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Amgen 2022: Operation growth strategy

Amgen is equipped with a broad and diverse product portfolio, commercial capabilities, and levers for delivering mid-single digit revenue growth over this…



Amgen is equipped with a broad and diverse product portfolio, commercial capabilities, and levers for delivering mid-single digit revenue growth over this decade.

By Andrew Humphreys •



One Amgen Center Drive

Thousand Oaks, CA 91320-1799

805-447-1000 •

Financial Performance
  2021 2020 1H 2022 1H 2021
Revenue $25,979 $25,424 $12,832 $12,427
Net income $5,893 $7,264 $2,793 $2,110
Diluted EPS $10.28 $12.31 $5.13 $3.65
R&D expense $4,819 $4,207 $1,998 $2,049
All figures are in millions of dollars, except EPS.

Best-selling products

All sales are in millions of dollars.

2021 sales

  • Enbrel $4,465 
  • Prolia $3,248 
  • Otezla $2,249 
  • Xgeva $2,018 
  • Neulasta $1,734 
  • Aranesp $1,480
  • Mvasi  $1,166 
  • Repatha $1,117 
  • Kyprolis $1,108 
  • Nplate $1,027 
  • Vectibix $873 
  • Kanjinti $572 
  • Evenity $530 
  • Epogen $521

 1H 2022 sales

  • Enbrel $1,913  
  • Prolia $1,774 
  • Otezla $1,045 
  • Xgeva $1,035
  • Aranesp $715
  • Neulasta $658 
  • Repatha $654 
  • Kyprolis $604 
  • Nplate $550 
  • Mvasi $487 
  • Vectibix $408 
  • Evenity $361 
  • Blincyto $277 
  • Epogen $256

Outcomes Creativity Index Score: 11

  • Manny Awards — 7
  • Cannes Lions — N/A
  • Clio Health — N/A
  • Creative Floor Awards — 4
  • London International Awards – N/A
  • MM+M Awards — N/A
  • One Show — N/A


Chairman and CEO Robert A. Bradway

Amgen concentrates on areas of high unmet medical need and leverages the company’s expertise to strive for solutions that improve health outcomes and dramatically improve people’s lives. A biotechnology pioneer since 1980, Amgen has grown to become one of the world’s leading independent biotech companies, has reached millions of patients globally, and is developing a pipeline of medicines with breakaway potential.

Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is additionally part of the Nasdaq-100 index. During 2021, Amgen was named one of the 25 World’s Best Workplaces by Fortune and Great Place to Work and one of the 100 most sustainable companies worldwide by Barron’s.

Amgen has outlined a growth strategy through 2030, a period during which management anticipates the company “will deliver attractive financial performance by serving many more patients globally than it does today, both with its current portfolio of marketed medicines and with the numerous new medicines it is advancing through its pipeline.”

During Amgen’s virtual business review meeting in February 2022, Chairman and CEO Robert A. Bradway stated that the company’s strategy remains concentrated on delivering innovative medicines that make a significant difference for patients around the world suffering from serious diseases – whether those medicines are discovered internally or sourced externally. Bradway added that demand for new medicines is being fueled by a rapidly aging population worldwide at the same time that advances in science and technology are significantly enhancing the ability of companies such as Amgen to innovate.

According to Bradway, many products in Amgen’s broad portfolio are poised for continued growth, and that an increasing percentage of product sales will come from outside the United States. Amgen’s CEO noted that the company’s growing portfolio of high-quality biosimilars saves money for the healthcare system, thereby freeing up funds for innovative medicines. Bradway added that Amgen’s pipeline is robust at all stages and the balance sheet is strategically strong. 

“We have all the pieces in place that we need to succeed,” Bradway stated. “Our job now is to execute.”

Peter Griffith, executive VP and chief financial officer, said Amgen is well-positioned to grow revenue through a declining pricing environment, with a focus on innovative products that result in strong volume growth and a broad, growing portfolio of biosimilars that benefits the healthcare system. 

Amgen’s long-term financial guidance for 2022–2030 includes revenue compound annual growth rate (CAGR) in the mid-single digits; non-GAAP operating margin of 50 percent of product sales; and non-GAAP earnings per share (EPS) CAGR in the high-single digits to low double digits.

Griffith said Amgen’s efficient operating model will enable the company to maintain industry-leading operating margins despite a declining net price environment.

According to Griffith, Amgen will continue to execute on the company’s capital allocation strategy, which seeks to maintain an efficient capital structure resulting in an optimal cost of capital. He highlighted that Amgen’s capital allocation principles start with internal and external innovation, noting that the company executed more than $30 billion in deals during the last decade, from platform and technology-related deals to acquisitions of marketed products. Amgen’s industry-leading manufacturing capabilities include a recently FDA-licensed next-generation drug substance plant in Rhode Island and new facilities under construction in North Carolina and Ohio.

Griffith indicated that it is Amgen’s plan to return, on average, 60 percent of non-GAAP net income to shareholders through 2030, through a combination of dividends and share repurchases. Amgen has grown the dividend meaningfully each year since 2011 and plans for continued dividend growth over the long term. Griffith noted that Amgen’s 2022 share repurchase plans were between $6 billion and $7 billion.

acquisitions, Deals & partnerships

Amgen struck a deal during August 2022 to acquire ChemoCentryx, a biopharma company focused on orally administered therapeutics to treat autoimmune diseases, inflammatory disorders, and cancer. Amgen agreed to acquire ChemoCentryx for $52 per share in cash, representing an enterprise value of $3.7 billion. The transaction was anticipated to close during the fourth quarter of 2022.

The acquisition includes Tavneos (avacopan), a first-in-class medicine for patients with serious autoimmune disease. Management said Tavneos adds to Amgen’s decades-long leadership in inflammation and nephrology.

“The acquisition of ChemoCentryx represents a compelling opportunity for Amgen to add to our decades-long leadership in inflammation and nephrology with Tavneos, a transformative, first-in-class treatment for ANCA-associated vasculitis,” Bradway stated. “We are excited to join in the Tavneos launch and help many more patients with this serious and sometimes life-threatening disease for which there remains significant unmet medical need. We also look forward to welcoming the highly skilled team from ChemoCentryx that shares our passion for serving patients suffering from serious diseases.”

Tavneos is an orally administered selective complement component 5a receptor inhibitor that was approved by the FDA during October 2021 as an adjunctive treatment for adults with severe active ANCA-associated vasculitis. Specifically, granulomatosis with polyangiitis (GPA) and microscopic polyangiitis (MPA) (the two main forms of ANCA-associated vasculitis), in combination with standard therapy. ANCA-associated vasculitis is an umbrella term for a collection of multi-system autoimmune diseases with small vessel inflammation.


Amgen anticipates that Otezla (apremilast), which generated $2.2 billion in 2021 global sales and nearly $1.05 billion in first-half 2022, will be a strong contributor to the company’s growth over the next several years. Otezla was acquired from Bristol Myers Squibb during November 2019 after the company’s acquisition of Celgene. Otezla is the only oral, non-biologic treatment for psoriasis and psoriatic arthritis.

Amgen is regarded as a leader in inflammation and nephrology. The company’s inflammation portfolio includes Otezla (apremilast), Enbrel (etanercept), Tezspire (tezepelumab-ekko), Amgevita (a biosimilar to AbbVie’s Humira, the world’s top-selling prescription medicine), Riabni (a biosimilar to the Roche/Genentech blockbuster brand Rituxan), and Avsola (a biosimilar to Janssen’s blockbuster product Remicade). The company’s pipeline includes four innovative Phase II inflammation medicines – efavaleukin alfa for systemic lupus erythematosus and ulcerative colitis, ordesekimab for celiac disease, rocatinlimab for atopic dermatitis and rozibafusap alfa for systemic lupus erythematosus – as well as ABP 654, a biosimilar to Janssen’s multibillion-dollar brand Stelara undergoing Phase III development. Amgen’s nephrology portfolio includes the products Epogen (epoetin alfa), Aranesp (darbepoetin alfa), Parsabiv (etelcalcetide) and Sensipar (cinacalcet).

