What changed in this filing

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Item 1A. Risk Factors

2025-11-05 compared with 2025-08-06 · 43 added, 188 removed, 169 unchanged (58% of the section changed)

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

On July 4, 2025, the OBBBA was signed into law that included several changes to Medicare, Medicaid and Affordable Care Act policies, that when implemented, may adversely affect coverage and reimbursement for certain of our products.

On May 12, 2025, the Administration issued the Most-Favored-Nations (MFN) Prescription Drug Pricing Executive Order (MFN EO) aimed at using price benchmarks from comparable developed countries to set U.S.

On July 4, 2025, OB3 was enacted and included several changes to Medicare, Medicaid and Affordable Care Act policies, that when implemented, may adversely affect coverage and reimbursement for our products.

On May 12, 2025, the Administration issued the Most-Favored-Nations (MFN) Prescription Drug Pricing Executive Order (MFN EO) aimed at using price benchmarks from other developed countries to set U.S.

pricing targets.

Subsequently, on July 31, 2025 the Administration sent letters to many pharmaceutical manufacturers, including Amgen (the July MFN Letter) as further described below, outlining voluntary steps that such manufacturers could take to advance actions consistent with elements of the MFN EO.

Subsequently, on July 31, 2025 the Administration sent letters to many pharmaceutical manufacturers, including Amgen (the July MFN Letter) as further described below, outlining steps that such manufacturers could take to advance actions consistent with elements of the MFN EO.

Such actions could reasonably be expected to adversely affect our business.

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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.

In October 2025, CMS set a price, beginning on January 1, 2027, for Otezla under Medicare Part D that is significantly lower than the current price, which we expect will negatively impact its profitability in Medicare.

Further, CMS has issued guidance, effective for the 2028 cycle, that allows for the re-setting of prices for drugs for which it previously set a price.

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, we may be required to accept a price set by the government for Medicare using the process that was applied to ENBREL and Otezla.

On April 15, 2025, the Administration issued an executive order (the April 2025 EO) that, among other directives, directs HHS to work with Congress to align the treatment of small molecule drugs and biologics in the Medicare price setting program under the IRA.

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Further, the IRA inflation penalties allow 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.

Such rebate obligations began to accrue October 1, 2022 for Medicare Part D and January 1, 2023 for Medicare Part B.

Several of our products have also 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.

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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.

Implementation of the OBBBA also may impact access to and reimbursement of our products.

Implementation of OB3 also may impact access to and reimbursement of our products.

For example, the Congressional Budget Office has projected significant cuts to federal Medicaid spending over the next decade and an increase in the number of people without health insurance.

This would place greater stress on state budgets and hospital finances, and could result in reduced access to medicines, additional pressure to further discount medicines and growth of 340B Program utilization.

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 April 2025 EO also directs HHS to provide recommendations within 180 days to accelerate the approval of generics, biosimilars, combination products and second-in-class medications, as well as to address Medicaid drug rebates and Medicaid drug payment methodologies, and, within one year, to develop and implement a plan to test a payment model to enable Medicare to obtain pharmaceuticals at lower cost.

The MFN EO directs HHS to set MFN price targets, which HHS identified in a press release as the lowest price in an OECD country with a GDP per capita of at least 60% of the U.S.

The MFN EO directs HHS to set MFN price targets, which HHS identified in a press release as the lowest price in an OECD country with a gross domestic product (GDP) per capita of at least 60% of the U.S.

GDP per capita and applicable to brand products that do not currently have generic or biosimilar competition.

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Trade Representative to take all necessary and appropriate action to ensure foreign countries are not engaged in any act, policy or practice that may be unreasonable or discriminatory, and directs HHS to facilitate direct-to-consumer purchasing programs at MFN prices.

The July MFN Letter calls for drug manufacturers, by September 29, 2025, to voluntarily:

The July MFN Letter calls for drug manufacturers to:

1) extend MFN pricing to Medicaid;

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to lower U.S.

and 4) participate in direct-to-consumer

models to provide MFN pricing for certain drugs.

