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Amgen
Team 2: Joshua Zamarron, James Stariha
Elizabeth Allen, Michael Johnson
Michael Mullin
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Industry AnalysisStrong growth rate
arriers to Enter
!om"etition
Threat o# Substitutes
$ower o# uyers
%rowth&$ro't $otential
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%rowth (ateEstimated mar)et *alue in 2+- is ./01 illion
%o*ernment Initiati*es
Increased (esearch and e*elo"ment #unding
!ountries becoming ma3or mar)ets
!hina, India, Euro"e
Mergers and Ac4uisitionAmgen and Immune5
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arriers to Enter6i)elihood is wea)
Ma3ority startu"s are s"in o7s
ased on inno*ati*e "roducts o# "rocesses
resulting #rom disco*eries in academic research6ong start u" "eriods with little "ro't
8igh '5ed costs
9ot enough #unding research and de*elo"ment;%o*ernment (egulations
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!om"etitionMore than ,+++ iotech com"anies in 9orth
America
To" < o# these com"anies ma)ing ma3ority o#
re*enue
!om"etition #or "atents
%ood #or Industry
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uyer $ower(anges #rom 8ealthcare "ro*iders to #armers
and growers
Amgen
8ealthcare "ro*iders8os"itals
S"ecialized "roducts don=t allow #or much buyer"ower
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%rowth&$ro't $otential
Mar)et >alue ./01 illion
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En*ironmental Threat and?""ortunity $ro'le ET?$;
An en*ironmental threat and o""ortunity "ro'le is adescri"tion o# the structure o# e5ternal #actors@
Multi"le (easons #or an ET?$
@ It hel"s the organization to identi#y o""ortunities and threats
2@ !onsolidates and strengthens an organization=s "osition
1@ $ro*ides strategists in#ormation on which sectors ha*e a#a*orable im"act on the organization
/@ The organization gains )nowledge o# its standing withres"ect to its en*ironment
0@ 8el"s #ormulate strategies@
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Ste"s in an ET?$@ Identi#y ma3or En*ironmental #actors such as:
economic, "olitical, social, technological,com"etiti*e, geogra"hical, etc@
2@ En*ironmental #actors are then subdi*ided intosubsectors o# each #actor@
1@ These #actors are then analyzed to determinema3or wea)nesses and strengths in each o# the
subsectors@
/@ The im"act o# each #actor is then accessed asbeing either #a*orable, un#a*orable, or neutral@
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Economic BactorsEconomic #actors a7ect the "urchasing "ower o#
"otential customers and the 'rm=s cost o# ca"ital@
These #actors include: business cycle, inCationarytrends, consum"tion, em"loyment, in*estment,
monetary, and 'scal "olicies@
E5": The most recent 'scal "olicy e*ent that hasha""ened, is that buried within the Biscal !li7 Section-12, is a clause that delays Medicare "rice restraints on
a class o# drugs including Sensi"ar@ This "ro*ision leadsto Amgen ha*ing two more years to sell Sensi"arwithout go*ernmental controls@ The delay o# Medicare"rice restraints has a "ositi*e e7ect on Amgen@
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$olitical Bactors$olitical #actors are how and to what degree
go*ernment inter*enes in the economy@
$olitical #actors include: "olitical "ower, ideologies,interest grou"s, social stability, legislation, andregulation@
E5": ?ne o# the most recent and contro*ersiallegislations "assed was the Dnited States health carere#orm@ Amgen e5"ects a drastic increase o#
com"etition in #uture years due to this legislation@ Thelegislation allows the a""ro*al o# biosimilars, genericbiotech drugs, to ta)e signi'cantly shorter time
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Social BactorsSocial #actors im"act an organization due to the
social, cultural, demogra"hic, and en*ironmental"ro'les in the industry@
Social #actors include: age distribution, geogra"hicdistribution, income distribution, mobility, education,#amily *alues, and business attitudes@
Amgen stri*es to encourage a high"er#ormingen*ironment where team members embrace thetalents and bac)grounds o# each other as well asnourish inno*ati*e thin)ing, and achie*e their #ullability and "otential that leads to Amgen=s success@
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Technological Bactors Technological #actors im"act how an organization or
com"any o"erates in relation to e4ui"ment used inthe com"any=s en*ironment@
Technological Bactors include: rate o# technologicalchange, #uture raw material a*ailability, rawmaterial cost, technological de*elo"ments, and"roduct li#e cycle@
!E? (obert radway announced during a lecture atMIT that he belie*es the com"any is on the cus" o#a ma3or change in how we manu#acture "roteins@F
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%eogra"hical Bactors%eogra"hical Bactors are im"ortant to the o*erall
analysis o# a com"any@
%eogra"hical #actors include: "lant&warehouse
location, relocation o# #acilities, head4uarters, and#oreign mar)ets@
Although the Dnited States mar)ets contribute tomore than G0< o# Amgen=s Annual re*enues,
Amgen has been wor)ing to increase its reach ininternational and #oreign mar)ets@ The com"any hase5tended its "roducts to highgrowth regions suchas Ja"an, !hina, (ussia, and A#rica@
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Amgen SH?T AnalysisStrengths Weaknesses
•E5"ertise in ( o# "roteinthera"eutics hel"ed Amgen buildstrong "roduct "ort#olio•9eulasta, 9eu"ogen and Enbreldri*ing Amgen=s to"line growth•Strong I$( "osition enablingAmgen to o7set biosimilar•(estructuring initiati*es dri*ing
signi'cant "ro't growth during a"eriod o# declining sales
•eclining sales o# Aranes" and
E"ogen•iscontinuation o# late stageclinical trials•(elati*ely low le*els o#technology di*ersi'cationincreasing de"endency on
thera"eutic "roteins
?""ortunity Threats
E5"anding $rolia #ranchise coulddri*e to"line growth, and reduceAmgen=s de"endency on "rotein
thera"euticsAc4uisitions could strengthenAmgen=s "i"elineBocus on the emerging economies"ro*iding growth o""ortunities!ollaboration with Hatson couldhel" Amgen enter oncology
biosimilars mar)et
•A7yma5=s ?montys li)ely toa7ect Aranes" and E"ogensales•!ost containment measuresmay a7ect Amgen=s salesgrowth
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StrengthsE5"ertise in (
To" o# industry
rea)throughs in $E%ylation and %lycosylationtechni4ues increased drug e7ecti*eness
irectly res"onsible #or de*elo"ment o# ne5t strength
9eulasta, 9eu"ogen, and Enbrel dri*ing to"line growth
e*elo"ed #rom $E%ylation and %lycosylation techni4ues#rom 1/ hrs to 0+ hrs;
Amgen=s to" three "roducts contributing to o*er 00< o#re*enues
9eulasta&9eu"ogen .0@2 billion in sales 2+
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StrengthsStrong I$( "osition enabling Amgen to o7set
biosimilar com"etition
8ighly inno*ati*e industry and "rotecting"ro"rietary "ro"erty is essential
Strong ( means nothing i# it is not "rotected
Success#ully de#ended "ro"erty numerous timesincluding + claims o# in#ringement on / o#Amgen=s E$? "atents that led to a "ermanent
in3unction against Swiss big $harma (oche #rome*er selling its "roducts in the DS
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Hea)nesseseclining sales o# Aranes" and E"ogen
!oncerns raised about sa#ety o# the drugs
BA issued blac) bo5ed warnings o# increasedchance o# death and other cardio*ascular disease
In 2++- sales reached + billion
iscontinuation o# late stage clinical trials
Two trials in "hase III #ailed due to statistics that
they had no real e7ectsE5tremely e5"ensi*e
id not loo) good ha*ing bac) to bac) #ailures
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Hea)nesses(elati*ely low le*els o# "roduct di*ersi'cation
1 most success#ul "roducts are all "roteinthera"eutics00< o# re*enues
?ther com"anies "ulling ahead in "romisingmedicine o# "rotein antibodies, small molecule,and limited MA=s drugs
Thera"eutic antibody mar)et is estimated to bethe #astest growing mar)et through 2+0
I$( could limit #uture growth in mar)ets same that"rotected their $E%ylation and %lycosylation #romothers;
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?""ortunityE5"anding $rolia Branchise could dri*e to"line growth
In 2+2 BA released new indicator #or $rolia as a treatment to increasebone mass in men
Showed signi'cant increases in sa#ety and eKcacy
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?""ortunityBocus on emerging economies "ro*iding growth
o""ortunity
?*er "ast / years ha*e e5"anded #rom 10countries to 0+
Including razil and Tur)ey
razil to" ten $harmaceuticals mar)et in the worldand by 2+0 it is estimated to be '#th
Hith more "lans to increase to G0 countries by
2+0 hel"s with di*ersity;
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ThreatsA7yma5=s ?montys li)ely to a7ect Aranes" and E"ogen sales
BA a""ro*ed their $eginesatide in3ection
6i)ely to out"er#orm Amgen=s and only need in3ections once amonth *s@ 1 times a wee)
!ombined with the sa#ety concerns already raised #uture does
not loo) good
!ost containment measures may a7ect Amgen=s sales growth
