AMLN Amylin Pharmaceuticals, Inc. (MM)

Amylin Pharmaceuticals, Inc. (AMLN) suffered a setback following a ruling by the United States District Court for the Southern District of California in the company’s ongoing lawsuit against Eli Lilly and Company (LLY).

Amylin had filed a motion seeking a preliminary injunction to enjoin Eli Lilly from engaging in anticompetitive activity and breaching its diabetes collaboration agreement with Amylin. Amylin’s motion was denied by the court. The court also vacated a temporary restraining order preventing Eli Lilly from using the same sales force for selling exenatide as well as linagliptin (trade name: Tradjenta).

Lawsuit Initiated in May 2011

Amylin had filed a lawsuit against its exenatide partner Eli Lilly in May 2011. Amylin claimed that Eli Lilly is engaging in anticompetitive activities thereby breaching its agreement for the maximization of sales of exenatide.

Amylin and Eli Lilly’s partnership dates back to 2002 when the companies entered into a global development and commercialization agreement for exenatide. Exenatide is currently available under the trade name, Byetta. It is also being developed as a once-weekly treatment (Bydureon) of type II diabetes.

While Eli Lilly co-promotes Byetta in the US with Amylin, the former is primarily responsible for the ex-US development and commercialization of Byetta and any sustained-release formulations like Bydureon.

Concern Stems from Eli Lilly’s Agreement with Boehringer Ingelheim

Amylin’s main complaint is regarding Eli Lilly’s recent global alliance with Boehringer Ingelheim for the development and commercialization of type II diabetes product, Tradjenta (linagliptin). According to Amylin, Tradjenta, which received US Food and Drug Administration (FDA) approval in early May, will compete directly with the exenatide family.

Amylin believes the manner in which Eli Lilly intends to implement the Tradjenta agreement shows that Eli Lilly is behaving in an improper, unlawful and anticompetitive manner. Amylin is looking to stop Eli Lilly from using the same sales force for promoting both Byetta and Tradjenta.

Amylin expressed disappointment at the latest ruling and said that it intends to pursue the litigation.

Neutral on Amylin and Eli Lilly

We currently have Neutral recommendations on both Amylin and Eli Lilly. Both companies carry a Zacks #3 Rank (short-term Hold rating). We expect investor focus to remain on the results of the thorough QT (tQT) study being conducted for gaining FDA approval of Bydureon. EU approval of Bydureon is expected by late June.

 
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