockholders in favor of the amendment, and the stockholders of the
Corporation approved the amendment by a majority of the outstanding
stock entitled to vote thereon.
THIRD: That said amendment was duly adopted in accordance
with the provisions of Section 242 of the Delaware General
Corporation Law.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, AMGEN INC. has caused this Certificate
of Incorporation to be signed by Gordon M. Binder, its Chief
Executive Officer, and Arthur F. Staubitz, its Secretary, on this
24th day of July, 1991.
/s/ Gordon M. Binder
--------------------
Gordon M. Binder, Chief Executive
Officer
ATTEST:
/s/ Arthur F. Staubitz
----------------------
Arthur F. Staubitz, Secretary
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
AMGEN INC.
Amgen Inc., a corporation organized under the General
Corporation Law of the State of Delaware (the "Corporation") does
hereby certify:
FIRST: That at a meeting of the Board of Directors of the
Corporation, resolutions were duly adopted setting forth a proposed
amendment of the Certificate of Incorporation, declaring said
amendment to be advisable and calling for the officers of the
Corporation to solicit the stockholders thereof to adopt such
amendment. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the first paragraph of the Fourth Article of
the Restated Certificate of Incorporation of the Corporation be,
and it hereby is, amended to read in full as follows:
"FOURTH: This corporation is authorized to issue two (2)
classes of stock to be designated respectively, "Preferred
Stock" and "Common Stock." The total number of shares which
this corporation is authorized to issue is one hundred thirty
million (130,000,000) shares, of which Five Million (5,000,000)
shares shall be Preferred Stock and one hundred twenty-five
million (125,000,000) shares shall be Common Stock, all with a
par value of $.0001."
SECOND: That thereafter, pursuant to a resolution of the Board
of Directors, the officers of the Corporation solicited the vote of
the stockholders thereof at the Annual Meeting of Stockholders in
favor of the amendment, and the stockholders of the Corporation
approved the amendment by a majority of the outstanding stock
entitled to vote thereon.
THIRD: That said amendment was adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, Amgen Inc. has caused this Certificate of
Amendment to be signed by the undersigned Chief Executive Officer of
the Corporation this 27th day of July, 1989.
AMGEN INC.
By: /s/ Gordon M. Binder
--------------------
Gordon M. Binder
Chief Executive Officer
ATTEST:
/s/ Robert D. Weist
-------------------
Robert D. Weist
Secretary
RESTATED CERTIFICATE OF INCORPORATION
OF
AMGEN INC.
AMGEN, INC., a corporation (the "Corporation") organized and
existing under the General Corporation Law of the State of Delaware
HEREBY CERTIFIES:
FIRST: The original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Delaware on October 31, 1986.
SECOND: The Restated Certificate of Incorporation of the
Corporation in the form attached hereto as Exhibit A has been duly
adopted in accordance with the provisions of Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
THIRD: The Restated Certificate of Incorporation so adopted
reads in full as set forth in Exhibit A attached hereto and is hereby
incorporated by reference.
IN WITNESS WHEREOF, Amgen Inc. Has caused this Certificate to be
signed by its duly authorized officers this 18th day of August, 1988.
AMGEN INC.
By /s/ George B. Rathmann
----------------------
George B. Rathmann
President
ATTEST:
/s/ Robert D. Weist
-------------------
Robert D. Weist
Secretary
AMGEN INC.
RESTATED CERTIFICATE OF INCORPORATION
FIRST: The name of this corporation is Amgen Inc.
SECOND: The address of the registered office of this
corporation in the State of Delaware is 229 South State Street, in
the City of Dover, County of Kent, and the name of its registered
agent at that address is The United States Corporation Company.
THIRD: The purpose of this corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of Delaware other than the banking
business, the trust company business or the practice of a profession
permitted to be incorporated by the Delaware Corporations Code.
FOURTH: This corporation is authorized to issue two (2) classes
of stock to be designated, respectively, "Preferred Stock" and
"Common Stock." The total number of shares which this corporation is
authorized to issue is Fifty-Five Million (55,000,000) shares, of
which Five Million (5,000,000) shares shall be Preferred Stock and
Fifty Million (50,000,000) shares shall be Common Stock, all with a
par value of one hundredth cent ($.0001).
