Amgen Inc.
Q4 2008 Earnings Call Transcript

Published: 27 Jan 2009

[Operator:]

Good afternoon, my name is Dennis and I will be your conference operator today. At this time I would like to welcome everyone to the Amgen Fourth Quarter, Full Year 2008 Financial Results Conference Call. (Operator Instructions). I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

[Arvind Sood:]

Thank you Dennis and good afternoon everybody. I would like to welcome you to our conference call. Over the next few minutes we will discuss our financial results for the fourth quarter and full year 2008 and we will also provide our estimate for growth output for 2009. At the end of our prepared comments we will have time to take your questions. Leading the discussion today will be our Chairman and CEO Kevin Sharer who will provide a strategic review of our business in 2008 as well as the challenges and opportunities that we will face in 2009. Our Chief Financial Officer, Bob Bradway, will then provide an analysis of our performance in the fourth quarter and how to translate it into a full year performance for 2008. George Morrow, who as you know is our head of Global Commercial Operations, will target his discussion on specific product performance during the quarter and key drivers for each of these products going into 2009. Lastly, Roger Perlmutter who is our head of R&D will provide a brief R&D update. This will be brief because we provided a rather exhaustive review of our pipeline opportunities at our recently held business review meeting. As in the past, we will be slide for our presentation today. These slides have been posted on our website and a link was sent to you separately by email. Before I turn the call over to Kevin, I would like to note that through the course of our presentation today we will make certain forward-looking statements and, of course, actual results can vary materially. With that I would like to turn the call over to Kevin.

[Kevin Sharer:]

Thank you Arvind and good afternoon everyone. Much has changed in the world around us since our last meeting with you in early November, but our strategy, results, and prospects remain consistent with our remarks that day. First I would like to thank my colleagues for their excellent performance in 2008. We delivered on our financial promises, won or settled important legal matters, advanced the pipeline, especially Denosumab an endplate and supplied every patient every time with high quality medicines manufactured in an ever more efficient manufacturing network. It was also gratifying, after a difficult 2007, that shareholders were rewarded too. We issued 2009 guidance today consistent with our aspiration to grow revenue in earnings as well as invest for the future. This plan fully funds our preparations for Denosumab, invests in the pipeline at aggressive levels, and counts on continued progress in capital and expense efficiencies. It will not be easy to deliver, but it represents the right set of goals and trade offs and was adopted after months of intensive efforts by the entire team. In 2009 we will make progress on a number of fronts. Important clinical data will be revealed; notably Denosumab SRE and Vectibix combination therapy. We will also learn more about our Phase II pipeline Two, work with regulators in the US and Europe on our Denosumab PMO filing, operating in Europe in an increasingly crowded bio similars environment as G-CSF Biosimilars continue to emerge. We will work with a new administration on a variety of healthcare initiatives and hopefully see the bottom of our financial and economic macro environment crisis with the financial system at least stabilized. Each year presents challenges and contains uncertainties, but 2009 will more than ever call on our best. Here is how we are operating going into 2009

[Robert Bradway:]

Thank you, Kevin. If I can turn your attention to page five I will walk you through the fourth quarter income statement. Starting with revenues, as you can see revenues for the fourth quarter were flat at $3.8 billion and that reflects the fact that product sales for our anemia franchise were down 8% while the rest of our products were up 8% during the quarter. Wholesaler inventories for the quarter showed Aranesp and EPOGEN ending at the high end of the normal ranges, while inventories for ended at the low end of our normal range. Inventories for our other major products ended in the middle to upper end of the normal ranges and George will give you further product detail in a moment. Now in terms of geography, in the fourth quarter our US sales totaled about $2.9 billion which represents an increase of 1% over the prior year and Internationally our fourth quarter sales were $774 million, which represents an increase of 4% and these sales were negatively impacted by $30 million from foreign exchange, so excluding that foreign exchange impact our total product sales for the quarter were up 2% and our International products sales increased by 8%. Now turning to operating expenses, which I will discuss on an adjusted basis, let me start with across the sales for the quarter which as you can see decreased by 3%. This decrease was primarily due to lower cost in the manufacturing of Enbrel(NYSE

[George Morrow:]

