===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): FEBRUARY 25, 1997
AMGEN INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-12477 95-3540776
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) 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
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
===============================================================================
Item 5. Other Events.
In a press release dated January 23, 1997, Amgen Inc. (the "Company" or
"Amgen") reported its results of operations for the year ended December 31,
1996. A copy of the press release is included as Exhibit 99.1 hereto.
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, Infergen(R). The complaint seeks
unspecified damages and injunctive relief. The Company filed a 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.
On January 10, 1997, FoxMeyer Health Corporation ("FMHC") filed suit 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,
together 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.
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
2
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 Amgen's results of operations for that period.
In Johnson v. Amgen Boulder Inc., et al., suits filed on February 14, 1995 in
the Superior Court for the State of Washington, King County (the "Superior
Court") and in the United States District Court for the Western District of
Washington, the plaintiff seeks rescission of certain payments made to one of
the defendants (or unspecified compensatory damages not less than $52.0 million)
and treble damages. The Superior Court action has been removed to federal court
and consolidated with the suit filed in the United States District Court for the
Western District of Washington. Plaintiff, a limited partner of defendant
Synergen Clinical Partners, L.P. (the "Partnership"), represents a class of
other limited partners. The complaints allege violations of federal and state
securities laws, violations of other federal and state statutes, fraud,
misrepresentation and breach of fiduciary duty. The defendants include
Synergen, the Partnership, Synergen Development Corporation and former officers
and directors of Synergen. The lawsuit has been certified as a class action
lawsuit. On June 25, 1996, the plaintiff in this suit also filed a second
amended complaint alleging violations of federal securities laws. The Company
has answered the complaint and the second amended complaint, denying plaintiff's
claims and asserting various affirmative defenses. In August and September
1996, the parties filed cross motions for summary judgment. The Court heard
arguments 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 plaintiff, who represents 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.
On October 16, 1996, Genentech, Inc. ("Genentech") 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, alleges that the Company has infringed its patents
by manufacturing and selling NEUPOGEN(R). On December 2, 1996, the Company 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 served the Company with
a reply to the counterclaim and an additional counterclaim asserting U.S. Patent
5,583,013, issued December 10, 1996, seeking relief similar to that sought for
the '362, '619 and '832 Patents.
On March 10, 1995, Biogen Inc. ("Biogen"), filed suit in the United States
District Court for the District of Massachusetts alleging infringement by the
Company of certain claims of U.S. Patent 4,874,702 (the "'702 Patent"), relating
to vectors for expressing cloned genes. Biogen alleges that the Company has
infringed its patent by manufacturing and selling NEUPOGEN(R). On March 28,
1995, Biogen filed an amended complaint further alleging that the Company is
also infringing the claims of two additional patents allegedly assigned to
Biogen, U.S. Patent 5,401,642 and U.S. Patent No. 5,401,658, relating to
vectors, methods for making vectors and expressing closed genes. The amended
complaint seeks injunctive relief, unspecified compensatory damages and treble
damages. On April 24, 1995, the Company answered Biogen's amended complaint,
denying its material allegations and pleading counterclaims for declaratory
judgment of non-infringement, patent invalidity and unenforceability. On
January 19, 1996, the Court decided, upon Biogen's motion to dismiss certain of
Amgen's counterclaims, that it will exert jurisdiction over claims 9 and 17 of
the '702 Patent, and dismissed all claims and counterclaims relating to any
other
3
claims of the '702 Patent. The Company has moved for summary judgment of
invalidity of claim 9 of the '702 Patent. This matter was heard on February 6,
1997. Discovery is ongoing.
While it is impossible to predict accurately or to determine the eventual
outcome of these matters, except with respect to the qui tam matter described
above, the Company believes that the outcome of these proceedings will not have
a material adverse effect on the financial statements of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The exhibit listed below is filed as a part of this report:
99.1 Press Release of the Registrant dated January 23, 1997
4
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 thereto duly authorized.
Amgen Inc.
Dated: February 25, 1997 By /s/ Robert S. Attiyeh
--------------------------------
Robert S. Attiyeh
Senior Vice President Finance
and Corporate Development,
and Chief Financial Officer
EXHIBIT 99.1
News Release
- --------------------------------------------------------------------------------
AMGEN ANNOUNCES 23% INCREASE IN
EARNINGS PER SHARE
FOR IMMEDIATE RELEASE
THOUSAND OAKS, Calif., January 23, 1997 -- Amgen (NASDAQ:AMGN) today announced
that earnings per share for the fourth quarter ending December 31 increased by
23 percent, to $0.64 from $0.52 for the same quarter a year ago. Net income
increased by 22 percent, to $178 million from $146 million for the same quarter
last year.
Total revenues increased by 16 percent, to $594 million from $514 million for
the same quarter of 1995.
Earnings per share for the year increased by 26 percent, to $2.42 from $1.92 in
1995. Net income for the year increased by 26 percent, to $680 million from
$538 million in 1995.
Total revenues for the year were $2.2 billion, up 15 percent from $1.9 billion
for 1995.
The year 1996 marked the first year in which sales of NEUPOGEN(R) (Filgrastim)
and EPOGEN(R) (Epoetin alfa) each exceeded $1 billion. Total sales of NEUPOGEN
for the quarter ending December 31, 1996 increased by 10 percent, to $270
million from $246 million for the same quarter a year ago. For the year, total
NEUPOGEN sales increased by 9 percent, to $1 billion from $936 million for 1995.
Sales of EPOGEN for the quarter increased by 22 percent, to $289 million from
$238 million for the same quarter of 1995. For the year, EPOGEN sales increased
by 21 percent, to $1.1 billion from $883 million for 1995.