The details of these requests and how they might be operationalized are unclear, but if put into place they could reasonably be expected to adversely affect our business.

Separate from the MFN EO and July MFN Letter, 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.

and 4) participate in direct-to-consumer models to provide MFN pricing for certain drugs.

The details of these requests and how they might be

operationalized are unclear, but if put into place they could reasonably be expected to adversely affect our business.

Recently, three drug manufacturers announced agreements with the Administration that are reported to fully address the July MFN Letter, and other manufacturers may enter into similar agreements in the future.

Separate from the MFN EO and the July MFN Letter, 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.

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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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 rulemaking to establish an Upper Payment Limit (UPL) commenced in the second quarter of 2025 that could be effective as soon as the first quarter of 2026.

The Colorado PDAB deemed three of five drugs “unaffordable,” including ENBREL, and in October 2025 the Colorado PDAB established an Upper Payment Limit (UPL) substantially lower than the wholesale acquisition cost of ENBREL that would be generally applicable to all formulations of ENBREL, effective no earlier than January 1, 2027, and will be reviewed annually.

On July 16, 2025, Washington state’s PDAB selected ENBREL for one of its first affordability reviews.

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These bills vary, but typically include provisions 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.

With the OBBBA’s reductions to federal Medicaid funding to states, increased pressure is anticipated for providers to find and preserve existing revenue sources at the state level, which may result in increased use of 340B contract pharmacy mandates.

With OB3’s reductions to federal Medicaid funding to states, increased pressure is anticipated for providers to find and preserve existing revenue sources at the state level, which may result in increased use of 340B contract pharmacy mandates.

In Genesis Health Care, Inc.

Becerra , the U.S.

District Court for the District of South Carolina issued an order in November 2023 enjoining the Health Resources and Services Administration from enforcing a more restrictive interpretation of who qualifies as a patient under the 340B Program, potentially expanding access to 340B discounts for healthcare systems.

Since this decision, courts have rejected arguments that state 340B laws are preempted by the federal 340B statute and have declined to enjoin such laws.

These rulings, including decisions in Arkansas, Mississippi, Louisiana, and Maryland, have accompanied a growing number of states to pursue similar legislation.

District Court for the District of South Carolina issued an order in November 2023 enjoining the Health Resources and Services Administration from enforcing a more restrictive interpretation against Genesis Health Care as to who qualifies as a patient under the 340B Program, potentially expanding access to 340B discounts for healthcare systems.

Since this decision, several courts have rejected arguments that state 340B laws are preempted by the federal 340B statute and have declined to enjoin such laws.

These rulings, including decisions in Arkansas, Mississippi, Louisiana, Maryland, Minnesota and Tennessee, have been accompanied by a growing number of states pursuing similar legislation.

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

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Further, the April 2025 EO also directs HHS to, within 90 days, streamline and improve the drug importation program to ease the process for states to obtain drug importation approvals.

On May 21, 2025, the FDA issued a press release indicating it was taking steps to enhance state importation programs and would offer individual states and

tribes the opportunity to submit draft proposals for pre-review and to meet with the agency to obtain initial feedback prior to formally submitting importation proposals.

On May 21, 2025, the FDA issued a press release indicating it was taking steps to enhance state importation programs and would offer individual states and tribes the opportunity to submit draft proposals for pre-review and to meet with the agency to obtain initial feedback prior to formally submitting importation proposals.

While under federal law biologics remain exempt from such state importation activities, our small molecule products could be impacted by these initiatives.

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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.

Policy reforms advanced by Congress, the Administration or the states 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.

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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.

For example, despite the EMA’s approval of Repatha for the treatment of patients with established atherosclerotic disease, prior to 2020, the reimbursement of Repatha in France was limited to a narrower patient population (such as those with homozygous familial hypercholesterolemia (HoFH)) following a national health technology assessment.

For example, despite the European Medicines Agency’s approval of Repatha for the treatment of patients with established atherosclerotic disease, prior to 2020, the reimbursement of Repatha in France was limited to a narrower patient population (such as those with homozygous familial hypercholesterolemia (HoFH)) following a national health technology assessment.

Many countries decide on reimbursement between potentially competing products through national or regional tenders that often result in one product receiving most, or all of, the sales in that country or region.

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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.

We could be subject to additional tax liabilities, including from an adverse outcome in our ongoing tax dispute with the IRS and other tax examinations, enactment of the OECD minimum corporate tax rate agreement and the adoption and interpretation of new tax legislation including the OBBBA.

Such tax liabilities could adversely affect our profitability and results of operations.

We are subject to income and other taxes in the United States and other jurisdictions in which we do business.

As a result, our provision for income taxes is derived from a combination of applicable tax rates in the various places we operate.

Significant judgment is required for determining our provision for income tax.

One or more of our legal entities file income tax returns in the U.S.

federal jurisdiction, various U.S.

state jurisdictions and foreign jurisdictions.

Our income tax returns are routinely examined by tax authorities in those jurisdictions.

Significant disputes can and have arisen with tax authorities involving issues regarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and relevant facts, and such tax authorities (including the IRS) are becoming more aggressive in its audits and are particularly focused on such matters.

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

territory of Puerto Rico.

We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS administrative appeals office but were unable to reach resolution.

In July 2021, we filed a petition in the U.S.

Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021 which seek to increase our U.S.

taxable income for the years 2010–2012.

In 2020, we received an RAR and a modified RAR from the IRS for the years 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S.

territory of Puerto Rico similar to those proposed for the years 2010–2012.

We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution.

In July 2022, we filed a petition in the U.S.

Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S.

taxable income for the years 2013–2015 and asserts penalties.

We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit.

We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process.

The cases were consolidated on December 19, 2022.

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

The parties filed opening post-trial briefs on June 13, 2025, and the Court held oral argument on July 16, 2025.

The parties are scheduled to file post-trial reply briefs in October 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 expect that the IRS will begin its audit of 2019–2022 in 2025 or early 2026, and we believe that it may seek to continue to audit similar issues related to the allocation of income between the United States and our foreign jurisdictions.

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

Final resolution of these complex tax matters is not likely within the next 12 months.

We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities;

however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse effect on the results of our operations.

See Part 1, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, and Part 1—Note 4, Income taxes, to the condensed consolidated financial statements.

Our provision for income taxes and results of operations in the future could be adversely affected by changes to our operating structure, changes in the mix of income and expenses in countries with differing tax rates, changes in the valuation of deferred tax assets and liabilities and changes in applicable tax laws, regulations or administrative interpretations thereof.

The 2017 Tax Act is complex and a large volume of regulations and guidance has been issued and could be subject to different interpretations.

We could face audit challenges to our application of the 2017 Tax Act.

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.

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.

In June 2025, the United States and the other six countries that make up the G7 nations jointly announced that U.S.

companies would be exempted from certain minimum taxes relating to the OECD agreement.

However, significant details regarding the G7 announcement remain uncertain and individual countries that have enacted the OECD agreement, including countries not within the G7, must amend their local legislation for the G7 announcement to become effective.

Additional provisions of the OECD agreement may also come into effect in future years, and the OECD is expected to continue to release additional guidance that may impact the application and interpretation of the agreement that could further increase our tax liabilities.

The continued response of other countries, including the U.S.

territory of Puerto Rico, to the OECD agreement and the G7 announcement remains highly uncertain.

The continued enactment of the OECD agreement, either by all OECD participants or unilaterally by individual countries, could result in tax increases or double taxation in the United States or foreign jurisdictions.

The OBBBA includes significant provisions related to taxation, such as the permanent extension of certain expiring provisions of the 2017 Tax Act, and modifications to the international tax framework.