Okay thanks Bob. So, let’s go right to the commercial highlights in Slide 10. For the fourth quarter 2008 product sales increased 2% year-over-year with the US growing 1% in International growing 4%. The US Aranesp decline to 22% was largely offset by gains in Enbrel and Filgrastim. Internationally our Europe segment continued its strong performance with 8% growth excluding the effects of foreign exchange. It is possible that during the fourth quarter demand for our products, particularly those with significant out of cash outlays, in less serious conditions, were adversely affected by broader economic conditions. As we learn more going forward we will share our observations with you. For the full year 2008 product sales increased 3% year-over-year driven mainly by growth in our International business. US sales were flat year-over-year with an Aranesp sales decline of 23% offset by the remainder of the sales portfolio which grew 6%. Excluding the effects of foreign exchange, International sales grew 5% with Aranesp declining 5% offset by Neulasta growth of 17%. The next slide graphically illustrates the components of year-over-year growth in the fourth quarter. Consistent with last quarter Aranesp was the only major component of our product portfolio to decline and was offset by solid growth in the other products. I can assure you that our commercial team is highly focused on stabilizing the Aranesp situation and driving continued growth with the in line products. Next I will discuss each of the products results in more detail starting with Aranesp. Worldwide Aranesp sales decreased 15% in the fourth quarter versus last year. In the US Aranesp sales were down 22% year-over-year with oncology sales down 28% and nephrology sales down 8%. After normalizing for quarter end Aranesp buy ins overall segment share decreased by four points versus fourth quarter ’07 and by two points versus the third quarter 2008. Internationally Aranesp sales declined 2% excluding the impact of foreign exchange, reflecting a decline in overall oncology and nephrology segments. Aranesp share increased slightly year-over-year and I will provide more details on biosimilars in a few moments. Next slide

[Roger Perlmutter:]

Thanks George. As Kevin mentioned 2008 was an extremely important year for research and development and ads with the approval and launch of Nplate a thrombopoietin receptor agonist indicated for the treatment of immune thrombocytopenic purpura and then finally the first registration package for Denosumab. Slide 23 provides a list of some of the key events for Amgen R&D in 2008. In addition to the launch of Nplate in the US we received a positive opinion from the Committee for Human Medicinal Products in the EU for use of Nplate in ITP patients with failed spleenectomy. And in treating [inaudible] for surgical treatment is not appropriate. Denosumab was launched in the US and in Canada for the prevention and treatment of osteoporosis in postmenopausal women and for the prevention and treatment of bone loss in patients undergoing hormone ablation therapy for breast or prostate cancer. At the same time we completed enrollment of pivotal studies for Vectibix in the treatment of colorectal cancer in combination with chemotherapy and we established an important partnership with the Takeda Pharmaceutical corporation to assist in developing Vectibix along with a dozen programs in earlier stages for the Japanese market. Finally, in addition to maintaining impressive productivity to in turn research the alpha and important reduce therapeutic candidate in AMG-t61 from Kyowa Hakko in Japan. Slide 24 updates our progress in developing Denosumab. This slide uses the same format that we have employed in earlier calls. You will note that we completed enrollment of the registration enabling study exploring the ability of monthly Denosumab therapy to alleviate the burden of cellular related pathology in patients with prostate cancer, metastatic as well. Counting this study we now have four ongoing phase III studies that address the potential utility of Denosumab in the oncology setting. The red box in the data availability column provides our best estimate of when we will be able so share top line data with you for the Denosumab skeletal related event studies. I wish to emphasize that these studies are event driven, so we can only estimate when we will be able to close the study, lock the database and perform the analysis. These studies are especially complicated as well because of the need to ensure the adequacy of the central review of radiographs to make certain that all fractures in this population are correctly assigned. I should say that I am especially proud of the work that we did to assemble the Denosumab postmenopausal osteoporosis file which was submitted on schedule in mid-December to US and Canadian regulatory authorities and less than a month later to regulatory authorities in the European Union. Our ability to orchestrate this very complex filing involving data from more than 11,000 patients, the complete file includes more than 200,00o pages, reflects the priority that we have given over the last three years to building an improved data management infrastructure and gives me confidence that we will be able to assemble very high quality data sets in the Denosumab oncology program. With respect to the pipeline, as we announced last year our data safety and monitoring board requested that we place enrollment in the MONET1 study, a Phase III study exploring the utility of the multi kinase inhibitor Motesanib to improve the survival of patients undergoing positional chemotherapy for non-small cell lung cancer on hold and that we discontinue Motesanib treatment in patients with squamous cell lung cancer. The study is continuing with respect to the majority of enrolled patients who suffer from pulmonary malignancy of other histologic types. Our results are reminiscent of those that were obtained in the study of Avastin where administration to patients with squamous cell lung cancer was associated with an unacceptably high frequency of severe or fatal pulmonary bleeding events. Hence it appears that inhibition of VEGF receptor signaling is associate with toxicicities similar to those seen with the vast and imposed VEGF blockade in this patient population. The DSMV has asked to review the data again in the next few weeks and will advise us as to whether enrollment of patients of other histology’s in the MONET1 study can recommence. Note that we are developing Motesanib in collaboration with Millennium Pharmaceuticals a subsidiary of the Tokyo based pharmaceutical company. The remainder of our development program for this molecule, including Phase II active comparative control studies remains on track as shown on Slide 25. In the fourth quarter we also obtained Phase II results demonstrating that AMG 223, our non-absorbed, metal free, phosphate-binding polymer administered in association with meals substantially reduces serum phosphate levels as compared with those observed in patients receiving a placebo treatment. While these data are in accord with what has been achieved with other phosphate binders, we have decided to look at a range of options for the development of this molecule rather than pursuing it by ourselves. I will remind you that the development of AMG 223 in Japan is partnered with the [Stellups] Pharma. Slide 26 provides a summary of key clinical results that will be available in 2009. This slide does not in any sense capture all of the data that we will be reviewing this year, 2009 promises to be especially data rich, but rather note those events that we believe will be of special interest to investors. Included on the slide of the Phase III results for Vectibix in first and second line colorectal cancer therapy, the Denosumab Phase III studies that I mentioned earlier and the TREAT study, which explores the ability of Aranesp to reduce cardiovascular events in patients with renal insufficiency not on dialysis. We will also be looking at Phase II studies for Motesanib, AMG 102, AMG 222, AMG 386, AMG 655 and recombinant [apro2 ligand trail] the latter of which we are developing with our colleagues at Genentech. Together these studies will define Amgen’s next generation of important therapy and we are looking forward to reviewing these data with you. Kevin?