In addition to Tavneos, ChemoCentryx has three early-stage product candidates that target chemoattractant receptors in other inflammatory diseases and an oral checkpoint inhibitor for cancer.

Amgen and Plexium agreed during February 2022 on an exclusive, global, multi-year research collaboration and license agreement to identify novel targeted protein degradation therapeutics toward historically challenging drug targets. The multi-year deal supports the discovery of novel molecular glue therapeutics leveraging insights from Amgen’s expertise in developing multispecific molecules.

The collaboration is initially focused on two programs with Amgen holding options to add additional programs. Plexium is eligible to receive more than $500 million in success-based target access, preclinical, clinical, regulatory, and commercial milestones, as well as tiered single-digit royalty payments, if all options are exercised. Amgen has a commercial license to each program that advances to a predefined preclinical stage of development and is responsible for worldwide development and commercialization.

The partnership is concentrating on expanding targeted protein degradation opportunities through the discovery of previously unrecognized molecular glues or monovalent degraders. These molecules work via a concept of induced proximity that take advantage of the normal biology of a cell to bring two proteins together to drive protein degradation. The collaboration incorporates Plexium’s comprehensive targeted protein degradation platform, powered by a proprietary high-throughput cell-based screening technology that enables the discovery of novel molecular glue therapies.

At the start of 2022, Amgen and Arrakis Therapeutics agreed on a research collaboration concentrated on the discovery and development of RNA degrader therapeutics against a range of difficult-to-drug targets in multiple therapeutic areas. Management said this new class of “targeted RNA degraders” consists of small molecule drugs that selectively destroy RNAs encoding disease-causing proteins by inducing their proximity to nucleases.

Arrakis is leading research activities for the identification of RNA-targeted small-molecule binders against a broad set of Amgen-nominated targets. Both parties are collaboratively designing and functionalizing these molecules to specifically degrade targeted RNAs, and Amgen is leading preclinical and clinical development activities. Amgen was responsible to pay $75 million upfront to Arrakis for five initial programs and has the option to nominate more programs. For every program, Arrakis is eligible for additional payments from Amgen for preclinical, clinical, regulatory, and sales milestones, and royalties up to low double digits. Arrakis could potentially garner several billion dollars in future payments if all milestones are met and future program options are exercised. 

 In another January deal, Amgen and Generate Biomedicines announced a research collaboration deal to discover and create protein therapeutics for five clinical targets across several therapeutic areas and multiple modalities. Amgen was responsible for paying $50 million in upfront funding for the initial five programs with a potential transaction value of $1.9 billion plus future royalties, and has the option to nominate up to five other programs, at additional cost. For every program, Amgen will pay up to $370 million in future milestones and royalties up to low double digits. Amgen will additionally participate in a future financing round for Generate Biomedicines.

According to Executive VP of R&D David M. Reese, Amgen’s industry-leading human data capabilities include multiple data sources such as real-world clinical data profiles, genomics, transcriptomics and proteomics. Reese said Amgen has built a human data resource consisting of 2.5 million genotypes from around the globe, including more than 350,000 whole genomes, 18,000 transcriptomes and 100,000 proteomes, coupled with phenotypic data for more than 10,000 traits on 2.5 million individuals. This significant data resource is analyzed in real-time via an integrated analytic capability allowing Amgen to rapidly generate insights into disease and human health, Reese noted. The application of these insights is used across the company’s R&D efforts, where 65 percent of Amgen’s non-
oncology portfolio is genetically validated, and human data capabilities inform almost all programs entering clinical development.

Financial & product performance

For Amgen, total revenue during the 2022 second quarter rose 1 percent year-over-year to $6.6 billion, resulting from 3 percent growth in worldwide product sales partially offset by lower Other Revenue from the company’s COVID-19 manufacturing collaboration. Management said volumes increased by double-digits for various products including Repatha (evolocumab), Prolia (denosumab), Lumakras/Lumykras (sotorasib) and Evenity (romosozumab-aqqg).

Amgen’s GAAP EPS grew from 81 cents in second-quarter 2021 to $2.45 during the 2022 second period, driven by a decline in operating expenses due to the write-off of $1.5 billion in Acquired In-Process Research & Development (Acquired IPR&D) associated with the company’s acquisition of Five Prime Therapeutics in Q2 2021 and lower weighted-average shares outstanding in Q2 2022, partially offset by an impairment charge related to the divestiture of the Turkish generics subsidiary Gensenta.

Amgen reported that GAAP operating income increased from $0.8 billion to $2.2 billion for Q2 2022, and GAAP operating margin grew 21.1 percentage points to 34.6 percent.

Amgen generated $1.7 billion of free cash flow in second-quarter 2022 compared to the one-year earlier period amount of $1.7 billion. 

The company’s total product sales grew 3 percent compared to the second quarter of 2021. Q2 2022 unit volumes increased 10 percent, partially offset by 6 percent lower net selling price and 2 percent negative impact from foreign exchange.

Total product sales rose during first-half 2022, primarily driven by higher unit demand for certain brands, including Repatha, Prolia, Evenity, Lumakras/Lumykras and Kyprolis (carfilzomib), and by favorable changes to estimated sales deductions, partially offset by decreases in the net selling prices of certain products and unfavorable changes in foreign currency exchange rates. Company management said for the remainder of 2022, net selling prices were expected to continue to decrease at a portfolio level, driven by increased competition.

Other revenue grew for the six-month period ended June 30, 2022, primarily driven by higher revenue from COVID-19 antibody material.

Enbrel represented Amgen’s top-selling product performer in the first half of 2022, with global sales coming in at $1.91 billion, falling 7 percent year-over-year. Amgen says the decrease in Enbrel sales for the three and six months ended June 30, 2022, was primarily driven by lower net selling price and lower unit demand.

An increase in Prolia sales for Q2 and first-half 2022 was primarily driven by higher unit demand. Sales during the January-June 2022 period rose 13 percent to $1.77 billion.

Amgen’s No. 3 seller during the 2022 first half was Otezla at $1.05 billion, rising 3 percent versus the 2021 first-half period. According to the company, worldwide sales growth was primarily driven by higher unit demand and favorable changes to estimated sales deductions, partially offset by lower net selling price and unfavorable changes to inventory. Amgen said global Otezla sales are expected to grow by low double-digits annually, on average, before the drug’s U.S. loss of exclusivity.

Xgeva (denosumab) global sales for the first six months of 2022 increased 8 percent versus the one-year earlier period, coming in at $1.04 billion. Worldwide sales growth sales for the three and six months ended June 30, 2022, was mainly driven by higher net selling price and favorable changes to estimated sales deductions.

A 1 percent decrease in Aranesp sales for first-half 2022 was driven by lower net selling price and unfavorable changes in foreign currency exchange rates, partially offset by favorable changes to estimated sales deductions and higher unit demand. Aranesp sales totaled $715 million during the first six months of 2022. According to Amgen, the product continues to face competition from a long-acting erythropoiesis-stimulating agent and from biosimilar versions of Epogen, which will continue to impact sales.

