Arvind Sood - VP of IR Kevin Sharer - Chairman and CEO Richard Nanula - CFO George Morrow - EVP of Commercial Operations Roger Perlmutter - EVP of Research and Development

Geoffrey Porges - Sanford Bernstein Craig Parker - Lehman Brothers Geoff Meacham - JPMorgan Elise Wang - Citigroup Joel Sendek - Lazard Capital Management Mark Schoenebaum - Bear Stearns May-Kin Ho - Goldman Sachs George Farmer - Wachovia Adam Walsh - Jefferies Eric Schmidt - Cowen & Company Eric Ende - Merrill Lynch Richard Bellison - Capital Research Shiv Kapoor - Montgomery and Company David Amsellem - Friedman Billings Ramsey Chris Raymond - Robert W Baird Steve Harr - Morgan Stanley Michael Aberman - Credit Suisse Gene Mack - HSBC David Witzke - Banc of America

Good afternoon, my name is Derrick and I will be your conference operator. At this time, I would like to welcome everyone to the Amgen Third Quarter Financial Results 2006 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. I would now like to turn the conference over to Mr. Arvind Sood, VP of Investor Relations. Mr. Sood, you may begin your conference.

Okay, thanks very much. Good afternoon everybody. I would like to welcome to our third quarter results conference call. I hope you’ve had a chance to access the slides that we intend to use today for presentation from our website. Since the last conference call, we have received many favorable comments on using the slide format, so we’ll continue to provide as a way of improving our communications efforts with the investment community. In terms of our presentations today, Kevin Sharer, our Chairman and CEO, will lead off with an overview of our quarterly and year-to-date accomplishment followed by our Chief Financial Officer, Richard Nanula, who will discuss our third quarter performance in detail and provide an outlook for the remainder of the year. George Morrow, who is our EVP of Commercial Operations, will then provide a commercial update, followed by Roger Perlmutter, our EVP of Research and Development, who will provide a pipeline update. So, before we start, I would like to mention that through the course of our presentation today, we’ll make certain forward-looking statements and, of course, actual results could vary materially. So with that I’d like to turn the call over to Kevin. Kevin?

Thanks, Arvind. Good afternoon, everybody. It's good to be with you. We’re going to, as Arvind said, go over the slide that we've sent you, expect you had the chance to look at our press release. But let me first just start out by talking about some of the highlights in the quarter, and I am very pleased with the company's performance in the quarter, and I think it really says a lot about our ability to execute and plan for the future. First of all, when we look at the revenue and adjusted EPS, they grew 15% and 22% respectively, and the earnings per share number at $1.04 is really a strong number. We also decided for the second time this year to raise guidance for adjusted EPS guidance to the $3.85 to $3.95 range, another good sign. As we told you in January, one of the most important things we are doing this year is investing in R&D and that it manifest itself in the initiation and expansion of large trials in our important product opportunities, and we initiated two more mega-trials in the third quarter, and by way of definition a mega-trial is with more than 200 sites. One is Vectibix in first-line colorectal cancer and the other one is our, surprising to me at least, a drug in its financial performance, a delightful surprise, Sensipar, outcomes morbidity and mortality, which if that works says a lot about the future. We are pleased to announce another strategic acquisition, Avidia, an important small company up in the Bay Area that we expect to close in the fourth quarter that both expands our therapeutic modality capability and gives us an important opportunity in the inflammation pathway, Roger can talk about that a bit. As you know, we launched Vectibix, our first cancer therapeutic, and we're very, very pleased with the initial market reaction, George will expand on that. We are taking steps to defend our dialysis franchise in United States, and we signed an agreement with Fresenius to be the sole supplier of erythropoietin stimulating proteins, and as they said that was based on the safety and efficacy of the molecule, and we are pleased with that. And today the district court said a few things that are important, I'll get to that in a minute, but we've already -- you already know they denied Roche's motion to dismiss. So, all in all, a very, very solid quarter and I feel good about it. If we then take a perspective, the years coming to a close here, we basically only have got two months left. It's not a bad time to take a picture of the year, and again I think the story is an expansion of what we saw in the third quarter. We made a strategic decision to deliver good EPS growth and also invest heavily in R&D and we're delivering on that, and by the way the EPS growth is significantly in excess of what we projected in January and the revenues are coming in about where we thought, yet we're still able to increase R&D investment by 30 to 40% this year, almost double the rate of revenue growth. We will have initiated nine mega-trials this year; for any company that would be a terrific accomplishment. I kind of don’t care what size the company is for a company in our stage of the development is particularly significant; it's just the beginning, we've got lots of work to do, but I’m proud of the team. We also are expanding our research and development presence, both in San Francisco, South San Francisco, in Seattle, in Boston and in Europe. We are excited about that and the number of good new people that we’re getting is encouraging as well. We also continue to invest heavily in capital expenditures with success. We are expanding our facilities in Puerto Rico meaningfully, and we’ve initiated work on our big new factory in Ireland. And then finally in terms of 2006 accomplishments, although it seems a while ago, the acquisition and integration of Abgenix, both in the Vectibix product launch itself and then our facilities for manufacturing up in Fremont have gone very, very smoothly and we're happy to welcome our new colleagues to Amgen. So, 2006 is shaping up to be another very strong year for Amgen. Before I turn the call over Richard to talk in more details about the business results, let me just make a few comments that are not in the slides that you have. They are kind of late-breaking, but I want to share them with you. Judge Young in Boston today accepted jurisdiction over the peg-EPO litigation and established a clear schedule for discovery, practice and motions. We see this as a positive step and we really are looking forward to getting to the merits of the case back in the court and are pleased that the judge has scheduled this matter for trial on September of 2007. Many of you have asked me in different forms what I think about this, and I want to try to give you as much as I can now. First of all, we are very confident that Roche infringes our patents. You have asked me questions, will Roche launch at risk? They say they will. Well, Amgen seek a preliminary injunction and for reasons you all understand, we won’t be able to answer that question and while we can't speculate in detail about Roche's strategy and intentions or discuss our legal strategy, you can rest assured that we will be very, very big risk on all fronts in defending our franchise and making sure that the patients get the right product. And we will see how this plays out, but we are on our toes and ready in all fronts. I know that Roche has made a lot of public announcements or pronouncements about this litigation, but we chose to litigate in court and not in other forms. So, this will have to play out. It's a matter of a lot of interest and importance, but I want all the investors in Amgen to have a lot of confidence that we are ready on all fronts. And so, with that let me ask my colleague, Richard, to take over and return to our presentation here on page 8, and talk about the financials results for the quarter, Richard.