The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is expressly authorized in the
resolution or resolutions providing for the issue of any wholly
unissued series of Preferred Stock, to fix, state and express the
powers, rights, designations, preferences, qualifications,
limitations and restrictions thereof, including, without limitation:
the rate of dividends upon which and the times at which dividends on
shares of such series shall be payable and the preference, if any,
which such dividends shall have relative to dividends on shares of
any other class or classes or any other series of stock of this
corporation; whether such dividends shall be cumulative or
noncumulative, and if cumulative, the date or dates from which
dividends on shares of such series shall be cumulative; the voting
rights, if any, to be provided for shares of such series; the rights,
if any, which the holders of shares of such series shall have in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of this corporation; the rights, if any,
which the holders of shares of such series shall have to convert such
shares into or exchange such shares for shares of stock of this
corporation and the terms and conditions, including price and rate of
exchange of such conversion or exchange; the redemption (including
sinking fund provisions), if any, for shares of such series; and such
other powers, rights, designations, preferences, qualifications,
limitations and restrictions as the Board of Directors may desire to
so fix. The Board of Directors is also expressly authorized to fix
the number of shares constituting such series and to increase or
decrease the number of shares of any series prior to the issue of
shares of that series and to decrease, but not increase, the number
of shares of any series subsequent to the issue of shares of that
series, but not below the number of shares of such series then
outstanding (in case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the
status which they had prior to the adoption of the resolution
originally fixing the number of shares of such series).
FIFTH: (a) The number of directors which shall constitute
the whole Board of Directors of this corporation shall be specified
in the bylaws of this corporation, subject to the provisions of this
Article Fifth.
(b) At the 1987 annual meeting, the Board of
Directors shall be divided into three classes: Class I, Class II and
Class III, which shall be as nearly equal in number as possible.
Each director shall serve for a term ending on the date of the third
annual meeting of stockholders following the annual meeting at which
the director was elected; provided, however, that each initial
director in Class I shall hold office until the annual meeting of
stockholders in 1988; each initial director in Class II shall hold
office until the annual meeting of stockholders in 1989; and each
initial director in Class III shall hold office until the annual
meeting of stockholders in 1990. Notwithstanding the foregoing
provisions of this Article, each director shall serve until his
successor is duly elected and qualified or until his death,
resignation or removal.
(c) In the event of any increase or decrease in the
authorized number of directors, the newly created or eliminated
directorships resulting from such increase or decrease shall be
apportioned by the Board of Directors among the three classes of
directors so as to maintain such classes as nearly equal as possible.
No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
(d) Newly created directorships resulting from any
increase in the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote of a
majority of the remaining directors then in office (and not by
stockholders), even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the
vacancy occurred and until such director's successor shall have been
elected and qualified.
SIXTH: A director of this corporation shall not be personally
liable to this corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to this corporation
or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the General Corporation Law of the State
of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit.
SEVENTH: This corporation reserves the right at any time and
from time to time to amend, alter, change, or appeal any provisions
contained herein, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in
the manner now or hereafter prescribed by law, and all rights,
preferences, and privileges of whatsoever nature conferred upon
stockholders, directors, or any other persons whomsoever by or
pursuant to this Certificate of Incorporation in its present form or
as hereafter amended are granted subject to the rights reserved in
this Article.
EIGHTH: All the powers of this corporation, insofar as the same
may be lawfully vested by this Certificate of Incorporation in the
Board of Directors, are hereby conferred upon the Board of Directors,
who shall have full control over the affairs of this corporation.
In furtherance and not in limitation of the powers conferred by
law and by this Certificate of Incorporation, the Board of Directors
is hereby expressly authorized:
1. To make, amend, repeal, or otherwise alter the Bylaws
of this corporation, without any action on the part of the
stockholders; provided, however, that any Bylaws made by the
directors and any and all powers conferred by any of said Bylaws may
be amended, altered, or repealed by the stockholders.
2. To fix, determine, and vary the amount to be reserved
or maintained for any proper purpose, and to fix the times for the
declaration and payment of dividends.