Global sales for Neulasta (pegfilgrastim) during the first six-month period of 2022 fell 32 percent year-over-year to $658 million, mainly driven by lower net selling price and unit demand. Amgen says increased competition as a result of biosimilar versions of Neulasta has had and will continue to have a significant adverse impact on brand sales, including accelerating net price erosion and lower unit demand. The company expects other biosimilar versions, including biosimilars that will use an on-body injector that would compete with Amgen’s Onpro injector, to be approved in the future.

Repatha sales growth of 14 percent during the first half of 2022 was fueled by higher unit demand, partially offset by lower net selling price, resulting in sales of $654 million. Contracting changes to support and expand Medicare Part D and commercial patient access and the inclusion of Repatha on China’s National Reimbursement Drug List as of January 1, 2022, led to the decline to net selling price in 2022. Management projects that Repatha will grow into a multi-billion-dollar franchise through 2030.

Increased Kyprolis sales globally during the first half of 2022 were driven by higher unit demand, partially offset by lower net selling price. The medicine’s sales rose 14 percent year-over-year to $604 million. The FDA has granted tentative or final approval of ANDAs for generic carfilzomib products filed by various companies. The date of approval of those ANDAs for generic carfilzomib products is governed by the Hatch–Waxman Act and any applicable settlement deals between Amgen and certain companies that seek to develop generic carfilzomib products, Amgen said.

Growth in global Nplate (romiplostim) sales for the three and six months ended June 30, 2022, was mainly driven by higher unit demand and net selling price. Amgen reported that first-half sales improved 17 percent to $550 million.

According to management in announcing the company’s Q2 results, Amgen’s 2022 total revenue guidance was revised to $25.5-$26.4 billion and EPS guidance was revised to $11.01-$12.15 on a GAAP basis.

Product approvals & pipeline updates

Amgen invested $4.8 billion in R&D during 2021, up 15 percent from the previous year, advancing numerous potential new medicines at all stages in the company’s pipeline and securing three significant regulatory approvals. One of those approvals was Lumakras/Lumykras, the first medicine approved for treating KRAS G12C-mutated non-small cell lung cancer (NSCLC), the culmination of a 40-year quest to treat cancers with this particular mutation. Initially approved by the FDA in May 2021, Lumakras has been approved in more than 40 countries. The company continues to study Lumakras as a monotherapy and in combination- therapy regimens for NSCLC and other solid tumors, including colorectal and pancreatic cancer. 

Launched in the United States during January 2022, Tezspire is the first biologic for severe asthma that does not have a phenotype – eosinophilic or allergic – or biomarker limitation within the drug’s approved label. Tezspire acts at the top of the inflammatory cascade by targeting thymic stromal lymphopoietin (TSLP), an epithelial cytokine.

Tezspire won U.S. marketing clearance in December 2021 as the first biologic for severe asthma that does not have a phenotype or biomarker limitation within its approved label. According to management, this provides Amgen with the opportunity to reach a broad population of patients who are living with this serious disease and are potential candidates for a biologic therapy such as Tezspire. Launched in the United States during January 2022, Amgen is evaluating the product in several other indications, including chronic rhinosinusitis with nasal polyps and chronic obstructive pulmonary disease.

Also during December, Otezla was cleared for an expanded indication by the FDA, making the medicine the first oral therapy approved to treat plaque psoriasis across all levels of severity and enabling Amgen to reach an another 1.5 million patients. Company management anticipates that Otezla – which generated $2.2 billion in 2021 worldwide sales – to be a strong contributor to Amgen’s growth during the next several years.

Amgen spent about $2 billion on R&D during first-half 2022. 

The company is advancing the largest and broadest worldwide KRAS G12C inhibitor development program through Lumakras/Lumykras with unparalleled speed and exploring more than 10 sotorasib combo regimens, with study sites spanning five continents. More than 6,500 patients have received Lumakras/Lumykras via the development program and commercial use. The European Commission granted conditional marketing authorization for Lumykras in January 2022 as the first targeted therapy for patients with the KRAS G12C mutation. Also in January, Lumakras was approved in Japan for treating KRAS G12C-mutated positive, unresectable, advanced and/or recurrent NSCLC that has progressed after systemic anticancer therapy.

The company reported detailed results from the worldwide Phase III CodeBreaK 200 study in September 2022, which demonstrated once-daily oral Lumakras/Lumykras led to significantly superior progression-
free survival (PFS; primary endpoint) and a significantly higher objective response rate (ORR; a key secondary endpoint) in patients with KRAS G12C-mutated NSCLC, compared with the intravenous chemo docetaxel. Of note, patient-reported outcomes (PROs; a key secondary endpoint) were improved with Lumakras compared to docetaxel. “This is the first Phase III randomized clinical trial for a KRASG12C inhibitor to show benefit in heavily pre-treated patients who have limited treatment options,” stated Melissa L. Johnson, M.D., director of Lung Cancer Research, Sarah Cannon Research Institute at Tennessee Oncology and presenting author. 

Clinical data were presented at the American Society of Clinical Oncology (ASCO) annual meeting in June 2022 where investigators assessed patterns of resistance to Lumakras in patients with NSCLC) and colorectal cancer (CRC) at disease progression. These and other data continue to guide the Lumakras clinical development program, per Amgen.

Company management is planning to launch a Phase III trial of Lumakras plus chemotherapy in first-line KRAS G12C mutant and PD-L1 negative advanced/metastatic NSCLC.

A Phase III trial of Lumakras in combination with Amgen’s monoclonal anti-epidermal growth factor receptor (anti-EGFR) antibody Vectibix (panitumumab) in third-line KRAS G12C-mutated CRC continued to enroll as of August 2022. Vectibix represents the first fully human monoclonal anti-EGFR antibody approved by the FDA for treating metastatic colorectal cancer (mCRC), initially approved by U.S. regulators in September 2006.

Tezspire was recommended for approval during July 2022 in the European Union by the Committee for Medicinal Products for Human Use for severe asthma. Tezspire is being developed in collaboration with AstraZeneca.

The PASSAGE Phase IV real-
world effectiveness study and the WAYFINDER Phase IIIb trial were enrolling patients with severe asthma as of August.

The SUNRISE Phase III trial, designed to assess the efficacy and safety of Tezspire in reducing oral corticosteroid use in adults with oral corticosteroid dependent asthma, started during 2022.

As of August, a Phase III trial continued to enroll patients with chronic rhinosinusitis with nasal polyps. Additionally, planning was under way for a Phase III trial for eosinophilic esophagitis.

A Phase IIb study in patients with chronic spontaneous urticaria is fully enrolled, and data readout is anticipated during first-half 2023. A Phase II trial was enrolling patients with chronic obstructive pulmonary disease as of August 2022.

The primary and secondary endpoints of the SPROUT trial, an international Phase III, multi-center, randomized, double-blind, placebo-controlled study testing Otezla in pediatric patients (ages 6 through 17) with moderate-to-severe pediatric plaque psoriasis, were successfully met. Amgen said no new safety signals were identified and the overall treatment-
emergent adverse event profile during the placebo-controlled phase of the clinical trial was consistent with the known safety profile of Otezla. The study will continue to completion and final analysis is anticipated during 2023.

In September 2022, 16-week data from the DISCREET study in adults with moderate-to-severe genital psoriasis showed a clinically meaningful and statistically significant improvement in genital psoriasis, with twice as many patients achieving the primary endpoint of a clear (0) or almost clear (1) score on the Physician Global Assessment of Genitalia (sPGA-G) scale when receiving Otezla, when compared with placebo (38.7 percent for Otezla versus 19.1 percent for placebo; P = 0.0003). The secondary endpoints of the clinical trial were additionally met.

