What changed in this filing

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Item 1A. Risk Factors

2025-02-14 compared with 2024-02-14 · 239 added, 169 removed, 602 unchanged (40% of the section changed)

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• Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions.

• We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

• 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.

• Our sales and operations are subject to the risks of doing business internationally, including in emerging markets.

• We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

Risks Related to Competition

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Further, pressures on healthcare budgets from the economic downturn and inflation continue and are likely to increase, across the markets we serve.

Payers are increasingly focused on costs, which have resulted, and are expected to continue to result, in lower reimbursement rates for our products or narrower populations for which payers will reimburse.

Payers are increasingly focused on costs, which has resulted, and is expected to continue to result, in lower reimbursement rates for our products and/or narrower patient populations for which payers will reimburse.

Continued intense public scrutiny of the price of drugs and other healthcare costs, together with payer dynamics, have limited, and are likely to continue to limit, our ability to set or adjust the price of our products based on their value, which can have a material adverse effect on our business.

In the United States, particularly over the past few years, a number of legislative and regulatory proposals have been introduced and/or signed into law that attempt to lower drug prices.

These include the IRA legislation that enables the U.S.

government to set prices for certain drugs in Medicare, redesigns Medicare Part D benefits to shift a greater portion of the costs to manufacturers and enables the U.S.

government to impose penalties if drug prices are increased at a rate faster than inflation.

Additional proposals focused on drug pricing continue to be debated, and additional executive orders focused on drug pricing and competition are likely to be adopted and implemented in some form.

Government actions or ballot initiatives at the state level also represent a highly active area of policymaking and experimentation, including pursuit of proposals that limit drug reimbursement under state run Medicaid programs based on reference prices or permitting importation of drugs from Canada.

Such state policies may also eventually be adopted at the federal level.

In the United States, particularly over the past few years, a number of legislative and regulatory proposals have been introduced and/or signed into law to lower drug prices.

These include the IRA law that enables the U.S.

government to set prices for certain drugs in Medicare, redesigns Medicare Part D benefits to shift a greater proportion of the costs to manufacturers and health plans, and enables the U.S.

government to impose penalties if drug prices are increased at a rate faster than inflation (IRA Inflation Penalties).

Additional proposals focused on drug pricing continue to be debated, and additional executive orders or regulatory initiatives focused on drug pricing and competition are likely to be adopted and implemented in some form.

It is unclear what policies the new Administration will advance with respect to IRA implementation and other drug pricing proposals.

Further, state government activity has been dynamic, including certain states enacting new laws limiting drug reimbursement under state run Medicaid programs and prohibiting restrictions on 340B Program use.

Such state laws could also eventually be adopted at the federal level.

We are unable to predict which or how many policy, regulatory, administrative or legislative changes may ultimately be, or effectively estimate the consequences to our business if, enacted and implemented.

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federal coverage and reimbursement policies and practices have affected, and are likely to continue to affect, access to, pricing of, and sales of our products

A substantial portion of our U.S.

A substantial proportion of our U.S.

business relies on reimbursement from federal government healthcare programs and commercial insurance plans regulated by federal and state governments.

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federal reimbursement policy.

For example, in 2022, the IRA was enacted and includes provisions requiring that beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S.

sales (starting with ten drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent years such that by 2031 approximately 100 drugs could be subject to such set prices).

price setting process began on August 29, 2023 when CMS announced the first ten drugs for Medicare price setting, which includes ENBREL.

Our wholly owned subsidiary, Immunex Corporation, which holds the rights to the ENBREL BLA, entered into an agreement with the U.S.

government to participate in the price setting process and submitted the required data to CMS for ENBREL, including certain price, cost and patent data.

The Medicare price setting process will conclude by August 1, 2024, and by September 1, 2024, CMS will publish prices that will be applicable to these ten drugs in the Medicare program beginning January 1, 2026.

Also under the IRA, starting on January 1, 2024, Medicare Part D was redesigned to cap beneficiary out-of-pocket costs and, beginning January 1, 2025, Federal reinsurance will be reduced in the catastrophic phase (resulting in a shift and increase of such costs to Part D plans and manufacturers, including by requiring manufacturer discounts on certain drugs).

Further, the IRA created a mechanism for CMS to collect rebates from manufacturers if price increases outpace inflation.

Rebate obligations began to accrue October 1, 2022 for Medicare Part D and January 1, 2023 for Medicare Part B, but CMS has not yet issued invoices and has some discretion as to when it must bill manufacturers.

We expect that several of our products will be subject to these inflation rebates, and several of our products have been on lists that are issued and updated on a quarterly basis by CMS under a related program under which Medicare beneficiaries are charged reduced coinsurance if price increases exceed inflation.

The IRA’s drug pricing controls and Medicare redesign are likely to have a material adverse effect on our sales, our business and our results of operations, and such impact is expected to increase through the end of the decade and will depend on factors including the extent of our portfolio’s exposure to Medicare reimbursement, the rate of inflation over time, the number of our products selected for mandatory price setting and the timing of market entry of generic or biosimilar competition.

Further, following the passage of the IRA, the environment remains dynamic and U.S.

For example, the IRA includes provisions requiring that, beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S.

sales (starting with 10 drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent

years such that, by 2031, approximately 100 drugs could be subject to such set prices).

The Medicare price setting process for the first 10 drugs subject to Medicare price setting in Part D began in 2023 , which includes ENBREL, our product that currently generates considerable revenues.

In 2024, CMS set a price for ENBREL under Medicare Part D that is significantly lower than currently applicable, beginning on January 1, 2026, which we expect will negatively impact its profitability in Medicare.

See Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations—Product sales—ENBREL.

In January 2025, CMS announced the next 15 drugs for Medicare price setting that will be applicable beginning on January 1, 2027, which includes Otezla.

Depending on the growth and success of our medicines, other of our medicines may also be subject to selection by CMS in the next, or in a future, cycle of mandatory Medicare price setting.

If other of our medicines are selected by CMS for Medicare price setting, we may be required to accept a price set by the government for Medicare similar to the process that was applied to ENBREL.

Also under the IRA, Medicare Part D was redesigned to cap beneficiary out-of-pocket costs and, beginning January 1, 2025, Federal reinsurance will be reduced in the catastrophic phase (resulting in a shift and increase of such costs to Part D plans and manufacturers, including by requiring manufacturer discounts on certain drugs).

Further, the IRA inflation penalties allows CMS to collect rebates from manufacturers if price increases outpace inflation.

Such rebate obligations began to accrue October 1, 2022 for Medicare Part D and January 1, 2023 for Medicare Part B, but CMS has not yet issued invoices and has some discretion as to when to issue such invoices to manufacturers.

We expect that several of our products will be subject to IRA inflation penalties, and several of our products have been on lists that are issued and updated on a quarterly basis by CMS under a related program under which Medicare beneficiaries are charged reduced coinsurance if price increases exceed inflation.

The IRA’s Medicare price setting and Medicare redesign are likely to have a material adverse effect on our sales, our business and our results of operations, and such impact is expected to increase through the end of the decade and will depend on factors including the extent of our portfolio’s exposure to Medicare reimbursement, the rate of inflation over time, the number of our products selected for Medicare price setting and the timing of market entry of generic or biosimilar competition.

Further, following the enactment of the IRA, the environment remains dynamic and U.S.

policymakers continue to demonstrate interest in health care and drug pricing changes.

For example, CMS issued a proposed Medicaid Drug Rebate Program rule that, if finalized, would require manufacturers to aggregate or “stack” all rebates, discounts, or other price concessions made to separate, unrelated entities across the pharmaceutical supply chain on a given unit of product to determine the “Best Price,” a metric that is used to determine Medicaid rebates and 340B statutory rates.

In early 2023, the HHS selected new healthcare payment and delivery models for testing, in response to an October 2022 Executive Order on Lowering Prescription Drug Costs for Americans, including the Accelerating Clinical Evidence Model, which could introduce new payment methods that reduce reimbursement for drugs approved under accelerated approval.

That Executive Order followed a 2021 Executive Order designed to increase competition in the healthcare sector, including by calling for the FDA to develop prescription drug importation programs and the FTC to apply greater scrutiny of anticompetitive activity and responses to which include actions from the HHS (which released a report with drug pricing proposals that seek to promote competition) and from the USPTO (which has taken steps to strengthen coordination with the FDA to address impediments to generic drug and biosimilar competition).

For example, in April 2024, CMS finalized policy changes that will give Part D plans more flexibility to substitute biosimilars for innovator products on formularies in 2025.

Additionally, various government agencies have taken actions designed to reduce expenditures on prescription drugs.

For example, HHS released a report with drug pricing proposals that seek to promote competition.

The USPTO has also taken steps to strengthen coordination with the FDA to address perceived impediments to generic drug and biosimilar competition.

Other CMS policy changes and demonstration projects to test new care, delivery and payment models can also significantly affect how drugs, including our products, are covered and reimbursed.

In the fourth quarter of 2021, HHS released a plan to address drug pricing that included potential future mandatory models that link payment for prescription drugs and biologics to certain factors, including the overall cost of care.

In March 2023, the Administration released its budget plan for fiscal year 2024 that included proposals to expand the number of drugs subject to mandatory Medicare price setting under the IRA, imposing such price setting activity earlier, and extending to commercial health insurance the requirement that drug manufacturers pay rebates if price increases outpace inflation.

While those proposed expansions of the IRA’s drug pricing controls have not been enacted, the proposals demonstrate that this area continues to be a focus of the Administration.

We also face risks related to the reporting of pricing data that affects reimbursement of and discounts provided for our products.

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—Changing reimbursement and pricing actions in various states have negatively affected, and may continue to negatively affect, access to, and have affected, and may continue to affect, sales of our products

At the state level, government actions or ballot initiatives can also affect how our products are covered and reimbursed and/or create additional pressure on our pricing decisions.

At the state level, legislation, government actions, and ballot initiatives can also affect how our products are covered and reimbursed and/or create additional pressure on our pricing decisions.

Existing and proposed state pricing laws have added complexity to the pricing of drugs and may already be affecting industry pricing decisions.

A number of states have adopted, and many other states are considering, drug importation programs and other pricing actions, including proposals designed to require biopharmaceutical manufacturers to report to the state proprietary pricing information or provide advance notice of certain price increases.

