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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-K

(Mark One)

OR

Commission file number 000-12477

AMGEN INC.

(Exact name of registrant as specified in its charter)

One Amgen Center Drive, Thousand Oaks, California 91320-1799

(Address of principal executive offices) (Zip Code)

(805) 447-1000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(g) of the Act:

Common stock, $0.0001 par value; preferred share purchase rights;

Contractual contingent payment rights

(Title of class)

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  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer.  x

The approximate aggregate market value of voting and non-voting stock held by non-affiliates of the registrant was $66,733,672,440 as of February 13, 2003 (A)

1,292,333,187

(Number of shares of common stock outstanding as of February 13, 2003)

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INDEX

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PART I

Item 1.    BUSINESS

Overview

Amgen Inc. (including its subsidiaries, “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. In July 2002, Amgen completed its acquisition of Immunex Corporation (“Immunex”). Immunex was a leading biotechnology company dedicated to developing immune system science to protect human health.

The Company markets human therapeutic products including, EPOGEN^® (Epoetin alfa), Aranesp^® (darbepoetin alfa), NEUPOGEN^® (Filgrastim), Neulasta^™ (pegfilgrastim), and Kineret^® (anakinra). Amgen acquired the rights to ENBREL^® (etanercept) as a result of the Immunex acquisition. ENBREL^® is marketed with Wyeth under a co-promotion agreement. EPOGEN^® stimulates the production of red blood cells and is marketed in the United States for the treatment of anemia associated with chronic renal failure in patients on dialysis. Aranesp^® stimulates the production of red blood cells and is marketed in the United States, most countries in Europe, Australia, and New Zealand for the treatment of anemia associated with chronic renal failure, including patients on dialysis and patients not on dialysis. Aranesp^® is also marketed in the United States for the treatment of chemotherapy-induced anemia in patients with non-myeloid malignancies. Aranesp^® is approved in Europe for the treatment of anemia in adult cancer patients with solid tumors receiving chemotherapy, and has been launched in several countries in Europe for this indication. NEUPOGEN^® selectively stimulates the production of neutrophils, one type of white blood cell. The Company markets NEUPOGEN^® in the United States, certain countries in Europe, Canada, and Australia for use in decreasing the incidence of infection in patients undergoing myelosuppressive chemotherapy. In addition, NEUPOGEN^® is marketed in most of these countries for use in increasing neutrophil counts in various other treatment modalities. The Company began marketing Neulasta^™ in the United States in April 2002 to decrease the incidence of infection, as manifested by febrile neutropenia in patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a clinically significant incidence of febrile neutropenia. In August 2002, the European Commission approved Neulasta^™ for the reduction in the duration of neutropenia and the incidence of febrile neutropenia in patients with cytotoxic chemotherapy for malignancy. In January 2003, the Company commenced launching Neulasta^™ in Europe on a country-by-country basis as reimbursement has been established. ENBREL^® blocks the biologic activity of tumor necrosis factor (“TNF”) by competitively inhibiting TNF, a substance induced in response to inflammatory and immunological responses. ENBREL^® is marketed in the United States and Canada for the reduction of the signs and symptoms in patients with moderately to severely active rheumatoid arthritis. Kineret^® blocks the biologic activity of interleukin-1 (“IL-1”), a substance that mediates inflammatory and immunological responses. Kineret^® is marketed in the United States for the reduction of the signs and symptoms of moderately to severely active rheumatoid arthritis, in patients 18 years of age or older who have failed one or more disease modifying antirheumatic drugs. Kineret^® is also approved for use in Europe and Canada. In addition, Amgen has entered into licensing and/or co-promotion agreements to market certain of its products including Aranesp^®, NEUPOGEN^®, and Neulasta^™ in certain geographic areas outside of the United States.

The Company focuses its research and development efforts on human therapeutics delivered in the form of proteins, monoclonal antibodies, and small molecules in the areas of nephrology, oncology, inflammation, neurology, and metabolic disorders. The Company has research facilities in the United States, and has clinical development staff in the United States, Europe, Canada, Australia, and Japan. In addition to internal research and development efforts, the Company has acquired certain product and technology rights and has established research and development collaborations.

The Company manufactures EPOGEN^®, Aranesp^®, NEUPOGEN^®, Neulasta^™, ENBREL^®, and Kineret^®. Amgen operates commercial manufacturing facilities located in the United States, Puerto Rico, and a packaging and distribution center in The Netherlands. Additional supply of ENBREL^® is produced by contract

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manufacturers. A sales and marketing force is maintained in the United States, Europe, Canada, Australia, and New Zealand.

The Company was incorporated in California in 1980 and was merged into a Delaware corporation in 1987. Amgen’s principal executive offices are located at One Amgen Center Drive, Thousand Oaks, California 91320-1799.