3. To transfer all or any part of the assets of this
corporation by way of mortgage, or in trust or in pledge, to secure
indebtedness of this corporation, without any vote or consent of
stockholders, and to authorize and to cause to be executed
instruments evidencing any and all such transfers.
4. To sell, lease, or exchange any part less than all or
less than substantially all of the property and assets, including
good will and corporate franchises, of this corporation upon such
terms and conditions as the Board of Directors may deem expedient for
the best interests of this corporation, without any authorization,
affirmative vote, or written consent or other action of the
stockholders or any class thereof.
NINTH: (a) Vote Required for Certain Business Combinations.
(1) Higher Vote for Certain Business Combinations.
In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly
provided in paragraph (b) of this Article NINTH:
(i) any merger or consolidation of this corporation
or any Subsidiary (as hereinafter defined) with (a) any Interested
Stockholder (as hereinafter defined) or (b) any other corporation
(whether or not itself an Interested Stockholder) which is, or after
such merger or consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition or security arrangement, investment,
loan, advance, guarantee, agreement to purchase, agreement to pay,
extension of credit, joint venture participation or other arrangement
(in one transaction or a series of transactions) to, with or for the
benefit of any Interested Stockholder or any Affiliate or Associate
of any Interested Stockholder involving any assets, securities or
commitments of this corporation or any Subsidiary having an aggregate
Fair Market Value equal to or greater than ten percent (10%) of the
corporation's assets as set forth on the corporation's most recent
audited, consolidated financial statements filed with the Securities
and Exchange Commission; or
(iii) the adoption of any plan or proposal for the
liquidation or dissolution of this corporation proposed by or on
behalf of an Interested Stockholder or any Affiliate of any
Interested Stockholder; or
(iv) any reclassification of securities (including
any reverse stock split) or recapitalization of this corporation, or
any merger or consolidation of this corporation with any of its
Subsidiaries or any other transaction (whether or not with or into or
otherwise involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of this corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder; or
(v) the issuance or transfer by this corporation or
any Subsidiary (in a transaction or a series of transactions) of any
securities of this corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate Fair Market Value of Twenty Million
Dollars ($20,000,000) or more;
shall require the affirmative vote of the holders of a least sixty-
six and two-thirds percent (66-2/3%) of the voting power of the then
outstanding shares of capital stock of the corporation entitled to
vote generally in the election of directors (the "Voting Stock") not
then held by the Interested Stockholder, voting together as a single
class. Such affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that a lesser percentage may be
specified, by law or in any agreement with any national securities
exchange or otherwise.
(2) Definition of "Business Combination." The term
"Business Combination" as used in this Article NINTH shall mean any
transaction which is referred to in any one or more clauses (i)
through (v) of subparagraph (1) of this paragraph (a).
(b) When Higher Vote is Not Required. The provisions of
paragraph (a) of this Article NINTH shall not be applicable to any
particular Business Combination, and such Business Combination shall
require only such affirmative vote as is required by law and any
other provision of this Certificate of Incorporation, if all of the
conditions specified in either of the following subparagraphs (b)(1)
or (b)(2) are met:
(1) Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
(2) Price and Procedure Requirements. All of the
following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration other than
cash to be received per share by holders of Common Stock in such
Business Combination shall be at least equal to the higher of the
following:
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any shares of
Common Stock acquired by it (1) within the two-year period
immediately prior to the first public announcement of the proposal of
the Business Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested Stockholder, whichever
is higher; and
(B) the Fair Market Value per share of Common
Stock (1) on the Announcement Date or (2) on the date on which the
Interested Stockholder became an Interested Stockholder (such latter
date is referred to in this Article NINTH as the "Determination
Date"), whichever is higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share
by holders of shares of any other class of outstanding Voting Stock
shall be at least equal to the highest of the following (it being
intended that the requirements of this subparagraph (b)(2)(ii) shall
be required to be met with respect to every class of outstanding
Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class of Voting
Stock):
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any shares of
such class of Voting Stock acquired by it (1) within the two-year
period immediately prior to the Announcement Date, or (2) in the
transaction in which it became an Interested Stockholder, whichever
is higher;
(B) (if applicable) the highest preferential
amount per share to which the holders of shares of such class of
Voting Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of this
corporation; and
(C) the Fair Market Value per share of such class
of Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(iii) The consideration to be received by holders of
any particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of Voting
Stock. If the Interested Stockholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the form
of consideration for such class of Voting Stock shall be either cash
or the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it. The price
determined in accordance with subparagraphs (b)(2)(i) and (b)(2)(ii)
shall be subject to appropriate adjustment in the event of any stock
dividend, stock split, combination of shares or similar event.