[Kevin Sharer:]

Okay, thank you. We will now be happy to take your questions.

[Arvind Sood:]

Dennis would you go ahead and open it up for the Q&A session please and you can also review the procedure again for asking questions.

[Operator:]

(Operator Instructions) Your first question comes from Chris Raymond - Robert W. Baird.

[Christopher Raymond:]

Roger I notice in your AMG 223 comments you are a little bit vague relative to the reasoning, but I am wondering if I could just ask specifically was there an issue with the dose or are you just looking at phosphate levels lowering parameters that were not what you were looking for? Can you give us just a little more color there?

[Roger Perlmutter:]

Yes. We want very much to introduce drugs that are truly substantial and 223 certainly looks like it has the properties necessary to permit registration as a phosphate binder, but it didn’t meet our current criteria in light of our other portfolio opportunities; so we are on the process of reassessing and asking how best to develop the drug. That was all I intended to say in that statement that I made.

[Operator:]

Your next question comes from Jeff Porges with Bernstein.

[Jeff Porges:]

Bob, I apologize for this question it betrays my ignorance of some accounting rules, but besides the rule change the $0.14 to $0.16 that you alluded to. I presume that that is included in your guidance for this year and what would the impact of that have been in 2008?

[Robert Bradway:]

We expect to take that out of adjusted earnings on the basis that it is a non-cash expense and doesn’t really have any economic impact on us. So we will be taking that out of adjusted earnings and it is in the range of $0.14 to $0.16.

[Jeff Porges:]

That is for 2009, what would it have been in 2008?

[Robert Bradway:]

I don’t have it to hand, Jeff. We will give it to you after the call.

[Operator:]

Your next question comes from Jim Birchenough with Barclays Capital.

[Jim Birchenough:]

Just on the Denosumab filing, based on your conversations with the FDA since the filing, is there any risk that you see to the filing not being accepted and perhaps you could just characterize the nature of the discussions you have had since the filing?

[Kevin Sharer:]

It is of course early days after the filing. The discussions that we have had at this point are mainly assisting the agency and understanding the file structure and where they can find particular kinds of data. My personal feeling is that it is an extremely good file. I am not concerned that the agency would reject the file, because obviously the agency needs to look at it and make their own decisions about how they want to handle it.

[Operator:]

Your next question comes from Ian Somaiya of Thomas Weisel Partners.