Since initially receiving FDA approval in 2014, Otezla has been prescribed to more than 700,000 patients. The product is an oral small-molecule inhibitor of phosphodiesterase 4 (PDE4) specific for cyclic adenosine monophosphate (cAMP). PDE4 inhibition leads to increased intracellular cAMP levels, which is believed to indirectly modulate the production of inflammatory mediators. The specific mechanism(s) by which Otezla exerts the drug’s therapeutic action in patients is not well defined. 

As for another Amgen blockbuster medicine, the company during August 2022 presented new compelling data from the Phase III FOURIER open label extension trials of Repatha in adults with atherosclerotic cardiovascular disease (ASCVD). Repatha is the first and only proprotein convertase subtilisin/kexin type 9 inhibitor that has demonstrated long-term clinical outcomes in patients with ASCVD for up to 8.4 years.

According to Amgen, earlier treatment with Repatha resulted in a lower incidence of major cardiovascular events, including CV death. Amgen reported that 80 percent of patients achieved guideline directed LDL-C levels of <55 mg/dL at week 12.

Repatha is cleared for marketing in more than 75 countries, including the United States, Japan, Canada, and in all 28 EU member countries.

The ROCKET Phase III program assessing the anti-OX40 monoclonal antibody rocatinlimab (formerly AMG 451/KHK4083), in patients with moderate-to-severe atopic dermatitis started in June 2022. Following additional discussions with regulators and Amgen’s collaboration partner Kyowa Kirin, the company is amending the clinical trials to further improve patient convenience and investigate a range of doses. No safety or efficacy issues have arisen, according to Amgen. 

In June, Amgen and its partner Takeda Pharmaceutical presented data from the Phase III PARADIGM clinical study of Vectibix in Japanese patients with previously untreated unresectable wild-type RAS metastatic CRC at the 2022 ASCO annual meeting. These data showed that the mFOLFOX6 + Vectibix combo provides a statistically significant improvement in overall survival over the mFOLFOX6 + bevacizumab combination in patients with a left-sided primary tumor or regardless of tumor locations.

Amgen is testing bemarituzumab, a first-in-class monoclonal antibody targeting fibroblast growth factor receptor 2b (FGFR2b), in various stages of development. The final analysis of the FIGHT study, a Phase II randomized, double-blind, controlled trial assessing bemarituzumab and modified FOLFOX6 in patients with previously untreated advanced gastric and gastroesophageal junction cancer, was completed in 2022. Amgen says these results show that bemarituzumab + mFOLFOX6 improves the clinical outcome of patients with FGFR2b expressing tumors with no new safety concerns. A greater survival benefit was observed with increasing FGFR2b expression levels.

Amgen is performing two Phase III trials with this molecule in gastric cancer and will evaluate the potential of bemarituzumab in other cancers that express FGFR2b, including squamous NSCLC and various other solid tumors. 

A Phase III trial (FORTITUDE-101) of bemarituzumab in combination with chemo, versus placebo plus chemotherapy in first-line gastric cancer with FGFR2b overexpression continued to enroll patients during Q2 2022. A Phase Ib/III trial (FORTITUDE-102) of bemarituzumab with chemotherapy and nivolumab versus chemo and nivolumab in first-line gastric cancer with FGFR2b overexpression was enrolling patients in the Phase III portion of the study in the second quarter.

The FDA during June 2022 approved the biosimilar Riabni (rituximab-arrx) in combination with methotrexate for adults with moderate-to-severely active rheumatoid arthritis who have had an inadequate response to one or more tumor necrosis factor antagonist therapies. Riabni was previously approved for treating adults with non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (also called Wegener’s granulomatosis), and microscopic polyangiitis. Riabni is a CD20-directed cytolytic antibody.

Also on the biosimilars front, the final analysis from a Phase III trial assessing the efficacy and safety of ABP 654 versus Stelara (ustekinumab) in adults with moderate-to-severe plaque psoriasis is anticipated in 2022.

A U.S. Phase III trial testing an interchangeability designation for ABP 654 is under way.

Positive top-line results were reported in August 2022 for ABP 959, an investigational biosimilar to Alexion’s Soliris (eculizumab). DAHLIA is a randomized, double-blind, active-controlled, two-period crossover Phase III trial assessing the efficacy and safety of ABP 959 versus Soliris in adults with paroxysmal nocturnal hemoglobinuria. The clinical trial met its primary endpoints, showing no clinically meaningful differences between ABP 959 and Soliris based on the control of intravascular hemolysis as measured by lactate dehydrogenase. 

Phase III studies of ABP 938, an investigational biosimilar to Regeneron’s multibillion-dollar medicine Eylea (aflibercept), are on track per Amgen, with data expected during 2022.

Other late-stage development includes a Phase III trial to support an interchangeability designation in the United States for Amjevita (adalimumab-atto). The U.S. label for Amjevita has been modified to include pediatric Crohn’s disease (ages 6 and older) and juvenile idiopathic arthritis (ages 2-3). Amgen anticipates the U.S. launch of Amjevita on January 31, 2023.

Company management expects Amgen’s biosimilars revenue to more than double from 2021 to 2030.

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Spread & Containment

Another beloved brewery files Chapter 11 bankruptcy

The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.



Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.

It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business. 

And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.

During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.

Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.

Overall beer sales have fallen.

Image source&colon; Shutterstock

Covid is not the only reason for brewery bankruptcies

While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,

Beer sales have fallen to their lowest levels since 1999 and some industry analysts

"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.

Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.

Another brewery files Chapter 11 bankruptcy

Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11. 

"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," explained. 

Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors. 

The popular brewery operates three taprooms and sells its beer to go at those locations.

"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.

The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).

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Students lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students

An estimated 95% of US cities provide economic development tax incentives to woo corporate investors, taking billions away from schools.




Exxon Mobil Corp.'s campus in East Baton Rouge Parish, left, received millions in tax abatements to the detriment of local schools, right. Barry Lewis/Getty Images, Tjean314/Wikimedia

Built in 1910, James Elementary is a three-story brick school in Kansas City, Missouri’s historic Northeast neighborhood, with a bright blue front door framed by a sand-colored stone arch adorned with a gargoyle. As bustling students and teachers negotiate a maze of gray stairs with worn wooden handrails, Marjorie Mayes, the school’s principal, escorts a visitor across uneven blue tile floors on the ground floor to a classroom with exposed brick walls and pipes. Bubbling paint mars some walls, evidence of the water leaks spreading inside the aging building.

“It’s living history,” said Mayes during a mid-September tour of the building. “Not the kind of living history we want.”

The district would like to tackle the US$400 million in deferred maintenance needed to create a 21st century learning environment at its 35 schools – including James Elementary – but it can’t. It doesn’t have the money.

Property tax redirect

The lack of funds is a direct result of the property tax breaks that Kansas City lavishes on companies and developers that do business there. The program is supposed to bring in new jobs and business but instead has ended up draining civic coffers and starving schools. Between 2017 and 2023, the Kansas City school district lost $237.3 million through tax abatements.

Kansas City is hardly an anomaly. An estimated 95% of U.S. cities provide economic development tax incentives to woo corporate investors. The upshot is that billions have been diverted from large urban school districts and from a growing number of small suburban and rural districts. The impact is seen in districts as diverse as Chicago and Cleveland, Hillsboro, Oregon, and Storey County, Nevada.

The result? A 2021 review of 2,498 financial statements from school districts across 27 states revealed that, in 2019 alone, at least $2.4 billion was diverted to fund tax incentives. Yet that substantial figure still downplays the magnitude of the problem, because three-quarters of the 10,370 districts analyzed did not provide any information on tax abatement agreements.