Amgen relies hea*ily on reimbursements #rom go*ernment aid"rograms and "ri*ate third "arty "ayers
8ealth care re#orm huge threat to those re*enues
Already seen a
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Matching SH with ?T
•(elati*ely low le*els o# "roductdi*ersi'cation
•E5"ertise in (
•Strong I$(
•eclining Aranes" and E"ogensales
•!ost containment measures
•Ac4uired multi"le 'rms with"ro"rietary technologies and"romising new "roducts
•Entering emerging economies
•E5"anding $rolia #ranchise
•Bailure o# late stage clinical trials
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!om"etiti*e Bactors!om"etiti*e #orces at wor) in the industry and
their strength
!om"anies in the strongest&wea)est com"etiti*e"osition
eys to com"etiti*e success
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Amgen=s To" !om"etitors Johnson Johnson
9o*artis A%
Te*a $harmaceutical Industries 6imited
A = Bi i l
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Amgen=s BinancialAnalysis
9et income, sales, and o"erating e5"enses
!urrent ratio is 1@
Asset turno*er ratio is +@12
ebttoe4uity ratio #or 2+2 is @0
9et "ro't margin is +@20
(eturn on e4uity is +@22
(eturn on assets is +@+
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Mar)et Share
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Managerial Bactors The Scienti'c Method
Teams
i*ersity
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Technical Bactors
Manu#acturing
Bacilities
!ollaboration
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Senior Management(obert A@ radway: !hairman and!hie#
E5ecuti*e ?Kcer
Madha*an alachandran: E5ecuti*e >ice
$resident, ?"erations
>ictoria 8@ latter: Senior >ice $resident, D@S@%o*ernment A7airs
Suzanne laug: Senior >ice $resident, %lobalMar)eting and !ommercial e*elo"ment
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Senior Management !ont@$aul (@ Eisenberg: Senior >ice $resident, %lobal
(egulatory A7airs and Sa#ety
Sean E@ 8ar"er: E5ecuti*e >ice $resident,
(esearch and e*elo"ment
(ol# @ 8o7mann: Senior >ice $resident, D@S@!ommercial ?"erations
Anthony !@ 8oo"er: E5ecuti*e >ice $resident,%lobal !ommercial ?"erations
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Senior Management !ont@(aymond !@ Jordan: Senior >ice $resident, !or"orate
A7airs
iana 6@ Mcenzie: Senior >ice $resident and !hie#In#ormation ?Kcer
rian M@ Mc9amee: Senior >ice $resident, 8uman(esources
Joshua J@ ?#man: Senior >ice $resident, %lobal >alue
and Access
!ynthia M@ $atton: Senior >ice $resident and !hie#!om"liance ?Kcer
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Senior Management !ont@ Jonathan M@ $eacoc): E5ecuti*e >ice $resident
and !hie# Binancial ?Kcer
a*id J@ Scott: Senior >ice $resident,%eneral
!ounsel and Secretary
Michael Se*erino: Senior >ice $resident,%lobale*elo"ment and !or"orate !hie# Medical?Kcer
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oard o# irectorsa*id altimore: $resident Emeritus and (obert
Andrews Milli)an $ro#essor o# iology, !ali#orniaInstitute o# Technology
Bran) J@ iondi, Jr@: Senior Managing irector,Hater>iew Ad*isors 66!
(obert A@ radway: !hairman and !hie# E5ecuti*e?Kcer, Amgen Inc@
BranNois de !arbonnel: Bormer !hairman o# theoard and irector, Thomson S@A@ and irector o#!or"orations
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oard o# irectors>ance @ !o7man 6ead Inde"endent irector;:
(etired !hairman o# the oard and !E?, 6oc)heedMartin !or"oration
(obert A@ Ec)ert: Bormer !E? and !hairman o# theoard, Mattel, Inc
(ebecca M@ 8enderson, $h@: John and 9attyMcArthur Dni*ersity $ro#essor, 8ar*ard Dni*ersity
Bran) !@ 8erringer: !hairman and (etired !E?, Transamerica !or"oration
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oard o# irectors Tyler Jac)s: a*id 8@ och $ro#essor o# iology,
Massachusetts Institute o# Technology and directoro# the a*id 8@ och Institute #or Integrati*e!ancer (esearch
%ilbert S@ ?menn: $ro#essor o# Internal Medicine,8uman %enetics $ublic 8ealth and irector o#the !enter #or !om"utational Medicine andioin#ormatics, Dni*ersity o# Michigan, and #ormer
!E?, Dni*ersity o# Michigan 8ealth System
Judith !@ $elham: $resident Emeritus, Trinity 8ealth
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oard o# irectorsAdm@ J@ $aul (eason, DS9 (etired;: Bormer >ice
!hairman and $resident, Metro Machine!or"oration
6eonard @ Schae7er: Senior Ad*isor, T$%!a"ital
(onald @ Sugar: !hairman Emeritus, 9orthro"%rumman !or"oration
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Assessment
Im"ortance o# !ulture
!om"atibility with Strategic !hange
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