Thank you, Kevin. I will spend a few minutes on page 8. Revenue growth was 15% for the quarter driven by strong demand, especially for Aranesp and the Filgrastim franchise. The quarter is really demand driven, George will talk about inventories, but we exited Q3 with wholesaler inventories down versus Q2 and flatter down versus Q3 of 2005. Neulasta was actually below our normal range of inventory and the other products were within their ranges. Q3 sales in the US were $2.9 billion, an increase of 14% versus Q3 of 2005. Internationally, Q3 sales were $639 million, an increase of 18% versus Q3 of last year. They were positively impacted by $16 million from foreign exchange. Excluding foreign exchange, worldwide product sales would have increased 14% and international products sales would have increased 15%. Operating expenses, which we are discussed on an adjusted basis, the cost of sales for the quarter decreased 4%. That was driven by lower royalty expenses, a favorable product mix, and to a lesser extent production efficiencies. You recall from our Q2 call, royalty expenses were lower than prior year driven by the exploration in December of certain royalty obligations on Neulasta and NEUPOGEN. Also, we repurchased royalty rights from one institution on international NEUPOGEN and Neulasta and settled with another, effectively ending a royalty obligation on Enbrel sales. So, royalties are probably the biggest reason why cost of sales are favorable; we have benefited from mix and product efficiencies. R&D expense was 49% increase, that was due to the very much a planned hiring in support of our aggressive clinical program and increased funding necessary to support the late-stage programs, including clinical material and manufacturing costs, which belongs in the R&D line on the income state. SG&A expense growth of 19% was due to higher staff and additional infrastructure costs to support our organization, but in particular to a couple of a large items like ERP and then higher litigation costs associated with our ongoing couple of different lawsuits, as well as higher Wyeth profit share expenses on Enbrel profitability. Enbrel profitability improves as royalties go down and as we get more efficient making ENBREL. The adjusted tax rate was 21% for the quarter, that’s versus 26% from Q3 of '05. Q3 of '06 was a lot lower than '05 due to the beneficial Federal and California audit settlements, which reduced our rate by a couple of points, as well as expanded manufacturing in the Puerto Rico. Earnings per share, then as Kevin mentioned, was $1.04, up 22%, EPS growth exceeded revenue growth of 15% by 7 percentage points, and that was driven, again by fewer shares due to our aggressive share repurchase program and the lower tax rate. On a GAAP basis, EPS in the third quarter was $0.94 versus $0.77 last year. These GAAP results were negatively impacted by $50 million in pre-tax costs associated with stock options. And our adjusted EPS, including stock option expense, would have been $1.01, an increase of 23% compared to $0.82 in Q3 of 2005. Let me turn you to page 9. As we discussed in our second quarter call, our major products, particularly those we've launched in the last five years, are exhibiting seasonality trends shown here, New Year's Day and 4th of July holidays at the beginning of the first and third quarters do impact shipping patterns. Wholesalers tend to raise inventory levels typically to the upper end of the normal range. We are just above sometimes in anticipation of shipping being on hold during the holidays. And so, as you can see from the graph, 2006 continues to follow this pattern with the Q3 sequential growth roughly flat. Turning to page 10, where I will talk a little bit about the fourth quarter outlook. As in prior years, we would expect fourth quarter exit inventory levels to increase some from the third quarter; again, due to the holiday shutdown, which is likely to occur at the end of the fourth quarter. We also expect continued favorability in cost of sales driven by the same practices as the third quarter, which I just discussed, namely, lower royalty expenses, a more profitable mix and to a lesser extent production efficiencies. We expect continued R&D expense growth in the quarter due to the ongoing impact of nine mega-trials and continued growth in staffing. Full year R&D expense growth should be in the middle of the 30 to 40% range we called out at the beginning of the year. As far as tax, regardless of whether the R&D tax credit is extended retroactively and we aren't counting on that, the fourth quarter tax rate will be somewhat higher than the third quarter and the full year tax rate for '06 will be lower than 2005. Lastly, in the fourth quarter, we do expect to record an IPR&D charge in accordance with GAAP related to the pending acquisition of Avidia, which will be excluded from our adjusted earnings. Turning to page 11, we have updated guidance on this page. We are narrowing the revenue range a bit with just a quarter to go for the year, and we are also raising EPS guidance, as Kevin mentioned, due to continued strong bottom-line performance, and that performance is driven by Aranesp's strong growth, making it a bigger and bigger part of our sales mix, the lower cost of sales as we've discussed, and just a better sense of what the fourth quarter spending will be across them. Turning to page 12, here we had, kind of, laid out a few balance sheet and cash flow statistics for you. First of all at the upper part of the page, the primary drivers of cash and debt in 2006 are the $5 billion of convertible notes we issued in the first quarter, and the acquisition of Abgenix along with our aggressive share repurchase program. As we've completed the vast majority of our share repurchase program detailed below, our year-end cash balance is expected to be less than that by approximately $2 billion versus the $3 plus billion that it stands as the end of the third quarter. You lost another substantial increase in inventory as of the third quarter. I just wanted to make sure you knew that was purposeful. In addition to building inventory for the Enbrel share quick launch, as well as the Vectibix launch, we strategically increased our target inventory for several of our products and are building inventory at least through the end of the year for those products. Capital expenditures reflect our manufacturing capacity and site expansions that Kevin detailed in Ireland, Puerto Rico and some other locations, as well as the investment in our ERP program, some of which is capitalized. And lastly, we currently have remaining -- $1.8 billion remaining underneath our stock repurchase program. So, with that I will turn the mic over to George.