Tax abatement programs have long been controversial, pitting states and communities against one another in beggar-thy-neighbor contests. Their economic value is also, at best, unclear: Studies show most companies would have made the same location decision without taxpayer subsidies. Meanwhile, schools make up the largest cost item in these communities, meaning they suffer most when companies are granted breaks in property taxes.

A three-month investigation by The Conversation and three scholars with expertise in economic development, tax laws and education policy shows that the cash drain from these programs is not equally shared by schools in the same communities. At the local level, tax abatements and exemptions often come at the cost of critical funding for school districts that disproportionately serve students from low-income households and who are racial minorities.

In Missouri, for example, in 2022 nearly $1,700 per student was redirected from Kansas City public and charter schools, while between $500 and $900 was redirected from wealthier, whiter Northland schools on the north side of the river in Kansas City and in the suburbs beyond. Other studies have found similar demographic trends elsewhere, including New York state, South Carolina and Columbus, Ohio.

The funding gaps produced by abated money often force schools to delay needed maintenance, increase class sizes, lay off teachers and support staff and even close outright. Schools also struggle to update or replace outdated technology, books and other educational resources. And, amid a nationwide teacher shortage, schools under financial pressures sometimes turn to inexperienced teachers who are not fully certified or rely too heavily on recruits from overseas who have been given special visa status.

Lost funding also prevents teachers and staff, who often feed, clothe and otherwise go above and beyond to help students in need, from earning a living wage. All told, tax abatements can end up harming a community’s value, with constant funding shortfalls creating a cycle of decline.

Incentives, payoffs and guarantees

Perversely, some of the largest beneficiaries of tax abatements are the politicians who publicly boast of handing out the breaks despite the harm to poorer communities. Incumbent governors have used the incentives as a means of taking credit for job creation, even when the jobs were coming anyway.

“We know that subsidies don’t work,” said Elizabeth Marcello, a doctoral lecturer at Hunter College who studies governmental planning and policy and the interactions between state and local governments. “But they are good political stories, and I think that’s why politicians love them so much.”

Academic research shows that economic development incentives are ineffective most of the time – and harm school systems.

While some voters may celebrate abatements, parents can recognize the disparities between school districts that are created by the tax breaks. Fairleigh Jackson pointed out that her daughter’s East Baton Rouge third grade class lacks access to playground equipment.

The class is attending school in a temporary building while their elementary school undergoes a two-year renovation.

The temporary site has some grass and a cement slab where kids can play, but no playground equipment, Jackson said. And parents needed to set up an Amazon wish list to purchase basic equipment such as balls, jump ropes and chalk for students to use. The district told parents there would be no playground equipment due to a lack of funds, then promised to install equipment, Jackson said, but months later, there is none.

Cement surface surrounded by a fence with grass beyond. There's no playground equipment..
The temporary site where Fairleigh Jackson’s daughter goes to school in East Baton Rouge Parish lacks playground equipment. Fairleigh Jackson, CC BY-ND

Jackson said it’s hard to complain when other schools in the district don’t even have needed security measures in place. “When I think about playground equipment, I think that’s a necessary piece of child development,” Jackson said. “Do we even advocate for something that should be a daily part of our kids’ experience when kids’ safety isn’t being funded?”

Meanwhile, the challenges facing administrators 500-odd miles away at Atlanta Public Schools are nothing if not formidable: The district is dealing with chronic absenteeism among half of its Black students, many students are experiencing homelessness, and it’s facing a teacher shortage.

At the same time, Atlanta is showering corporations with tax breaks. The city has two bodies that dole them out: the Development Authority of Fulton County, or DAFC, and Invest Atlanta, the city’s economic development agency. The deals handed out by the two agencies have drained $103.8 million from schools from fiscal 2017 to 2022, according to Atlanta school system financial statements.

What exactly Atlanta and other cities and states are accomplishing with tax abatement programs is hard to discern. Fewer than a quarter of companies that receive breaks in the U.S. needed an incentive to invest, according to a 2018 study by the Upjohn Institute for Employment Research, a nonprofit research organization.

This means that at least 75% of companies received tax abatements when they’re not needed – with communities paying a heavy price for economic development that sometimes provides little benefit.

In Kansas City, for example, there’s no guarantee that the businesses that do set up shop after receiving a tax abatement will remain there long term. That’s significant considering the historic border war between the Missouri and Kansas sides of Kansas City – a competition to be the most generous to the businesses, said Jason Roberts, president of the Kansas City Federation of Teachers and School-Related Personnel. Kansas City, Missouri, has a 1% income tax on people who work in the city, so it competes for as many workers as possible to secure that earnings tax, Roberts said.

Under city and state tax abatement programs, companies that used to be in Kansas City have since relocated. The AMC Theaters headquarters, for example, moved from the city’s downtown to Leawood, Kansas, about a decade ago, garnering some $40 million in Promoting Employment Across Kansas tax incentives.

Roberts said that when one side’s financial largesse runs out, companies often move across the state line – until both states decided in 2019 that enough was enough and declared a cease-fire.

But tax breaks for other businesses continue. “Our mission is to grow the economy of Kansas City, and application of tools such as tax exemptions are vital to achieving that mission, said Jon Stephens, president and CEO of Port KC, the Kansas City Port Authority. The incentives speed development, and providing them "has resulted in growth choosing KC versus other markets,” he added.

In Atlanta, those tax breaks are not going to projects in neighborhoods that need help attracting development. They have largely been handed out to projects that are in high demand areas of the city, said Julian Bene, who served on Invest Atlanta’s board from 2010 to 2018. In 2019, for instance, the Fulton County development authority approved a 10-year, $16 million tax abatement for a 410-foot-tall, 27,000-square-foot tower in Atlanta’s vibrant Midtown business district. The project included hotel space, retail space and office space that is now occupied by Google and Invesco.

In 2021, a developer in Atlanta pulled its request for an $8 million tax break to expand its new massive, mixed-use Ponce City Market development in the trendy Beltline neighborhood with an office tower and apartment building. Because of community pushback, the developer knew it likely did not have enough votes from the commission for approval, Bene said. After a second try for $5 million in lower taxes was also rejected, the developer went ahead and built the project anyway.

Invest Atlanta has also turned down projects in the past, Bene said. Oftentimes, after getting rejected, the developer goes back to the landowner and asks for a better price to buy the property to make their numbers work, because it was overvalued at the start.

Trouble in Philadelphia

On Thursday, Oct. 26, 2023, an environmental team was preparing Southwark School in Philadelphia for the winter cold. While checking an attic fan, members of the team saw loose dust on top of flooring that contained asbestos. The dust that certainly was blowing into the floors below could contain the cancer-causing agent. Within a day, Southwark was closed – the seventh Philadelphia school temporarily shuttered since the previous academic year because of possible asbestos contamination.

A 2019 inspection of the John L Kinsey school in Philadelphia found asbestos in plaster walls, floor tiles, radiator insulation and electrical panels. Asbestos is a major problem for Philadelphia’s public schools. The district needs $430 million to clean up the asbestos, lead, and other environmental hazards that place the health of students, teachers and staff at risk. And that is on top of an additional $2.4 billion to fix failing and damaged buildings.

Yet the money is not available. Matthew Stem, a former district official, testified in a 2023 lawsuit about financing of Pennsylvania schools that the environmental health risks cannot be addressed until an emergency like at Southwark because “existing funding sources are not sufficient to remediate those types of issues.”

Meanwhile, the city keeps doling out abatements, draining money that could have gone toward making Philadelphia schools safer. In the fiscal year ending June 2022, such tax breaks cost the school district $118 million – more than 25% of the total amount needed to remove the asbestos and other health dangers. These abatements take 31 years to break even, according to the city’s own scenario impact analyses.

