Amgen Inc

Core operations · Operational disruption and business continuity

Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales. Manufacturing biologic and small molecule human therapeutic products is difficult, complex and highly regulated.

Digital transformation and innovation · Artificial intelligence and automation

We are adopting and exploring the use of AI in our business, and as an emerging and rapidly evolving technology, our use of AI introduces potential opportunities but also presents risks that could adversely affect our operations, information security and reputation. AI systems may produce inaccurate or flawed outputs due to flawed algorithms, or insufficient and/or erroneous training data.

Cybersecurity and data protection · Third party data security and vendors

System vulnerabilities and/or cybersecurity breaches experienced by our third-party service providers have constituted a substantial share of the information security risks that have affected us. For example, in the past we have experienced cybersecurity incidents involving third-party service providers, including incidents in which unauthorized third parties accessed or exfiltrated certain information.

Cybersecurity and data protection · Data breaches and cyber attacks

A breakdown of our information technology systems, cyberattack or information security breach could significantly compromise the confidentiality, integrity and availability of our information technology systems, network-connected control systems and/or our data, interrupt the operation of our business and/or affect our reputation.

Technology infrastructure · Technology systems and infrastructure failure

Our information technology systems, including AI-enabled tools and systems are highly integrated into our business, including our R&D efforts, our clinical and commercial manufacturing processes and our product sales and distribution processes. The complexity and interconnected nature of software, hardware and our systems make them vulnerable to breakdown or other service interruptions.

Market position and competition · Industry consolidation and market concentration

Significant consolidation in the health insurance industry has resulted in a few large insurers and PBMs, which places greater pressure on pricing and usage negotiations with biopharmaceutical manufacturers, significantly increasing discount and rebate requirements.

Innovation and product development · Product development and randd investment risks

We may not be able to develop commercial products despite significant investments in R&D. Successful product development in the biotechnology industry is highly uncertain, and very few R&D projects yield approved and commercially viable products.

Market position and competition · Pricing pressure and margin compression

Payers, including healthcare insurers, PBMs, integrated healthcare delivery systems and group purchasing organizations, are continuing to seek ways to further reduce their costs. With increasing frequency, payers are adopting benefit plan changes that shift a greater proportion of drug costs to patients.

Market position and competition · Competitive pressure and market share loss

Our products face substantial competition and our product candidates are also likely to face substantial competition. We operate in a highly competitive environment. We expect that our products and product candidates will compete with existing drugs, new drugs currently in development, drugs currently approved for other indications that may later be approved for the same indications as those of our products.

Customer and revenue · Reimbursement and pricing pressure healthcare or insurance

Our sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected, and are likely to continue to affect, our profitability. Sales of our products depend on the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans.

Market position and competition · Patent expiration and generic competition

We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future. Expiration or successful challenge of applicable patent rights or expiration of an applicable exclusivity period has accelerated such competition, and we expect to face more litigation regarding the validity and/or scope of our patents.

Innovation and product development · Clinical trial and regulatory approval risks

We must conduct clinical trials in humans before we commercialize and sell any of our product candidates or existing products for new indications. Before a product may be sold, we must conduct clinical trials to demonstrate that our product candidates are safe and effective for use in humans.

Customer and revenue · Customer concentration and key customer dependence

Concentration of sales at certain of our wholesaler distributors, and consolidation of private payers, such as insurers, and PBMs has negatively affected, and may continue to negatively affect, our business. The substantial majority of our U.S. product sales is made to three pharmaceutical product wholesaler distributors: McKesson Corporation, Cencora, Inc. and Cardinal Health, Inc.

Geopolitical and trade · Trade policies tariffs and sanctions

Recent and ongoing changes in U.S. trade and tariff policies, including the imposition, modification, suspension and threatened expansion of tariffs on imported goods, as well as retaliatory measures by foreign governments, have increased uncertainty in the overall business and operating environment.

Natural and catastrophic events · Climate change and environmental impact

The severity and frequency of weather-related natural disasters has been amplified, and is expected to continue to be amplified by, global climate change. For example, in January 2025, Los Angeles county experienced unprecedented wildfires, and while the natural disaster did not impact our facilities or their operations, a number of our staff members lost their homes.

Reputation and brand · Corporate social responsibility

Our business and operations may be negatively affected by the failure, or perceived failure, of achieving our sustainability objectives. Stakeholders, including our investors and our employees, have increasingly focused on, and are expected to continue to focus on, our sustainability practices.

International and currency · International operations and emerging markets

Our sales and operations are subject to the risks of doing business internationally, including in new or emerging markets. As we continue our expansion efforts in emerging markets around the world, through acquisitions and licensing transactions as well as through the development and introduction of our products in new markets, we face numerous risks to our business.

International and currency · Foreign exchange and currency exposure

We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar in the non-U.S. jurisdictions where we do business. While we have a program in place that is designed to reduce our exposure to foreign currency exchange rate fluctuations through foreign currency hedging arrangements, our hedging efforts do not completely offset the effect of these fluctuations.

Industry regulation · Regulatory compliance and changes

Regulation by government authorities in the United States and other countries is a significant factor in the production and marketing of our products and our ongoing R&D activities. To clinically test, manufacture and market products for therapeutic use, we must satisfy mandatory procedures and safety and effectiveness standards established by various regulatory bodies.

Tax and financial reporting · Transfer pricing and international tax

In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico.