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Amgen Major Expansion Won’t Include Local Site

Amgen’s recent investments throughout the world, where it will build and expand manufacturing plants, are illustrative of a growth strategy that will largely bypass Southern California. “Amgen remains committed to the Thousand Oaks site as our world headquarters, but the company has to plan for growth elsewhere,” said Amgen spokeswoman Mary Klem. “The majority of staff growth in Thousand Oaks will come from new hires. There aren’t any plans to scale back or relocate research and development or manufacturing that’s there, but as the company plans for growth it will probably be outside the Thousand Oaks area.” Over the last few weeks, Amgen has announced billion dollar investments in Ireland and at its existing Puerto Rico locations. The decision to build a plant in Ireland for more than $1 billion comes as no surprise to the biotechnology industry. Ireland has the fastest growing economy in Europe, and has positioned itself to attract investment from pharmaceutical companies in particular. The Irish government provided an unknown amount of grants in order to lure Amgen. The Thousand Oaks biotech giant is not the first company to set up shop in Ireland. Over the past two years, Wyeth, Johnson & Johnson, Pfizer, Schering-Plough, Genzyme, Allergan and Bristol-Myers Squibb have all announced plan to invest in Ireland. It’s no accident that so many of these companies have decided to move to Ireland, its corporate tax rate is 12.5 percent, about a third of what other European companies charge. In Puerto Rico, the company is investing another $1 billion in order to expand its operations in the city of Juncos. Amgen plans to hire an additional 500 employees to staff its expanding Puerto Rico operations and it would be looking to hire more than 1,100 people in Ireland. In the fourth quarter of 2005, the company reported a net income of $824 million, compared with $689 million the previous year. For all of 2005, the company reported a net income of $3.7 billion, a 55 percent increase over $2.7 billion in 2004. In 2006, the company is also going to increase its research and development spending by $700 to $900 million, an increase of between 30 and 40 percent. The money will be used to put many of its pipeline drugs through the final stages of clinical trials. Amgen’s status in the world of biotechnology was cemented by the drugs it developed for cancer and chemotherapy patients. It has been unable to develop and market new drugs over the last several years, but that may be changing soon. “In addition to delivering financially, we achieved four major regulatory milestones and added six new molecules to our pipeline. We made significant progress in advancing our late stage pipeline,” said CEO Kevin Sharer in a news release. “Also during the fourth quarter, we received positive data from a pivotal trial with panitumumab, which could potentially advance the treatment of colorectal cancer. This contributed to our strategic decisions to acquire Abgenix.” Amgen’s proposal to buy Abgenix for $2.2 billion was approved in January, the companies were co-developing panitumumab. Developing new products is particularly important for Amgen now because drugs that are similar to Amgen’s current sellers will soon be on the market in Europe, and could take away some of the company’s sales. As Amgen moves closer to developing its new drugs, the manufacturing operations in Thousand Oaks will be changing as well. Its other plants will handle all of the company’s bulk manufacturing needs. The facilities in Thousand Oaks, which are still being used occasionally for bulk manufacturing, will transition to clinical manufacturing of drugs that are not yet in full production.

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