(iv) A proxy or information statement describing the
proposed Business Combination and complying with the requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder (or any subsequent
provisions replacing the Exchange Act or such rules or regulations)
shall be mailed to public stockholders of this corporation at least
thirty (30) days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).
(v) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination:
(A) except as approved by a majority of the
Board entitled to vote thereon (determined in a manner similar to
that set forth in subparagraph (b)(1) above), there shall have been
no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the outstanding
Preferred Stock;
(B) there shall have been (I) no reduction in
the annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock), except as
approved by a majority of the Board entitled to vote thereon
(determined in a manner similar to that set forth in subparagraph
(b)(1) above), and (II) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of
outstanding shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority of the Board
entitled to vote thereon (determined in a manner similar to that set
forth in subparagraph (b)(1) above); and
(C) such Interested Stockholder shall have not
become the beneficial owner of any additional shares of Voting Stock
except as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.
(vi) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except proportionately
as a stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax advantages
provided by this corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(c) Certain Definitions. For the purposes of this Article
NINTH:
(1) A "person" shall mean any individual, firm,
corporation or other entity.
(2) "Interested Stockholder" shall mean any person (other
than this corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than twenty percent (20%) of the voting power of the
outstanding Voting Stock; or
(ii) is an Affiliate of this corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of twenty
percent (20%) or more of the voting power of the then outstanding
Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to
any shares of Voting Stock that were at any time within the two-year
period immediately prior to the date in question beneficially owned
by an Interested Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of
the Securities Act of 1933, as amended.
(3) A person shall be a "beneficial owner" of any Voting
Stock:
(i) that such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or
indirectly; or
(ii) that such person or any of its Affiliates or
Associates has:
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant
to an agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise; provided, however, that a person shall not be deemed the
beneficial owner of securities tendered pursuant to a tender or
exchange offer made by or on behalf of such person or any of such
persons' Affiliates or Associates until such tendered securities are
accepted for purchase; or
(B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a person shall
not be deemed the beneficial owner of any security if the agreement,
arrangement or understanding to vote such security (I) arises solely
from a revocable proxy or consent given to such person in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and (II) is not also then
reportable on Schedule 13D under the Exchange Act (or a comparable or
successor report); or
(iii) that is beneficially owned, directly or
indirectly, by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except
to the extent permitted by the proviso of subparagraph (c)(3)(ii)(B)
above) or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an
Interested Stockholder pursuant to subparagraph (c)(2), the number of
shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (c)(3), but shall
not include any other shares of Voting Stock that may be issuable
pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on January 1,
1988.
(6) "Subsidiary" means any corporation of which a majority
of any class of equity security is owned, directly or indirectly, by
this corporation; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in subparagraph
(c)(2), the term "Subsidiary" shall mean only a corporation of which
a majority of each class of equity security is owned, directly or
indirectly, by this corporation.
(7) "Disinterested Director" means any member of the Board
of Directors of this corporation (the "Board") who is unaffiliated
with the Interested Stockholder and was a member of the Board prior
to the time that the Interested Stockholder became an Interested
Stockholder, and any successor of a Disinterested Director who is
unaffiliated with the Interested Stockholder and is recommended to
succeed a Disinterested Director by a majority of Disinterested
Directors then on the Board.
(8) "Majority of the Disinterested Directors" means a
majority of the Disinterested Directors, whether or not the number of
such Disinterested Directors then constitutes a quorum of the Board
of Directors of this corporation.
(9) "Fair Market Value" means:
(i) in the case of stock, the average of the closing
sale prices during the ten (10)-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for
New York Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if
such stock is not listed on such exchange, on the principal United
States securities exchange registered under the Exchange Act on which
such stock is listed, or, if the stock is not listed on any such
exchange but is listed as a National Market System stock in the
National Association of Securities Dealers, Inc. Automated Quotation
System, as reported in that National Market System, if such stock is
not listed on any such exchange or reported in such system the
average of the closing bid quotations with respect to a share of such
stock during the ten (10)-day period preceding the date in question
on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations
are available, the fair market value on the date in question of a
share of such stock as determined by the Board in good faith; and
(ii) in the case of property other than cash or
stock, the fair market value of such property on the date in question
as determined by the Board in good faith.
(10) In the event of any Business Combination in which the
corporation survives, the phrase "consideration other than cash to be
received" as used in subparagraphs (b)(2)(i) and (ii) of this Article
NINTH shall include the shares of Common Stock and/or the shares of
any other class of outstanding Voting Stock retained by the holders
of such shares.
(d) Powers of the Board of Directors. A majority of the
Disinterested Directors of this corporation shall have the power and
duty to determine for the purposes of this Article NINTH on the basis
of information known to them after reasonable inquiry:
(i) whether a person is an Interested Stockholder;
(ii) the number of shares of Voting Stock beneficially
owned by any person;
(iii) whether a person is an Affiliate or Associate of
another; and
(iv) the Fair Market Value of the assets that are the
subject of any Business Combination. A majority of the Disinterested
Directors of this corporation shall have the further power to
interpret all of the terms and provisions of the Article NINTH. Any
such determination made in good faith shall be binding and conclusive
on all parties.
(e) No Effect on Fiduciary Obligations of Interested
Stockholders or Directors.
(1) Nothing contained in this Article Ninth shall be
construed to relieve any Interested Stockholder from any fiduciary
obligation imposed by law.
(2) The fact that any Business Combination complies with
the provisions of Section (b) of this Article NINTH shall not be
construed to impose any fiduciary duty, obligation or responsibility
on the Board of Directors, or any member thereof, to approve such
Business Combination or recommend its adoption or approval to the
stockholders of the corporation, and such compliance shall not limit,
prohibit or otherwise restrict in any manner the Board of Directors,
or any members thereof, with respect to evaluations of or actions and
responses taken with respect to such Business Combination.
(f) Amendment, Repeal, etc. Notwithstanding any other
provisions of this Certificate of Incorporation or the bylaws of this
corporation (and notwithstanding the fact that a lesser percentage
may be specified by law, this Certificate of Incorporation or the
bylaws of this corporation), the affirmative vote of the holders of
sixty-six and two-thirds percent (66-2/3%) or more of the outstanding
Voting Stock not then held by any Interested Stockholder, voting
together as a single class, shall be required to amend or repeal, or
adopt any provisions inconsistent with this Article NINTH.
TENTH: Any action required or permitted to be taken by the
stockholders of this corporation must be effected at a duly called
annual or special meeting of such holders and may not be effected by
any consent in writing by such holders. At any annual meeting or
special meeting of stockholders of this corporation, only such
business shall be conducted as shall have been brought before such
meeting in the manner provided by the bylaws of this corporation.
EXHIBIT 4.6
[AMGEN LOGO]
NUMBER SHARES
AMGEN INC.
INCORPORATED UNDER THE LAWS SEE REVERSE FOR
OF THE STATE OF DELAWARE CERTAIN DEFINITIONS
THIS CERTIFIES THAT CUSIP 031162 10 0
is the record holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.0001 PAR
VALUE, OF
AMGEN INC.
transferable on the books of the Corporation by the holder hereof in
person or by duly authorized attorney upon the surrender of this
Certificate properly endorsed.
This Certificate is not valid unless countersigned and registered
by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
/s/George A. Vandeman /s/Gordon M. Binder
--------------------- --------------------
SECRETARY CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
[AMGEN SEAL]
COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(NEW YORK)
TRANSFER AGENT AND REGISTRAR
BY
--------------------------------
AUTHORIZED SIGNATURE
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Amgen Inc.
and American Stock Transfer & Trust Company, dated as of February 18,
1997, as the same may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Amgen Inc. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Amgen Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. As described in the Right Agreement, Rights which are held
or have been held by Acquiring Persons or Associates or Affiliates
thereof (as defined in the Rights Agreement) shall become null and
void.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with
right of survivorship
and not as tenants
in common
UNIF GIFT MIN ACT-- Custodian
------ ------
(Cust) (Minor)
under Uniform Gifts to Minors Act
---------------------------------
(State)
UNIF TRF MIN ACT-- Custodian (until age --)
------
(Cust)
------ under Uniform Transfers
(Minor)
------ to Minors Act -------
(State)
Additional abbreviations may also be used though not in the above
list.