States are also enacting laws referencing the IRA and seeking to regulate the 340B Drug Pricing Program.

For example, following the passage of the IRA, bills have been proposed in multiple states that would apply the drug price caps set by HHS for Medicare to drug prices in an individual state.

A number of states have adopted, and many other states are considering, PDABs, drug importation programs, reference pricing schemes, and other drug pricing actions, including proposals designed to require biopharmaceutical manufacturers to report to the state proprietary pricing information or provide advance notice of certain price increases.

States are also enacting laws referencing the IRA and seeking to regulate and prohibit restrictions on the 340B Program.

For example, following the passage of the IRA, bills have been proposed in multiple states that would apply the drug price caps set by HHS for Medicare to drug prices in an individual state, and such references to IRA price caps have also been included in PDAB legislation.

For Medicaid patients, states have established a Medicaid drug spending cap (New York) and implemented a new review and supplemental rebate negotiation process (Massachusetts).

Seven states (Colorado, Maine, New Hampshire, Maryland, Minnesota, Oregon and Washington) have enacted laws that establish PDABs to

identify drugs that pose affordability challenges, and four such states include authority for the state PDAB to set upper payment limits on certain drugs for in-state patients, payers and providers.

So far in 2024, no fewer than 11 states have pending PDAB legislation.

States with enacted PDAB laws are in various phases of implementation, with Colorado’s PDAB being the furthest along.

In August 2023, the Colorado PDAB announced the first five drugs to undergo an affordability review, one of which is ENBREL.

If the PDAB process determines that ENBREL is unaffordable, ENBREL could be subject to an upper payment limit as early as Q4 2024.

Louisiana and Arkansas have enacted laws with mandates on manufacturers participating in 340B, and thus far in 2024, no fewer than 15 states have similar legislation pending.

These bills vary, but include provisions on restricting a manufacturer’s ability to direct drugs in 340B channels, recognizing 340B contract pharmacies and a prohibition on requiring the inclusion of 340B claims modifiers.

Further, in Genesis Health Care, Inc.

Becerra , the U.S.

District Court for the District of South Carolina issued an order in November 2023 that enjoins the Health Resources and Services Administration from enforcing its more restrictive interpretation of what is considered a patient under the 340B program, to the potential benefit of healthcare systems seeking to expand the application of 340B discounts.

Additionally, on January 5, 2024, the FDA authorized Florida to move forward with its importation program proposal.

Eight states (Colorado, Maine, New Hampshire, New Jersey, Maryland, Minnesota, Oregon and Washington) have enacted laws that establish PDABs to identify drugs that pose affordability challenges, and four such states include authority for the state PDABs to set upper payment limits on certain drugs for in-state patients, payers and providers.

In 2024, no fewer than 17 states introduced PDAB legislation.

The eight states with enacted PDAB laws are in various phases of implementation, with Colorado’s PDAB being the furthest along.

The Colorado PDAB deemed three of five drugs “unaffordable,” including ENBREL, and are subject to rulemaking to establish an Upper Payment Limit (UPL) commencing March 2025 and that could be effective as soon as the fourth quarter of 2025.

Further, inappropriate expanded utilization of the 340B Program from broadened application of the 340B discounts has had, and is

expected to continue to have, a negative impact on the Company’s product sales, business and results of operations.

Louisiana, Arkansas, West Virginia, Minnesota, Kansas, Mississippi, Missouri and Maryland have enacted laws with mandates on manufacturers participating in the 340B Program, and, in 2024, no fewer than 25 states considered similar legislation.

These bills vary, but typically include provisions on restricting a manufacturer’s ability to direct drugs in 340B channels, recognizing 340B contract pharmacies and a prohibition on requiring the inclusion of 340B claims modifiers.

In March 2024, the U.S.

Court of Appeals for the 8th Circuit ruled that Arkansas’ Act 1103, which prohibits drugmakers from restricting the acquisition or delivery of 340B drugs to covered entities and their contract pharmacies, was not preempted by the federal 340B statute.

The decision contributed to an increase in the number of states considering similar legislation.

In July 2024, the U.S.

District Court for the Southern District of Mississippi denied motions for a preliminary injunction in two cases challenging a similar law in Mississippi, finding that neither plaintiff had demonstrated a substantial likelihood of success on the merits.

These orders are being appealed at the U.S.

Court of Appeals for the 5th Circuit.

In September 2024, the U.S.

District Court for the Western District of Louisiana dismissed a lawsuit challenging Louisiana’s 340B contract pharmacy mandate law, and the U.S.

District Court for the District of Maryland denied a motion for preliminary injunction challenging a similar law in Maryland.

These lawsuits challenging states on their 340B contract pharmacy laws are subsequent to Genesis Health Care, Inc.

Becerra, where the U.S.

District Court for the District of South Carolina issued an order in November 2023 that enjoins the Health Resources and Services Administration from enforcing its more restrictive interpretation of who is considered a patient under the 340B Program, to the potential benefit of healthcare systems seeking to expand the application of 340B discounts.

Additionally, on January 5, 2024, the FDA authorized Florida to move forward with its importation program proposal, though the state has not completed any significant steps towards importation within the one-year authorization window.

Colorado, Maine, New Hampshire, New Mexico, Texas and Vermont have also enacted state importation laws, and some have submitted plans for approval to the FDA.

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commercial payer actions have affected, and may continue to affect, access to and sales of our products

Payers, including healthcare insurers, PBMs, integrated healthcare delivery systems (vertically-integrated organizations built from consolidations of healthcare insurers and PBMs) and group purchasing organizations, increasingly seek ways to reduce their costs.

With increasing frequency, payers are adopting benefit plan changes that shift a greater proportion of drug costs to patients.

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Further, government regulation of payers may affect these trends.

For example, CMS finalized a policy for plan years starting on or after January 1, 2021 that has caused commercial payers to more widely adopt co-pay accumulator adjustment programs.

While the U.S.

District Court for the District of Columbia struck down this policy in September 2023 and further clarified in December 2023 that its ruling had the effect of reinstating the co-pay accumulator adjustment policy from 2020, CMS and HHS have signaled that they do not intend to enforce certain restrictions from the 2020 policy that would reduce the adoption of co-pay accumulator adjustment programs.

Payers, including PBMs, have sought, and continue to seek, price discounts or rebates in connection with the placement of our products on their formularies or those they manage, and to also impose restrictions on access to, or usage of, our products (such as Step Therapy), require that patients receive the payer’s prior authorization before covering the product, and/or chosen to exclude certain indications for which our products are approved.

For example, some payers require physicians to demonstrate or document that the patients for whom Repatha has been prescribed meet their utilization criteria, and these requirements have served to limit and may continue to limit patient access to Repatha treatment.

In an effort to reduce barriers to access, we reduced the net price of Repatha by providing greater discounts and rebates to payers (including PBMs that administer Medicare Part D prescription drug plans), and in response to a very high percentage of Medicare patients abandoning their Repatha prescriptions rather than paying their co-pay, we introduced a set of new National Drug Codes to make Repatha available at a lower list price.

However, affordability of patient out-of-pocket co-pay cost has limited, and may continue to limit, patient use.

Further, despite these net and list price reductions, some payers have restricted, and may continue to restrict, patient access and may seek further discounts or rebates or take other actions, such as changing formulary coverage for Repatha, that could reduce our sales of Repatha.

These factors have limited, and may continue to limit, patient affordability and use, negatively affecting Repatha sales.

Further, 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 and limiting patient access and usage.

For example, in the United States, as of the beginning of 2024, the top five integrated health plans and PBMs controlled about 92% of all pharmacy prescriptions.

For example, in the United States, the FTC’s interim report released in 2024 showed that the top six integrated health plans and PBMs controlled about 94% of all pharmacy prescriptions.

This high degree of consolidation among insurers, PBMs and other payers, including integrated healthcare delivery systems and/or with specialty or mail-order pharmacies and pharmacy retailers, has increased the negotiating leverage such entities have over us and other biopharmaceutical manufacturers and has resulted in greater price discounts, rebates and service fees realized by those payers from our business.

Each of CVS, Express Scripts and United Health Group (among the top five integrated health plans and PBMs), have Rebate Management Organizations that further increase their leverage to negotiate deeper discounts.

Ultimately, additional discounts, rebates, fees, coverage changes, plan changes, restrictions or exclusions imposed by these commercial payers could have a material adverse effect on our product sales, business and results of operations.

Each of CVS, Express Scripts and United Health Group (among the top six integrated health plans and PBMs) have Rebate Management Organizations that further increase their leverage to negotiate deeper discounts on their behalf and for the benefit of their other customers.

Ultimately, additional discounts, rebates, fees, coverage changes, plan changes, restrictions or exclusions imposed by these commercial payers could have a material adverse

effect on our product sales, business and results of operations.

Policy reforms advanced by Congress or the Administration that refine the role of PBMs in the U.S.

marketplace could have downstream implications or

consequences for our business and how we interact with these entities.

For example, in June 2022, the FTC launched an inquiry into the business practices of PBMs and subsequently expanded the investigation to the three rebate management organizations owned by the three largest PBMs.

In addition, multiple Congressional Committees are investigating PBM practices and have also proposed legislation that could increase transparency and reporting of these practices and/or impact rebates and service fees.

The results of such inquiry could have an effect on manufacturer interactions with PBMs, resulting in changes to access for certain medicines.

marketplace could have downstream implications or consequences for our business and how we interact with these entities.

For example, in September 2024, the FTC brought action against the three largest PBMs alleging anticompetitive and unfair rebating practices.

In addition, multiple Congressional Committees have been investigating PBM practices and have also proposed legislation that could increase transparency and reporting of these practices and/or impact rebates and service fees.

The results of such inquiries could have an effect on manufacturer interactions with PBMs, resulting in changes to access for certain medicines.

See 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.

Our business is also affected by policies implemented by private healthcare entities that process Medicare claims, including Medicare Administrative Contractors.

For example, in the second quarter of 2022, several Medicare Administrative Contractors issued notice that TEZSPIRE would be added to their “self-administered drug” exclusion lists.