[Ian Somaiya:]

I just have a question on the guidance. It seems to imply a certain level of cost cutting measures. I was just hoping you could maybe give us a little bit more insight into that. Is it from R&D is it from SG&A and what portion of the Denosumab launch costs should we assume show up in ’09 versus 2010?

[Robert Bradway:]

With respect to the cost outlook for 2009, I think we demonstrated in 2007 and 2008 that we have been pretty disciplined about expense management and we will be focused very much in 2009 on our G&A expenses. With respect to R&D and with respect to the investments in Denosumab we are really not providing any further color beyond what we gave you in November on those operating expense lines.

[Kevin Sharer:]

I think the way to think about it is on a nearly $9 billion operating expense base we have got some flexibility here. As I said in my remarks it is a low altitude, short time constant year, so we are going to watch this very carefully and we can adjust and we are doing everything we need to do this year to get ready for the launch of Denosumab. So we have flexibility and then we are investing ahead of what we hope will be a launch.

[Arvind Sood:]

Dennis before you go onto the next question I just also wanted to respond to the question by Jeff Porges. The estimated reduction in the 2008 GAAP EPS is $0.13 because of the FASB accounting change. But as Bob rightfully pointed out it is not going to have an impact on the adjusted earnings.

[Operator:]

Your next question comes from May-Kin Ho with Goldman Sachs.

[May-Kin Ho:]

I have a question for George. Since November what have you learned about the use of Denosumab under the pharmacy benefit versus the medical benefit in terms of your launch plan?

[George Morrow:]

Nothing really, we have been out with customers and we are talking about if the FD how we would handle it May-Kin, but the CMFs will not make a decision until after the product has been approved by the FDA so we will not learn anything about how they will reimburse until that time.

[May-Kin Ho:]

But the physicians feedback?

[George Morrow:]

I think we have had great feedback and we are finding a very solid way forward with customers and we will be able to handle either one.

[Operator:]

Your next question comes from Mark Schoenebaum with Deutsche Bank Securities.

[Mark Schoenebaum:]

This question may aggravate you a little bit, but I have got to ask it. At your analyst meeting in November I thought you guys were very clear that in 2009 your expenses were going to grow faster than revenue; I think that is actually in the transcript. I am looking at your guidance that you provided this year and it has earnings, I think, expressed as percent growth of 0 to 4% in change and revenue down marginally to up marginally. So, number one do you stand by that statement at the R&D meeting or should we be adapting or thinking around that? Then number two, if that statement holds is it a reasonable assumption the difference is share buybacks?

[Kevin Sharer:]

No aggravation there, Mark, it is a sharp question and I can’t, out of context, respond to a very, very long multi-hour day with lots of presentations, so I don’t want to try to comment on that. Let me give you maybe a little bit different altitude response. I think my overall remarks are we are trying to invest where we need to invest. That is the pipeline and that is getting ready for Denosumab and that is making sure we have enough money to support the products and we are looking for efficiencies everywhere else we can possibly find them. If there is anything that has perhaps changed in the three months since we talked with you all in November, it is our confidence which was not zero then, but it continues to grow and our ability to adjust expenses and make the right investments. I think what you are seeing in today’s guidance is consistent with our aspiration to grow revenue and earnings and get ready for Denosumab and to hopefully have this be a multi-year success. But, we will go back on that exact transcript and try to answer the question, but I think I have given you a strategic sense of what is going on. There is certainly no major change in our outlook now compared to November with the exception we are just more confident in our ability to manage expenses and invest in the right place.

[Operator:]

Your next question comes from Eric Schmidt from Cowen and Company.

[Eric Schmidt:]

I have a couple of quick questions for Roger on Denosumab. Did you ask for priority review in the bone loss associated with cancer indication and also has the interim analysis in the prostate cancer met prevention study, has that occurred as scheduled in Q4 ’08?

[Roger Perlmutter:]

Yes Eric, we did ask for priority review; however I caution you that, as you know, it is entirely the FDA’s decision on what represents a true priority application and what does not. I mean we are impressed by the fracture reduction that was achieved, as we mentioned before, in men with prostate cancer receiving hormone ablation therapy, but they will have to look at that carefully. And yes, we did go through the interim. Just to remind you that was an analysis that really is a tripping point for a Data Safety and Monitoring Board, you know was there a reason to halt the study for any result either negative or positive or should it continue as planned. And the outcome from their review, was completely blinded. We have not seen anything, from the Data Safety Monitoring Board looks at it independently was it should continue as planned.

[Operator:]

Your next question comes from Michael Aberman with Credit Suisse.

