The strategy at Amgen is clear—to develop innovative medicines that meet important unmet medical needs. This focus guided us when we developed our first medicine nearly four decades ago for patients suffering from kidney disease. The same unwavering focus inspired us as we have launched new and innovative products, including our novel medicine for certain patients at risk for heart disease, the most significant unmet medical need facing society today.

Indeed, the common denominator for products we develop in all six focused therapeutic areas—cardiovascular disease, oncology, bone health, nephrology, neuroscience and inflammation—is the innovative contribution they make to addressing serious illness.

Our Strategy

Amgen's strategy is multifaceted, allowing us to drive long-term growth, while also delivering on our short- and medium-term goals. Our strategy also enables multiple approaches to creating shareholder value. We've made a commitment to our shareholders to launch our biosimilars portfolio and deliver on target revenue, adjusted operating margin, earnings per share and return of adjusted net income. We remain squarely on track with our long-term strategy for growth.

Innovative Medicines

We are at an exhilarating moment in the history of biotechnology, with a growing number of opportunities to address serious illness in important new ways. Our approach to research and development focuses on innovative medicines to address unmet medical needs in patients with serious illnesses. We employ state-of-the-art science to drive internal innovation. We are also encouraged by the wellspring of innovation occurring globally and maintain an active licensing and acquisition effort to access external opportunities. Amgen maintains a balanced approach to sourcing innovation internally and externally. Roughly half of our marketed products came from outside Amgen, and maintaining this balance requires intense focus on business development and partnership activities.

There is much discussion about the cost of innovation in healthcare today. Against this backdrop, we recognize that new medicines must help alleviate the social and economic burden of disease. This calls for truly innovative medicines that provide large beneficial effects, not just marginal improvements over existing therapies.

Our medicines utilize human genetic validation whenever possible in the discovery and development process. Additionally, Amgen pursues a "biology-first" approach to drug discovery—striving to select drug targets based on a deep understanding of disease biology and then selecting a drug modality, or structural template, best suited to the target. We maintain the industry's leading toolkit of modalities in order to have the right tool for any target we pursue. Together, these approaches aim to enhance the likelihood of success, reduce development timelines and lower the cost of delivering new medicines to patients.

Our focus on developing innovative, breakaway medicines to address important unmet needs guides how we allocate resources across the best of the internal and external programs available to us within our six core therapeutic areas. This generates a productive balance of internal development and external programs and collaborations, the outcome of which is reflected in our current product portfolio and pipeline.

In 2015 alone, we launched an unprecedented four innovative products in oncology and two in cardiovascular disease—including Repatha® (evolocumab), the first PCSK9 inhibitor in the world approved for the treatment of certain patients requiring additional LDL cholesterol lowering. Following behind our six product launches are a number of additional exciting innovative pipeline opportunities progressing in our focused therapeutic areas.

Transforming Amgen for the Future

As we bring more medicines to more people in more places than ever before and continue to invest in innovation, we must continuously increase operational efficiency. This is essential in order to deliver important, innovative medicines while generating satisfactory investor returns.

Since 2013, we have focused our business and operating model through significant transformation and process improvement efforts. We have initiated programs to, among other things, reduce the time it takes to bring new medicines to market, reengineer internal processes to make them as efficient as possible, explore new technologies with the potential to further enhance the value we deliver to patients, and make working at Amgen an attractive and dynamic long-term proposition. We are making these changes from a position of strength, and we are pleased with the results we've achieved to date.

Global Geographic Reach

Demand for innovative medicines that address serious illness continues to grow across the globe, especially with aging populations in many countries. Amgen is working to tap the global potential for our medicines, bringing treatments to the patients who could benefit from them throughout the world.

Earlier this decade, Amgen set a target of operating in 75 countries by 2015, which we have well exceeded. Amgen medicines are now available to patients in approximately 100 countries worldwide. We've been working actively to expand our presence by opening new affiliates and locations around the world, pursuing smart acquisitions and acquiring global rights to market our products.

We obtained expanded rights for our marketing of Prolia® (denosumab), XGEVA® (denosumab) and Vectibix® (panitumumab) to 48 countries throughout Asia, South America, Europe, Australia and other regions. In addition, we have gained footholds in key expansion markets for Amgen, including Brazil, China, Colombia, Hong Kong, Israel, Singapore, South Korea, Taiwan and Thailand. Early in 2016, we also achieved approval of Repatha® in Japan, the world's second-largest pharmaceuticals market. This represented the first product approved through our Japanese partnership with Astellas.

Next-Generation Biomanufacturing

Manufacturing biologic medicines involves working with living cells—making it a complex and difficult task. We have long held that Amgen's biomanufacturing capabilities are a source of competitive advantage, delivering a reliable supply of high-quality medicines with continuously improving efficiency. Through investment in next-generation biomanufacturing, we believe we are significantly extending our advantage.

A traditional biomanufacturing facility can take four years to build at a cost of $1 billion or more, and the floor space of just one of these facilities can cover more than a dozen football fields. Our first next-generation biomanufacturing facility has been constructed in Singapore in less than half the time and at a quarter of the cost of a traditional facility. This plant produces approximately the same output as a traditional one, but does so using 80 percent less space. It also means having a smaller impact on the environment, while helping to extend the reach of vital medicines to more patients worldwide.

Improved Drug Delivery Systems

Biologic medicines are, for the most part, injected subcutaneously or administered intravenously, which often means that patients need to visit a doctor's office or hospital to receive treatment. Innovations that make the delivery of our medicines easier and less costly offer important opportunities for differentiation. We believe improved drug delivery systems are good for patients and also create positive economic benefits for the healthcare system overall. Recognizing this, we have invested in new ways to formulate and deliver our medicines.

In 2015, for example, we launched the Neulasta® (pegfilgrastim) Onpro kit, which provides patients the opportunity to administer the recommended dose of Neulasta® at home the day after chemotherapy—saving a trip back to the doctor. We also developed the Pushtronex® system for use with Repatha® (on-body infusor with prefilled cartridge), a single 420 mg monthly injection option that was approved by the U.S. Food and Drug Administration in July 2016. In February 2017, a single-dose delivery option, known as the automated mini-doser, was approved for use in the European Union. In the future, we plan to continue to develop proprietary patientand provider-friendly delivery systems for our biologic medicines.

Capital Allocation and Investing for Long-Term Growth

We recognize that investing in developing innovative medicines is risky. And we also recognize that shareholders who support this investment require an appropriate return on the capital they commit to Amgen. We believe we have a long track record of delivering these returns, and it is one we aim to maintain.

In 2016, we returned $6 billion of capital to our shareholders through dividends and stock repurchases. We increased our dividend per share by 27 percent over 2015. We also repurchased approximately 20 million shares of our common stock during 2016 at an aggregate cost of $3 billion. We acquired these shares at prices we felt provided an attractive return for shareholders for the capital deployed.

Branded Biosimilars

Biotechnology-based medicines serve an increasingly critical role in fighting serious diseases around the world. With advances in the science of biotechnology, these therapies are being utilized for an increasing number of ailments. As newer biologic medicines come to market, the first wave of biologics is beginning to face competition as patents expire. Global regulatory authorities are adopting pathways for approval of competitors to these off-patent biologics, known as biosimilars, and there is a clear pathway for approval of biosimilars in the United States.

At Amgen, we believe our deep experience in biologics development and unparalleled capabilities in biotechnology manufacturing make entry into the emerging biosimilars market attractive and will position us for leadership. Amgen currently has multiple biosimilar products in development in therapeutic areas that include oncology and inflammation.