This legislation has multiple effective dates, with certain provisions effective in 2026 and beyond.

The OBBBA is complex and we are awaiting guidance to be issued.

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

territory of Puerto Rico or other jurisdictions, including the changes and potential changes discussed above, could result in tax increases where we do business and could have a material adverse effect on the results of our 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 licensing transactions as well as through the development and introduction, both independently and through collaborations such as our collaboration with BeOne, 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 would prohibit 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.

We may also be required to increase our reliance on third-party agents and unfamiliar operations and arrangements, including those previously utilized by companies we partner with or acquire in emerging markets.

See our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1A.

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

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.

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.

Further, recent increases in tariffs imposed on certain goods imported into the United States, including inputs relevant to biopharmaceutical manufacturing, have raised our production costs to a limited degree in the first half of 2025, and, going forward, such tariffs, together with the imposition of tariffs from agreements the Administration has made with other countries and other potential future tariffs, could more significantly increase our production costs and potentially disrupt the operation of our supply chain.

Additionally, any tariffs imposed directly on the pharmaceutical industry would have the potential to adversely affect our sales.

See Global economic conditions may negatively affect us and may magnify certain risks that affect our business.

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, as well as a new U.S.

Department of Justice 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 U kraine, 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 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 Annual Report on Form 10-K for the year ended December 31, 2024, 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 .

T hese conflicts, in addition to other geopolitical tensions, may also precipitate or amplify the other risks described herein, including risks relating to cybersecurity, global economic conditions, clinical trials and supply chains, which could adversely affect our business, operations and financial condition and results.

As we expand internationally , we are subject to fluctuations in foreign currency exchange rates relative to the U.S.

While we have a program in place that is designed to reduce our exposure to foreign currency exchange rate fluctuations through foreign currency hedging arrangements, our hedging efforts do not completely offset the effect of these fluctuations on our revenues and earnings.

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.

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

Manufacturing biologic and small molecule human therapeutic products is difficult, complex and highly regulated.

We manufacture many of our commercial products and product candidates internally.

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 acquisition of Horizon, as Horizon required such contract manufacturers for all of its products.

See our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1.

Business—Manufacturing, Distribution and Raw Materials—Manufacturing;

and our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1A.

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:

• capacity of manufacturing facilities;

• contamination by microorganisms or viruses, or foreign particles from the manufacturing process;

• natural or other disasters, including hurricanes, earthquakes, volcanoes or fires;

• labor disputes or shortages, including the effects of health emergencies (such as novel viruses or pandemics) or natural disasters;

• compliance with regulatory requirements;

• changes in forecasts of future demand;

• timing and actual number of production runs and production success rates and yields;

• updates of manufacturing specifications;

• contractual disputes with our suppliers and contract manufacturers;

• timing and outcome of product quality testing;

• power failures and/or other utility failures;

• cyberattacks on supplier systems;

• breakdown, failure, substandard performance or improper installation or operation of equipment (including our information technology systems and network-connected control systems or those of our contract manufacturers or third-party service providers);

• delays in the ability of the FDA or foreign regulatory agencies to provide us necessary reviews, inspections and approvals, including as a result of a subsequent extended U.S.

federal or other government shutdowns;

• tariffs or other trade barriers that increase costs, limit availability, or disrupt the flow of goods;

• geopolitical conflicts (such as the ongoing conflicts in Ukraine and the Middle East).

If any of these or other problems affect production in one or more of our facilities or those of our third-party contract manufacturers, or if we do not accurately forecast demand for our products or the amount of our product candidates required in clinical trials, we may be unable to start or increase production in our unaffected facilities to meet demand.

If the efficient manufacture and supply of our products or product candidates is interrupted, we may experience delayed shipments, delays in our clinical trials, supply constraints, stock-outs, adverse event trends, contract disputes and/or recalls of our products.

