Amylin & Friends Brace for Diabetes Review (AMLN, LLY, ALKS)
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) has a big event on deck this week. This Friday, March 12, is its Prescription Drug User Fee Act (PDUFA) action date for an FDA panel to issue a recommendation on Byetta as the the first once a week treatment for Type II diabetes. The date had been moved due to recent weather closures in February in and around Washington D.C.
Analysts are mixed on the stock with BMO cutting its rating last week, but there were two positive calls from Credit Suisse and Jesup & Lamont.
Options are elevated today, but not overly active. The open interest of stock options is also large enough that the $20 synthetic options straddle would imply that shares have to rise above $24.70 or drop below $15.30 to be profitable.
Byetta is already sold with Eli Lilly & Co. (NYSE: LLY), and Alkermes, Inc. (NASDAQ: ALKS) provides the technology that makes Byetta last longer in the delivery mechanism for a once per week use. Open interest in the Alkermes options is elevated but not astronomical.
There is a risk here for a potential delay on top of what has already been seen. Some feel the FDA will delay this recommendation with a request for more side effect data.
Amylin is currently believed to be the winner of ultimate once-weekly approval, even if a delay comes this week. But that notion also depends upon whom you ask. The most recent short interest data shows about 16.25 million shares (almost 12% of the float) are listed as being in the short interest. The stock is at $20.10 and the 52-week trading range is $7.89 to $20.46. That 52-week high was also hit today.
JON C. OGG
Why Byetta may be the efficacy leader among many diabetes candidates (LLY, ALKS, SNY, NVO, GSK)
Partners Eli Lilly & Co. (NYSE: LLY) And Alkermes Inc. (Nasdaq: ALKS) announced data Monday that further supports its weekly Byetta candidate, although the FDA still may have questions about the entire class of long-acting diabetes treatments.
The data in the anticipated Duration 3 trial of once-weekly Byetta was solid. The candidate demonstrated better efficacy in a head-to-head comparison to Sanofi Aventis’ (NYSE: SNY) Lantus once-daily injection, the class leader. In a trial involving 467 Type 2 diabetes patients, once-weekly Byetta showed a 1.5 percent reduction in A1c levels vs. the baseline, compared to a 1.3 percent reduction for Lantus.
An added benefit of taking the drug may be weight loss. The mean weight loss for once-weekly Byetta patients was 5.8 pounds during the 26-week trial. Mean weight loss was 3.1 pounds for study subjects taking Lantus.
There were no new safety concerns raised. Common side effects were respiratory infection and nausea.
It’s hard to compare all the drugs in the class against one another, but it appears based on the efficacy data that once-weekly Byetta may put it at the top of a class that includes Lantus, Novo Nordisk’s (NYSE: NVO) Victoza, and GlaxoSmithKline’s (NYSE: GSK) Avandia.
The big lingering question is the FDA’s view of all the diabetes drug candidates called GLP-1 analogs. The agency is reviewing heart-related safety data of candidates among many of the drugs in the class.
It also may be looking at possible cancer ties. The journal Diabetologia, associated with the European Association for the Study of Diabetes in late June published four studies that made a possible link between Sanofi’s Lantus and cancer. The studies fell short of making a direct link, but they raised plenty of questions. At the time, analysts became concerned that more questions could be asked about many drugs, if not the entire class of long-acting diabetes drugs.
The FDA’s view of Novo Norisk’s candidate could be important to the entire group. In April, its heart-related safety was seen as mostly favorable, based an 8-to-5 FDA panel vote. The decision was split, however, on if it should be put on the market. That company’s earnings report in early August might specify the FDA’s upcoming timeline. The drug received EU approval earlier this month.
The Novo Nordisk FDA timing may provide clues as to whether the FDA want to see more studies for many, if not all drugs in the class, which may extend the approval processes. — Mike Tarsala
Once-weekly Byetta market may be huge, pending potential new diabetes drug safety concerns (AMLN, SNY, LLY, ALKS, NVO)
Amylin Pharmaceuticals Inc. (AMLN) along with partners Eli Lilly & Co. (NYSE: LLY) and Alkermes Inc. (Nasdaq: ALKS) announced its new drug application for a once-weekly version of Byetta for diabetes has been accepted for review by the FDA, a move that may eventually help invigorate growth for the franchise.
The catalyst may be muted, however, as the announcement comes amid safety concerns among other drugs that are long-acting treatments for diabetes. Analysts became concerned last week about potential links between the Sanofi Aventis (NYSE: SNY) Lantus long-acting insulin product — the second-biggest seller in its product lineup — to cancer risk, sending its shares and those of competing manufacturers including Novo Nordisk Inc. (NVO) lower.
The journal Diabetologia, associated with the European Association for the Study of Diabetes in late June published four studies that made a possible link between Sanofi’s Lantus and cancer. The studies fell short of making a direct link, but they raised plenty of questions that were picked up by Wall Street.
Byetta works differently than long-acting insulin treatments including Lantus, but analysts became concerned that more questions could be asked about many drugs, if not the entire class of long-acting diabetes drugs.
Byetta had faced another big safety worry over the past 12 months that arguably held back it sales; a potential link to pancreatitis. But Amilyn and and Eli Lilly announced retrospective study data last month that involved 260,000 patients that did not show an increased risk of pancreatitis for Byetta patients, vs. patients taking other diabetes drugs.
Assuming that Amylin can make a strong case that Byetta is different from other long-acting diabetes treatments for which potential safety concerns have been raised, the new weekly formulation of the drug may help spur recently stagnant sales.
Byetta will not replace insulin in patients whose diabetes requires insulin treatment. But there are 20 million people in the U.S. with Type 2 diabetes, and it’s fair to say that many of them might be interested in a once-weekly drug that can help them control their blood sugar levels, assuming they feel comfortable that it’s safe. – Mike Tarsala
Amylin Results Better Than Stock Performance? (AMLN, LLY, ALKS, NVO)
Last night we saw the long-awaited results from Amylin Pharmaceuticals Inc. (NASDAQ: AMLN), Eli Lilly & Co. (NYSE: LLY) and Alkermes Inc. (NASDAQ: ALKS) announce their results from their one-year open-label clinical study for a once/week Byetta treatment in type II diabetes in patients who are taking metformin but still don’t have their blood sugar under control.
The results showed that the durable efficacy sustained a similar improvement in their glucose control compared to those receiving treatment for 30 weeks. The results also showed that patients who switched from a BYETTA injection after 30 weeks to exenatide once weekly also experienced additional improvements in A1C and fasting plasma glucose.
Byetta has been on the market since 2005 and exenatide is not yet approved.
If you have watched Amylin over the last few days, it has been a tough patch for the stock as the diabetes competitor Novo-Nordisk AS (NYSE: NVO) results were far better than Wall Street was expecting. On Friday, shares were north of $32.00 and they closed down at $26.84 yesterday.
While there has been relatively thin volume with under 30,000 shares with 1 hour and 10 minutes to the open, shares are up marginally in pre-market trading but are also already off the highs. Unfortunately with an over an hour and a low-grade reaction to what seems like good news it is hard to see any major reaction so far.
Jon Ogg
June 10, 2008