For example, in 2022, several Medicare Administrative Contractors issued notice that TEZSPIRE would be added to their “self-administered drug” exclusion lists.

Although the Medicare Administrative Contractors subsequently removed TEZSPIRE from their exclusion lists, these exclusions, if reintroduced and/or implemented, would result in Medicare beneficiaries with severe asthma losing access to TEZSPIRE coverage under Medicare Part B and potentially also under Medicare Advantage.

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Business—Reimbursement.

Pressures to decrease drug expenditures may intensify as governments take actions to address budgets strained by high inflation, expenditures to respond to the COVID-19 pandemic and weak economic conditions, including in Europe where the effects of the Russia–Ukraine conflict have challenged the economies in that region.

Further, the EU is currently undergoing a review and possible revision of its pharmaceutical legislation that, while full implementation is not expected before 2027, could lead to proposals that will reduce intellectual property protection for new products (including potentially shortening the duration of regulatory data exclusivity and orphan drug exclusivity protections), as well as change the reimbursement and regulatory landscape.

International reference pricing has been widely used by many countries outside the United States to control costs based on an external benchmark of a product’s price in other countries.

International reference pricing policies can change quickly and frequently and may not reflect differences in the burden of disease, indications, market structures or affordability differences across countries or regions.

Other expenditure control practices, including but not limited to the use of revenue clawbacks, rebates and caps on product sales, are used in various foreign jurisdictions as well.

Pressures to decrease drug expenditures may intensify as governments take actions to address budgets strained by high inflation and weak economic conditions, including in Europe where the effects of the Russia–Ukraine conflict have challenged the economies in that region.

Further, the EU is currently undergoing a review and revision of its general pharmaceutical legislation that, while full implementation is not expected before 2027, has led to proposals that would reduce intellectual property protection for new products (including potentially shortening the duration of regulatory data exclusivity and orphan drug exclusivity protections), as well as change the reimbursement and regulatory landscape.

International reference pricing has been widely used by many countries outside the United States to control costs.

Other expenditure control practices, including the use of revenue clawbacks, rebates and caps on product sales, are also used in various foreign jurisdictions.

In addition, countries may refuse to reimburse, or may restrict the reimbursed population for a product, when their national health technology assessments do not consider a medicine to demonstrate sufficient clinical benefit beyond existing therapies or to meet certain cost effectiveness thresholds.

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Failure to obtain coverage and reimbursement for our products, a deterioration in their existing coverage and reimbursement, or a decline in the timeliness or certainty of payment by payers to hospitals and other providers, has negatively affected, and may further negatively affect, the ability or willingness of healthcare providers to prescribe our products for their patients and otherwise negatively affect the use of our products or the prices we realize for them.

Such changes have had, and could in the future have, a material adverse effect on our product sales, business and results of operations.

Such failures and changes have had, and could in the future have, a material adverse effect on our product sales, business and results of operations.

Guidelines and recommendations published by various organizations can reduce the use of our products.

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In addition, government health technology assessment organizations in many countries make reimbursement recommendations to payers in their jurisdictions based on the clinical effectiveness, cost-effectiveness and service effects of new, emerging and existing medicines and treatments.

Such health technology assessment organizations have recommended, and may in the future recommend, reimbursement for certain of our products for a narrower indication than was

approved by applicable regulatory agencies or may recommend against reimbursement entirely.

See 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.

The EU has adopted regulations, effective beginning in January 2025, that are intended to increase cooperation among EU member states and harmonize various procedures and standards at the EU level in assessing health technologies and in support of joint clinical assessments of health technologies and medicines.

Such health technology assessment organizations have recommended, and may in the future recommend, reimbursement for certain of our products for a narrower indication than was approved by applicable regulatory agencies or may recommend against reimbursement entirely.

See 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.

The EU has adopted regulations, beginning this year, intended to increase cooperation among EU member states and harmonize various procedures and standards at the EU level in assessing health technologies and in support of joint clinical assessments of health technologies and medicines.

These and other such recommendations or guidelines may affect our reputation, and any recommendations or guidelines that result in decreased use, dosage or reimbursement of our products could have a material adverse effect on our product sales, business and results of operations.

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The cases were consolidated on December 19, 2022.

The trial began on November 4, 2024 and concluded on January 17, 2025.

With the conclusion of the trial, the parties will file post-trial briefs and make closing arguments in 2025.

The Company expects a decision from the U.S.

Tax Court no earlier than 2026.

We are currently also under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period.

We believe that the IRS may also seek to continue to audit similar issues related to the allocation of income between the United States and the U.S.

territory of Puerto Rico for years beyond 2018.

In addition, we are under examination by a number of state and foreign tax jurisdictions.

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As previously reported, the OECD reached an agreement to align countries on a minimum corporate tax rate and an expansion of the taxing rights of market countries.

Effective January 1, 2024, select individual countries, including the United Kingdom and EU member countries, have enacted the global minimum tax agreement.

As of January 1, 2025, select individual countries, including the United Kingdom, EU member countries, and Singapore, have enacted the global minimum tax agreement.

Our legal entities in the countries that have enacted the agreement, along with their direct and indirect subsidiaries, are now subject to a 15% minimum tax rate on adjusted financial statement income.

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The Administration and U.S.

Congress continue to discuss various proposals that would change the international provisions of the 2017 Tax Act and other corporate provisions of U.S.

Congress are discussing various proposals that would renew, modify, or eliminate the international and other corporate provisions of the 2017 Tax Act and U.S.

tax law more generally.

Changes to existing tax law in the United States, the U.S.

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Product liability claims, regardless of their merits, could be costly and divert management’s attention and could adversely affect our reputation and the demand for our products.

We and certain of our subsidiaries have previously been named as defendants in product liability actions for certain of our products.

We and certain of our subsidiaries have previously been, and currently are, named as defendants in product liability actions for certain of our products.

We are also involved in government investigations that arise in the ordinary course of our business.

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We cannot ensure that all our employees, agents, contractors, vendors, licensees, partners or collaborators will comply with all applicable laws and regulations.

On April 25, 2019, we entered into a settlement agreement with the DOJ and the OIG of the HHS to settle certain allegations relating to our support of independent charitable organizations that provide patients with financial assistance to access their medicines.

As a result, we entered into a corporate integrity agreement with the OIG that requires us to maintain a corporate compliance program and to undertake a set of defined corporate integrity obligations through April 2024.

While we expect to fully comply with all of our obligations under the corporate integrity agreement, failure to do so could result in substantial penalties and potential exclusion from government healthcare programs.

We entered into a corporate integrity agreement with the DOJ and the OIG of the HHS to settle certain allegations relating to our support of independent charitable organizations that provide patients with financial assistance to access their medicines that required us to maintain a corporate compliance program and to undertake a set of defined corporate integrity obligations through April 2024, and that we completed on November 27, 2024.

While we fully complied with all of our obligations under the corporate integrity agreement, we may be subject to future corporate integrity agreements and failure to comply could result in substantial penalties and potential exclusion from government healthcare programs.

We may also see new government investigations of or actions against us citing novel theories of recovery.

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We may pay substantial amounts of cash, incur debt or issue equity securities to pay for acquisition activities, which could adversely affect our liquidity or result in dilution to our stockholders, respectively.

For example, the primary sources of funds for our acquisition of Horizon were those received from our $24 billion of senior notes issued on March 2, 2023, together with the $4 billion drawn down from our term loan facility, and while the Company currently has investment grade credit ratings, this substantial additional indebtedness has resulted in downgrades to our credit ratings.

For example, the primary sources of funds for our acquisition of Horizon were those received from our $24 billion of senior notes issued on March 2, 2023, together with the $4 billion drawn down from our term loan facility, of which we repaid $2.2 billion, and while the Company currently has investment grade credit ratings, this substantial additional indebtedness resulted in downgrades to our credit ratings.

Further, failures or difficulties in integrating or retaining new personnel or in integrating the operations of the businesses, products or assets we acquire (including related technology, research, development and commercial operations, compliance programs, manufacturing, distribution and general business operations and procedures and ESG activities) may affect our ability to realize the benefits of the transaction and grow our business and may result in us incurring asset impairment or restructuring charges.

These and other challenges may arise in connection with our acquisitions of Otezla, Five Prime, Teneobio, ChemoCentryx, Horizon and/or our collaborations with BeiGene and Kyowa Kirin, or with other acquisition activities, which could have a material adverse effect on our business, results of operations and stock price.

These and other challenges may arise in connection with our acquisitions, including our acquisitions of ChemoCentryx and Horizon and/or our collaborations with BeiGene and Kyowa Kirin, or with other acquisition activities, which could have a material adverse effect on our business, results of operations and stock price.

We may not realize the anticipated strategic benefits of our acquisition of Horizon, including our efforts to leverage Amgen’s global presence and commercial and medical capabilities in inflammation and nephrology to accelerate revenue growth of Horizon’s products.

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We may also face greater than expected challenges associated with rare disease drug development (such as challenges obtaining patients for clinical trials and/or regulatory approvals) and reimbursement (such as obtaining reimbursement of orphan drugs by public health systems).

We are in the process of integrating the Horizon business into ours, including a large number of complex operational and administrative systems, to form a unified combined company, including with respect to human resources, intellectual property management, research and development activities, finance, accounting and internal control processes and systems, sales operations, product distribution, commercialization efforts, information and information security systems, compliance programs and policies and supply chain systems and third party relationships (including vendors and third party manufacturers).

We are in the process of completing the integration of the Horizon business into ours, including a number of complex operational and administrative systems, including with respect to information and information security systems and supply chain systems and third party relationships (including vendors and third party manufacturers).

For example, Horizon adds more than 30 contract manufacturing organizations (CMOs) to our operations, many of which are single source suppliers (including the CMO that produces TEPEZZA drug substance and the CMO that produces all of our KRYSTEXXA drug substance in Israel that is affected by the current conflict in Israel and Gaza).

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These integration efforts may also divert our management’s attention and resources away from other business operations, which may disrupt to some degree our ongoing business.

Failure to successfully integrate the Horizon business into ours and/or achieve its anticipated strategic benefits may result in our incurring significant asset impairment or restructuring charges, and could have a material adverse effect on our business, results of operations and stock price.