Hey, thanks Richard. I will start with the commercial highlights shown on slide 14. We drew 50% year-over-year revenue growth in the third quarter and as Richard mentioned, we exited the quarter with inventories on the low end of the normal range. And just as a reference, there are four to five days that typically separate the high from the low ends of the range. International continued outstanding performance and while globally Aranesp remains the key driver of overall growth, Enbrel is not meeting our expectations and I will have a lot more to say about that in a few moments. We launched Vectibix 10 days ago and I am pleased to report that although it’s early days, it is exceeding our expectation. Slide 15 reviews our international performance. As you can see, the third quarter was another record in terms of product sales. Growth was 15% at constant exchange rates and 18% including exchange rate fluctuations. We believe Aranesp is a best-in-class product and now we can say we are the market leader in nephrology in all major European countries because of our recent success in Germany. Slide 16, provides the summary of Aranesp revenue growth and key drivers. Our teams drove 27% growth third quarter '06 over third quarter '05. We exited the third quarter at the low end of the normal inventory range and slightly lower than the third quarter exit last year. You may recall that we reported 26% growth last quarter, so we remain at a rock solid trend for Aranesp. Well, share gains and segment growth contributed to overall growth and pricing has being relatively stable. Key points of differentiation include our more convenient extended dosing and SureClick autoinjector. In the oncology space in the US, we launched our Q3W, extended dosing regimen in April or May and we already have over 40% of the applications at Q3W or more at this point. Well, we are disappointed with the FDA approvable letter for every two week or every four week dosing in CKD, we believe the situation is manageable. Today about 75% of administrations are every two weeks or four weeks. Turning to slide 17; NEUPOGEN and Neulasta combined grew 13% third quarter '06 versus third quarter '05. In the US, Neulasta actually exited the third below the normal inventory range. Year-over-year growth last quarter was 12%, so like Aranesp, we feel we are on a solid growth curve. As I mentioned last quarter, driving greater first cycle penetration according to our label and numerous expert guidelines, remains our focus. Slide 18 is Enbrel, and as I mentioned Enbrel is not meeting expectations despite considerable effort. So, what's going on and what are we doing about it? In the rheumatology segment, biologics are now growing 20% and we are now keeping pace. Product differentiation is more challenging as new competitors enter the market, like Orencia and Rituxan, and older competitors gain new indications. For example Humira with psoriatic arthritis.. Our key actions are focused on product differentiation. Enbrel continues to have the best documented combination of efficacy and long-term safety in the class and we frankly need to do a better job from an executional standpoint driving that point home, for competitive reasons I am not going to go into a lot of our tactics on that at this point. In the dermatology segment, the growth rate has slowed considerably from 70% third quarter last year to 11% this quarter. For a variety of reasons, biologics are being reserved for the most severe patients and typically as body surface areas are greater than 20%. We believe the key to tapping the huge potential of this segment is to catalyze a patient-doctor dialogue that uncovers the true burden for psoriasis as a disease. We have done a lot of research recently and there is a huge disconnect between doctors and patients on the proceed to stress associated with this disorder. Our firm belief is that properly motivated patients and doctors and nurses will more likely invest the time it takes to navigate an increasingly onerous reimbursement. Our key actions are focused on patient identification and mobilization through efforts such as direct-to-consumer advertising, the web, direct-to-patient communications and improved reimbursement services and financial assistance. We have the proper sense of urgency and we are totally committed along with our partners via to improving Enbrel’s performance. EPOGEN is next on slide 19. We continue to believe that EPOGEN is growing roughly in line with dialysis patient growth, net of some conversion to Aranesp in the hospital dialysis segment. As we have guided, that conversion appears to have stabilized at this point. The news where the event of course, is the fact that Fresenius has selected Amgen as their long term partner, and that we discussed that on slide 20. I think the key points are as follows. First Fresenius approached Amgen to explore the possibility of a longer-term partnership given the mutual desire to improve patient outcomes and after a thorough review on their part of alternative sourcing options. The deciding factor with EPOGEN's long-term track record of safety and efficacy -- and I have to tell you we are looking forward to supplying all of their commercial requirements for anemia treatment. And although this deal will be good for each party, payors and patients; the impact on Amgen's earnings will be inconsequential. Sensipar, slide 21. I noted during the second quarter conference call that the big jump in second quarter sales represented a step change reflecting pent-up Part D demand not a true inflection point. Going forward, we expect demand to grow through appropriate dose titration and greater penetration of patients whose PTHs are less than 800, which happens to be the bulk of the addressable market. And then my last slide is slide 22. Last, but certainly not least, we are in the midst of launching our new and our first cancer therapeutic and I have to say it's going really well. So, what has led the market to embrace Vectibix so readily? First, our impressive progression-free survival data; our cancer is first and foremost an efficacy driven market and we've got great data in late stage colorectal cancer. But other strong contributors include a low incidence of infusion reactions, every other week dosing, patient comfort kits that we've given doctors and nurses to deal with the on-target rash that develops in most cases, our socially responsible pricing and access program, and I would be remiss if I didn't add our highly respected field organizations. So, I look forward to providing a full update on the launch in January. Roger?

Thank you, George. So, as George already mentioned, and going to slide 24, the major event in the third quarter was the launch of Vectibix, which was enabled by a massive effort by our regulatory organization, as well as our development organization, and bringing this data to appropriate regulatory authorities. We are approved in third-line colorectal cancer in the United States, and we initiated in support of the broader indications for Vectibix our first-line colorectal cancer study in the third quarter, which supports as well our second-line colorectal cancer study, which we initiated in June of last year. Also, we completed PACCE enrollment this quarter, I'll say a few more words about that in a minute. We have a complete response letter for Aranesp, which was not what we had expected and I'll say a few words about that. But in general, our clinical program is on track, and as Kevin mentioned, we did initiate all nine planned mega-trials now in the third quarter. Our research productivity point has been unprecedented, I'll say a few words about that, and in particular I'll mention the fact that we've gained access to new technology with the acquisition of Avidia. Slide 25 presents in the format that we've initiated last quarter, the set of clinical studies that are going on, in this case with respect to Vectibix. Now I wish to remind you that in the far right hand column, we have projected data publication date, and that column designates exactly what it says. This is when we expect to be able to publish data largely through presentations and meetings for which there will be published abstracts. In some cases, data would be available to us internally before this time that would be considered to be material and, of course, when that happens we would let you know in advance. So just looking at the Vectibix program, of course, you are all familiar with the third-line colorectal cancer program where we have ongoing regulatory review in the EU, Australia, Canada and in Switzerland, in addition of course to the US approval. In first-line colorectal cancer, we have the PACCE study, which now has completely enrolled. Enrollment was slower than we had hoped for you will recall when we spoke about it back in January, but it picked up smartly and indeed we enrolled 824 patients in the oxaliplatin-containing arm and 229 patients in the irinotecan arm. Keep in mind that patients in the PACCE study have been exposed to different chemotherapeutic regimens. There is a lot of interesting information that will come out of this beginning with response rate data, which we will make available in January of '07 and thereafter we will begin to talk about progression data and survival data as these data roll out. Our third-line colorectal cancer studies are enrolling in Japan and we do expect to complete that enrollment on time. We are also enrolling second-line colorectal cancer and first-line colorectal cancer studies with registrational intent, as I previously discussed. In our colorectal cancer adjuvant study, which is an NSABP study, a cooperative group study, we now expect that a study initiation will occur sometime in the second or third quarter of '07 representing ongoing discussions with NSABP about our study design. In head and neck cancer, our first-line study for locally advanced squamous cell carcinoma of the head and neck, we now expect study initiation probably in Q2-Q3 '07 with a slightly larger number of patients, again based on our consideration of data that have become available in other context and discussion with regulatory agencies. We are still expecting to engage in our study as recurrent metastatic squamous cell carcinoma of the head and neck are beginning in the first quarter of 2007. When we look at AMG706, you will recall that last quarter I mentioned to you that we had concerns about potential safety signal with respect to cholecystitis and we are still investigating that, but we have become confident enough in where we stand, that we are relaunching enrollment in our Phase II study, first-line in HER2-negative metastatic breast cancer, head-to-head with Avastin, beginning in the fourth quarter. We've also initiated a study in non-small cell lung cancer, again head-to-head with Avastin, a Phase II study where enrollment will initiate in the fourth quarter and this reflects, as I say, a lot of review of data and discussion with experts in oncology and in gallbladder physiology, and we feel like we have an understanding now of where we are with respect to AMG 706. We are going to be performing some studies in '07 that will help to illuminate the effect of AMG 706 on gallbladder function, if any. The GIST Second-line data which I mentioned to you on last quarter will be presented at the Connective Tissue Oncology Society meetings with an abstract available in the first week of November, which will give a sense of the efficacy profile of AMG 706. And we do expect fairly soon to be able to see the behavior of AMG 706 in metastatic thyroid cancer refractory to previous statement, a Phase II study with 184 subjects for which enrollment has been complete for some time. Turning then to page 27, we have AMG 531; many of you'll have seen the New England Journal publication of October 19, on our Phase I, II studies in immune thrombocytopenic purpura. The Phase III studies, which are fully enrolled, both in pre- and post-splenectomy patients will conclude at the end of this year. We expect to have data base locks early in '07, we will have an opportunity to present those data in various forms during the year 2007. The open-label extension for our Phase II studies, which we described in the New England Journal, will be presented at the American Society of Hematology meetings this quarter. We also have ongoing Phase II studies in chemotherapy-induced thrombocytopenia and in patients with low or intermediate risk myelodysplastic syndromes, which are enrolling well. On page 28, highlight the current state of the denosumab studies and you will recall a very, very large series of studies exploring indications, both in postmenopausal osteoporosis as well as in oncology, and in the osteoporosis case, we have our treatment study, the 216 study, a Phase III study involving almost 8,000 patients, which is continuing on now towards its ultimate completion in 2008 with projected data publication in 2009. Though we have also initiated some other studies, including a transition study or switch study in which we look at patients who are already being treated with alendronate were then switched to denosumab and that Phase III study is enrolling at the present time. We are continuing to pursue other indications as well; one of the most exciting is in the treatment of metastases, that is asking the question whether we can reduce skeletal-related events in patients with prostate, breast cancer or other solid tumors or who already have a bony metastases, we're looking in the setting of individuals who have prostate cancer, but where there is no evidence of bony metastases and asking whether we can prevent metastases to bone. Those studies are all enrolling, they are very large studies and we are completely focused on the execution of these studies. I should also mention that in the inflammatory disease setting in rheumatoid arthritis, we will be presenting our six-month Phase II data at the American College of Rheumatology meetings this quarter and the radiographic readings from the one year analysis of this study in which we look at patients with rheumatoid arthritis and have asked whether denosumab is capable of reducing bone erosions, will be available towards the end of this month. On page 29, we look at Aranesp and Sensipar; just to mention a few things as Kevin discussed; our cardiovascular studies for Sensipar are now enrolling a Phase III study, ultimately which will involve more than 3,800 patients asking the question as to whether or not control of secondary hyperparathyroidism can in fact improve cardiovascular outcomes. And with respect to Aranesp, we have ongoing cardiovascular outcome studies in heart failure as we've previously discussed and also in patients with chronic renal insufficiency with diabetes, and then we ask, whether control of anemia actually improves cardiovascular outcomes. This is the TREAT study, currently there are 2,700 patients enrolled in the TREAT study, we continue to enroll this study and the event rate is on track to support our planned timeline. Since I mentioned Aranesp to you, I want to say a few words about the complete response or approvable letter that we received with respect to our supplementary biological license application for Q2 weekly dosing, de novo or Q4 weekly dosing for maintenance in the chronic renal disease setting. These letters came to us as something of a surprise because of course we've had quite substantial discussions with the FDA prior to the submission of the supplementary BLAs. But I have to say that in October of this year, just weeks before the PDUFA date, our new issues were raised by the agency, which were felt to be important to engage on, and those issues are now the subject for our clarification. We submitted an intention to amend to resubmit based on what we believe is very substantial amount of important data. I should say that the Q2 week filing -- the concerns raised by the agency were really quite minor and we think relatively easy to address. However, in the case of Q4 weekly dosing, approval may require an additional clinical study. We do have quite a lot of data that was not available to us at the time of filing of those supplementary BLA, and those data could be used in principle to support approval and we hope that that will be the results of the discussion. I want to emphasize that we have an extremely good relationship with regulators at the FDA, and we've agreed to work together to solve these issues, which came up relatively late in the review process. Lastly, I want to say a little bit about the R&D pipeline. We now have 47 molecules in development in the R&D pipeline, which is a very, very large number. Research productivity this year is frankly unprecedented. So far, we have 11 new molecules that we've committed into clinical development with three new molecules entering clinical trials and there will be probably a couple of more that will actually have first subject exposure before the end of the year. The breadth of these programs is quite remarkable. It includes, for example, four new programs in oncology therapeutics, one in oncology supportive care, two in diabetes, one in Alzheimer's disease, and the remainder in inflammatory diseases of different kinds. Virtually all of these programs are addressing targets that have never previously been explored in patients, which I’m very, very proud of and very enthusiastic about. Lastly, let me say that we did have the opportunity to acquire Avidia, which is a completely novel technology for generating protein therapeutics based on the construction of small molecular avimers that have specialized binding properties. The lead program in that particular case is directed against interleukin 6, a proven target in inflammatory disease. But the avimer approach offers the potential to address virtually any extra cellular target with a completely unique way of generating a protein therapeutic with ideal binding properties. We are very pleased about this. We welcome our colleagues in Mountain View, California, who have joined us now in this effort and I look forward to saying more about this in the weeks and months to come. And with that, let me turn it over to Kevin.

Thanks, Roger. Just one last page before we go to questions. Page 33, I thought it would be good to just kind of summarize how 2006 is shaping up, kind of, from the highest strategic level here. We talked at the beginning of the year about some high level objectives, and I feel that we are achieving all of them. Certainly, we are balancing EPS growth with heavy R&D investment. I think that’s real statement about our confidence in our pipeline and our optimism about the future and recognition that all companies like us have to get ready for patents expiring eventually and we are going to do that. We want to also grow markets and hold or increase share and that has not been a 100%. But when you take it on balance, that is, when you have lot of products, sometimes some are going to do a lot better than you think, sometimes others might do a little bit less good, but on balance our share of the worldwide pharmaceutical market has certainly increased. Defend our intellectual property and growth our anemia franchise, we certainly have done that. Our defenses are just starting to take shape in both, timing and location, our commercial efforts are obvious and I feel very good about where we are. Our factories continue to perform at a very, very high level. They are, kind of, the unsung heroes of this rapid expansion of the company we have seen in last few years and I deeply appreciate what they do. We also live in a world that has increasing demands in the way of compliance, whether that's at the financial level or the R&D level or the legal level, it's kind of all over the place and we are very proud that we operate at the highest standards there and that is not an accident or necessarily something that just happens. So, we feel really good about this quarter, about the year-to-date, about the future and with that point we will take your questions. One last thing just to mention in case you wonder, as is our normal practice, we will talk to you about guidance for '07 in January and that will be a more extensive conversation. But Arvind, I will turn it over to you. We are ready to have a conversation here.

Yes, absolutely. Let's open it up for the Q&A session. Derrick, would you please review the procedure for asking questions.

Yes, sir. (Operator Instructions). Your first question comes from the line of Geoffrey Porges with Sanford Bernstein. Geoffrey Porges - Sanford Bernstein: Thanks very much for taking the question, and congratulations on a solid quarter. Could you just give us a little bit more color, George, on EPOGEN, and you are 6% up year-over-year, and 3% up Q-over-Q? It's the first up quarter you have had for some time, and usually Q3 tends to be down. So, could you comment specifically on the inventories for EPOGEN, and then whether there are any one-time orders that contributed to what was a reversal of the trend we've seen before?

Okay. So, inventory levels are pretty flat from the second quarter, and actually down slightly from the third quarter last year, Geoff. Geoffrey Porges - Sanford Bernstein: Okay, and what about the underlying demand, what's picking up out there?

It's interesting if you just look at the quarterly sales charts, it tends to choppy and also we have the spill over audit, some other cats and dogs; so, when I say that we are growing roughly in line with patient growth of 3 to 4% minus that which has been cannibalized in Aranesp in hospitals. We know, we are really indicating, it's growing in the low single digit range. Geoffrey Porges - Sanford Bernstein: Thanks.

Thank you. Next.

Your next question comes from the line Craig Parker with Lehman Brothers. Craig Parker - Lehman Brothers: Hi, a question I guess for both George and Roger on Enbrel. I have heard from some academic rheumatologists, at least you guys aren’t really pursuing even investigative INDs or kind of development program of Enbrel, and I guess question number one is, do you think you are suffering for that now in the market because most of the other molecules have new indications under development? And two, are you going to revisit that and potentially ramp up any kind of Enbrel development, specifically for indications like asthma?

Let me just sort that by saying, obviously we always like new information to bring to our customers, but it’s never an excuse when you have a product that is this robust, that we still believe is best-in-class. So, Roger, do you want to talk about things we are doing with them.

Yeah, we are always interested, Craig, in pursuing other opportunities. We had an opportunity to look at the asthma data; we think they are provocative, but it's hard to define where the right patient population would be and we have worked jointly with Wyeth and with a number of academic investigators to look at that. We are looking at some other systemic inflammatory diseases, potential targets for Enbrel. Gee, it just has near ideal properties as a TNF-sequestrant in efficacy and safety but that's the most important part. We have such a large database, its not surprising of course that other competitors are making noise in the market as they complete their study.

Okay. Next question please?

Your next question comes from the line of Geoff Meacham with JPMorgan. Geoff Meacham - JP Morgan: Hi, thanks for taking the question. Just to follow-on in that same vein area, I am wondering one of you can give us your take on the Humira data and psoriasis to Phase III data and how you see that playing out vis-à-vis off-label use and then beyond following formal approval?

Humira is a pretty good product for psoriasis and psoriatic arthritis, but we -- there is a lot we don't know about it. How durable is it, and what's the safety profile? And as I mentioned many times in the past, dermatologists are first and foremost safety conscious about these products. They don't want to put their patients in jeopardy, and the monoclonal antibodies are different from soluble receptors like Enbrel, and I think it schools out on how safe these products are to be used in psoriasis, I don’t -- Roger if you want to comment; but I think that's going to be a big issue going forward, durability and safety.

Yeah, Geoff I think the issue with the monoclonal antibodies has been that they behave really quite differently from the soluble receptor with the respect to their ability to lyze a pre-existing granuloma and that's of considerable concern where you have someone who has for example, latent TB. And in addition, it's of some concern in terms of controlling new infections. So, anything that behaves in that way would potentially be problematic in a safety conscious prescribing population. I guess the most important thing to emphasize is that there have been no direct head-to-head studies and without head-to-head studies you really can't say very much about efficacy or safety.

I think, just one thing to add, the latest Humira data had a very high placebo response, and I think that's probably confounding things a little. Geoff Meacham - JP Morgan: Great. Thanks.

Thank you.

Your next question comes from the line of Elise Wang with Citigroup. Elise Wang - Citigroup: Hi, congratulations on a nice quarter.

Thank you.

Thank you. Elise Wang - Citigroup: I just wanted to get some of your thoughts on the longer acting erythropoiesis stimulating products. Clearly there is lots of speculation in light of data that we are expecting out of CERA in regards to whether or not that has some better control over hemoglobin levels. And given your experience with Aranesp as well as in general with EPO, I was wondering if Roger could just elaborate a little bit more on some of the characteristics if you will, of these EPO products and the longer acting ones?

Yes, Elise thanks. We don’t have a lot of data from the Roche presentation. So, they have now provided abstracts, because of the recent publication of the ASN abstracts that give a limited view of their Phase III program. And I guess in many respects it's not surprising if you take erythropoietin and pegylate it, so it has a longer half-life that it behaves, kind of like erythropoietin with a longer half-life. In my view, certainly from everything I've seen is that that's exactly what they’ve done and not surprisingly from an efficacy point of view, they’ve been able to show non-inferiority because in fact they’ve just made the same product. I am concerned though that there are some safety signals that are a little bit surprising, and I say that because one of the features of the Roche studies was that they have excluded the sickest patients and they've done so using a different characteristic that's never previously been used in such studies, which is to exclude patients who have high level of C-reactive protein, and we know from their studies, our studies, a variety of studies by academic groups, that patients with high levels of C-reactive protein have -- are at higher risk for cardiovascular events. They are in general the sickest patients and they are also the least responsive to erythropoietic stimulating agents. So, in essence by excluding those people with high levels of CRP, they are taking the best population; and even in this best population, if you look at the Maxima study, the safety results for peg-EPO were significantly worse not only than what were seen with simultaneous analysis of EPO, but also worse than what we've come to experience looking at all of our previous studies, and now we have 4 million patient years of experience with Aranesp and EPO. So, that makes me concerned that first of all you use a uncharacterized method of excluding patients who are most at risk and still end up with a safety problem, and I think that’s something that we're going to have to look at very carefully going forward. But in other respects, I would say that peg-EPO looks pretty much like pegylated erythropoietin as we would expect.

Thank you.

Your next question comes from the line of Joel Sendek with Lazard Capital Management. Joel Sendek - Lazard Capital Management: Hi, thanks. I have a question on the Fresenius deals, specifically can you tell us about when the effective date? How strict the termination clauses are, if there are any? Whether it's renewable? And, can you explain why there will be no impact on earnings and why your assumptions are behind that? Thank you.

I will let George answer, but we are not going to go into the, as you probably would expect, the real nitty-gritty of all of the contract terms. I can understand your question, but it’s a confidential sort of information and we can't give out the specific details of the contract. But I think the word inconsequential, kind of, doesn’t really need interpretation. It is inconsequential for our financial results, and I would rather just probably stand behind that word and try to parse more than that, so I wish I could tell you more, but that I think is responsive with the spirit of the question. So, thank you, and we will take the next question. Joel Sendek - Lazard Capital Management: Okay.

Your next question comes from the line of Mark Schoenebaum with Bear Stearns. Mark Schoenebaum - Bear Stearns: Hi, and I'll add my congratulations to a good quarter. Given the development to date, do you recommend that we, as the investment community, assume that Roche's peg-EPO will be on the market for at least some portion of 2007 assuming that the FDA granted approval by February PDUFA?

We are not going to speculate on what Roche may or may not do. We would expect the FDA will approve the product, but you never know. I think the important thing for investors to be confident about, is Amgen is going to be effectively and appropriately competitive on all fronts and ready for anything. And as we proceed here, we will see what happens. But we are not ready to comment on some expectation about Roche, that's probably a question that's asked to them, but we will be ready for anything and you can rest assure to that. Thank you. Mark Schoenebaum - Bear Stearns: Thanks.

Your next question comes from the line of May-Kin Ho with Goldman Sachs. May-Kin Ho - Goldman Sachs: Hi. Along the line of the Fresenius agreement, should we expect you to be talking to other dialysis chains as well; for example, DaVita?

May-Kin, we are always happy to sit down with our customers and talk about ways of enhancing our business, and so -- yes, we are ready, willing and able. May-Kin Ho - Goldman Sachs: Thank you.

Your next question comes from the line of George Farmer with Wachovia. George Farmer - Wachovia: Hi, thanks for taking my question. Roger, last quarter you talked about denosumab Phase II three-year data and talked about how denosumab improved lumbar spine bone mineral density relative to alendronate over the three-year period. Do you guys intend on expounding upon that, can we see fracture data from that study?

We will present the data in some detail a little bit later next year. So, you’ll have a chance to look at all of the data. The study is not large enough -- the Phase II studies are not large enough to get meaningful fracture results. So, really the study, of course, was intended to look at changes in bone mineral density and bone turnover, but we won’t be able to see fracture data from our Phase II studies. George Farmer - Wachovia: Okay, thanks.

Your next question comes from the line of Adam Walsh with Jefferies. Adam Walsh - Jefferies: Hi, thanks. I wonder if you could give us the status update on the litigation between J&J and Amgen regarding the validity of your bundling contracts for Neulasta and Aranesp and provide us with the time line as best you understand at this point? Thank you.

Thanks. It's obviously an important legal matter predicting exactly how things will proceed legally is kind of speculation on our part, so I’d rather not to do that. We will contest this very, very vigorously in court. That’s the right place. We are confident in our position. I would guess no matter what the outcome that appeals will happen and so, this could stretch on for some time, but we will defend ourselves vigorously and are confident the facts will support us. So, I think I will just leave it at that. I wish I could give you a more precision, but that's kind of the shape of these kind of issues. Thank you. Next question please?

Your next question comes from the line of Eric Schmidt with Cowen & Company. Eric Schmidt - Cowen & Company: Yes, good afternoon, a question for Roger on the sBLA response for Aranesp. The new questions that the FDA raised in October are specific to the products or the clinical trial data or are they some how more general to erythropoiesis stimulating agents in this setting?