Products

EPOGEN^® (Epoetin alfa)

EPOGEN^® (proper name—Epoetin alfa) is Amgen’s registered trademark for its recombinant human erythropoietin product, a protein that stimulates red blood cell production. Red blood cells transport oxygen to all cells of the body. Without adequate amounts of erythropoietin, the red blood cell count is reduced, thereby diminishing the ability of the blood to deliver sufficient amounts of oxygen to the body, resulting in anemia. People with chronic renal failure suffer from anemia because they do not produce sufficient amounts of erythropoietin, which is normally produced in healthy kidneys. Amgen markets EPOGEN^® for the treatment of anemia associated with chronic renal failure for patients who are on dialysis. EPOGEN^® is indicated to elevate or maintain the red blood cell level (as determined by hematocrit or hemoglobin measurements) and to decrease the need for blood transfusions in these patients.

In the United States, Amgen was granted rights to market recombinant human erythropoietin under a licensing agreement with Kirin-Amgen, Inc. (“Kirin-Amgen”), a joint venture between Kirin Brewery Company, Limited (“Kirin”) and Amgen (see “Joint Ventures and Business Relationships—Kirin Brewery Company, Limited”). The Company received U.S. Food and Drug Administration (“FDA”) approval and launched EPOGEN^® in 1989 for the treatment of anemia associated with chronic renal failure. In November 1999, the FDA approved EPOGEN^® for the treatment of anemia in children with chronic renal failure who are on dialysis.

The Company has retained exclusive rights to market EPOGEN^® in the United States for dialysis patients. Amgen has granted Ortho Pharmaceutical Corporation (which has assigned its rights under the Product License Agreement to Ortho Biotech Products, L.P., a subsidiary of Johnson & Johnson, hereafter referred to as “Johnson & Johnson”) a license to commercialize recombinant human erythropoietin as a human therapeutic in the United States in all markets other than dialysis (see “Joint Ventures and Business Relationships—Johnson & Johnson”). Johnson & Johnson markets recombinant human erythropoietin under the trademark PROCRIT^® in the United States (see Note 1 to the Consolidated Financial Statements, “Summary of significant accounting policies—Product sales”).

EPOGEN^® sales for the years ended December 31, 2002, 2001, and 2000 were $2,260.6 million, $2,108.5 million, and $1,962.9 million, respectively.

Aranesp^® (darbepoetin alfa)

Aranesp^® (proper name—darbepoetin alfa) is Amgen’s registered trademark for its erythropoiesis stimulating protein, a protein that stimulates red blood cell production. A reduced red blood cell count can result in anemia (see “—EPOGEN^® (Epoetin alfa)”). Since this protein leaves the body more slowly, Aranesp^® should be administered less frequently than Epoetin alfa, thus simplifying anemia management for patients and health care providers.

The Company has an agreement with Kirin to jointly develop darbepoetin alfa through its joint venture, Kirin-Amgen (see “Joint Ventures and Business Relationships—Kirin Brewery Company, Limited”). Amgen was granted an exclusive license by Kirin-Amgen to manufacture and market darbepoetin alfa in the United States, all European countries, Canada, Australia, New Zealand, Mexico, and all Central and South American countries. In 2001, the Company received approval to market Aranesp^® in the United States,

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most countries in Europe, Australia, and New Zealand for the treatment of anemia associated with chronic renal failure, including patients on dialysis and patients not on dialysis. In July 2002, the Company received approval to market Aranesp^® in the United States for the treatment of chemotherapy-induced anemia in patients with non-myeloid malignancies. In August 2002, Aranesp^® was approved in Canada for the treatment of anemia associated with chronic renal failure, including patients on dialysis and patients not on dialysis. In August 2002, the European Commission approved Aranesp^® for the treatment of anemia in adult cancer patients with solid tumors receiving chemotherapy. Aranesp^® has been launched in several countries in Europe for this indication. Amgen markets darbepoetin alfa under the brand name Nespo^® in Italy.

Worldwide Aranesp^® sales for the years ended December 31, 2002 and 2001 were $415.6 million and $41.5 million, respectively.

NEUPOGEN^® (Filgrastim)

NEUPOGEN^® (proper name—Filgrastim) is Amgen’s registered trademark for its recombinant-methionyl human granulocyte colony-stimulating factor (“G-CSF”), a protein that selectively stimulates production of certain white blood cells known as neutrophils. Neutrophils defend against infection. Treatments for various diseases and diseases themselves can result in extremely low numbers of neutrophils, a condition called neutropenia. Myelosuppressive chemotherapy, one treatment option for individuals with certain types of cancers, targets cell types which grow rapidly, such as tumor cells, neutrophils, and other types of blood cells. Myelosuppressive chemotherapy can be administered with the intent to cure cancer (curative setting) or with the intent to reduce pain and other complications of cancer by managing tumor growth (palliative setting). NEUPOGEN^® is prescribed more frequently in the curative setting. Providing NEUPOGEN^® as an adjunct to myelosuppressive chemotherapy can reduce the duration of neutropenia and thereby reduce the potential for infection.