We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

The capital and credit markets may experience extreme volatility and disruption, which may lead to uncertainty and liquidity issues for both borrowers and investors.

For example, in early 2020, there were significant disruptions in the commercial paper market and several borrowers were unable to obtain funding at normal rates or maturities, which resulted in a significant increase in draws of corporate credit lines with banks.

Similarly, the bond markets experienced extreme volatility in terms of interest rates and credit spreads, with several days without new issuances of corporate bonds.

While we have historically accessed capital markets to supplement our existing funds and cash generated from operations to satisfy our needs for capital expenditures, debt service requirements, to pay dividends and repurchase stock, and engage in other business initiatives, including acquisitions and licensing activities, in 2023, we substantially increased our outstanding indebtedness in connection with our acquisition of Horizon, which may limit our ability to timely obtain additional financing on desired terms.

See Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the

operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .

While our plans include reducing our debt leverage levels before returning to the capital or credit markets for new funds, if we are required to access the capital and credit markets at an inopportune time, including when adverse capital and credit market conditions prevail, we may be unable to obtain financing on favorable terms, or at all, which could have a material adverse effect on our business and results of operations or our ability to complete business acquisitions.

Changes in credit ratings issued by nationally recognized credit-rating agencies could also adversely affect our ability to obtain capital and credit market financing and the cost of such financing and have an adverse effect on the market price of our securities.

Failure to successfully fully integrate the Horizon business into ours and/or achieve its anticipated strategic benefits may result in our incurring significant asset impairment or restructuring charges, and could have a material adverse effect on our business, results of operations and stock price.

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.

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Further, as the majority of our employees work remotely for some portion of their jobs in our hybrid work environment, our reliance on our and third-party information technology systems has increased substantially and is expected to continue to increase.

Remote and hybrid working arrangements, including those of at many third-party providers, can increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

Remote and hybrid working arrangements, including those of many third-party providers, can increase cybersecurity risks due to the challenges associated

with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

The complexity and interconnected nature of software, hardware and our systems make them vulnerable to breakdown or other service interruptions, and to software errors or defects, misconfiguration and other security vulnerabilities.

For example, in July 2024, businesses worldwide were affected by an information technology outage due to a faulty software update issued by a cybersecurity firm.

Although our systems and operations were temporarily affected by the outage, the impact of this firm’s faulty update on the Company was immaterial to our business operations.

However, there can be no assurance that a future similar incident would not result in a material adverse effect on our business or results of operations.

Upgrades or changes to our systems or the software that we use have resulted and we expect, in the future, will result in the introduction of new cybersecurity vulnerabilities and risks.

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For example, as a result of our cybersecurity monitoring of the Horizon legacy information systems, we detected phishing activity in the accounts of two Horizon executives.

These accounts were de-activated, the incidents were investigated and the determination was made separately by both our internal cybersecurity team and our external digital forensics and incident response supplier that no confidential information had been exfiltrated.

As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication, and intensity, and are becoming increasingly difficult to detect and increasingly sophisticated in using techniques and tools—including artificial intelligence—that circumvent security controls, evade detection and remove forensic evidence.

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Intentional or inadvertent data privacy or security breaches (including cyberattacks) resulting from attacks or lapses by employees, service providers (including providers of information technology-specific services), business partners, nation states (including groups associated with or supported by foreign intelligence agencies), organized crime organizations, “hacktivists” or others, create risks that our sensitive data may be exposed to unauthorized persons, our competitors or the public.

Malicious actors, including those working under state-sponsored campaigns, have sought employment, often in remote information technology roles, as a means to gain inside access at targeted companies.

In the third quarter of 2024, an individual used fraudulent identification in connection with their hiring by the Company.

While the individual was detected and terminated before any data was extracted or malware installed, there can be no assurance that future attempts by similar actors will be unsuccessful.

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.

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As required, we promptly notified the applicable state attorneys general and the individuals whose personally identifiable information was affected of this data breach at the supplier.

In the third quarter of 2022, another service provider experienced a similar cybersecurity breach in which an attacker exfiltrated certain data (including non-significant Amgen data) from the service provider’s systems.

In the third quarter of 2022, another service provider experienced a

similar cybersecurity breach in which an attacker exfiltrated certain data (including non-significant Amgen data) from the service provider’s systems.

Additionally, in April 2024, one of our former vendors notified us that its subsidiary that had provided us with certain patient support services until mid-2022, experienced a cybersecurity incident that it discovered in February 2024 and that data containing individually identifiable health information of over 1.7 million Amgen patients (that was retained as required by FDA regulations) was involved in the incident.

Pursuant to the Health Breach Notification Rule requirements, we notified the FTC of this incident.

Although these supplier data breaches have not resulted in material adverse effects on our business, there can be no assurance that a similar future cybersecurity incident would not result in a material adverse effect on our business or results of operations.

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While we were able to reconnect our systems following restoration of these vendors’ capabilities without significantly affecting product availability, a more extended service outage affecting these or other vendors, particularly where such vendor is the single source from which we obtain the services, could have a material adverse effect on our business or results of operations.

In February 2024, Change Healthcare, a large U.S.

insurance claim and co-pay card processing clearinghouse, experienced a ransomware attack that has caused significant disruptions to healthcare provider and pharmacy operations.

While Change Healthcare does not directly provide us with services, disruptions to co-pay card support, insurance billing and Medicaid rebate processing led to lost sales and required us to take action to help patients access their medications and to provide extended payment terms to certain customers.

Although services have been rerouted and restored, and the impact on our business has been immaterial, similar disruptions may occur in the future stemming from the interconnectedness of the U.S.

healthcare ecosystem and industry reliance on centralized claims processing systems and networks, and such future disruptions may have a material adverse effect on our business or results of operations.

In addition, we distribute our products in the United States primarily through three pharmaceutical wholesalers, and a security breach that impairs the distribution operations of our wholesalers could significantly impair our ability to deliver our products to healthcare providers and patients.

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While we maintain cyber-liability insurance, our insurance is not sufficient to cover us against all losses that could potentially result from a service interruption, breach of our systems or loss of our critical or sensitive data.

We are also subject to various laws and regulations globally regarding privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal data.

We are also subject to various laws and regulations globally regarding cybersecurity, privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal

The legislative and regulatory environment regarding privacy and data protection is continuously evolving and developing and the subject of significant attention globally.

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The CCPA was amended in late 2020, to create the California Privacy Rights Act to create opt in requirements for the use of sensitive personal data and the formation of a new dedicated agency for the enforcement of the law, the California Privacy Protection Agency.

Similar consumer privacy laws went into effect in Virginia, Colorado, Utah, Connecticut and Florida in 2023.

Consumer privacy laws were also passed in eleven other states, with the earliest effective dates later this year, and proposed in three additional states.

Outside the United States, other jurisdictions where we operate have passed, or continue to propose, similar legislation and/or regulations.

Similar consumer privacy laws went into effect in 13 other states, have been enacted (but not yet in effect) in 6 other states, and have been proposed in four additional states.

Outside the United States, other jurisdictions where we operate have passed, or continue to propose, data privacy or cybersecurity legislation and/or regulations.

For example, in China, the Personal Information Protection Law and the Data Security Law, which regulate data processing activities associated with personal and nonpersonal data, are in effect and build upon the existing Cybersecurity Law.

Failure to comply with these current and future laws could result in significant penalties and reputational harm and could have a material adverse effect on our business and results of operations.

We are adopting and exploring the use of artificial intelligence (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.

Reliance on flawed outputs could result in lower quality decision-making or prevent us from effectively utilizing AI in our business.

We may also become vulnerable to operational disruptions if the AI technologies we use experience downtimes or are compromised by cyberattacks.

If we do not effectively implement guardrails and train our staff on the safe and proper use of AI, or if our staff fail to effectively adhere to our established guardrails and training on the use of AI, we may experience adverse effects on our business, including data breaches, the loss of confidential information (including our intellectual property), unintentional disclosure of personal data, or other misuse of our proprietary information.

Further, several governments and regulatory authorities have proposed or passed laws and regulations governing the use of AI.

For example, in March 2024, the European Parliament adopted the Artificial Intelligence Act that provides for EU-wide rules on data quality, transparency, human oversight and accountability with respect to the use of artificial intelligence.

In April 2024, the EU also revised its Cybersecurity Directive NIS2 rules that create new cybersecurity risk management and reporting obligations.

Failure to comply with these current and future laws could result in significant penalties and reputational harm and could have a material adverse effect on our business and results of operations.

Our sales and operations are subject to the risks of doing business internationally, including in emerging markets.

As we continue our expansion efforts in emerging markets around the world, through acquisitions and l icensing transactions as well as through the development and introduction, both independently and through collaborations such as our collaboration with BeiGene, of our products in new markets, we face numerous risks to our business.

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, both independently and through collaborations such as our collaboration with BeiGene, of our products in new markets, we face numerous risks to our business.

There is no guarantee that our efforts and strategies to expand sales in emerging markets will succeed.

Our international business, including in China and emerging market countries, may be especially vulnerable to periods of global and local political, legal, regulatory and financial instability, including issues of geopolitical relations, the imposition of international sanctions in response to certain state actions and/or sovereign debt issues, and management of health policy in response to pressures such as global pandemics.

For example, the BIOSECURE Act that prohibits federal contracting with companies that have commercial connections with enumerated “biotechnology companies of concern” located in certain geographies, including China, has passed in the U.S.

House of Representatives, and, if passed by the U.S.

Senate and signed into law by the Administration, could restrict our ability to contract or collaborate with such biotechnology companies in the future.

If relations between the United States and other governments deteriorate, our business and investments in such markets may also be adversely affected.

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Our expansion efforts in China and emerging markets around the world are dependent upon the establishment of an environment that is predictable, navigable and supportive of biopharmaceutical innovation, sustained access for our products and predictable pricing controls.

For example, China continues to strengthen regulations on the collection, use and transmission of Chinese human genetic resources, and has expanded regulations on the conduct of biotechnology R&D activities in China.

Between 2020 and 2022, we experienced delays in our applications to the Human Genetic Resources Administration of China that sought approval to conduct clinical trials in China.

China continues to strengthen regulations on the collection, use and transmission of Chinese human genetic resources, and has expanded regulations on the conduct of biotechnology R&D activities in China.