From time to time, we have initiated recalls of certain lots of our products.

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.

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.

It can take longer than five years to build, validate and license another manufacturing plant, and it can take longer than three years to qualify and license a new contract manufacturer or service provider.

If we elect or are required to make changes to our manufacturing processes because of new regulatory requirements, new interpretations of existing requirements or other reasons, this could increase our manufacturing costs and result in delayed shipments, delays in our clinical trials, supply constraints, stock-outs, adverse event trends or contract negotiations or disputes.

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.

However, recent tariffs on imported equipment, construction materials, and key inputs have increased our costs to a limited extent in the first half of 2025, and, going forward, such tariffs, or other tariffs imposed in the future, could further increase costs, potentially disrupt supply chains, and put at risk the timely and cost-effective execution of these projects.

Further, these efforts, often rely on a single or small number of vendors and suppliers, and finding alternatives for such vendors and suppliers may not be feasible or could require significant time and expense due to the specialized nature of our facility requirements.

In addition, 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, either until we or the affected third-party contract manufacturers or third-party service providers comply, or indefinitely.

See our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1A.

Risk Factors —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.

Because our third-party contract manufacturers and certain of our third-party service providers are subject to the FDA and foreign regulatory authorities, alternative qualified third-party contract manufacturers and third-party service providers may not be available on a timely basis, or at all.

If we or our third-party contract manufacturers or third-party service providers cease or interrupt production or if our third-party contract manufacturers and third-party service providers fail to supply materials, products or services to us, we may experience delayed shipments, delays in our clinical trials, supply constraints, contract disputes, stock-outs and/or recalls of our products.

Additionally, we distribute a substantial volume of our commercial products through our primary distribution centers in Louisville, Kentucky for the United States and in Breda, Netherlands for Europe and much of the rest of the world.

We also conduct most of the labeling and packaging of our products distributed in Europe and much of the rest of the world in Breda.

Our ability to timely supply products is dependent on the uninterrupted and efficient operations of our distribution and logistics centers, our third-party logistics providers and our labeling and packaging facility in Breda.

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.

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 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, 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.

While we perform a substantial majority of our commercial manufacturing activities in the United States, including in the U.S.

territory of Puerto Rico, and a substantial majority of our clinical manufacturing activities at our facility in Thousand Oaks, California, the passage of such legislation could result in foreign governments enacting retaliatory legislation or regulatory actions, which may have an adverse effect on our product sales, business and results of operations.

Global economic conditions may negatively affect us and may magnify certain risks that affect our business.

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The economic downturn resulting from the COVID-19 pandemic precipitated a global recession, which was followed by high rates of inflation and actions taken by financial regulators to raise interest rates.

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.

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 (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 measures to fund the government through September 2025, the federal government continues to be at risk of a shutdown if legislation providing funding for the subsequent fiscal year is not passed as a result of political divisions in Congress and an impasse on budgetary and spending matters.

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.

Further, in the United States, Congress was not able to come to agreement on extending government funding before a September 30, 2025 deadline, resulting in a federal government shutdown, and government funding remains at risk of additional disruptions if legislation providing full funding for the fiscal year is not enacted.

In addition, as this budget impasse reportedly involves disagreement over the continuation of Affordable Care Act premium subsidies, this disagreement could lead to pressure on Congress to take further actions to pay for healthcare.

Also, the federal government shutdown has disrupted, and may have the potential to disrupt, certain federal agency operations, government contract negotiations and regulatory activities, including delays to the U.S.

Customs and Border Protection’s processing of import clearances for products and materials, and potential delays to the FDA’s review of product applications and new indication filings.

Further, 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.

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 .

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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 cumulative effects of inflationary pressures, an uncertain trade environment with escalating and rapidly-changing tariffs, 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, an uncertain trade environment with escalating and

rapidly-changing tariffs, 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.