Severe chronic neutropenia is an example of disease-related neutropenia. In severe chronic neutropenia, the body fails to manufacture sufficient neutrophils. Daily administration of NEUPOGEN^® has been shown to reduce the incidence and duration of neutropenia-related consequences, such as fever and infections, in symptomatic patients with severe chronic neutropenia.

Patients undergoing bone marrow transplantation may be treated with NEUPOGEN^® to accelerate recovery of neutrophils following chemotherapy and bone marrow infusion. NEUPOGEN^® also has been shown to induce immature blood cells (progenitor cells, sometimes referred to as stem cells) to migrate (mobilize) from the bone marrow into the blood circulatory system. When these peripheral blood progenitor cells (“PBPC”) are collected from the blood, stored, and re-infused (transplanted) after high dose chemotherapy, recovery of platelets, red blood cells, and neutrophils is accelerated. PBPC transplantation may be an alternative to autologous bone marrow transplantation for some cancer patients.

In the United States, NEUPOGEN^® was initially indicated to decrease the incidence of infection as manifested by febrile neutropenia for patients with non-myeloid malignancies undergoing myelosuppressive chemotherapy. Subsequently, the FDA approved NEUPOGEN^® for additional indications: to reduce the duration of neutropenia and neutropenia-related consequences for patients with non-myeloid malignancies undergoing myeloablative chemotherapy followed by bone marrow transplantation; to reduce the incidence and duration of neutropenia-related consequences in symptomatic patients with congenital neutropenia, cyclic neutropenia, or idiopathic neutropenia (collectively, severe chronic neutropenia); for use in mobilization of PBPC for stem cell transplantation; and to reduce the recovery time of neutrophils and the duration of fever following induction or consolidation chemotherapy treatment in adult patients with acute myelogenous leukemia (“AML”). In Europe, Canada, and Australia, NEUPOGEN^® is marketed for these same indications. The Company also markets NEUPOGEN^® in Europe, Canada, and Australia for the treatment of neutropenia in HIV patients receiving antiviral and/or other myelosuppressive medications.

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Amgen was granted rights to market G-CSF under a licensing agreement with Kirin-Amgen in the United States, Europe, Canada, Australia, and New Zealand. The Company began selling NEUPOGEN^® in the United States in 1991. In May 2002, the Company acquired certain rights related to the commercialization of NEUPOGEN^® and GRANULOKINE^® (Filgrastim) and pegfilgrastim in the European Union (“EU”) from F. Hoffmann-La Roche Ltd (“Roche”). Prior to this acquisition, NEUPOGEN^® and GRANULOKINE^® were commercialized in the EU under a co-promotion agreement between Amgen and Roche. Roche will continue as the licensee for Filgrastim and pegfilgrastim in certain countries outside the United States and the EU (see “Joint Ventures and Business Relationships—F. Hoffmann-La Roche Ltd”). Amgen markets Filgrastim under the brand name GRANULOKINE^® in Italy.

Worldwide NEUPOGEN^® sales for the years ended December 31, 2002, 2001, and 2000 were $1,379.6 million, $1,346.4 million, and $1,223.7 million, respectively.

Neulasta^™ (pegfilgrastim)

Neulasta^™ (proper name—pegfilgrastim) is Amgen’s trademark for a protein that selectively stimulates production of certain white blood cells known as neutrophils and is based on the Filgrastim molecule. A polyethylene glycol molecule or “PEG” unit is added to enlarge the Filgrastim molecule, thereby extending its half-life and causing it to be removed more slowly from the body. This allows for administration as a single dose per chemotherapy cycle compared with NEUPOGEN^® which requires more frequent dosing.

Amgen was granted rights to market pegfilgrastim under a licensing agreement with Kirin-Amgen. In January 2002, the FDA approved Neulasta^™ for decreasing the incidence of infection, as manifested by febrile neutropenia, in patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a clinically significant incidence of febrile neutropenia. The Company launched Neulasta^™ in the United States in April 2002 for this indication. In August 2002, the European Commission approved Neulasta^™ for the reduction in the duration of neutropenia and the incidence of febrile neutropenia in patients with cytotoxic chemotherapy for malignancy. In January 2003, the Company commenced launching Neulasta^™ in Europe on a country-by-country basis as reimbursement has been established. Amgen markets pegfilgrastim under the brand name Neupopeg^™ in Italy.

