Amgen (AMGN -1.33%) presented its long-term plan to investors yesterday that includes an R&D strategy to "pick winners."

Umm, what exactly was the strategy before? Pick losers?

While the name for the strategy is downright stupid, the actual approach behind it isn't quite as bad. The plan is to use human genetics to identify and validate targets. Amgen's recent acquisition of deCODE Genetics should certainly help. It won't ensure that winners are actually picked, but having a genetic basis for a drug should help increase the likelihood of success.

Amgen expects data from eight pivotal trials by 2016. Data from talimogene laherparepvec in melanoma and trebananib for ovarian cancer are expected this year.

The biotech also laid out plans to develop biosimilar drugs, or generic versions of biologic drugs. Yes, the same type of drugs that Amgen is famous for. Call it a "if you can't beat 'em, join 'em" strategy. While it faces potential competition for its biologics, Amgen plans to go after AbbVie's (NYSE: ABBV) Humira; Remicade, which is sold by Merck and Johnson & Johnson (JNJ -1.15%); Eli Lilly (LLY -1.00%) and Bristol-Myers Squibb's (BMY -8.51%) Erbitux; and Roche's Avastin, Herceptin, and Rituxan.

Amgen likely isn't the only one targeting those blockbuster biologics, but given its experience, it's in one of the better positions to follow all of the rules the Food and Drug Administration is establishing to ensure the drugs are similar enough to be safe and effective. Investors in companies that sell branded biologics should be worried although Amgen isn't targeting to launch the copycat drugs until at least 2017, so the companies have time to prepare.

Finally, Amgen outlined plans to move into Japan and China. Biotechs have typically licensed drugs to a drugmaker in Japan, but Amgen is getting big enough where it makes sense to have a direct presence there. I wouldn't count on sales in Japan having a major impact on the bottom line compared to out-licensing its drugs, but every little bit helps, I guess.

I've made my view of companies moving into China and the rest of the developing nations abundantly clear. It'll boost the top line, but lower margins aren't going to result in much of an increase in earnings. Call me when the developing nations have actually developed.

The company in Amgen's cross hairs
Amgen's biosimilars strategy highlights a key risk facing another company, AbbVie. With the patent expiration of Humira coming up in the few years, many investors need to understand the opportunities and risks facing this recent spinoff. The Fool's brand new premium report on the company answers the high-profile questions that AbbVie investors are asking, and as an added bonus, you'll receive a full year of free analyst updates as significant news hits. Simply click here now to claim your copy today.