[Michael Aberman:]

I have a question on a more strategic side of things; you know your cash balance and your cash flow offers some flexibility. Obviously you are seeing a potential decline in revenue that you are flattening and it puts a lot of the importance on Denosumab delivering. Are you thinking about diversifying that at all, looking outside of Amgen in this environment for strategic opportunities, or are you going to continue to pursue share buybacks or are you thinking differently about dividends now that you have potentially a position of strength?

[Kevin Sharer:]

Let me start with the last question. We said all along that we would never say never on dividends, but we have no current plans and I stand by that statement. The other broader question is I think that we are going to continue to do what we have done in the past which is opportunistic acquisition focused on good product opportunities. I think over the last eight years we have spent on the order of, I can’t remember the exact number; it is on the order of $18 to $20 billion on acquisitions. Obviously most of that was Immunex, but still we have done others and half of our pipeline has come from outside the company if you will. So, we look for good product opportunities and so for example if a product opportunity we were not very interested in was available for $1.00 last year and now that product opportunity is available for $0.50, we are still not interested because it is not a good product opportunity. But I think what this environment will do is have people who perhaps in the past didn’t need money and therefore were not willing to be considered as a partner in acquisition, will for a variety of reasons hopefully be more willing. So, the net effect of this new macro economic environment is going to be that hopefully more people raise their hands and win more conversations. In terms of diversification, we are in the human therapeutics business and we are going to stay there. In terms of pursuing, what I would call, industrial mergers to get a relatively brief increase perhaps in earnings per share without meaningful new product or top line growth opportunity would not be something that interests us. We will continue to be opportunistic and I would guess that we will keep buying stuff that is good as it is available.

[Michael Aberman:]

Can you look at the Elipsa deal and learn anything from that given what we learned today? Or GenEx, can you look back at those and give us a checklist of how that was good or not?

[Kevin Sharer:]

I don’t want to get into a multiple question dialogue, but I will say that certainly we have made many, many acquisitions and as I look at the score card the net present value of the returns to shareholders in the totality program has been quiet positive. Certainly we are going to have a few that worked out better than we thought and a few that were disappointing but that is the nature of the deal and so I will kind of leave it there. We analyze each one internally and from every one we learn stuff.

[Operator:]

Your next question comes from Yaron Werber – Citigroup.

[Yaron Werber:]

My question is for Roger. Roger could you just help me clarify a little confusion that I have. When I talked to some of the management offline in November at the R&D day, I could swear that I saw the breast cancer BMAB study was done in terms of all of the events happening. Can you just clarify if that is the case and if so is it that it has taken a long time to really, as you mention, look at all the stands and make sure that everything is in line or is the study still going on?

[Roger Perlmutter:]

It is understandable confusion. It is, as you know, as I put out, an event driven study. The events that are important are the events that are centrally defined So, we might reach an end point with respect to an internal tally from peripheral sites of fractures, but the question is what do they see at the central level in terms of their radiographic analysis. We are extremely close on the breast cancer study, but we haven’t yet hit the final endpoint in terms of total number of events.

[Yaron Werber:]

I got you and then once that is completed how long does it actually take to publish the data?

[Roger Perlmutter:]

A lot depends on the fundamental quality of the data. You can imagine that we are busy trying to clean these files as we go along, but there are a lot of queries that get generated, particularly in a study like this where for example there is just a clerical imbalance that occurred, because something is noted at a site, but then it doesn’t appear in the central record and you have to reconcile those findings. We can’t lock the database until we have reconciled all of those mismatches and there typically are hundreds of them. So, we are busy doing that and depending on how long it takes to finally close the last one, that is how long it takes to close the study. It takes some months to do.

[Operator:]

Your next question comes from Geoffrey Meacham with J.P. Morgan.

[Geoffrey Meacham:]

This question is for George. You talked about the stability this year some time for Aranesp in the US. How should we be thinking about International trends? Another way to ask this question is, does the year-over-year declines in the US really where the International sales are heading?

[George Morrow:]

It is really hard to tell if they are headed in the same direction as the US. I think the US is a bit extreme because the European oncology segment was never as deeply penetrated as the US. So, I think the way to think about outside the US is we have bisimilars that are not taking share, but as I said occasionally we have to relax our price to maintain a good value proposition. I think we are setting the biosimilar road in curve and we are all going to learn from that. I think certainly the oncology market in Europe has a decline going on that is maybe paralleling the US in terms of slope, but certainly it is not as deep in terms of absolute euros, because it is a smaller market and I think the doses probably come down a little bit as everybody is being a little bit cautious in terms of what hemoglobin they are titrating to. Generally speaking the European market has held up better than the US and I expect that to continue, although again, we are learning every month we get new data from the biosimilar situation.