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While the April 2025 Tariff EO exempts pharmaceuticals, the universal 10% tariff and any foreign retaliatory tariffs will increase certain of our costs, including the materials we use to manufacture our products as well as to conduct our research and development activities, such as delivery devices, consumable supplies and certain other laboratory materials, and the tariffs imposed by China may negatively affect our business in that country.

The Administration has since suspended China’s country-specific rate until August 12, 2025 and suspended Mexico’s country-specific rate until October 30, 2025.

In July 2025, preliminary tariff agreements have been announced for countries such as Vietnam, Japan, the United Kingdom, the EU and South Korea.

In addition, in late July, the Administration signed executive orders that raised the tariffs on imports from Brazil and Canada to 50% and 35%, respectively (the Brazil and Canada Tariff EOs), and modified the country-specific tariffs for more than 60 countries that will become effective on August 7, 2025 (the Modified Country-Specific Tariff EO, together with the Brazil and Canada Tariff EOs, the July Tariff EOs).

The Administration has also stated that it will impose an additional penalty tariff of an unspecified amount on top of the 25% tariff on imports from India enumerated in the Modified Country-Specific Tariff EO.

Certain details of such preliminary agreements, the July Tariff EOs and the potential tariffs on India are not yet available, and we will assess their potential effects when such details become available.

In July 2025, the Administration signed executive orders that raised or modified the country-specific tariffs for more than 60 countries that became effective on August 7, 2025 (the July Tariff EOs).

On August 21, 2025, the Administration also announced that it reached an agreement with the EU on a trade framework that establishes a baseline 15% tariff on most EU goods, with a specific exemption for generic pharmaceuticals, beginning on September 1, 2025.

In April 2025, the Administration also initiated an investigation under Section 232 of the Trade Expansion Act of 1962 of the importation of pharmaceuticals, pharmaceutical ingredients and their derivative products, which may lead to the imposition of a sector-specific tariff on such products.

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As such, a Section 232 tariff on pharmaceuticals could significantly increase our costs, particularly for our products that rely on globally distributed manufacturing, transportation or sourcing networks.

On September 25, 2025, it was reported that the Administration would impose a 100% tariff on all branded or patented pharmaceutical products unless the manufacturer is in the process of building a manufacturing plant in the United States.

Details regarding the scope, timing and implementation of this proposal remain uncertain.

Subsequently, the Administration indicated these pharmaceutical tariffs were “paused” while they negotiate with companies on MFN pricing.

Additionally, if the current tariff exemptions applicable to pharmaceutical products are revoked, our product sales and research and development activities may also be adversely affected.

Further, the administrative requirements of tariffs across global trade could also slow and/or delay the processing and delivery of products and materials in supply chains.

On October 24, 2025, the Administration initiated, under the Trade Act of 1974, a Section 301 investigation of China’s implementation of the Economic and Trade Agreement between the U.S.

and Chinese governments.

This investigation, and any other 301 investigations initiated, may result in additional tariffs on imported goods from China and any other foreign markets subsequently investigated, respectively, potentially including pharmaceutical products and other goods that Amgen requires for the manufacture of our products.

If subject to Section 301 tariffs, China, and other affected foreign governments, may retaliate against such tariffs by imposing tariffs of their own on U.S.-made goods.

Given the many uncertainties and variables, it is currently unclear the extent, and degree, to which existing and future tariffs will disrupt and adversely affect our business activities (including product sales, and conduct of clinical trial and research and development activities), and the global economic environment, and/or amplify the other risks described herein.

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Any of those events could cause us to record impairment charges with respect to our investment portfolio or to realize losses on sales of investments.

We also maintain a majority of our cash and cash equivalents in accounts with major multi-national financial institutions, and our deposits at these institutions exceed insured limits.

We also maintain a majority of our cash and cash equivalents in accounts with major multi-national financial institutions, and our deposits at these

institutions exceed insured limits.

Market conditions can adversely affect the viability of these institutions.

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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-Q

Item 1A. Risk Factors