For example, between 2020 and 2022, we experienced delays in our applications to the Human Genetic Resources Administration of China that sought approval to conduct clinical trials in China.

Our international operations and business may also be subject to less protective intellectual property or other applicable laws, diverse data privacy and protection requirements, changing tax laws and tariffs, trade restrictions or other barriers designed to protect industry in the home country against foreign competition, far-reaching antibribery and anticorruption laws and regulations and/or evolving legal and regulatory environments.

For example, recent cross-border data transfer compliance requirements in China may also impose additional costs of doing business, including costs associated with localizing operations.

For example, recent cross-border data transfer compliance requirements in China, as well as a new DOJ final rule on preventing access to Americans’ bulk sensitive personal data by “countries of concern,” may also impose additional costs of doing business, including costs associated with localizing operations.

In response to the ongoing armed conflict in Ukraine, the U.S.

government, numerous state governments, the EU and other countries in which we conduct business have imposed a wide range of economic sanctions that restrict commerce and business dealings with Russia, certain regions of Ukraine and certain entities and individuals.

Additionally, the armed conflict in the Middle East that has been ongoing since October 2023 has caused regional disruptions to economic activity.

Additionally, the recent armed conflict in the Middle East has caused regional disruptions to economic activity.

For a description of the conflict’s impact on our third-party contract manufacturing of KRYSTEXXA, see Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .

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Overall, the legal and operational challenges of our international business operations, along with government controls, the challenges of attracting and retaining qualified personnel and obtaining and/or maintaining necessary regulatory or pricing approvals of our products, may result in material adverse effects on our international product sales, business and results of operations.

We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

The capital and credit markets may experience extreme volatility and disruption, which may lead to uncertainty and liquidity issues for both borrowers and investors.

Similarly, the bond markets experienced extreme volatility in terms of interest rates and credit spreads, with several days without new issuances of corporate bonds.

See Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .

While we have reduced, and plan to continue to reduce, our debt leverage levels before returning to the capital or credit markets for new funds, if we are required to access the capital and credit markets at an inopportune time, including when adverse capital and credit market conditions prevail, we may be unable to obtain financing on favorable terms, or at all, which could have a material adverse effect on our business and results of operations or our ability to complete business acquisitions.

RISKS RELATED TO COMPETITION

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These advantages may make it difficult for us to compete with them successfully to discover, develop and market new products and for our current products to compete with new products or new product indications they may bring to market.

As a result, our products have been competing and may continue to compete, and our product candidates may compete, against products or product candidates that offer higher rebates or discounts, lower prices, equivalent or superior efficacy, better safety profiles, easier administration, earlier market availability or other competitive features.

If we are unable to compete effectively, this could reduce our sales, which could have a material adverse effect on our business and results of operations.

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Driven by cost pressures, efforts to limit or weaken patent protection for our industry are increasing.

For example, the COVID-19 pandemic has resulted in increased interest in compulsory licenses, march-in rights or other governmental interventions, both in the United States and internationally, related to the procurement of drugs, and the World Trade Organization has agreed to a waiver of COVID-19 vaccine intellectual property protections through the Trade-Related Aspects of Intellectual Property Rights waiver process.

Also, in December 2023, the Administration released a proposed framework that would consider price as a factor when determining whether to exercise march-in rights pursuant to the Bayh-Dole Act with respect to drugs or other taxpayer-funded inventions.

For example, the COVID-19 pandemic resulted in increased interest in compulsory licenses, march-in rights or other governmental interventions, both in the United States and internationally, related to the procurement of drugs, and the World Trade Organization has agreed to a waiver of COVID-19 vaccine intellectual property protections through the Trade-Related Aspects of Intellectual Property Rights waiver process.

At the end of 2023, the prior Administration released a proposed framework that would consider price as a factor when determining whether to exercise march-in rights pursuant to the Bayh-Dole Act with respect to drugs or other taxpayer-funded inventions, and it is unclear whether the current Administration will finalize this framework.

Further, in early 2025, the new Administration has taken actions to freeze or reduce the federal workforce.

Significant reductions of, or disruptions to, staffing and resources available at the USPTO could lead to delays in the examination or approval of patent applications, or other challenges to securing and/or enforcing our intellectual property rights.

Third parties have challenged and may continue to challenge, invalidate or circumvent our patents (including any patent applications, term extensions, term adjustments and supplemental protection certificates) relating to our products, product candidates and technologies.

See Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.

Challenges to patents may come from potential competitors or from parties other than those who seek to market a potentially-infringing product.

In addition, our patent positions might not protect us against competitors with similar products or technologies because competing products or technologies may not infringe our patents.

For certain of our product candidates, there are third parties who have patents or pending patent applications that they may claim necessitate payment of a royalty or prevent us from commercializing these product candidates in certain territories.

Challenges to patents have come from potential competitors or from parties other than those who sought to market a potentially-infringing product.

In addition, in certain cases our patent positions have not protected us, and may not protect us, against competitors with similar products or technologies because competing products or technologies may not infringe our patents.

For certain of our products and/or product candidates, third parties may obtain patents that claim the product, one or more of its uses, the drug delivery device used to administer the product, or our manufacturing process used to make the product, and they may seek to prevent us from commercializing the product and/or seek payment of a royalty on the product’s sales in one or more territories.

Further, disputes may arise with third parties from whom we have licensed rights to intellectual property necessary for the development and commercialization of some of our products.

For example, we are in a dispute with Roche regarding a license agreement that we acquired through our acquisition of Horizon for patents and know-how for TEPEZZA.

Patent disputes are frequent, costly and can preclude, delay or increase the cost of commercialization of products.

We have been in the past, are currently and expect to be in the future, involved in patent litigation.

These matters have included, and may in the future include, litigation with manufacturers of products that purport to be biosimilars of certain of our products for patent infringement, invalidity, unenforceability and failure to comply with certain provisions of the BPCIA.

A determination made by a court, agency or tribunal concerning infringement, validity, enforceability, injunctive or economic remedy, or the right to patent protection, for example, are typically subject to appellate or administrative review.

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We have been, and may in the future be, subject to competition during this period and may not be able to recover fully from the losses, damages and harms we incur from infringement by the competitor product even if we prevail.

Moreover, if we lose or settle current or future litigations at certain stages or entirely, we could be subject to competition and/or significant liabilities, be required to enter into third-party licenses for the infringed product or technology or be required to

cease using the technology or product in dispute.

In addition, we cannot guarantee that such licenses will be available on terms acceptable to us, or at all.

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In addition, we have faced, and may in the future face, patent litigation involving claims that our biosimilar product candidates infringe the patents of other companies, including those that manufacture, market or sell the applicable reference products or who are developing or have developed other biosimilar versions of such products.

Alternatively, patents held by other entities have contributed, and may in the future contribute, to a decision by us to not pursue all of the same labeled indications as are held by these companies.

While we have attempted, and expect to continue to attempt, to challenge the patents held by other companies, our efforts may be unsuccessful.

Patents held by other entities have contributed, and may in the future contribute, to a decision by us to not pursue all of the labeled indications of the applicable reference product.

However, a decision not to pursue all of the labeled indications of the applicable reference product might not avoid, or end, potential litigation.

While we have attempted,

and expect to continue to attempt, to challenge the patents held by other companies, our efforts may be unsuccessful.

For examples of and information related to our patent litigation, see Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.

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Some EU countries impose automatic price reductions upon market entry of one or more biosimilar competitors.

In September 2022, the EMA and the EU Heads of Medicines’ Agencies (HMA) issued a joint statement providing that biosimilar medicines approved in the EU are “interchangeable” with their reference products and other biosimilars of the same reference product.

This EMA-HMA statement could further contribute to the prescribing of biosimilars and to greater competition in Europe.

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Business—Government Regulation—Regulation in the United States—Approval of Biosimilars.

In the United States, the FDA has approved numerous biosimilars, including biosimilar versions of Neulasta, EPOGEN and ENBREL, and a growing number of companies have announced that they are also developing biosimilar versions of our products.

For example, six biosimilar versions of Neulasta are now approved in the United States, including an on-body injector presentation that was approved in December 2023 for a Neulasta biosimilar, and we expect that other biosimilar versions of Neulasta may be marketed or receive approval in the future.

Impact to our Neulasta sales has accelerated as additional competitors have launched.

In the United States, the FDA has approved numerous biosimilars, including biosimilar versions of Neulasta, EPOGEN, ENBREL, Prolia and XGEVA, and a growing number of companies have announced that they are also developing biosimilar versions of our products.

For example, a number of biosimilar versions of Neulasta have been approved in the United States, including an on-body injector presentation that was approved in December 2023 for a Neulasta biosimilar, and impact to our Neulasta sales has been accelerated as the number of additional competitors has increased.

Business—Marketing, Distribution and Selected Marketed Products—Competition.

Manufacturers of biosimilars have attempted, and may in the future attempt, to compete with our products by offering lower list prices, greater discounts or rebates, or contracts that offer longer-term pricing or a broader portfolio of other products.

Manufacturers of biosimilars have attempted, and may in the future attempt, to compete with our products by offering greater discounts or rebates, contracts that offer longer-term pricing or a broader portfolio of other products, or lower list prices.

Companies pursuing development of biosimilar versions of our products have challenged and may continue to challenge our patents well in advance of the expiration of our material patents.

For examples of and information related to our biosimilars and generics patent litigation, see Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.

intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation.

See Our intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation.

biosimilar pathway includes the option for biosimilar products that meet certain criteria to be approved as interchangeable with their reference products.

Some companies currently developing or already marketing biosimilars may seek to obtain interchangeable status from the FDA, which could potentially allow pharmacists to substitute those biosimilars for our reference products without prior approval from the prescriber in most states under state law.

The FDA approved the first interchangeable biosimilar in 2021 and has subsequently granted interchangeability designations to additional biosimilars, including without always requiring a switching study.

For example, in August 2022, the FDA designated a monoclonal antibody biosimilar as interchangeable without requiring a switching study to support the interchangeability determination, and has continued to make other such designations of interchangeability on a case-by-case basis.

In addition, critics of the 12-year exclusivity period in the biosimilar pathway law will likely continue to seek to shorten the data exclusivity period and/or to encourage the FDA to interpret narrowly the law’s provisions regarding which new products receive data exclusivity.

