AMLN Amylin Pharmaceuticals, Inc. (MM)

Type II diabetes treatment, Byetta (exenatide), recently received a label expansion in the EU. Amylin Pharmaceuticals, Inc. (AMLN) and Eli Lilly and Company (LLY) said that the European Commission granted approval for the use of Byetta as an adjunctive therapy to basal insulin, with or without metformin and/or Takeda’s Actos (pioglitazone) for the treatment of type II diabetes in patients who are not achieving adequate glycemic control using these agents.

The approval was not entirely unexpected as, in February 2012, the European Medicines Agency (EMA)’s Committee for Medicinal Products for Human Use (CHMP) had issued its opinion in favor of expanding the use of Byetta for the said indication.

We note that the US Food and Drug Administration (FDA) had expanded Byetta’s label in October 2011 for use in combination with insulin glargine, with or without metformin and/or a TZD (thiazolidinedione), for the treatment of type II diabetes in patients who are not achieving adequate glycemic control on insulin glargine alone.

Amylin is looking to strengthen its exenatide franchise by focusing on driving Byetta sales. The label expansion should help increase sales. Amylin, which terminated its exenatide agreement with Eli Lilly in November 2011, is looking for an ex-US partner. Partnering exenatide should maximize the value of the product.

Neutral on Amylin

We currently have a Neutral recommendation on Amylin Pharma, which carries a Zacks #3 Rank (short-term ‘’Hold’’ rating). Amylin received a huge boost earlier this year with the US approval of its type II diabetes treatment, Bydureon. Bydureon represents huge commercial potential and could carve a position for itself in the diabetes market given its efficacy data and convenient dosing regimen. Meanwhile, although the termination of the Lilly agreement does bring with it some near-term pressure due to concerns regarding Amylin’s debt situation and cash position, longer term, we expect Amylin to benefit. With Bydureon approved and launched in the US, we expect investor focus to remain on the commercialization of the product.

 
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