A TOAST TO THE '90S; AMGEN LEADS LOCAL COMPANIES' CHARGE ON WALL STREET AS TECHNOLOGY TAKES THE BULL BY THE HORNS.

Byline: Jason Z. Cohen Staff Writer

THOUSAND OAKS - It hasn't had the largest stock run-up of all regional companies; that distinction belongs to another Thousand Oaks company, Semtech. And it doesn't have the market capitalization of entertainment giant Disney, the largest company headquartered in the San Fernando Valley.

But Amgen was arguably the region's darling company of the 1990s.

Riding multibillion-dollar sales of its two flagship products, Epogen and Neupogen, Amgen has grown into one of the great success stories of the 1990s, nationally as well as locally.

The evidence is at the company's Thousand Oaks headquarters, which now houses more employees - 5,000 and counting - than any other private company in Ventura County. The proof can also be found on Wall Street, where $1,000 of Amgen shares bought on Dec. 31, 1989, is now worth approximately $60,000.

The company began as a boutique biotechnology firm founded by genetic engineers. With the 1989 launch of Epogen, it entered the 1990s poised for major growth.

``There was a lot of promise in the early 1990s from the biotech revolution,'' said Richard Dahlberg, fund manager for Pioneer Mutual Funds. ``I think it's one of the few companies that sort of fulfilled its promise with some products. There's been much R&D in the industry and few mega-products.''

Epogen and Neupogen are two of those mega-products. Since entering the decade shortly after the launch of Epogen, Amgen has gone from 500 employees and a split-adjusted stock price of a little more than $1 to the nation's largest biotechnology firm, with 6,000 employees worldwide and a market capitalization of nearly $55 billion.

But leaders of the company are well aware that it's going to take more than two decade-old drugs to sustain the level of growth it enjoyed in the '90s.

``We have to expand our drug discovery process,'' said Amgen President Kevin Sharer, who is on track to become Amgen's chief executive in May. ``It used to be that we just had to grow and defend Epogen and Neupogen. Now, we have to do that and add more products to the pipeline.''

NESP, likely Amgen's next blockbuster drug, is in the final stages of testing. The drug, a longer-dose version of the anemia medication Epogen, shows great promise for patients as well as for Amgen shareholders, said Dahlberg, who manages the Pioneer II Growth Fund. The fund holds 5 million shares of Amgen.

Although Amgen developed erythropoietin, or EPO, the substance that stimulates production of red blood cells in anemia patients, it has had to share marketing rights and revenue from the drug.

Epogen, Amgen's version of EPO, is one of its largest-selling drugs with more than $1 billion in annual sales. But most of the marketing potential for EPO belongs to Johnson & Johnson, which sells it under the name Procrit.

Amgen only retains the right to market Epogen in the United States to kidney dialysis patients.

In 1998, Amgen won approval to market NESP as a separate and unique drug, circumventing the agreement it had with Johnson & Johnson and creating a direct competitor to Procrit. Analysts say the earliest that Amgen's NESP could hit the market is late 2000 or early 2001.

Sharer said Amgen's success to date is largely based on its corporate culture, which has created a sense of ownership and enthusiasm among its employees.

Tony Gringeri, a director of product development for Amgen, remembers the early days when Amgen was but one-third its present size. Gringeri, who started with the company shortly after the 1991 launch of Neupogen, said the company's nonhierarchical structure encourages creativity.

``Even as we were growing so rapidly, there was a corporate culture that began as a really strong biotech boutique,'' Gringeri said. ``Every person mattered.''

The inside joke at the time was that Amgen's first CEO, George Rathmann, not only knew every employee's name, but also names of employees' spouses and birthdays of their children.

The key to Amgen's success is that it hasn't abandoned that culture as it has grown, Gringeri said.

Of course, there were some bumps along the way.

``The stock was an extremely strong performer, particularly through the early 1990s,'' said Dennis Harp, an analyst with Deutsche Banc Alex. Brown in Baltimore. ``It stalled a bit in late 1996 and 1997.''

At that time, the federal government changed its reimbursement policy to restrict some payments for Epogen. The policy was changed back in 1998.

``A lot of things have fallen into place to make the stock look attractive,'' Harp said.

There have also been some products that were unveiled with a lot of expectation but fizzled by the time they reached the marketplace, if they even made it that far.

``Not all products that Amgen has invested in have turned out to be significant for the company in terms of ultimate sales or even getting out into the marketplace,'' Harp said. ``There are just a number of things that didn't work out for them, but other investments seem to be paying off nicely.''

The ups and downs have been some cause for concern among investors, Dahlberg said, even though the industry norm is that only about 10 percent of drug discoveries turn into commercially successful products.

``It's one of those stocks that one enjoys with fingers crossed,'' he said.

Still, Amgen's decade-long success has instilled a lot of confidence on Wall Street.

In November, Merrill Lynch created a biotechnology ``holder basket'' of the nation's top biotech companies that trades independently on the American Stock Exchange. The grouping, designed to emulate the biotechnology sector, consists of 46 percent Amgen stock; the second largest holding is Genentech with only 22 percent.

And last week, Salomon Smith Barney analyst Meirav Chovav upped her price target from $56 to $70, based on her belief that Amgen already has filed for approval of both NESP and its rheumatoid arthritis drug, Kineret.

Sharer declined to say whether the filing has been made.

Harp said it is common for companies to file for approval and keep silent about it until the federal Food and Drug Administration reviews the initial paperwork to make sure the application is in order.

Both NESP and Kineret, as well as SD-01, the follow-up to Neupogen, hold strong potential for Amgen, said Harp, who predicts NESP will develop into a $2 billion annual seller.

``The future looks very, very bright for the company,'' he said. ``They are entering the new millennium with three products that could be major blockbuster drugs.''

CAPTION(S):

Illustration, chart

Illustration: (P. 1 -- color) Bull sipping martini (no cutline)

Knight Ridder Newspapers

Chart: Impressive Run

Shares of Amgen Inc. rose dramatically during the '90s.

Daily News Research