Huge subsets of the community – primarily Black, Brown, poor or a combination – are being “drastically impacted” by the exemptions and funding shortfalls for the school district, said Kendra Brooks, a Philadelphia City Council member. Schools and students are affected by mold, asbestos and lead, and crumbling infrastructure, as well as teacher and staffing shortages – including support staff, social workers and psychologists.

More than half the district’s schools that lacked adequate air conditioning – 87 schools – had to go to half days during the first week of the 2023 school year because of extreme heat. Poor heating systems also leave the schools cold in the winter. And some schools are overcrowded, resulting in large class sizes, she said.

Front of a four-story brick school building with tall windows, some with air-conditioners
Horace Furness High School in Philadelphia, where hot summers have temporarily closed schools that lack air conditioning. Nick-philly/Wikimedia, CC BY-SA

Teachers and researchers agree that a lack of adequate funding undermines educational opportunities and outcomes. That’s especially true for children living in poverty. A 2016 study found that a 10% increase in per-pupil spending each year for all 12 years of public schooling results in nearly one-third of a year of more education, 7.7% higher wages and a 3.2% reduction in annual incidence of adult poverty. The study estimated that a 21.7% increase could eliminate the high school graduation gap faced by children from low-income families.

More money for schools leads to more education resources for students and their teachers. The same researchers found that spending increases were associated with reductions in student-to-teacher ratios, increases in teacher salaries and longer school years. Other studies yielded similar results: School funding matters, especially for children already suffering the harms of poverty.

While tax abatements themselves are generally linked to rising property values, the benefits are not evenly distributed. In fact, any expansion of the tax base due to new property construction tends to be outside of the county granting the tax abatement. For families in school districts with the lost tax revenues, their neighbors’ good fortune likely comes as little solace. Meanwhile, a poorly funded education system is less likely to yield a skilled and competitive workforce, creating longer-term economic costs that make the region less attractive for businesses and residents.

“There’s a head-on collision here between private gain and the future quality of America’s workforce,” said Greg LeRoy, executive director at Good Jobs First, a Washington, D.C., advocacy group that’s critical of tax abatement and tracks the use of economic development subsidies.

Three-story school building with police officers out front and traffic lights in the foreground
Roxborough High School in Philadelphia. AP Photo/Matt Rourke

As funding dwindles and educational quality declines, additional families with means often opt for alternative educational avenues such as private schooling, home-schooling or moving to a different school district, further weakening the public school system.

Throughout the U.S., parents with the power to do so demand special arrangements, such as selective schools or high-track enclaves that hire experienced, fully prepared teachers. If demands aren’t met, they leave the district’s public schools for private schools or for the suburbs. Some parents even organize to splinter their more advantaged, and generally whiter, neighborhoods away from the larger urban school districts.

Those parental demands – known among scholars as “opportunity hoarding” – may seem unreasonable from the outside, but scarcity breeds very real fears about educational harms inflicted on one’s own children. Regardless of who’s to blame, the children who bear the heaviest burden of the nation’s concentrated poverty and racialized poverty again lose out.

Rethinking in Philadelphia and Riverhead

Americans also ask public schools to accomplish Herculean tasks that go far beyond the education basics, as many parents discovered at the onset of the pandemic when schools closed and their support for families largely disappeared.

A school serving students who endure housing and food insecurity must dedicate resources toward children’s basic needs and trauma. But districts serving more low-income students spend less per student on average, and almost half the states have regressive funding structures.

Facing dwindling resources for schools, several cities have begun to rethink their tax exemption programs.

The Philadelphia City Council recently passed a scale-back on a 10-year property tax abatement by decreasing the percentage of the subsidy over that time. But even with that change, millions will be lost to tax exemptions that could instead be invested in cash-depleted schools. “We could make major changes in our schools’ infrastructure, curriculum, staffing, staffing ratios, support staff, social workers, school psychologists – take your pick,” Brooks said.

Other cities looking to reform tax abatement programs are taking a different approach. In Riverhead, New York, on Long Island, developers or project owners can be granted exemptions on their property tax and allowed instead to shell out a far smaller “payment in lieu of taxes,” or PILOT. When the abatement ends, most commonly after 10 years, the businesses then will pay full property taxes.

At least, that’s the idea, but the system is far from perfect. Beneficiaries of the PILOT program have failed to pay on time, leaving the school board struggling to fill a budget hole. Also, the payments are not equal to the amount they would receive for property taxes, with millions of dollars in potential revenue over a decade being cut to as little as a few hundred thousand. On the back end, if a business that’s subsidized with tax breaks fails after 10 years, the projected benefits never emerge.

And when the time came to start paying taxes, developers have returned to the city’s Industrial Development Agency with hat in hand, asking for more tax breaks. A local for-profit aquarium, for example, was granted a 10-year PILOT program break by Riverhead in 1999; it has received so many extensions that it is not scheduled to start paying full taxes until 2031 – 22 years after originally planned.

Kansas City border politics

Like many cities, Kansas City has a long history of segregation, white flight and racial redlining, said Kathleen Pointer, senior policy strategist for Kansas City Public Schools.

James Elementary in Kansas City, Mo. Danielle McLean, CC BY-ND

Troost Avenue, where the Kansas City Public Schools administrative office is located, serves as the city’s historic racial dividing line, with wealthier white families living in the west and more economically disadvantaged people of color in the east. Most of the district’s schools are located east of Troost, not west.

Students on the west side “pretty much automatically funnel into the college preparatory middle school and high schools,” said The Federation of Teachers’ Roberts. Those schools are considered signature schools that are selective and are better taken care of than the typical neighborhood schools, he added.

The school district’s tax levy was set by voters in 1969 at 3.75%. But successive attempts over the next few decades to increase the levy at the ballot box failed. During a decadeslong desegregation lawsuit that was eventually resolved through a settlement agreement in the 1990s, a court raised the district’s levy rate to 4.96% without voter approval. The levy has remained at the same 4.96% rate since.

Meanwhile, Kansas City is still distributing 20-year tax abatements to companies and developers for projects. The district calculated that about 92% of the money that was abated within the school district’s boundaries was for projects within the whiter west side of the city, Pointer said.

“Unfortunately, we can’t pick or choose where developers build,” said Meredith Hoenes, director of communications for Port KC. “We aren’t planning and zoning. Developers typically have plans in place when they knock on our door.”

In Kansas City, several agencies administer tax incentives, allowing developers to shop around to different bodies to receive one. Pointer said he believes the Port Authority is popular because they don’t do a third-party financial analysis to prove that the developers need the amount that they say they do.

With 20-year abatements, a child will start pre-K and graduate high school before seeing the benefits of a property being fully on the tax rolls, Pointer said. Developers, meanwhile, routinely threaten to build somewhere else if they don’t get the incentive, she said.

In 2020, BlueScope Construction, a company that had received tax incentives for nearly 20 years and was about to roll off its abatement, asked for another 13 years and threatened to move to another state if it didn’t get it. At the time, the U.S. was grappling with a racial reckoning following the murder of George Floyd, who was killed by a Minneapolis police officer.

“That was a moment for Kansas City Public Schools where we really drew a line in the sand and talked about incentives as an equity issue,” Pointer said.

After the district raised the issue – tying the incentives to systemic racism – the City Council rejected BlueScope’s bid and, three years later, it’s still in Kansas City, fully on the tax rolls, she said. BlueScope did not return multiple requests for comment.