Neulasta^™ sales for the year ended December 31, 2002 were $463.5 million.

ENBREL^® (etanercept)

ENBREL^® (proper name—etanercept) is Amgen’s registered trademark for its TNF receptor fusion protein that inhibits the binding of TNF to TNF receptors, resulting in a significant reduction in inflammatory activity. ENBREL^® was launched in November 1998 by Immunex. Amgen acquired the rights to ENBREL^® in July 2002 as part of its acquisition of Immunex. In the United States, ENBREL^® is indicated for reducing the signs and symptoms and inhibiting the progression of structural damage in patients with moderately to severely active rheumatoid arthritis. In addition, the FDA approved ENBREL^® for the following indications: for reducing the signs and symptoms of moderately to severely active polyarticular-course juvenile rheumatoid arthritis in patients who have had an inadequate response to one or more disease-modifying antirheumatic drugs, and for reducing the signs and symptoms of active arthritis in patients with psoriatic arthritis.

As part of its acquisition of Immunex, the Company entered into a co-promotion agreement and co-development agreement with Wyeth. Under the terms of these agreements, Amgen and Wyeth market and sell ENBREL^® in the United States and Canada and develop certain future indications of ENBREL^® for use in these geographic territories. In return for these efforts, Wyeth is paid a share of the resulting profits on sales of ENBREL^®, after deducting the applicable cost of sales, including royalties paid to third parties, and associated research and development (“R&D”) and selling and marketing expenses (see “Joint Ventures and Business Relationships—Wyeth”).

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ENBREL^® sales for the period from July 16, 2002 through December 31, 2002 were $362.1 million.

Kineret^® (anakinra)

Kineret^® (proper name—anakinra) is Amgen’s registered trademark for its recombinant nonglycosylated form of the human interleukin-1 (“IL-1”) receptor antagonist. Kineret^® blocks the biologic activity of IL-1 by competitively inhibiting IL-1 binding to the interleukin-1 type I receptor, which is expressed in a wide variety of tissues. IL-1 production is induced in response to inflammatory stimuli and mediates various physiologic responses including inflammatory and immunological responses.

In November 2001, Amgen received FDA approval and began marketing Kineret^® in the United States for the reduction of the signs and symptoms of moderately to severely active rheumatoid arthritis, in patients 18 years of age or older who have failed one or more disease modifying antirheumatic drugs. In March 2002, Kineret^® was approved in Europe for the treatment of the signs and symptoms of rheumatoid arthritis in combination with methotrexate, in patients with an inadequate response to methotrexate alone. In May 2002, Kineret^® was approved in Canada to reduce the signs and symptoms of active rheumatoid arthritis in patients 18 years of age or older.

Worldwide Kineret^® sales for the years ended December 31, 2002 and 2001 were $69.9 million and $12.3 million, respectively.

Product Candidates

The Company focuses its research and development efforts on human therapeutics delivered in the form of proteins, monoclonal antibodies, and small molecules in the areas of nephrology, oncology, inflammation, neurology, and metabolic disorders (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)—Financial Outlook—Forward looking statements and factors that may affect Amgen—Our product development efforts may not result in commercial products”).

Nephrology

A focus of the Company’s R&D effort is in the area of hyperparathyroidism (“HPT”). HPT is a disorder that results from excessive secretion of parathyroid hormone (“PTH”) from the parathyroid gland. Symptoms of HPT include bone loss, muscle weakness, depression, and forgetfulness. Secondary HPT is commonly seen as a result of kidney failure, affecting a majority of dialysis patients. Primary HPT principally afflicts post-menopausal women. The Company has entered into a license agreement with NPS Pharmaceuticals, Inc. (“NPS”) for Amgen to develop and commercialize calcimimetic small molecules based on NPS’s proprietary calcium receptor technology for the treatment of HPT. The Company has conducted separate phase 2 clinical trials for primary and secondary HPT with a second generation calcimimetic compound (Cinacalcet hydrochloride). In 2000 and 2001, data from phase 2 studies with Cinacalcet hydrochloride were presented demonstrating that treatment with small-molecule calcimimetics results in dose-dependent decreases in PTH levels and control of elevated calcium levels. A phase 3 clinical trial with Cinacalcet hydrochloride in secondary HPT is ongoing and enrollment has been completed.

Oncology

Certain tissue growth factors are believed to play a role in tissue protection, regeneration and/or repair processes. Mucositis is a side effect often experienced by patients undergoing radiation therapy and chemotherapy and is characterized as the irritation or ulceration of the lining of the gastrointestinal tract. Amgen currently is conducting research with Keratinocyte Growth Factor (“KGF”) to prevent and treat mucositis. A phase 3 clinical trial evaluating the effects of KGF in decreasing the incidence and duration of oral mucositis in patients with hematologic malignancies undergoing chemotherapy and radiation therapy with autologous PBPC

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transplantation was completed in the latter part of 2002. In January 2003, the Company announced that preliminary analysis of the data suggested that KGF reduced the duration and incidence of severe mucositis in those who received it, as compared to placebo.

