At Trillium Asset Management Corporation we have long raised questions about the environmental and ethical dangers of agricultural biotechnology (genetically modified organisms). Simultaneously we have found advances in the field of pharmaceutical biotechnology to be socially compelling. While some clients retain a preference to avoid investing in biotechnology firms altogether, medical biotechnology is an area where we are focusing increased attention. We have recently added Amgen (AMGN – NASDAQ) to our approved list of stocks in the health care sector.
Amgen was founded in 1980 with the mission to “be the world leader in discovering, developing and manufacturing cost-effective human therapeutics based on advances in cellular and molecular biology.” The company states that “in-depth knowledge developed through the utilization of state-of-the-art cellular and molecular biology enables Amgen scientists to discover and develop both naturally occurring proteins and small molecules as potential human therapeutics.”
Amgen’s first two products were Epogen, which is used to treat anemia associated with chronic renal failure for patients on dialysis, and Neupogen, which is used to prevent infection in cancer patients undergoing certain types of chemotherapy and bone marrow transplants. Amgen is beginning to enter a new product cycle, with Aranesp standing out as the key growth driver.
Aranesp is Amgen’s successor to its largest product, Epogen ($2 billion/year) – a recombinant human protein that stimulates production of red blood cells. Aranesp represents a reengineering of Epogen to offer more convenient dosing schedules. Amgen has retained exclusive worldwide marketing rights to Aranesp. The product is expected to compete well since it can be administered as infrequently as once every three weeks, while competing products require once-weekly dosing.
Kineret is Amgen’s novel treatment for rheumatoid arthritis. Clinical data suggest that Kineret is extremely effective at arresting the progression of the disease.
SD/01 is Amgen’s latest treatment for Neutropenia, a deficiency of white blood cells commonly associated with chemotherapy. Neutropenia typically leads to infections for which a patient’s chemotherapy treatments must be delayed or reduced. SD/01 could be administered once per chemotherapy session compared with the current daily dosing of Neupogen. The drug has been submitted to the FDA for approval.
Amgen is considered an excellent place to work. In January 2001, Fortune magazine included Amgen on its list of “The 100 Best Companies to Work for in America,” which was compiled by Robert Levering and Milton Moskowitz. In addition to an array of work-family benefits, Amgen offers all employees stock options each year based on performance, responsibility, and seniority. The company grants additional options as part of performance reviews and other merit awards.
According to KLD, Amgen’s Predoctoral Minority Support Program provides financial support for minority predoctoral students in partnership with the Department of Molecular and Cell Biology at the University of California at Berkeley. The company also donated $1.5 million to Spelman College’s science program to encourage African American women to enter the field of biotechnology.
In May 2001, the company named Richard Nanula, who is African American, executive vice president for finance, strategy, and communications. One woman sits on the company’s 11-member board of directors. The company has a written policy barring employee discrimination based on sexual orientation.
-Eric Becker, CFA