For Value received, -------------- hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
----------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------shares
of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
--------------------------------------------------------------Attorney
to transfer the said stock on the books of the within named Company
with full power of substitution in the premises.
Dated
--------------------
-------------------------
Notice: The signature to this assignment must correspond with the
name as written upon the face of the certificate in every particular,
without alteration or enlargement or any change whatever.
Signature(s) Guaranteed:
By
-----------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANK, STOCKBROKER, SAVINGS AND LOAN ASSOCIATION AND
CREDIT UNION WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE
GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
Exhibit 99
Factors That May Affect Future Results
Amgen operates in a rapidly changing environment that
involves a number of risks, some of which are beyond the
Company's control. The following discussion highlights some
of these risks, and others are discussed elsewhere herein
and in other documents filed by the Company with the
Securities and Exchange Commission.
Product development
The Company intends to continue an aggressive product
development program. Successful product development in the
biotechnology industry is highly uncertain, and only a small
minority of research and development programs ultimately
result in the commercialization of a product. Of the
candidates that are commercialized, all may not be
commercially successful. Product candidates that appear
promising in the early phases of development may fail to
reach the market for numerous reasons, including, without
limitation, results indicating lack of effectiveness or
harmful side effects in clinical or preclinical testing,
failure to receive necessary regulatory approvals,
uneconomical manufacturing costs, the existence of third
party proprietary rights, failure to be cost effective in
light of existing therapeutics or other factors. There can
be no assurance that the Company will be able to produce
future products that have commercial potential.
Additionally, success in preclinical and early clinical
trials does not ensure that large scale clinical trials will
be successful. Clinical results are frequently susceptible
to varying interpretations which may delay, limit or prevent
further clinical development or regulatory approvals. The
length of time necessary to complete clinical trials and
receive approval for product marketing by regulatory
authorities varies significantly by product and indication
and is often difficult to predict. See "--Regulatory
approvals."
Regulatory approvals
The Company's research and development, preclinical
testing, clinical trials, facilities, manufacturing and
marketing of its products are subject to extensive
regulation by numerous governmental authorities in the U.S.
and other countries. The success of the Company's current
products and future product candidates will depend in part
upon obtaining and maintaining regulatory approval to market
products in approved indications. Even if regulatory
approval is obtained, a marketed product and its
manufacturer are subject to continued review. Later
discovery of previously unknown problems with a product or
manufacturer may result in restrictions on such product or
manufacturer, including withdrawal of the product from the
market. Failure to obtain necessary approvals, or the
restriction, suspension or revocation of any approvals or
the failure to comply with regulatory requirements could
have a material adverse effect on the Company.
Reimbursement; Third party payors
In both domestic and foreign markets, sales of the
Company's products are dependent in part on the availability
of reimbursement from third party payors such as governments
and private insurance plans. In certain foreign markets
pricing and profitability of prescription pharmaceuticals
are subject to government controls. In the United States,
there has been, and the Company expects there to continue to
be, a number of state and federal proposals to implement
price controls. In addition, an increasing emphasis on
managed care in the United States has and will continue to
increase the pressure on pharmaceutical pricing and usage.
Further, significant uncertainties exist as to the
reimbursement status of newly approved therapeutic products,
and current reimbursement policies for existing products may
change. Changes in reimbursement or failure to obtain
reimbursement may reduce the demand for, or the price of,
the Company's products which could have a material adverse
effect on the Company including results of operations.
Specifically, patients in the U.S. receiving EPOGEN(R) in
connection with treatment for end stage renal disease are
covered primarily under medical programs provided by the
federal government. Therefore, EPOGEN(R) sales may be
affected by future changes in reimbursement rates or the
basis for reimbursement by the federal government.