Recently, a multifamily housing project was approved for a 20-year tax abatement by the Port Authority of Kansas City at Country Club Plaza, an outdoor shopping center in an affluent part of the city. The housing project included no affordable units. “This project was approved without any independent financial analysis proving that it needed that subsidy,” Pointer said.

All told, the Kansas City Public Schools district faces several shortfalls beyond the $400 million in deferred maintenance, Superintendent Jennifer Collier said. There are staffing shortages at all positions: teachers, paraprofessionals and support staff. As in much of the U.S., the cost of housing is surging. New developments that are being built do not include affordable housing, or when they do, the units are still out of reach for teachers.

That’s making it harder for a district that already loses about 1 in 5 of its teachers each year to keep or recruit new ones, who earn an average of only $46,150 their first year on the job, Collier said.

East Baton Rouge and the industrial corridor

It’s impossible to miss the tanks, towers, pipes and industrial structures that incongruously line Baton Rouge’s Scenic Highway landscape. They’re part of Exxon Mobil Corp.’s campus, home of the oil giant’s refinery in addition to chemical and plastics plants.

Aerial view of industrial buildings along a river
Exxon Mobil Corp.’s Baton Rouge campus occupies 3.28 square miles. AP Photo/Gerald Herbert

Sitting along the Mississippi River, the campus has been a staple of Louisiana’s capital for over 100 years. It’s where 6,000 employees and contractors who collectively earn over $400 million annually produce 522,000 barrels of crude oil per day when at full capacity, as well as the annual production and manufacture of 3 billion pounds of high-density polyethylene and polypropylene and 6.6 billion pounds of petrochemical products. The company posted a record-breaking $55.7 billion in profits in 2022 and $36 billion in 2023.

Across the street are empty fields and roads leading into neighborhoods that have been designated by the U.S. Department of Agriculture as a low-income food desert. A mile drive down the street to Route 67 is a Dollar General, fast-food restaurants, and tiny, rundown food stores. A Hi Nabor Supermarket is 4 miles away.

East Baton Rouge Parish’s McKinley High School, a 12-minute drive from the refinery, serves a student body that is about 80% Black and 85% poor. The school, which boasts famous alums such as rapper Kevin Gates, former NBA player Tyrus Thomas and Presidential Medal of Freedom recipient Gardner C. Taylor, holds a special place in the community, but it has been beset by violence and tragedy lately. Its football team quarterback, who was killed days before graduation in 2017, was among at least four of McKinley’s students who have been shot or murdered over the past six years.

The experience is starkly different at some of the district’s more advantaged schools, including its magnet programs open to high-performing students.

Black-and-white outline of Louisiana showing the parishes, with one, near the bottom right, filled in red
East Baton Rouge Parish, marked in red, includes an Exxon Mobil Corp. campus and the city of Baton Rouge. David Benbennick/Wikimedia

Baton Rouge is a tale of two cities, with some of the worst outcomes in the state for education, income and mortality, and some of the best outcomes. “It was only separated by sometimes a few blocks,” said Edgar Cage, the lead organizer for the advocacy group Together Baton Rouge. Cage, who grew up in the city when it was segregated by Jim Crow laws, said the root cause of that disparity was racism.

“Underserved kids don’t have a path forward” in East Baton Rouge public schools, Cage said.

A 2019 report from the Urban League of Louisiana found that economically disadvantaged African American and Hispanic students are not provided equitable access to high-quality education opportunities. That has contributed to those students underperforming on standardized state assessments, such as the LEAP exam, being unprepared to advance to higher grades and being excluded from high-quality curricula and instruction, as well as the highest-performing schools and magnet schools.

“Baton Rouge is home to some of the highest performing schools in the state,” according to the report. “Yet the highest performing schools and schools that have selective admissions policies often exclude disadvantaged students and African American and Hispanic students.”

Dawn Collins, who served on the district’s school board from 2016 to 2022, said that with more funding, the district could provide more targeted interventions for students who were struggling academically or additional support to staff so they can better assist students with greater needs.

But for decades, Louisiana’s Industrial Ad Valorem Tax Exemption Program, or ITEP, allowed for 100% property tax exemptions for industrial manufacturing facilities, said Erin Hansen, the statewide policy analyst at Together Louisiana, a network of 250 religious and civic organizations across the state that advocates for grassroots issues, including tax fairness.

The ITEP program was created in the 1930s through a state constitutional amendment, allowing companies to bypass a public vote and get approval for the exemption through the governor-appointed Board of Commerce and Industry, Hansen said. For over 80 years, that board approved nearly all applications that it received, she said.

Since 2000, Louisiana has granted a total of $35 billion in corporate property tax breaks for 12,590 projects.

Louisiana’s executive order

A few efforts to reform the program over the years have largely failed. But in 2016, Gov. John Bel Edwards signed an executive order that slightly but importantly tweaked the system. On top of the state board vote, the order gave local taxing bodies – such as school boards, sheriffs and parish or city councils – the ability to vote on their own individual portions of the tax exemptions. And in 2019 the East Baton Rouge Parish School Board exercised its power to vote down an abatement.

Throughout the U.S., school boards’ power over the tax abatements that affect their budgets vary, and in some states, including Georgia, Kansas, Nevada, New Jersey and South Carolina, school boards lack any formal ability to vote or comment on tax abatement deals that affect them.

Edwards’ executive order also capped the maximum exemption at 80% and tightened the rules so routine capital investments and maintenance were no longer eligible, Hansen said. A requirement concerning job creation was also put in place.

Concerned residents and activists, led by Together Louisiana and sister group Together Baton Rouge, rallied around the new rules and pushed back against the billion-dollar corporation taking more tax money from the schools. In 2019, the campaign worked: the school board rejected a $2.9 million property tax break bid by Exxon Mobil.

After the decision, Exxon Mobil reportedly described the city as “unpredictable.”

However, members of the business community have continued to lobby for the tax breaks, and they have pushed back against further rejections. In fact, according to Hansen, loopholes were created during the rulemaking process around the governor’s executive order that allowed companies to weaken its effectiveness.

In total, 223 Exxon Mobil projects worth nearly $580 million in tax abatements have been granted in the state of Louisiana under the ITEP program since 2000.

“ITEP is needed to compete with other states – and, in ExxonMobil’s case, other countries,” according to Exxon Mobil spokesperson Lauren Kight.

She pointed out that Exxon Mobil is the largest property taxpayer for the EBR school system, paying more than $46 million in property taxes in EBR parish in 2022 and another $34 million in sales taxes.

A new ITEP contract won’t decrease this existing tax revenue, Kight added. “Losing out on future projects absolutely will.”

The East Baton Rouge Parish School Board has continued to approve Exxon Mobil abatements, passing $46.9 million between 2020 and 2022. Between 2017 and 2023, the school district has lost $96.3 million.

Taxes are highest when industrial buildings are first built. Industrial property comes onto the tax rolls at 40% to 50% of its original value in Louisiana after the initial 10-year exemption, according to the Ascension Economic Development Corp.

Exxon Mobil received its latest tax exemption, $8.6 million over 10 years – an 80% break – in October 2023 for $250 million to install facilities at the Baton Rouge complex that purify isopropyl alcohol for microchip production and that create a new advanced recycling facility, allowing the company to address plastic waste. The project created zero new jobs.

The school board approved it by a 7-2 vote after a long and occasionally contentious board meeting.

“Does it make sense for Louisiana and other economically disadvantaged states to kind of compete with each other by providing tax incentives to mega corporations like Exxon Mobil?” said EBR School Board Vice President Patrick Martin, who voted for the abatement. “Probably, in a macro sense, it does not make a lot of sense. But it is the program that we have.”