"Our core businesses of EPOGEN and NEUPOGEN continue to be strong, reflecting
our focused marketing initiatives and additional indications," said Gordon
Binder, chairman and chief executive officer. "We began clinical trials of five
potential new products in 1996 and announced a sixth this week, and we made
substantial progress throughout the year developing the other product candidates
in our pipeline," he said.
During the quarter, Amgen began the first human clinical trials of NESP, the
company's Novel Erythropoiesis Stimulating Protein. The trials are designed to
evaluate the safety and efficacy of this novel, recombinant protein. NESP is
being developed to stimulate the production of red blood cells.
Also during the quarter, Amgen announced positive results from its Phase 3
clinical trial of Stem Cell Factor (SCF). SCF, trade name STEMGEN(R), is the
early-acting blood cell factor discovered by Amgen scientists. The trial
demonstrated that a median of approximately one-third fewer blood cell
collection procedures were required using a combination of SCF and NEUPOGEN
compared with NEUPOGEN
AMGEN ANNOUNCES 23% INCREASE IN EARNINGS PER SHARE
Page 2 of 2
alone. SCF was generally well tolerated, with most patients experiencing mild
injection-site redness that resolved itself in one to two days.
Several other key events occurred during the quarter and earlier this month.
Amgen and Regeneron Pharmaceuticals, Inc. announced that the Phase 3 clinical
trial of Brain Derived Neurotrophic Factor (BDNF) administered subcutaneously
did not demonstrate clinical efficacy in patients with ALS.
Amgen filed a license supplement with the FDA for the use of EPOGEN(R) (Epoetin
alfa) in pediatric dialysis patients.
The Board of Directors authorized the repurchase of up to $450 million of Amgen
stock during 1997.
During the year, Amgen strengthened the patent protection of both NEUPOGEN(R)
(Filgrastim) and EPOGEN, obtaining product patents that extend the U.S. patent
lives of each to the year 2013.
Amgen is a global biotechnology company that discovers, develops, manufactures
and markets human therapeutics based on advances in cellular and molecular
biology.
NOTE: This news release contains forward-looking statements that involve risks
and uncertainties, including risks associated with clinical development,
regulatory approvals, product commercialization and other risks described from
time to time in the SEC reports filed by Amgen, including the most recently-
filed Form 10-Q.
An electronic version of this news release may be accessed via Amgen's web site
at WWW.AMGEN.COM. Visit the Corporate Center and click on Amgen News.
Journalists and media representatives may sign up to receive all news releases
electronically at time of announcement by filling out a short form in the Amgen
News section of the web site.
CONTACT: Amgen, Thousand Oaks
David Kaye, 805/447-6692 (media)
Denise Powell, 805/447-4346 (investors)
(Financial Chart Follows)
Amgen Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------------- ------------------------
1996 1995 1996 1995
------------------- -------- ------------ ---------
Revenues:
Product sales..................................... $559.1 $484.2 $2,088.2 $1,818.6
Corporate partner revenues........................ 23.0 20.1 109.9 85.2
Royalty income.................................... 11.4 9.2 41.7 36.1
------ ------ -------- --------
Total revenues................................. 593.5 513.5 2,239.8 1,939.9
Operating expenses:
Cost of sales..................................... 74.9 65.8 283.2 272.9
Research and development.......................... 143.7 124.0 528.3 451.7
Marketing and selling............................. 87.6 75.1 310.1 272.9
General and administrative........................ 41.4 38.7 160.5 145.5
Loss of affiliates, net........................... 13.3 12.1 52.8 53.3
------ ------ -------- --------
Total operating expenses....................... 360.9 315.7 1,334.9 1,196.3
Operating income.................................. 232.6 197.8 904.9 743.6
Other income/(expense):
Interest and other income......................... 15.6 19.4 63.6 66.1
Interest expense, net............................. (1.0) (4.1) (6.2) (15.3)
------ ------ -------- --------
Total other income/(expense)................... 14.6 15.3 57.4 50.8
Income before income taxes........................ 247.2 213.1 962.3 794.4
Provision for income taxes........................ 69.2 67.5 282.5 256.7
------ ------ -------- --------
Net income........................................ $178.0 $145.6 $ 679.8 $ 537.7
====== ====== ======== ========
Earnings per share:
Primary earnings per share..................... $ 0.64 $ 0.52 $ 2.42 $ 1.92
Fully diluted earnings per share............... $ 0.64 $ 0.51 $ 2.42 $ 1.88
Shares used in calculation of:
Primary earnings per share..................... 278.8 282.4 280.7 280.7
Fully diluted earnings per share............... 279.0 284.7 280.9 285.3
Amgen Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
December 31, December 31,
1996 1995
------------ ------------
Assets:
Current assets:
Cash and marketable securities........ $1,077.0 $1,050.3
Trade receivables..................... 225.4 199.3
Inventories........................... 97.4 88.8
Other current assets.................. 102.8 115.7
-------- --------
Total current assets............... 1,502.6 1,454.1
Property, plant and equipment, net....... 910.5 743.8
Other non-current assets................. 352.5 234.9
-------- --------
Total assets....................... $2,765.6 $2,432.8
======== ========
Liabilities and Stockholders' Equity
Current liabilities...................... $ 642.9 $ 583.8
Non-current liabilities.................. 216.4 177.2
Stockholders' equity..................... 1,906.3 1,671.8
-------- --------
Total liabilities and stockholders'
equity................................ $2,765.6 $2,432.8
======== ========
Shares outstanding....................... 264.7 265.7