Guidelines
In addition to government agencies that promulgate
regulations and guidelines directly applicable to the
Company and its products, private health/science foundations
and organizations involved in various diseases may also
publish, from time to time, guidelines or recommendations to
the healthcare and patient communities. These private
organizations may make recommendations that affect the usage
of certain therapies, drugs or procedures, including the
Company's products. Such recommendations may relate to such
matters as usage, dosage, route of administration and use of
concomitant therapies. Recommendations or guidelines that
are followed by patients and healthcare providers and that
result in, among other things, decreased use of the
Company's products could have a material adverse effect on
the Company. In addition, the perception that such
recommendations or guidelines will be followed could
adversely affect prevailing market prices for the Company's
common stock.
Intellectual property and legal matters
The patent positions of pharmaceutical and
biotechnology companies can be highly uncertain and involve
complex legal, scientific and factual questions. To date
there has emerged no consistent policy regarding breadth of
claims allowed in such companies' patents. Accordingly,
there can be no assurance that patents and patent
applications relating to the Company's products and
technologies will not be challenged, invalidated or
circumvented or will afford protection against competitors
with similar products or technology. Patent disputes are
frequent and can preclude commercialization of products.
The Company currently is, and may in the future be, involved
in patent litigation. Such litigation, if decided
adversely, could subject the Company to significant
liabilities, cause the Company to obtain third party
licenses or cease using the technology or product in
dispute. However, there can be no assurance that such
licenses will be available on terms acceptable to the
Company, or at all.
The Company is currently involved in arbitration
proceedings with Ortho Pharmaceutical Corporation, a
subsidiary of Johnson & Johnson ("Johnson & Johnson"),
relating to a license granted by the Company to Johnson &
Johnson for sales of Epoetin alfa in the United States for
all human uses except dialysis and diagnostics. See Note 4
to the Condensed Consolidated Financial Statements,
"Contingencies - Johnson & Johnson arbitrations."
Competition
Amgen operates in a highly competitive environment.
The Company competes with pharmaceutical and biotechnology
companies, some of which may have technical or competitive
advantages, for, among other things, the development of
technologies and processes and the acquisition of
technology from academic institutions, government agencies
and other private and public research organizations. There
can be no assurance that the Company will be able to produce
or acquire rights to products that have commercial
potential. Even if the Company achieves product
commercialization, there can be no assurance that one or
more of the Company's competitors will not: (1) achieve
product commercialization earlier than the Company, (2)
receive patent protection that dominates or adversely
affects the Company's activities or (3) have significantly
greater marketing capabilities.
Fluctuations in operating results
The Company's operating results may fluctuate from
period to period for a number of reasons. Historically the
Company has planned its operating expenses, many of which
are relatively fixed in the short term, on the basis that
revenues will continue to grow. Accordingly, even a
relatively small revenue shortfall may cause a period's
results to be below Company expectations. Such a revenue
shortfall could arise from any number of factors, including,
without limitation, lower than expected demand, changes in
wholesaler buying patterns, changes in product pricing
strategies, increased competition from new and existing
products, fluctuations in foreign currency exchange rates,
changes in government or private reimbursement, transit
interruptions, overall economic conditions or natural
disasters (including earthquakes). The Company also
experiences a degree of seasonality in its operating
results. See "Results of Operations - Product sales -
NEUPOGEN(R) (Filgrastim)."
Rapid growth
The Company has adopted an aggressive growth plan that
includes substantial and increased investments in research
and development and investments in facilities that will be
required to support significant growth. This plan carries
with it a number of risks, including a higher level of
operating expenses, the difficulty of attracting and
assimilating a large number of new employees, and the
complexities associated with managing a larger and faster
growing organization.
Stock price volatility
The Company's stock price, like that of other
biotechnology companies, is subject to significant
volatility. The stock price may be affected by, among other
things, clinical trial results and other product development
related announcements by Amgen or its competitors,
regulatory matters, announcements in the scientific and
research community, intellectual property and legal matters,
changes in reimbursement policies or medical practices or
broader industry and market trends unrelated to the
Company's performance. In addition, if revenues or earnings
in any quarter fail to meet the investment community's
expectations, there could be an immediate adverse impact on
the Company's stock price.