Eric, I kind of lost you a little bit on the last part, but the questions that were raised are in the case of the Q2 weekly de novo sBLA, because again this was an extended dose sBLA that was split into two. For the Q2 weekly, it really has to do with data presentation and questions that I think are relatively easy to manage; however, I think with respect to the Q4, the questions that were raised are questions that apply more broadly to the use of erythropoietic agents in the setting of chronic renal insufficiency that proceeds to renal failure and there I think there is a lot more that needs to be discussed that's general to the whole field of anemia management; obviously something that we have a lot of experience in and we need to spend some time making sure that we become aligned with the regulatory view, we tried some of them, it is a little bit different from where we are. Eric Schmidt - Cowen & Company: Thanks a lot.

Next question please?

Your next question comes from the line of Eric Ende, Merrill Lynch. Eric Ende - Merrill Lynch: Thanks, I was wondering if you guys can tell us what you ended the quarter at with respect to inventories for each of the products, the Neulasta NEUPOGEN, Aranesp and EPOGEN?

Hi Eric, it's Richard. No, we are not going to go all the way down for the product-by-product. I would say the bulk of the increase, a good portion of the increase was Enbrel. I wouldn’t surprise you, as we were trying to build up inventory beginning -- really this year, prior to this year we didn’t really have much inventory at all, living a little bit hand-to-mouth with Enbrel. Now that we can make sufficient Enbrel, we are building up some inventory like we've had inventory of other products. So that's the bulk of the difference year-over-year. But again it's spread out across all the products. I mentioned that we obviously have some Vectibix inventory as of the end of September, looking forward to the launch in October which we've had. It's really in across the board, but Enbrel focused growth in inventory. Eric Ende - Merrill Lynch: Actually Richard, I was talking about wholesaler inventories.

Oh sorry. George?

Let me just run down. What I'll give you is what happened in the third quarter versus second quarter. Aranesp is down pretty significantly, Neulasta's down very significantly, NEUPOGEN is down significantly, EPOGEN is roughly comparable, Sensipar is roughly comparable. Eric Ende - Merrill Lynch: Okay, thank you.

Thank you.

Next.

Your next question comes from the line of [Richard Bellison with Capital Research]. Richard Bellison - Capital Research: Thank you. Two questions, first I was wondering is there anything you learned from receiving your approvable letters that raises questions in your mind as to the approvability of CERA.

I don't know because I don't know what the peg-EPO file looks like. So, I can't really say about that. We are managing that interface. I would say in general that everyone has the experience that the agency is looking more and more carefully at all of the files that come in, we certainly see that. Now, we’ve got a very long history of working with the agency particularly in the area of anemia filing and I expected the same careful looks that we got, it is going to be same -- is going to the careful look that they would get for their filing. Richard Bellison - Capital Research: Is there any issue regarding the number of patients in any of their studies, any sub-groups where they might have a small number of patients.

Frankly, I just have no idea what their file looks like. They didn’t send me a copy.

But we can't. We understand the interest in the question and we cant, we just don’t have any insight. I can tell you just from, what are we ready for operationally here? We just have to be ready for anything. But it is clear that the agency has taken a harder look at all these filings and, it's a high hurdle. We'll just have to wait, thank you. Richard Bellison - Capital Research: Second part of my question is, I guess in some of the legal documents Amgen made an issue of Roche approaching some dialysis clinics and suggesting they would make more money if they ended up using CERA --

Your next question comes from the line of David Witzke with BOA Securities.

Let's let Rick finish his question, he got cut off. Hello Rick, can you hear us.

One moment please.

Are you on the line, Rick? Okay. We will get back to you after the call, I am sorry. I am not sure of how it happened. There was another question. Go ahead. David Witzke - Bank of America Securities: Yeah, it's Dave Witzke. Good afternoon, I hope you can hear me.

Yeah, we can hear you loud and clear. David Witzke - Banc of America Securities: Great. Can you provide any color at all regarding the Vectibix launch, regarding percent used as monotherapy with chemo or any evidence of use in head and neck? Thanks.

It's so early that any speculation that we make right now just -- I think if I not serve you well, I think the main message that we want to convey is strong acceptance here in the first two weeks. It's above our expectation. We are optimistic and as time goes on, we will be able to be more fulsome, but that's the right way to think about the story right now. Next question please.

Your next question comes from the line Shiv Kapoor with Montgomery & Company. Shiv Kapoor - Montgomery & Company: Thanks for taking my questions, and it's around your R&D spend. This has really been a landmark year in terms of the number of large trials that you have started, and as a result your R&D expense seems at a six-year high. Do you expect to continue to have accelerated R&D spend in the coming two to three years or do you expect R&D to grow inline with your sales, now that you have a good idea of what your current pipeline looks like?

Yes, that’s an important strategic question for sure. I can say a couple of things. This year is certainly an unusually high increase in R&D expenditure compared to the prior year. I sure don’t see this level of increase sustainable or appropriate. We kind of got up on a new high ramp this year, and while we can't give guidance for '07 and beyond, I am sure that the R&D spending will be closer to sales growth going forward. But I do have to say that we have to balance earnings delivery with what we think the potential of our molecules are and what the future needs of the company are. And I will say that right now, we feel very enthusiastic about the potential of our pipeline and my bias is to try to invest heavily in R&D. But, certainly this year's 30 to 40% increase in R&D compared to the prior year is something you just -- you can't sustain at that level in the future. But, we are probably going to be pretty heavy investors in R&D going forward. We have got a lot of exiting stuff to focus on. Shiv Kapoor - Montgomery & Company: Thanks.

Your next question comes from the line of Jim Reddoch with FBR. David Amsellem - FBR: Hi, this is David Amsellem for Jim. Two quick Vectibix questions. One is, do you anticipate in the near future seeing significant Vectibix use outside of third-line colorectal cancer? And then, secondly, how big of a driver do you think is the discounted pricing going to be in terms of adoption as it relates to pricing, efficacy, safety and all the other points of differentiation? Thanks.

We promote our product based on the label. Physicians make decisions based on their experience and the overall data set. And so, we are trying to develop our product, the clinical data to try to move up the chain, if you will, into earlier lines of treatment. And I think in terms of where this product is going to go, it's kind of early to predict. The economics of the product are I think responsible socially. I think we care about everybody who needs our product getting it and the aspect of when you spend more than 5% of your adjusted income, when you are in certain income categories and you get the product is socially responsible. But, our judgment is that doctors make decisions overwhelmingly on safety and efficacy, not economics, but certainly in this case, the economics doesn't hurt us.

David, this is Roger. I just would emphasize that we have a powerful on-label indication and that’s what all of our activity is based on. We are busy doing clinical studies in other areas, but our expectation is that the drug is used on-label. David Amsellem - FBR: Okay. Thank you.