[Operator:]

Your next question comes from Joel Sendek with Lazard Capital Markets.

[Joel Sendek:]

George I have a similar question, but I am after more detail in the US. You made a prediction of a 10% step down last quarter; you’ve pretty much got that now to a $25 million a week run rate. Is that the appropriate number to use? Are we troughed here? I mean what is the likelihood of a further step down?

[George Morrow:]

What I said is that we have been experiencing 10% to 20% deflections and already in the fourth quarter we were close to 20% with the REM’s still in front of us, so I expect there is a little more to go. But, again it is every hard to tell until we see the final REM’s.

[Operator:]

Your next question comes from David Reisinger with Bank of America.

[David Reisinger:]

In the US I think J&J has said that procrit has started to regain share in oncology clinics. Can you discuss the market share outlook and how you are attempting to blunt that threat?

[Kevin Sharer:]

Yes. There are a number of dynamics ongoing. We of course went away from our family contracts and that probably had an impact. We are going to be very competitive going forward. I would be disappointed if we continue to lose share at the rate that we have been losing it, but I can’t rule out further share declines at the same time.

[Operator:]

Your next question comes from Steven Harr with Morgan Stanley.

[Steven Harr:]

As you guys look to your ex US partner for Denosumab could you help us understand how one, how far along you are on this? I guess given that how far in advance of a launch you need to have a partner given that you’ve already filed. Then two, what is it exactly you are looking for from a partner whether it is more about sharing costs and R&D expense or do you want a profit split or a royalty stream or how are you looking at structuring these deals

[George Morrow:]

Okay so we are going to be launching in Europe probably after the US, so we have got considerable time. We will have a partner way in advance of when we need to have a partner and so we are comfortably right on track. I am not going to tell you exactly where we are, but we are in robust discussions and a lot of interest. There is no question in our minds that there is a really good partner out there and we just have to make sure we choose the best partner. What are we looking for? Clearly we would like to leverage another company’s primary care sales capability through out international. That includes the developed markets, the bigger European, but we also don’t have a commercial footprint in a lot of markets outside of the European Union, for example, we are just gradually expanding that. Certainly a partner could help us commercialize Denosumab in places where we don’t even have our feet on the ground or a distributorship, so that is on the table as well. We always want a partner who has an ability to challenge our thinking and has a demonstrated track record of being very successful at launching products in the primary care space and so we are looking for a partner that is an intellectual partner, not just a company that is going to rent us some sale capability.

[Operator:]

Your next question comes from Schiff Capor with Morgan Joseph.

[Schiff Capor:]

I want to ask a question on biosimilar products. It has been over a year since biosimilar products were first approved in EO-ESAs. What have you learned from the launch process in Europe and are you better prepared now for biosimilars’ in the US?

[George Morrow:]

I think that w expect biosimilars in the US. We support a law to make that pathway clear that respects innovator rights and is patient focused. I am sure we will get there. I think in Europe, although it is early days, we found out that we can compete against biosimilars. It is a rational, competitive environment with normal commercial characteristics. This year we are going to learn as GCSF biosimilars show up, but I think before Amgen’s major US patent expirees happen in the mid to distant future we are going to have a good model from Europe about what to expect. But, I am highly confident that that model is going to be one where we maintain with our products a very meaningful market share and have an experience quite different from what the standard pill pharmaceuticals do, yet payers will get the economic benefit that biosimilars will offer and patients like choice. I think it will be an important learning experience for us and so far so good.

[Operator:]

Your final question comes from Maged Shenouda with UBS.

[Maged Shenouda:]

I just have a follow up question on the Denosumab partnering. Do you need the SRE data before striking a deal or is SRE off the table?

[Kevin Sharer:]

No, we feel we have got a capability to launch in the oncology setting, so no we don’t need that data.

[Arvind Sood:]

Let me thank everybody for their participation in our call this afternoon. If you have any follow on questions or thoughts feel free to call us, the IR team will be standing by. Thanks again.

[Operator:]

Ladies and gentlemen, this does conclude Amgen’s Fourth Quarter Full Year 2008 Financial Results Conference Call.