Report: Analysis of Amgen Inc. Biotechnology Company

This report provides a comprehensive review of Amgen Inc., a prominent biotechnology company. It begins with an overview of Amgen's focus on six therapeutic areas and its global presence. The report analyzes the company's financial performance, noting a decrease in revenue and free cash flow in 2019, and discusses the impact of generic and biosimilar competition. It highlights Amgen's strategies, including lowering product prices and increasing unit demands for certain drugs. The report also explores the importance of developing multiple indications and examines Amgen's pipeline, including EVENITY for osteoporosis. The analysis considers strategies such as operational trimming, restructuring, and predicting revenue. The report concludes by addressing the marketing authorization of EVENITY and proposes distribution strategies for the drug.

Running head: BIOTECHNOLOGY COMPANY
Review of the Biotechnology Company Amgen Inc.
Name of the Student
Name of the University
Author Note

BIOTECHNOLOGY COMPANY
Part A
As one of the leading biotechnology companies in the world, Amgen Inc. is one of the
top contenders in using cutting-edge technology and science to develop medicines for several
serious illnesses. The biotechnology company focuses on six therapeutic areas, including
inflammation, nephrology, neuroscience, bone health, oncology and cardiovascular disease,
and the company has its presence in over 100 countries. The company was founded in the
year 1980 and is currently running as an established and mature biotechnology company.
From the quarterly and full-year financial reports published in 2019, it is indicated
that the company is acting sensibly in deciding the market price for their drugs and not
targeting high price/high-value disease indications. However, the generic and biosimilar
competitions against some select products have negatively influenced the total revenue
accumulation by the company, which decreased by 2 per cent in the year 2019, along with the
decline of 2 per cent in the global product sales. Working capital is an effective indicator of
whether a company might be soon hitting downtrend in business. The company’s free cash
flow in the year 2018 was about $10.6 billion, which decreased to $8.5 billion in the year
2019 (Amgen, Inc., 2020). This might be indicative of potential downtrend that the company
might be facing despite the increase in the global sales for units of some important drugs
including Nplate, Prolia, Repatha and Parsabiv (Özdemir & Patrinos, 2017).
Analysing the revenue patterns and other aspects from the financial report, it is
understood that the company may observe a similar pattern of vicissitudes in their revenue
trajectory curve as Gilead’s Harvoni (Pagliarulo, 2018). However, the company has a
stronger history in adopting better management strategies, which can essentially help them to
prevent such downfall. The company is believed to develop platform biotechnology with the
potential of developing multiple indications instead of targeting one-off hit.

BIOTECHNOLOGY COMPANY
The company has taken several measures to ensure this, including lowering of the net
selling price of the products, which has led to a decrease of 2% but is offset partially by
higher unit demands. EVENITY, Repatha, and Aimovig were the drugs with the highest unit
demands, whereas, Neulasta, EPOGEN, NEUPOGEN, and Mimpara were the major drugs
with a significant decrease in the unit sells, affected by generic completion, biosimilar
competition and lower net selling price (Amgen, Inc., 2020).
It is evident that the company’s management is doing satisfactory work to lower the
net selling prices of the unit to match up with the competition in the market and engaging
offsets with higher unit demands (Kearney, 2019). However, to prevent the onset of any such
downfall as observed by Gilead Sciences, the management of Amgen Inc. have to carefully
plan their market distribution of upcoming pipeline programs, which includes Otezla (for
psoriasis), EVENITY (severe osteoporosis in postmenopausal women), BLINCYTO
(refractory B-cell acute lymphoblastic leukemia) and other drugs (Amgen, Inc., 2020).
Strategies will include trimming of operations to the highest profitable core, restructuring
initiatives, predicting revenue with product sales before going public to eliminate risks
associated with reimbursements, regulations and technology and to gain liquidation for early
investors (Archive.bio.org, 2020).
Part B
From the analysis of financial reports and products in pipeline of a biotech company
as mentioned in the above sections of the paper, the most interesting learned was the
importance of developing multiple indications instead of one-off hit. Amgen Inc. is a
successfully established biotechnology company that has been running for several decades,
and even though the reports indicate a downtrend in the revenue generation and free cash
flow, the company’s management is doing a good job in preventing a complete collapse as
observed in the case of Gilead Sciences.

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Question: The EC (European Commission) has granted Amgen Inc., marketing authorization
for their pipeline drug of EVENITY, which is indicated for the treatment of severe
osteoporosis in the women (postmenopausal) with greater risk of fracture. What should be the
appropriate distribution or multiple indication strategy in this scenario?

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References
Amgen, Inc. (2020). Amgen Reports Fourth Quarter And Full Year 2019 Financial
Results.Amgen, Inc. Retrieved 1 March 2020, from
https://wwwext.amgen.com/media/news-releases/2020/01/amgen-reports-fourth-
quarter-and-full-year-2019-financial-results/
Archive.bio.org (2020). Five Strategies for Success: Brave New Biotech World - BIO
Retrieved 1 March 2020, from https://archive.bio.org/articles/five-strategies-success-
brave-new-biotech-world
Kearney, C. (2019). Strategic Planning for Financing and Growing Biotechnology
Companies: Strategic Planning for Financing and Growing Biotechnology
Companies. Journal of Commercial Biotechnology, 24(4).
Özdemir, V., & Patrinos, G. P. (2017). David Bowie and the art of slow innovation: A fast-
second winner strategy for biotechnology and precision medicine global
development. Omics: a journal of integrative biology, 21(11), 633-637.
Pagliarulo, N. (2018). Gilead forecasts steep slide in 2018 hepatitis C revenues. BioPharma
Dive. Retrieved 1 March 2020, from https://www.biopharmadive.com/news/gilead-
hepatitis-c-revenues-slide-fourth-quarter-earnings/516494/