In 2002, as part of the Immunex acquisition, Amgen and Abgenix, Inc. (“Abgenix”) have an agreement providing for the joint development and commercialization of ABX-EGF, a fully human antibody created by Abgenix. ABX-EGF targets the receptor for human epidermal growth factor, or EGFr, which is overexpressed on some of the most prevalent human solid tumor types, including lung, colorectal, pancreatic, renal cell, prostate, and esophageal. Amgen and Abgenix have a series of Phase 2 clinical trials to evaluate ABX-EGF for the treatment of several types of cancer

In December 2000, the Company acquired the rights from Immunomedics, Inc. (“Immunomedics”) to develop and commercialize epratuzumab. Epratuzumab is currently being evaluated for the treatment of non-Hodgkin’s lymphoma (“NHL”). Epratuzumab is a humanized monoclonal antibody. Preliminary research and early-stage clinical trials showed epratuzumab has some level of anti-tumor activity, either directly or indirectly, against some B-cell malignancies. In July 2001, the Company initiated a phase 3 clinical trial. The phase 3 clinical trial was designed to evaluate epratuzumab for the treatment of low-grade NHL in patients who failed to respond, or who responded for less than six months, to rituximab, a monoclonal antibody approved for the treatment of certain types of NHL (see “Competition—Cancer”). In January 2003, the Company announced the closure of this phase 3 study as epratuzumab did not, as a single agent, provide sufficient benefit to meet protocol-specified criteria for continued evaluation using the regimen. A phase 1/2 clinical trial of epratuzumab in combination with rituximab to treat low-grade and aggressive NHL is ongoing. In 2001, the Company initiated a phase 2 clinical trial of epratuzumab in combination with rituximab in low-grade NHL patients and a phase 2 clinical trial of epratuzumab in aggressive NHL patients.

Osteoprotegerin (“OPG”) is implicated in the regulation of bone mass. Bone mass is maintained in the body by the regulation of the competing activities of bone forming cells (osteoblasts) and bone resorbing cells (osteoclasts). Cancer metastases (cancers which have spread from their original tumor site) to bone cause bone destruction, leading to fractures and bone pain. In preclinical studies, OPG has been shown to inhibit the osteoclast mediated bone destruction induced by invading cancer cells. The Company completed phase 1 studies with the initial molecule in its OPG program. Data from these studies validated the importance of this pathway in the pathology of bone disorders. The Company has selected a lead candidate and is currently conducting phase 1 studies in metastatic bone disease and a phase 2 study in osteoporosis.

Inflammation

The inflammatory response is essential for defense against harmful microorganisms and for the repair of damaged tissues. The failure of the body’s control mechanisms for the inflammatory response results in conditions such as rheumatoid arthritis. In September 2002, the Company submitted a supplemental Biologics License Application (“sBLA”) with the FDA for the use of ENBREL^® to improve physical function in patients with moderately to severely active rheumatoid arthritis. In October 2002, the Company submitted an sBLA with the FDA to further expand the use of ENBREL^® to inhibit the progression of structural damage in psoriatic arthritis patients. The filing was based on the results of a 12-month, double-blind, placebo controlled trial. In December 2002, the Company also submitted an sBLA with the FDA supporting once-weekly dosing of ENBREL^®. The filing was based on results from a phase 3 study demonstrating that patients treated with 50 mg of ENBREL^® once weekly achieved similar efficacy, tolerability, and pharmacokinetics when compared to patients receiving 25 mg of ENBREL^® twice weekly. Additionally, in January 2003, the Company submitted an sBLA with the FDA to expand the labeling of ENBREL^® to treat ankylosing spondylitis (“AS”), a chronic inflammatory disease predominantly affecting the spine that results in pain and stiffness and can result in partial or complete fusion of the spine. The filing was based on the results of a phase 3 study of patients with active AS, who were treated with ENBREL^® over a six month period. In January 2003, the Company announced positive results of a phase 3 clinical study assessing the efficacy and tolerability of ENBREL^® in the treatment of

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moderate to severe plaque psoriasis. Psoriasis is an inflammatory disease which is characterized by chronic inflammation of the skin that drives the formation of skin plaques.

In addition, in October 2002, the Company submitted an sBLA with the FDA for the use of Kineret^® to inhibit the progression of structural damage in adult patients with moderately to severely active rheumatoid arthritis. The filing was based on the results of a 12-month, double-blind, placebo controlled trial. In October 2002, the Company announced that the ENBREL^®/Kineret^® combination study was stopped as the combination resulted in increased safety concerns with no increased efficacy. The Company is in phase 2 development of a second generation inhibitor of tumor necrosis factor, pegylated soluble tumor necrosis factor-receptor type 1 (“PEG-sTNF-R1”) in patients with rheumatoid arthritis. In 2001, the Company initiated a phase 2 clinical trial of PEG-sTNF-R1 in combination with Kineret^® in patients with rheumatoid arthritis. This phase 2 clinical trial was stopped in February 2003 as the combination resulted in increased safety concerns with no increased efficacy.

Neurology and Metabolic Disorders

The Company has discovery programs in neurological and metabolic disorders. Neurotrophic factors are proteins which play a role in nerve cell protection and regeneration and which may therefore be useful in treating a variety of neurological disorders, including neurodegenerative diseases of the central and peripheral nervous systems, and also nerve injury or trauma. In 1999, the Company discontinued development of glial cell line derived neurotrophic factor (“GDNF”) after a phase 1/2 trial of GDNF in Parkinson’s disease failed to demonstrate a statistically significant benefit. However, based on favorable phase 1 clinical data from investigator-sponsored research, the Company is currently in clinical studies of GDNF using a different treatment protocol for possible use in the treatment of Parkinson’s disease.

Amgen continues to support investigator research in certain exploratory indications for Leptin which is a naturally occurring cytokine hormone secreted by fat cells that may act primarily at the hypothalamus to regulate food intake and energy expenditure. In 1995, the Rockefeller University granted the Company an exclusive license that allows the Company to develop products based on the obesity gene. The Company’s clinical trials of leptin failed to show clinical efficacy in normal obesity and diabetes, and development of this molecule was subsequently discontinued in these diseases.

Immunex Acquisition

On July 15, 2002, Amgen acquired all of the outstanding common stock of Immunex in a transaction accounted for as a business combination. Immunex was a leading biotechnology company dedicated to developing immune system science to protect human health. The Immunex acquisition is expected to further advance Amgen’s role as a global biotechnology leader with the benefits of accelerated growth and increased size, product base, product pipeline, and employees. The acquisition is also intended to enhance Amgen’s strategic position within the biotechnology industry by strengthening and diversifying its (1) product base and product pipeline in key therapeutic areas, and (2) discovery research capabilities in proteins and antibodies. The results of Immunex’s operations have been included in the consolidated financial statements commencing July 16, 2002.

Each share of Immunex common stock outstanding at July 15, 2002 was converted into 0.44 of a share of Amgen common stock and $4.50 in cash. As a result, Amgen issued approximately 244.6 million shares of common stock and paid approximately $2.5 billion in cash to former Immunex shareholders. Amgen also paid Wyeth $25 million at the closing of the merger for the termination of certain Immunex product rights in favor of Wyeth, as specified in the agreement regarding governance and commercial matters. In addition, each employee stock option to purchase Immunex common stock outstanding at July 15, 2002 was assumed by Amgen and converted into an option to purchase Amgen common stock based on the terms specified in the merger agreement. As a result, approximately 22.4 million options to purchase Amgen common stock were assumed, on a converted basis. The acquisition was structured to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

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The purchase price of approximately $17.8 billion was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair values of assets and liabilities acquired amounted to approximately $9.8 billion and was allocated to goodwill.

In May 2002, Immunex entered into an agreement to sell certain assets used in connection with its Leukine^® business to Schering AG Germany (“Schering”) for approximately $389.9 million in cash plus the payment of additional cash consideration upon achievement of certain milestones. The sale of the Leukine^® business was pursued in connection with Amgen’s acquisition of Immunex and was completed on July 17, 2002. In December 2002, the Company licensed the commercialization rights for Novantrone^® in the United States to Serono S.A. in exchange for royalties based on future product sales. Also, in connection with the acquisition, the Company initiated an integration plan to consolidate and restructure certain functions and operations of the pre-acquisition Immunex primarily consisting of the termination and relocation of certain Immunex personnel, termination of certain duplicative and non-strategic Immunex R&D programs, and consolidation of certain Immunex leased facilities. See Note 3 to the Consolidated Financial Statements for further discussion of the Immunex acquisition and the related purchase price allocation.

Joint Ventures and Business Relationships

The Company generally manufactures and markets its products. From time to time, the Company may enter into joint ventures and other business relationships to provide additional manufacturing, marketing and product development capabilities. In addition to internal R&D efforts, the Company has acquired certain product and technology rights and has established R&D collaborations.

Wyeth

Prior to the acquisition of Immunex, Wyeth and Immunex were parties to several agreements relating to business and corporate governance matters. As a result of the acquisition, some of these agreements were terminated, however, some agreements have survived the acquisition. In connection with the acquisition, Amgen entered into an agreement with Wyeth to amend and restate an existing long-term ENBREL^® co-promotion agreement between Wyeth and Immunex.

Under the amended and restated co-promotion agreement, Wyeth and Amgen market and sell ENBREL^® to all appropriate customer segments in the United States and Canada for all approved indications other than oncology. The rights to promote ENBREL^® in the United States and Canada for oncology indications are reserved to Amgen.

Under the amended and restated co-promotion agreement, an ENBREL^® management committee comprised of equal representation from Wyeth and Amgen is responsible for overseeing the marketing and sales of ENBREL^® including strategic planning, approval of an annual marketing plan, product pricing, and establishing an ENBREL^® brand team. The ENBREL^® brand team, with equal representation from each party, prepares and implements the annual marketing plan and is responsible for all sales activities. The agreement provides that Wyeth and Amgen:

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The amended and restated co-promotion agreement further provides that Amgen:

Under the co-promotion agreement between the parties, Wyeth has agreed to reimburse Amgen for a defined percentage of the clinical and regulatory expenses Amgen incurs in connection with the filing and approval of any new indications for ENBREL^® in the United States and Canada, excluding oncology and rheumatoid arthritis indications. The Wyeth reimbursement for clinical and regulatory expenses under this agreement, a portion of which is payable upon regulatory filing of any new indication and the remainder of which will be payable upon regulatory approval of any new indication, if any, applies for that part of the United States and Canada’s clinical and regulatory expenses for ENBREL^® for which Amgen would otherwise be financially responsible under the cost-sharing provisions in the pre-existing co-development agreement. Wyeth will also provide reimbursement for a defined percentage of specified patent expenses related to ENBREL^®, including any up-front license fees, as well as patent litigation and interference expenses.

Subject to specified limitations, Wyeth will also be responsible for a defined percentage of the liabilities, costs, and expenses associated with the manufacture, use, or sale of ENBREL^® in the United States and Canada.

Immunex and Wyeth have also entered into a collaboration and global supply agreement related to the manufacture, supply, inventory, and allocation of defined supplies of ENBREL^® produced at the Rhode Island manufacturing facility, and a new Rhode Island manufacturing facility under construction as well as particular supplies of ENBREL^® produced by Boehringer Ingelheim Pharma KG (“BI Pharma”) in Germany and Wyeth at a manufacturing facility Wyeth is constructing in Ireland.

Johnson & Johnson

Amgen granted Johnson & Johnson a license to commercialize recombinant human erythropoietin as a human therapeutic in the United States in all markets other than dialysis. In the United States, all recombinant human erythropoietin sold by Johnson & Johnson is manufactured by Amgen and sold by Johnson & Johnson under the trademark PROCRIT^® (Epoetin alfa). PROCRIT^® brand Epoetin alfa is identical to EPOGEN^® brand Epoetin alfa, which is manufactured by Amgen and sold by Amgen in the United States dialysis market. Pursuant to the license agreement with Johnson & Johnson, the Company earns a 10% royalty on sales of PROCRIT^® by Johnson & Johnson in the United States. Outside the United States, with the exception of the People’s Republic of China and Japan, Johnson & Johnson was granted rights to commercialize recombinant human erythropoietin as a human therapeutic for all uses under a licensing agreement with Kirin-Amgen. With respect to its sales outside of the United States, Johnson & Johnson manufactures its own brand of Epoetin alfa which is then sold throughout the world by Johnson & Johnson under various trademarks such as EPREX^® and ERYPO^®. The Company is not involved in the manufacture of Epoetin alfa sold by Johnson & Johnson outside of the United States.

Kirin Brewery Company, Limited

The Company formed a 50-50 joint venture (Kirin-Amgen) with Kirin in 1984. Kirin-Amgen develops and commercializes certain of the Company’s and Kirin’s technologies which have been transferred to this joint venture. Kirin-Amgen has given exclusive licenses to Amgen to manufacture and market: 1) recombinant human

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erythropoietin in the United States, 2) darbepoetin alfa in the United States, all European countries, Canada, Australia, New Zealand, Mexico, all Central and South American countries, and certain countries in Central Asia, North Africa, and the Middle East, and 3) G-CSF and pegfilgrastim in the United States, Europe, Canada, Australia, and New Zealand. Kirin-Amgen has also licensed to Amgen and Kirin the rights to develop darbepoetin alfa.

Kirin-Amgen has also given exclusive licenses to Kirin to manufacture and market: 1) recombinant human erythropoietin in Japan, 2) darbepoetin alfa in Japan, the People’s Republic of China, Taiwan, Korea, and certain other countries in Southeast Asia, and 3) G-CSF and pegfilgrastim in Japan, Taiwan and Korea. Kirin markets recombinant human erythropoietin and G-CSF in the People’s Republic of China under a separate agreement. Kirin markets its recombinant human erythropoietin product in Japan under the trademark ESPO^®. Kirin markets its G-CSF product in its respective territories under the trademark GRAN^®. Kirin-Amgen has licensed to Johnson & Johnson rights to recombinant human erythropoietin in certain geographic areas of the world (see “—Johnson & Johnson”). Under its agreement with Kirin-Amgen, Johnson & Johnson pays a royalty to Kirin-Amgen based on sales. Kirin-Amgen and Roche have an agreement to commercialize Filgrastim and pegfilgrastim in those territories not licensed to either Amgen or Kirin as described above. Under this agreement, Roche markets Filgrastim and pegfilgrastim in these countries and pays a royalty to Kirin-Amgen on these sales.

In connection with its various license agreements with Kirin-Amgen, the Company pays Kirin-Amgen royalties based on product sales. For the years ended December 31, 2002, 2001, and 2000, Amgen paid Kirin-Amgen royalties of $168.2 million, $147.1 million, and $140.8 million, respectively, under such agreements, which are included in “Cost of sales” in the Company’s Consolidated Financial Statements.

Pursuant to the terms of agreements entered into with Kirin-Amgen, the Company conducts certain R&D activities on behalf of Kirin-Amgen and is paid for such services at negotiated rates, which is included in “Corporate partner revenues” in the Company’s Consolidated Financial Statements. For the years ended December 31, 2002, 2001, and 2000, Amgen recognized $174.6 million, $210.1 million, and $221.0 million, respectively, related to these agreements.

F. Hoffmann-La Roche Ltd

In May 2002, the Company acquired certain rights related to the commercialization of NEUPOGEN^® and GRANULOKINE^® (Filgrastim) and pegfilgrastim in the EU, Switzerland, and Norway from Roche. Roche will continue as the licensee for Filgrastim and pegfilgrastim in certain countries outside the United States and the EU (see Note 12 to the Consolidated Financial Statements).

Prior to the acquisition of these commercialization rights, Amgen and Roche had an agreement providing for the commercialization of Filgrastim and pegfilgrastim in the EU. Under this agreement, the companies collaborated in the EU on the commercialization and further clinical development of the product, and Amgen had a majority share in the related costs and profits from sales. Amgen had substantially all of the responsibilities for marketing, promotion, distribution, and other key functions relating to product sales, and primarily distributed the product to the EU countries from its European Logistics Center in Breda, The Netherlands.

ENBREL^® manufacturing relationships

In November 1998, Immunex and Wyeth entered into a long-term supply agreement with BI Pharma to manufacture commercial quantities of ENBREL^®. Amgen’s supply of ENBREL^® is largely dependent on product manufactured by BI Pharma. Amgen has made significant purchase commitments to BI Pharma (see “MD&A—Liquidity and Capital Resources—Contractual obligations”). Under the supply agreement, BI Pharma has reserved a specified level of production capacity for ENBREL^®, and Amgen’s purchase commitments for ENBREL^® are manufactured from that reserved production capacity. Amgen is required to submit a rolling three-year forecast for manufacturing the bulk drug for ENBREL^®, and a rolling forecast for a shorter period for

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the number of finished vials of ENBREL^® to be manufactured from the bulk drug. Amgen has submitted firm orders for the maximum production capacity that BI Pharma currently has reserved for ENBREL^®. Amgen will be responsible for substantial payments to BI Pharma if Amgen fails to use a specified percentage of the production capacity that BI Pharma has reserved for ENBREL^® each calendar year, or if the BI Pharma supply agreement is terminated prematurely under specified conditions. In June 2000, Immunex, Wyeth and BI Pharma amended the BI Pharma supply agreement to offer BI Pharma financial incentives to provide additional near- term production capacity for ENBREL^®, to facilitate process improvements for ENBREL^®, and to extend the term of the agreement (see “—Wyeth”). The parties further amended the ENBREL^® supply agreement as of June 2002, to reflect the transfer of production to a new BI Pharma manufacturing facility, to provide for the use of an improved manufacturing process, to extend the term of the agreement, and to offer BI Pharma additional financial incentives to provide additional near-term production capacity for ENBREL^®. A significant portion of all finished dosage forms of ENBREL^® are currently manufactured by BI Pharma. Amgen also relies on a third-party contract manufacturer to perform fill and finish services for ENBREL^® that is manufactured at its Rhode Island manufacturing facility, as well as a third-party to perform packaging services for ENBREL^® manufactured by BI Pharma and at the Company’s Rhode Island facility. The third-party fill and finish plant was approved by the FDA in December 2002.