Amylin Pharmaceuticals (Nasdaq: AMLN) and its partners, Eli Lilly and Alkermes (Nasdaq: ALKS), have had a rough time in their quest to market the first once-weekly injectable drug for diabetes patients in the U.S. But they have found a more sympathetic set of ears in Europe.

San Diego-based Amylin, along with Lilly and Waltham, MA-based Alkermes, said today that their once-weekly version of exenatide (Bydureon) received a recommendation for approval in Europe. It's not a formal clearance to start selling the drug in the European Union, but the EU usually follows the advice of its experts on this panel, the Committee for Medicinal Products for Human Use. The European Commission's final decision is expected in two to three months.

Shares of Amylin jumped 13 percent at 10:04 a.m. Eastern, while one of its key technology providers, Alkermes climbed almost 4 percent. Indianapolis-based Lilly, a bigger company with a more diversified product lineup, saw a more modest rise of less than 1 percent.

"We remain deeply committed to advancing the treatment of diabetes through innovative treatment options and solutions that meet the specific needs of millions of people living with diabetes," said Enrique Conterno, president, Lilly Diabetes, in a statement.

If the drug is approved in Europe, it could help soothe the wounds the companies suffered in their experience with the FDA. The U.S. application for once-weekly exenatide was shot down in October, and the FDA asked for a thorough new study of the treatment's effect on abnormal heart rhythms -- a setback that probably cost the drug at least 18 months of time on the market. Before the FDA rejection, JP Morgan analyst Cory Kasimov forecasted that the drug -- which seeks to replace a twice-daily injection -- had potential to generate peak worldwide sales of about $2 billion in 2017. Demand for new diabetes treatments is surging as an estimated 25 million people in the U.S. suffer from the disease, and incidence is expected to climb for years as more and more people develop complications from obesity.

Amylin has pinned its hopes on once-weekly exenatide being one of its franchise drugs for years to come, and Alkermes stands to gain a sizable royalty from sales, as the company that makes technology to enable the active ingredient to remain stable for a longer period of time in the bloodstream. Analysts will now get busy tweaking their models again, to see how much money can be made through commercializing the drug in Europe in mid-2011, with the U.S. rollout potentially coming a year later.

Even if European approval is granted now, some investors are bound to be cautious about the drug's prospects. Amylin and its partners recently announced that their treatment was unable to beat a competing drug, Victoza, from Novo Nordisk in a head-to-head study. That concern is bound to linger, Kasimov wrote today in a note to clients.

"Despite today's positive development, we expect some investors will continue to harbor skepticism regarding Bydureon's commercial outlook given the disappointing DURATION-6 results (head-to-head vs. Victoza) and the somewhat lackluster growth of the GLP-1 market," Kasimov wrote. "We are relatively more optimistic on the outlook for the class in general, and Bydureon in particular, but concede that cardiovascular outcomes data (not expected until around the middle of the decade) may be necessary to drive the substantial growth that was at one time widely assumed for the class."

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Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. You can email him at [email protected], or follow him at twitter.com/ldtimmerman.