In June 2024, the FDA issued a draft guidance on considerations for demonstrating interchangeability and stated that switching studies generally would not be needed, potentially codifying the FDA’s practice.

In addition, critics of the 12-year exclusivity period in the biosimilar pathway law may continue to seek to shorten the data exclusivity period and/or to encourage the FDA to interpret narrowly the law’s provisions regarding which new products receive data exclusivity.

In 2019, the Administration agreed to remove from the United States-Mexico-Canada Agreement a requirement for at least 10 years of data exclusivity for biologic products.

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There also have been, and may continue to be, legislative and regulatory efforts to promote competition through policies enabling easier generic and biosimilar approval and commercialization, including efforts to lower standards for demonstrating biosimilarity or interchangeability, eliminate the standard for interchangeability and declare by law that all biosimilars are de facto interchangeable with their reference products, limit patents that may be litigated and/or patent settlements, implement preferential reimbursement policies for biosimilars and pass new laws requiring more disclosure in the FDA’s Orange Book and Purple Book.

For example, in 2021 the FDA sent a letter to the USPTO describing ways to strengthen coordination between the two agencies, offered training to help identify prior art, and seeking USPTO’s views on practices that extend market exclusivities, whether pharmaceutical patent examiners need additional resources, and the effect of post-grant challenges at the Patent Trial and Appeal Board on drug patents.

For example, in 2021 the FDA sent a letter to the USPTO describing ways to strengthen coordination between the two agencies, offering training to help identify prior art, and seeking USPTO’s views on practices that extend market exclusivities, whether pharmaceutical patent examiners need additional resources, and the effect of post-grant challenges at the Patent Trial and Appeal Board on drug patents.

The USPTO responded in July 2022 with a letter to the FDA stating that it is prepared to create formal mechanisms to collaborate with the FDA on patent issues that may affect the timing of generic and biosimilar entry.

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Additionally, if one of our products is the subject of an FDA Written Request for pediatric studies and we are unable to adequately complete these studies, we may not obtain the pediatric exclusivity award that extends unexpired regulatory exclusivity for the product (and existing patents for a small molecule product) by an additional six months.

Further, in 2023, FDA draft guidance contemplates that the agency may no longer grant pediatric exclusivity for studies conducted solely to fulfill Pediatric Research Equity Act (PREA) requirements.

Further, in 2023, the FDA released draft guidance that contemplates that the agency may no longer grant pediatric exclusivity for studies conducted solely to fulfill Pediatric Research Equity Act (PREA) requirements.

While we are unable to predict the precise effects of biosimilars and generics on our products, we are currently facing and expect to face greater competition in the United States, Europe and elsewhere as a result of biosimilar and generic competition and, in turn, downward pressure on our product prices and sales.

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These distributors, in turn, sell our products to their customers, which include physicians or their clinics, dialysis centers, hospitals and pharmacies.

Similarly, as discussed above, there has been significant consolidation in the health insurance industry, including that a small number of PBMs now oversee a

substantial percentage of total covered lives in the United States.

Similarly, as discussed above, there has been significant consolidation in the health insurance industry, including that a small number of PBMs now oversee a substantial percentage of total covered lives in the United States.

For example, the five largest PBMs in the United States are now part of major health insurance providers, and nationally account for 92% of prescription drug claims.

For example, the six largest PBMs in the United States are now part of major health insurance providers, and nationally account for 94% of prescription drug claims.

The growing concentration of purchasing and negotiating power by these entities has, and may continue to, put pressure on our pricing due to their ability to extract price discounts on our products, fees for other services or rebates, negatively affecting our bargaining position, sales and/or profit margins.

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Further, if one of our significant wholesale distributors encounters financial or other difficulties and becomes unable or unwilling to pay us all amounts that such distributor owes us on a timely basis, or at all, it could negatively affect our business and results of operations.

In addition, if one of our significant wholesale distributors becomes insolvent or otherwise unable to continue its commercial relationship with us in its present form, it could significantly disrupt our business and adversely affect our product sales, our business and results of operations unless suitable alternatives are timely found or lost sales are absorbed by another distributor.

In addition, if one of our significant wholesale distributors becomes insolvent or otherwise unable to

continue its commercial relationship with us in its present form, it could significantly disrupt our business and adversely affect our product sales, our business and results of operations unless suitable alternatives are timely found or lost sales are absorbed by another distributor.

RISKS RELATED TO RESEARCH AND DEVELOPMENT

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We believe that genetics, together with the benefit of artificial intelligence and computational evidence, could meaningfully aid our search for new medicines and help guide our R&D decisions and investments, and have focused our R&D strategy on drug targets validated by genetic or other compelling human evidence.

We have invested considerable time, energy and resources into developing our expertise in human genetics, acquiring access to libraries of genetic information, and are applying artificial intelligence to our R&D activities, including applying such technologies to advance our human data efforts and our generative biology platform that seek to discover and design new drugs.

However, product candidates based on

genetically validated targets or developed with the assistance of such technologies remain subject to the uncertainties of the drug development process and may not reach the market for a number of reasons, including the factors listed above.

We have invested considerable time, energy and resources into developing our expertise in human genetics and acquiring access to libraries of genetic information, and are applying artificial intelligence to our R&D activities, including applying such technologies to advance our human data efforts and our generative biology platform that seek to discover and design new drugs.

However, product candidates based on genetically validated targets or developed with the assistance of such technologies remain subject to the uncertainties of the drug development process and may not reach the market for a number of reasons, including the factors listed above.

We must conduct clinical trials in humans before we commercialize and sell any of our product candidates or existing products for new indications.

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The length of time, number of trial sites and number of patients required for clinical trials vary substantially, and we may spend several years and incur substantial expense in completing certain clinical trials.

In addition, we may have difficulty finding a sufficient number of clinical trial sites and/or patients to participate in our clinical trials, particularly if competitors are conducting clinical trials in similar patient populations and/or in rare disease therapy clinical trials due to the inherently small patient population potentially served by such therapies.

Patients may withdraw from clinical trials at any time (including trials in which patients believe that they may not be receiving a clinical benefit), and privacy laws and/or other restrictions in certain countries may restrict the ability of clinical trial investigators to conduct further follow-up on such patients, which may adversely affect the interpretation of study results.

In addition, we may have difficulty finding a sufficient number of clinical trial sites and/or patients to participate in our clinical trials,

particularly if competitors are conducting clinical trials in similar patient populations and/or in rare disease therapy clinical trials due to the inherently small patient population potentially served by such therapies.

Patients may withdraw from clinical trials at any time (including trials in which patients believe that they may not be receiving a clinical benefit), and evolving legal obligations including, but not limited to, privacy laws and/or other restrictions in certain countries may restrict the ability of clinical trial investigators to conduct further follow-up on such patients, which may adversely affect the interpretation of study results.

Regulatory authorities may also pause or halt conduct of clinical trials based on their appraisal of the potential or actual risks of continuing the study.

Delays and complications in planned clinical trials can result in increased development costs, associated delays in regulatory approvals and in product candidates reaching the market and revisions to existing product labels.

Further, to increase the number of patients available for enrollment in our clinical trials, we have opened, and will continue to open, clinical sites and enroll patients in a number of locations where our experience conducting clinical trials is more limited, including India, China, South Korea, the Philippines, Singapore and some Central and South American countries, either through utilization of third-party contract clinical trial providers entirely or in combination with local staff.

Further, to increase the number of patients available for enrollment in our clinical trials, we have opened, and will continue to open, clinical sites and enroll patients in a number of locations where our experience conducting clinical trials is more limited, including India, China, South Korea, the Philippines, Singapore, Saudi Arabia and some Central and South American countries, either through utilization of third-party contract clinical trial providers entirely or in combination with local staff.

Conducting clinical trials in locations where we have limited experience requires substantial time and resources to understand the unique regulatory environments of individual countries.

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We rely on independent third-party clinical investigators to recruit patients and conduct clinical trials on our behalf in accordance with applicable study protocols, laws and regulations.

Further, we rely on unaffiliated third-party vendors to perform certain aspects of our clinical trial operations.

We also rely on unaffiliated third-party vendors to perform certain aspects of our clinical trial operations, including that such vendors have appropriate experienced staff to execute on such activities.

Further, the disease states that we are studying, such as cancers, require complex treatment protocols that may be difficult to consistently apply across global trial sites, which can impact the quality, interpretability, timing and/or registrability of the data generated.

In some circumstances, we enter into co-development arrangements with other pharmaceutical and medical devices companies that provide for the other company to conduct certain clinical trials for the product we are co-developing or to develop a diagnostic test used in screening or monitoring patients in our clinical trials.

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In the United States, a partial federal government shutdown halted the work of many federal agencies and their employees from late December 2018 through late January 2019.

A subsequent extended shutdown could result in reductions or delays of FDA’s activities, including with respect to our ongoing clinical programs, our manufacturing of our products and product candidates and our product approvals.

A subsequent extended shutdown or, pursuant to the new Administration’s actions in early 2025 to freeze or reduce the federal workforce, significant reductions of, or disruptions to, staffing and resources available to government agencies could result in reductions or delays of FDA’s activities, including with respect to our ongoing clinical programs, our manufacturing of our products and product candidates and our product approvals.

Regulatory authorities have questioned, and may in the future question, the sufficiency for approval of the endpoints we select for our clinical trials.

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Demonstrating that the product candidate induces MRD-negative responses or produces a statistically significant improvement in PFS does not necessarily mean that the product candidate will show a statistically significant improvement in overall survival or the time that the patients remain alive.

In the cardiovascular (CV) setting, a heart disease therapeutic candidate may be evaluated for its ability to reduce LDL-C levels, as an elevated LDL-C level has been a surrogate endpoint for CV events such as death, heart attack and stroke.

In the cardiovascular setting, a heart disease therapeutic candidate may be evaluated for its ability to reduce LDL-C levels, as an elevated LDL-C level has been a surrogate endpoint for cardiovascular events such as death, heart attack and stroke.

The use of surrogate endpoints such as PFS and LDL-C reduction, in the absence of other measures of clinical benefit, may not be sufficient for broad usage or approval even when such results are statistically significant.