Obviously, Exxon Mobil benefits, he said. “The company gets a benefit in reducing the property taxes that they would otherwise pay on their industrial activity that adds value to that property.” But the community benefits from the 20% of the property taxes that are not exempted, he said.

“I believe if we don’t pass it, over time the investments will not come and our district as a whole will have less money,” he added.

In 2022, a year when Exxon Mobil made a record $55.7 billion, the company asked for a 10-year, 80% property tax break from the cash-starved East Baton Rouge Parish school district. A lively debate ensued.

Meanwhile, the district’s budgetary woes are coming to a head. Bus drivers staged a sickout at the start of the school year, refusing to pick up students – in protest of low pay and not having buses equipped with air conditioning amid a heat wave. The district was forced to release students early, leaving kids stranded without a ride to school, before it acquiesced and provided the drivers and other staff one-time stipends and purchased new buses with air conditioning.

The district also agreed to reestablish transfer points as a temporary response to the shortages. But that transfer-point plan has historically resulted in students riding on the bus for hours and occasionally missing breakfast when the bus arrives late, according to Angela Reams-Brown, president of the East Baton Rouge Federation of Teachers. The district plans to purchase or lease over 160 buses and solve its bus driver shortage next year, but the plan could lead to a budget crisis.

A teacher shortage looms as well, because the district is paying teachers below the regional average. At the school board meeting, Laverne Simoneaux, an ELL specialist at East Baton Rouge’s Woodlawn Elementary, said she was informed that her job was not guaranteed next year since she’s being paid through federal COVID-19 relief funds. By receiving tax exemptions, Exxon Mobil was taking money from her salary to deepen their pockets, she said.

A young student in the district told the school board that the money could provide better internet access or be used to hire someone to pick up the glass and barbed wire in the playground. But at least they have a playground – Hayden Crockett, a seventh grader at Sherwood Middle Academic Magnet School, noted that his sister’s elementary school lacked one.

“If it wasn’t in the budget to fund playground equipment, how can it also be in the budget to give one of the most powerful corporations in the world a tax break?” Crockett said. “The math just ain’t mathing.”

Christine Wen worked for the nonprofit organization Good Jobs First from June 2019 to May 2022 where she helped collect tax abatement data.

Nathan Jensen has received funding from the John and Laura Arnold Foundation, the Smith Richardson Foundation, the Ewing Marion Kauffman Foundation and the Washington Center for Equitable Growth. He is a Senior Fellow at the Niskanen Center.

Danielle McLean and Kevin Welner do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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Spread & Containment

Revving up tourism: Formula One and other big events look set to drive growth in the hospitality industry

With big events drawing a growing share of of tourism dollars, F1 offers a potential glimpse of the travel industry’s future.




Sergio Perez of Oracle Red Bull Racing, right, and Charles Leclerc of the Scuderia Ferrari team compete in the Las Vegas Grand Prix on Nov. 19, 2023. Tayfun Coskun/Anadolu via Getty Images

In late 2023, I embarked on my first Formula One race experience, attending the first-ever Las Vegas Grand Prix. I had never been to an F1 race; my interest was sparked during the pandemic, largely through the Netflix series “Formula 1: Drive to Survive.”

But I wasn’t just attending as a fan. As the inaugural chair of the University of Florida’s department of tourism, hospitality and event management, I saw this as an opportunity. Big events and festivals represent a growing share of the tourism market – as an educator, I want to prepare future leaders to manage them.

And what better place to learn how to do that than in the stands of the Las Vegas Grand Prix?

A smiling professor is illuminated by bright lights in a nighttime photo taken at a Formula 1 event in Nevada.
The author at the Las Vegas Grand Prix. Katherine Fu

The future of tourism is in events and experiences

Tourism is fun, but it’s also big business: In the U.S. alone, it’s a US$2.6 trillion industry employing 15 million people. And with travelers increasingly planning their trips around events rather than places, both industry leaders and academics are paying attention.

Event tourism is also key to many cities’ economic development strategies – think Chicago and its annual Lollapalooza music festival, which has been hosted in Grant Park since 2005. In 2023, Lollapalooza generated an estimated $422 million for the local economy and drew record-breaking crowds to the city’s hotels.

That’s why when Formula One announced it would be making a 10-year commitment to host races in Las Vegas, the region’s tourism agency was eager to spread the news. The 2023 grand prix eventually generated $100 million in tax revenue, the head of that agency later announced.

Why Formula One?

Formula One offers a prime example of the economic importance of event tourism. In 2022, Formula One generated about $2.6 billion in total revenues, according to the latest full-year data from its parent company. That’s up 20% from 2021 and 27% from 2019, the last pre-COVID year. A record 5.7 million fans attended Formula One races in 2022, up 36% from 2019.

This surge in interest can be attributed to expanded broadcasting rights, sponsorship deals and a growing global fan base. And, of course, the in-person events make a lot of money – the cheapest tickets to the Las Vegas Grand Prix were $500.

Two brightly colored race cars are seen speeding down a track in a blur.
Turn 1 at the first Las Vegas Grand Prix. Rachel Fu, CC BY

That’s why I think of Formula One as more than just a pastime: It’s emblematic of a major shift in the tourism industry that offers substantial job opportunities. And it takes more than drivers and pit crews to make Formula One run – it takes a diverse range of professionals in fields such as event management, marketing, engineering and beyond.

This rapid industry growth indicates an opportune moment for universities to adapt their hospitality and business curricula and prepare students for careers in this profitable field.

How hospitality and business programs should prepare students

To align with the evolving landscape of mega-events like Formula One races, hospitality schools should, I believe, integrate specialized training in event management, luxury hospitality and international business. Courses focusing on large-scale event planning, VIP client management and cross-cultural communication are essential.

Another area for curriculum enhancement is sustainability and innovation in hospitality. Formula One, like many other companies, has increased its emphasis on environmental responsibility in recent years. While some critics have been skeptical of this push, I think it makes sense. After all, the event tourism industry both contributes to climate change and is threatened by it. So, programs may consider incorporating courses in sustainable event management, eco-friendly hospitality practices and innovations in sustainable event and tourism.

Additionally, business programs may consider emphasizing strategic marketing, brand management and digital media strategies for F1 and for the larger event-tourism space. As both continue to evolve, understanding how to leverage digital platforms, engage global audiences and create compelling brand narratives becomes increasingly important.

Beyond hospitality and business, other disciplines such as material sciences, engineering and data analytics can also integrate F1 into their curricula. Given the younger generation’s growing interest in motor sports, embedding F1 case studies and projects in these programs can enhance student engagement and provide practical applications of theoretical concepts.

Racing into the future: Formula One today and tomorrow

F1 has boosted its outreach to younger audiences in recent years and has also acted to strengthen its presence in the U.S., a market with major potential for the sport. The 2023 Las Vegas race was a strategic move in this direction. These decisions, along with the continued growth of the sport’s fan base and sponsorship deals, underscore F1’s economic significance and future potential.

Looking ahead in 2024, Formula One seems ripe for further expansion. New races, continued advancements in broadcasting technology and evolving sponsorship models are expected to drive revenue growth. And Season 6 of “Drive to Survive” will be released on Feb. 23, 2024. We already know that was effective marketing – after all, it inspired me to check out the Las Vegas Grand Prix.

I’m more sure than ever that big events like this will play a major role in the future of tourism – a message I’ll be imparting to my students. And in my free time, I’m planning to enhance my quality of life in 2024 by synchronizing my vacations with the F1 calendar. After all, nothing says “relaxing getaway” quite like the roar of engines and excitement of the racetrack.

Rachel J.C. Fu does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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