Amgen2

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No. 4

Amgen Inc.

Thousand Oaks

Buoyed by two drugs in which it has a virtual monopoly, Amgen Inc. has become the world’s largest biotechnology company.

But the markets for those drugs are maturing, so can Amgen keep up its double-digit growth?

“The key thing is they have to bring new products into the marketplace for sales growth and earnings growth,” said David Molowa, an analyst with Bear, Stearns & Co.

The company agrees in fact, nine drugs are now in clinical development, and Amgen’s goal is to introduce five new drugs in the next five years, said Andrea Rothschild, a company spokeswoman.

The two drugs that have propelled Amgen’s growth for the past nine years are Epogen, the world’s leading anti-anemia drug, and Neupogen, which is used in cancer treatment. Amgen has 100 percent of the anti-anemia drug market and 90 percent of the market for the type of treatment provided by Neupogen, Molowa said.

A key to Amgen’s success is that the patient population for the drugs is limited, so sales and marketing expenses are also limited, Molowa said.

“Given the benefit (of Epogen), they can charge high prices and (achieve) high gross margins,” Molowa said.

Amgen reported net income for 1997 of $644.3 million ($2.44 per share), compared with $374.6 million ($1.33) in 1993.

Amgen started in 1981 with just two people in shared office space in Thousand Oaks. Today, it employs 5,000 people worldwide, including close to 4,000 spread around 37 buildings in Thousand Oaks.

In 1989, it introduced Epogen, which it used to treat anemia associated with chronic renal failure for patients on kidney dialysis. Before Epogen, such anemia had to be treated with costly blood transfusions.

In 1991, Neupogen came on the market. It stimulates production of infection-fighting white blood cells and has allowed a lot of chemotherapy to be performed on an outpatient basis.

A third drug was approved last fall for the treatment of hepatitis C. While it has not enjoyed the level of sales of the other two, Rothschild said there are an estimated 4 million people in the U.S. who are infected with the disease each year.

Elizabeth Hayes

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