Regulatory authorities could also add new requirements, such as the completion of enrollment in a confirmatory study or the completion of an outcomes study or a meaningful portion of an outcomes study, as conditions for obtaining approval or obtaining an indication.

For example, despite demonstrating that Repatha reduced LDL-C levels in a broad patient population, only after our large phase 3 outcomes study evaluating the ability of Repatha to prevent CV events met certain of its primary composite endpoint and key secondary composite endpoint did the FDA grant a broader approval of Repatha to reduce the risk of certain CV events.

Regulatory authorities could also add new requirements, such as the completion of enrollment in a confirmatory study or the completion of an outcomes study or a meaningful portion of an

outcomes study, as conditions for obtaining approval or obtaining an indication.

For example, despite demonstrating that Repatha reduced LDL-C levels in a broad patient population, only after our large phase 3 outcomes study evaluating the ability of Repatha to prevent cardiovascular events met certain of its primary composite endpoint and key secondary composite endpoint did the FDA grant a broader approval of Repatha to reduce the risk of certain cardiovascular events.

There may also be situations in which demonstrating the efficacy and safety of a product candidate may not be sufficient to gain regulatory approval unless superiority to other existing treatment options can be shown.

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For example, the FDA has approved LUMAKRAS under accelerated approval for the treatment of adult patients with KRAS G12C-mutated local advanced or metastatic NSCLC.

Following our submission of the LUMAKRAS/LUMYKRAS CodeBreaK 200 Phase 3 confirmatory data submission in March 2023 to the FDA and EMA, we received a Complete Response Letter from the FDA and a new post-marketing requirement for an additional confirmatory study to support full approval.

Following our submission of the LUMAKRAS/LUMYKRAS CodeBreaK 200 Phase 3 confirmatory data in March 2023 to the FDA and EMA, we received a Complete Response Letter from the FDA and a new post-marketing requirement for an additional confirmatory study to support full approval.

Regulatory authorities are placing greater focus on whether the sponsors of products originally approved on an accelerated or conditional basis have met the conditions of the accelerated or conditional approvals.

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Our product candidates and marketed products can also be affected by safety problems or signals occurring with respect to products that are similar to ours or that implicate an entire class of products.

Further, as a result of clinical trials, including sub-analyses or meta-analyses of earlier clinical trials (a meta-analysis involves the use of various statistical methods to combine results from previous separate but related studies) performed by us or others, concerns may arise about the

sufficiency of the data or studies underlying a product’s approved label.

Such actual or perceived safety problems or concerns can lead to:

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• treatments or product candidates not being approved by regulatory bodies.

For example, after an imbalance in positively adjudicated CV serious adverse events was observed in one of the phase 3 clinical trials for EVENITY but not in another, larger phase 3 study, in April 2019 the FDA approved EVENITY for the treatment of osteoporosis in postmenopausal women at high risk for fracture, along with a post-marketing requirement.

For example, after an imbalance in positively adjudicated cardiovascular serious adverse events was observed in one of the phase 3 clinical trials for EVENITY but not in another, larger phase 3 study, in April 2019 the FDA approved EVENITY for the treatment of osteoporosis in postmenopausal women at high risk for fracture, along with a post-marketing requirement.

The requirement includes a five-year observational feasibility study that could be followed by a comparative safety study or trial.

Regulatory authorities also require that our products are tested and controlled for impurities.

Impurities exceeding established limits may lead to delayed product approvals or disrupt the manufacture and distribution of our products.

For example, certain jurisdictions and regulatory agencies, including the FDA and EMA, require risk assessments, and if applicable, testing, for the presence of nitrosamine impurities in certain small molecule drugs, and we are following the established process of evaluating potentially impacted small molecule products.

Testing of our cinacalcet product has indicated the presence of nitrosamines in certain lots above established limits.

After working closely with regulatory agencies in each impacted country we have stopped distribution of cinacalcet in certain countries and initiated recalls in certain Middle Eastern countries.

In addition to our innovative products, we are working to develop and commercialize biosimilar versions of a number of products currently manufactured, marketed and sold by other pharmaceutical companies.

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Many of our products and product candidates may be used in combination with a drug delivery device, such as an injector or other delivery system.

For example, Neulasta is available as part of the Neulasta Onpro kit, our AutoTouch reusable autoinjector is used with ENBREL Mini single-dose prefilled cartridges, and Repatha can be administered with the Repatha SureClick autoinjector or Pushtronex automated mini doser.

For example, Neulasta is available as part of the Neulasta Onpro kit, our AutoTouch reusable autoinjector is used with ENBREL Mini single-dose prefilled cartridges, Repatha can be administered with the Repatha SureClick autoinjector, and WEZLANA uses our ConfiPen drug delivery device.

In addition, some of our products or product candidates, including many of our oncology product candidates and products, including LUMAKRAS/LUMYKRAS and bemarituzumab, may also require the use of a companion or other diagnostic device such as a device that determines whether the patient is eligible to use our drug or that helps ensure its safe and effective use.

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We are dependent on the sustained cooperation and effort of those third-party companies to supply and/or market the devices and, in some cases, to conduct the studies required for approval or clearance by the applicable regulatory agencies.

We are also dependent on those

third-party companies continuing to meet applicable regulatory or other requirements.

Failure to successfully develop, modify, or supply the devices, delays in or failures of the Amgen or third-party studies, or failure of us or the third-party companies to obtain or maintain regulatory approval or clearance of the devices could result in increased development costs;

We are also dependent on those third-party companies continuing to meet applicable regulatory or other requirements.

Failure to successfully develop, modify, or supply the devices, delays in or failures of the Amgen or third-party studies, or failure by us or the third-party companies to obtain or maintain regulatory approval or clearance of the devices could result in increased

development costs;

delays in, or failure to obtain or maintain, regulatory approval;

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Further, failure to successfully develop, supply, or gain or maintain approval for these devices could adversely affect sales of the related approved products.

See also We rely on third-party suppliers for certain of our raw materials, medical devices and components.

Some of our pharmaceutical pipeline and our commercial product sales rely on collaborations with third parties, which may adversely affect the development and sales of our products.

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We also operated on backup generators for a few weeks after the early 2020 earthquakes in Puerto Rico.

In 2021, the baseload power generation units of the Puerto Rico Electric Power Authority malfunctioned due to the lack of adequate maintenance for over a decade, leading to selective outages across the island.

In 2021, the baseload power generation units of the Puerto Rico Electric Power Authority malfunctioned, leading to selective outages across the island.

In September 2022, Hurricane Fiona caused further damage to the island’s utility infrastructure which again resulted in widespread power outages and water supply issues.

Although these events did not directly have a material effect on our

business, they have resulted in disruptions to our third-party suppliers on the island.

On December 31, 2024, an island-wide power outage also required that we operate on backup generators.

Although these events did not directly have a material effect on our business, they have resulted in disruptions to our third-party suppliers on the island.

Further instability of the electric grid could require us to increase our use of our generators or to use them exclusively.

In addition, future storms, earthquakes or other natural or man-made disasters or events (including political unrest or labor shortages) could have a more significant effect on our manufacturing operations.

In addition, future storms,

earthquakes or other natural or man-made disasters or events (including political unrest or labor shortages) could have a more significant effect on our manufacturing operations.

The COVID-19 pandemic also resulted in disruptions to activities on the island.

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Certain of those raw materials, medical devices and components are proprietary products of those unaffiliated third-party suppliers and are specifically cited in our drug applications with regulatory agencies so that they must be obtained from that specific sole source or sources and could not be obtained from another supplier unless and until the regulatory agency approved such supplier.

For example, we rely on a single source for the SureClick autoinjectors used in the drug delivery of Repatha, ENBREL, Aimovig, AMJEVITA/AMGEVITA and Aranesp, and we also rely on a single source for the Pushtronex automated mini doser used in the drug delivery of Repatha.

For example, we rely on a single source for the SureClick autoinjectors used in the drug delivery of Repatha, ENBREL, Aimovig, AMJEVITA/AMGEVITA and Aranesp, and we also relied on a single source for the Pushtronex automated mini doser used in the drug delivery of Repatha.

Recently, to uphold the high standards that we have set for patient experience and the need for a reliable supply of components, we have decided to discontinue the Repatha automated mini doser presentation in all countries and are working with health care professionals to transition patients to alternative Repatha delivery options.

Also, certain of the raw materials required in the commercial and clinical manufacturing of our products are sourced from other countries and/or derived from biological sources, including mammalian tissues, bovine serum and human serum albumin.

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For example, in prior years we have experienced shortages in certain components necessary for the formulation, fill and finish of certain of our products in our Puerto Rico facility, and we have also experienced shortages related to single use systems and packaging which has caused disruptions to our manufacturing plans.

Further quality issues that result in unexpected additional demand for certain components have resulted in shortages and in the future may lead to shortages of required raw materials or components (such as we have experienced with EPOGEN glass vials).

We may experience similar or

other shortages in the future resulting in delayed shipments, supply constraints, clinical trial delays, contract disputes and/or stock-outs of our products.

Further quality issues that result in unexpected additional demand for certain components have resulted in shortages and in the future may lead to shortages of

required raw materials or components (such as we have experienced with EPOGEN glass vials).

We may experience similar or other shortages in the future resulting in delayed shipments, supply constraints, clinical trial delays, contract disputes and/or stock-outs of our products.

These or other similar events could negatively affect our ability to satisfy demand for our products or conduct clinical trials, which could have a material adverse effect on our product sales, business and results of operations.

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In addition, we use third-party contract manufacturers to produce, or assist in the production of, a number of our products, and we currently use contract manufacturers to produce, or assist in the production of, a number of our late-stage product candidates and drug delivery devices.

The number of third-party contract manufacturers that we use has increased with our recent acquisition of Horizon, as Horizon required such contract manufacturers for all of its products.

The number of third-party contract manufacturers that we use has increased with our acquisition of Horizon, as Horizon required such contract manufacturers for all of its products.

See Part I, Item 1.

Business—Manufacturing, Distribution and Raw Materials—Manufacturing;

see also Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .

and Part I, Item 1A, Risk Factors— Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .

Our ability to adequately and timely manufacture and supply our products (and product candidates to support our clinical trials) is dependent on the uninterrupted and efficient operation of our facilities and those of our third-party contract manufacturers, which may be affected by:

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For example, in July 2014 we initiated a voluntary recall of an Aranesp lot distributed in the EU after particles were detected in a quality control sample following distribution of that lot, and in April 2018 we initiated a precautionary recall of two batches of Vectibix distributed in Switzerland after potential crimping defects were discovered in the metal seals on some product vials.

If we are at any time unable to provide an uninterrupted supply of our products to patients, we may lose patients and physicians may elect to prescribe competing therapeutics instead of our products, which could have a material adverse effect on our product sales, business and results of operations.

If we are at any time unable to provide an uninterrupted supply of our products to patients, we may lose patients and physicians may elect to prescribe competing

therapeutics instead of our products, which could have a material adverse effect on our product sales, business and results of operations.

Our manufacturing processes, those of our third-party contract manufacturers and those of certain of our third-party service providers must undergo regulatory approval processes and are subject to continued review by the FDA and other regulatory authorities.

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Such manufacturing challenges may also occur if our existing contract manufacturers are unable or unwilling to timely implement such changes, or at all.

We are expanding our manufacturing capabilities to support current and anticipated demand for our products and product candidates.

Our expansion efforts, in certain circumstances, rely on a single or small number of vendors or suppliers, and finding alternative suppliers may not be feasible or could take a significant amount of time and involve significant expense due to the nature of the requirements of our facilities.

Construction or quality assurance challenges at the facilities we are building or expanding, labor shortages, contractual disputes with our suppliers, negative outcomes from agency officials or other delays or challenges in operationalizing additional manufacturing capacity could limit our ability to capitalize on demand for our products and product candidates.

In addition, regulatory agencies conduct routine monitoring and inspections of our manufacturing facilities and processes as well as those of our third-party contract manufacturers and service providers.

If regulatory authorities determine that we or our third-party contract manufacturers or certain of our third-party service providers have violated regulations, they may mandate corrective actions and/or issue warning letters, or even restrict, suspend or revoke our prior approvals, prohibiting us from manufacturing our products or conducting clinical trials or selling our marketed products until we or the affected third-party contract manufacturers or third-party service providers comply, or indefinitely.

See also Our current products and products in development cannot be sold without regulatory approval.

See Our current products and products in development cannot be sold without regulatory approval.

Such issues may also delay the approval of product candidates we have submitted for regulatory review, even if such product candidates are not directly related to the products, devices or processes at issue with regulators.

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Further, we rely on commercial transportation, including air and sea freight, for the distribution of our products to our customers, which has been negatively affected by the COVID-19 pandemic, labor unrest, natural disasters and geopolitical security threats.

Changes in laws or regulations with respect to the use and/or presence of certain chemicals in our products or the components used in the research, development, manufacture and/or packaging of our products could also disrupt or restrict our ability to develop, produce or sell our products in the affected jurisdictions.

For example, the EU, the U.S.

Congress, the U.S.

Environmental Protection Agency, and several U.S.

states are considering legislation and/or policies to address the reporting, presence, and/or use, of certain chemicals in certain of the components used in the manufacture or packaging of commercial products, including chemicals known as per- and polyfluorinated substances (PFAS).

In July 2024, Canada (through Environment and Climate Change Canada) issued a notice requiring reporting on PFAS manufacture, import, and use in Canada.

In addition, proposed legislation in several jurisdictions are under consideration to prohibit or otherwise regulate the importation, manufacture, or distribution of goods containing PFAS, and some such proposals do not provide exemptions for drug products, medical devices, their packaging, or the materials used in the research, development, or manufacture of such products or devices.

For example, the EU is considering a ban on PFAS in the manufacturing and packaging of pharmaceutical products that could affect pharmaceutical research and development activities and commercial distribution.

Some proposals, if enacted without exemptions for pharmaceutical products, and materials used in their research, development, and manufacture, or without adequate time to research and develop or otherwise identify alternative materials or suppliers, may cause significant disruptions to our ability to manufacture and supply products to the affected jurisdictions, potentially resulting in a material adverse effect on our business.

There have also been legislative and administrative proposals seeking to incentivize greater drug manufacturing in the United States with the stated goal of improving supply reliability in the United States.

For example, on August 6, 2020, the previous Administration issued an Executive Order aimed at boosting domestic production of essential medicines, medical countermeasures, and critical inputs titled “Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs are Made in the United States.” Additionally, one legislative proposal would have prohibited the U.S.

For example, on August 6, 2020, an Executive Order was issued that was aimed at boosting domestic production of essential medicines, medical countermeasures, and critical inputs titled “Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs are Made in the United States.” Additionally, one legislative proposal would have prohibited the U.S.

Department of Veterans Affairs from purchasing certain drugs that have active pharmaceutical ingredients manufactured outside the United States.

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In contrast, in other states, there are a growing number of anti-ESG initiatives that may conflict with certain of our stakeholders’ expectations.

For example, 11 states have enacted laws prohibiting the consideration of ESG factors in connection with state pension asset investment decisions.

For example, at least 16 states have enacted laws prohibiting the consideration of ESG factors in connection with state pension asset investment decisions.

If our ESG practices fail to meet our stakeholders’ expectations and standards, or if we fail to comply with ESG-related regulations across our global business, there could be a material adverse effect on our reputation, business and, ultimately, our stock price.

Our ESG report is made available on our website and describes our current ESG goals and the progress we have made on the ESG issues that we believe our external and internal stakeholders consider to be important, based on surveys, interviews and certain frameworks for corporate responsibility.

Achieving our ESG goals requires long-term investments and broad,

coordinated activity, and we may be required to incur additional costs or allocate additional resources towards monitoring, reporting and implementing our ESG programs.

Achieving our ESG goals requires long-term investments and broad, coordinated activity, and we may be required to incur additional costs or allocate additional resources towards monitoring, reporting and implementing our ESG programs.

Further, we may fail to accurately assess our stakeholders’ ESG priorities and concerns, as such priorities and concerns have been rapidly changing.

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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 or were subject to evacuation orders and/or multiple-day power outages.

Such natural disasters have caused, and in the future may cause, damage to and/or disrupt our operations, which may result in a material adverse effect on our product sales, business and results of operations.

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territory of Puerto Rico and a substantial majority of our clinical manufacturing activities at our facility in Thousand Oaks, California;

significant disruptions or production failures at these facilities could significantly impair our ability to supply our products or continue our clinical trials and Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales.

significant disruptions or production failures at these facilities could significantly impair our ability to supply

our products or continue our clinical trials and Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales.

GENERAL RISK FACTORS

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Instability in the financial system, tighter lending standards and higher interest rates have added stress that may create additional vulnerabilities in the global economy, the effects of which may be of an extended duration.

Additionally, with higher interest rates, deficits, and other fiscal pressures, governments may be unable to sustain their previously high levels of fiscal spending.

Additionally, with higher interest rates, deficits (including those associated with the pandemic), and other fiscal pressures, governments may be unable to sustain their previously high levels of fiscal spending.

Further, in the United States, although Congress has approved stopgap measures to fund the government through early March, the federal government continues to be at risk of a shutdown if legislation providing funding for the fiscal year is not passed as a result of political divisions in Congress and an impasse on budgetary and spending matters.

Congress must also reach an agreement to extend the federal debt ceiling in 2025 to avoid default on U.S.

government debt, and such negotiation will also likely include a focus on decreasing government spending (which the new Administration and Congressional majorities have indicated will be a priority).

Consequently, these and other financial pressures have caused, and may continue to cause, government or other third-party payers to more aggressively seek cost containment measures in healthcare and other settings.

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We believe such conditions have led and could continue to lead to reduced demand for our products, which could have a material adverse effect on our product sales, business and results of operations.

The current inflationary environment related to increased aggregate demand, supply chain constraints and the effects from the armed conflict in Ukraine (including the effects of the sanctions that were implemented in response to the conflict and the resulting impacts on the commodity market and supply chains) and the Middle East have also increased our operating expenses and may continue to affect our operating expenses.

The cumulative effects of inflationary pressures and the effects from the armed conflict in Ukraine (including the effects of the sanctions that were implemented in response to the conflict and the resulting impacts on the commodity market and supply chains) and the Middle East have also increased our operating expenses and may continue to affect our operating expenses.

Our operational costs, including the cost of energy, materials, labor, distribution and our other operational and facilities costs are subject to market conditions and are being adversely affected by inflationary pressures.

Economic conditions may also adversely affect the ability of our distributors, customers and suppliers to

obtain the liquidity required to buy inventory or raw materials and to perform their obligations under agreements with us, which could disrupt our operations.

Although we monitor our distributors’, customers’ and suppliers’ financial condition and their liquidity to mitigate our business risks, some of our distributors, customers and suppliers may become insolvent, which could have a material adverse effect on our product sales, business and results of operations.

A significant worsening of global economic conditions could precipitate or materially amplify the other risks described herein.

We maintain a significant portfolio of investments disclosed as cash equivalents and marketable securities on our consolidated balance sheets.

In recent years, the global COVID-19 pandemic and interest rate increases have led to disruption and volatility in the global capital markets.

Further, the range of actions the new Administration has taken, and may take, around tariffs and trade and the associated uncertainty of how such actions may be implemented may have adverse effects on the global economic environment and could also amplify such other risks.

We maintain a significant portfolio of investments on our consolidated balance sheets.

In the recent past, the global COVID-19 pandemic and interest rate increases have led to disruption and volatility in the global capital markets.

We have certain assets, including equity investments, that are exposed to market fluctuations that could, in a sustained or recurrent series of market disruptions, result in impairments.

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Announcements or discussions, including via social media channels, of possible restrictive actions by government or private payers that would negatively affect our business or industry if ultimately enacted or adopted may also cause our stock price to fluctuate, whether or not such restrictive actions ever actually occur.

Similarly, actual or perceived safety issues with our products or similar products or unexpected clinical trial results can have an immediate and rapid effect on our stock price, whether or not our operating results are materially affected.

Similarly, actual or

perceived safety issues with our products or similar products or unexpected clinical trial results can have an immediate and rapid effect on our stock price, whether or not our operating results are materially affected.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors