Amgen Inc., BA 497.01: External Environment, Industry Analysis, and Company Assessment
Authors:Justin Deats, Ryan Joe, Christine Kim, Brennan Lee, Madeline Lee, Calvin McCutchen, Amanda Miller, Meredith Nelson, Sarah Pak, Natalia Pamich, Elliott Park, Colin Presnell, Kingsin Pun
Mentor:Venkatachalam Seshan, Professor of Management, Business Administration Division, Pepperdine University, Pepperdine University
Amgen is currently a leader in the Biotechnology industry with a 4.32% share of the market. Amgen had $17.27 Billion in Revenues and a Net Income of $4.35 Billion in 2012. Enbrel accounted for $1.09 Billion of product sales in 2012, followed by Amgen’s blockbuster drugs of Neulasta/ NEUPOGEN with sales of $1.03 Billion in 2012. Amgen’s products are concentrated in just a few of the market segments, but it has an opportunity to expand into other market segments, such as the fastest growing segment in the industry: Oncology. Cancer medicines are becoming the focus of biotech companies because the effectiveness of the current market drugs are limited, allowing the biotech firms to charge steep prices. Amgen is attempting to gain a more significant presence in the Oncology Market Segment with the recent $10.4 Billion acquisition of Onyx Pharmaceuticals, a biopharmaceutical company specializing in drug therapies for cancer patients. This acquisition will give Amgen full rights to, Kryprolis, Onyx’s newest cancer drug that treats multiple myeloma and is expected to have sales over $2 Billion annually. Amgen also gains drugs that treat liver and kidney disease. These additions to the Amgen product pipeline come at a time where it is facing expiring patents on four out of its five top selling drugs in 2015 and the declining sales of its anemia drugs, Aranesp and Epogen. Amgen’s growth rate has remained high with a growth rate of 10.85% in 2012 despite the slowing growth rate of the Biotechnology industry. The goal of this undergraduate research project is to analyze Amgen’s Share of Market (SOM) in order to develop a comprehensive strategic direction the company should go in. Upon completion of this project, our Capstone Project Research Team will have developed an implementation strategy for Amgen that will sustain its SOM globally.