Your next question comes from the line of Chris Raymond with Robert W. Baird & Company. Chris Raymond - Robert W. Baird & Company: Hi, thanks. If you don’t mind, maybe another renal business contracting question. Being respectful there is some aspects maybe of the Fresenius deal you would like to sort of keep close to the vest, I can't help but notice that DaVita announced back in February a deal that seems to read similar to the Fresenius agreement. The only different I see is it goes just through 2007. I guess, is it safe to say that these agreements are similar or is it possible that maybe the Fresenius deal has more sort of substance to it.

Again, the financial details are confidential, but there is a difference between the contracts. Chris Raymond - Robert W. Baird & Company: And so, is it safe to say that Fresenius has more of a binding -- some more teeth in the Fresenius deal or --?

Really don’t want to go into that, but we feel very confident that the Fresenius deal is extremely binding, although we hope to never have to go to the contract. We hope to have the kind of relationship where you don’t use the contract to manage your relationship and I think that’s where we are at Fresenius. Chris Raymond - Robert W. Baird & Company: Okay. Thanks very much.

Thank you.

Your next question comes from the line of Steve Harr with Morgan Stanley. Steve Harr - Morgan Stanley: I wanted to ask about the potential for CMS to readdress their bundling guidance, or reimbursement for our cancer drugs, and the guidance comes out in 2000 -- I guess on November 1 for 2007. A) what are your expectations? And B) if CMS does change the way they reimbursed bundled drugs, do you think this will have an impact on your business in '07 and beyond?

I don’t, Steve, think it's real productive for us to try to speculate on what the government may or may not do. We certainly know that there is intense effort on the part of some to try to have that happen. We are fully engaged, we are confident the government's going to do the right thing and I'd probably just leave it at that. I'll ask George if he's got anything he'd like to say about it.

Yeah I think most everybody that commented on the rule basically said, A), this should play out through a formal process of comment and rule making, not be done in the November rule and we certainly support that point of view. So, I think that will give us a chance to get the facts out. I think once people look at the entire facts around this situation, it's viewed as something that's very balanced pro-competitive and the right thing to do for patients and payors. Steve Harr - Morgan Stanley: Thank you.

Your next question comes from the line of Michael Aberman with Credit Suisse. Michael Aberman - Credit Suisse: Hey guys, thanks. Can you guys share some of your insights on the gallbladder toxicity for AMG 706? And should we assume that no Phase III trials will start until we get the head-to-head data against Avastin back?

Michael, let me just say with respect to what we've seen in the 706 studies we reported last time, we had a number of episodes of cholecystitis, some leading to cholecystectomy, but of course cholecystitis and cholecystectomy are not uncommon in this population. You see them anyway. We have explored the question and asked whether we can see anything either from the pre-clinical or the clinical data that would tell us that 706 was acting in an untoward passion with respect to gallbladder function, and we’ve had the opportunity to bring in lot of experts in oncology and in gallbladder disease. I think one of the things we learned from that was that, the perspective from those involved in our clinical trials and external experts is they feel that whatever signal may exist with respect to gallbladder disease and we are talking about something that is in the 2 to 3% range is what we have see out of the 650 or so people exposed to 706, is something that they consider very manageable depending upon the efficacy profile. We will have the opportunity to study that in more detail, as I mentioned in next year and with respect to what studies we will initiate when, that’s a matter of deep discussion right now, I should say. We are getting the head-to-head study started again with the Phase II study that we had held in abeyance, while we’re looking at these safety data and the question of which additional studies to do and the timing of those, is something we are looking at very carefully right now. Michael Aberman - Credit Suisse: Thanks.

Why don’t we take two more questions?

We have now reconnected with [Richard Bellison from Capital Research].

There is one, I am sorry about that, why don’t you try your question, Richard. Richard Bellison - Capital Research: Okay, my question is, given that the reimbursement for EPO products is ASP plus 6%. It's not quite clear to me, how Roche could you price as a weapon to gain share. It seems like they're are promising that dialysis providers could make more money if they switched to CERA, but given the way this product is reimbursed, I don’t quite see how that could happen?

I agree with you Rick, the only way to do that is to constantly lower your selling price which gets reflected in your ASP in subsequent quarters, so you are in a downward spiral, and particularly as the companies look into get into the oncology market at some point, that would probably not be the brightest things to do. So, once you have an ASP out there, it's pretty difficult to create price advantages without really disadvantaging another group of customers who are included in the ASP calculation; I think you are right on. Richard Bellison - Capital Research: Thank you.

Thank you. Next, one last question.

Your final question comes from the line of Gene Mack with HSBC. Gene Mack - HSBC: Thanks for taking the question. I just wanted to go back to Enbrel, really quick; I think during the call -- in part of the call, you mentioned there was some sort of a disconnect between doctors and patients with regard to severity of disease or something like that, may be you can clarify those comments and maybe just expand a bit about -- on it?

Yes. So, we have done a lot of market research with physicians and with psoriasis sufferers, and basically asked questions like, how much distress do you think patients with psoriasis encounter, and then ask patients, how much distress do you encounter in terms of their quality of life and things they are able to do and there is a huge gap between what doctors view as distress on the part of the psoriasis patients and what patients feel and if that disconnect, frankly that creates a lot of the problems. So, the doctor is looking at a psoriatic patient saying, no big deal it's a skin disease and you know what, I don’t really want to put my staff through all the hassles to get him or her on Enbrel, and get the reimbursement and so forth, and the patients sitting here, may be not articulating, but saying, help me please, because this is really affecting my life in a profound way. So, we have got to connect those two and that's what -- when DTC works well, that’s what it does. It stimulates the right dialogue between the patient and the doctor, and so there is shared reality between the two and they can actually then move forward. Most of these patients, even patients with 50% body involvement, body surface involvement, many of those patients are on topicals which we know are not anywhere close to being affected. So, we have got a lot of work to do. My point is huge potential. We need to find the keys to unlock that potential and we are working real hard at it.

Okay, thanks very much George. Let me thank everybody for their participation. I realize that some of you may not have gotten to your questions, so feel free to call us. The Investor Relations team is available to respond to your questions and thanks again for your participation.

This concludes the Amgen third quarter financial results 2006 conference call. You may now disconnect.