Amylin Gets Past the Formalities

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The prevalence of diabetes in Europe and the world is growing rapidly, with more than 9 million people in the United Kingdom, Germany, and France alone expected to have diabetes by 2030. This would be up 50% from the more than 6 million afflicted with the disease today in these countries, according to the World Health Organization.

With millions of patients needing treatment for the two types of diabetes, it comes as no surprise that there would be a massive increase in pharmaceutical research and development spending -- which is now producing great results, with numerous innovative therapies entering the market in just the past two years.

Amylin Pharmaceuticals (Nasdaq: AMLN) is one of those pharmaceutical companies with an innovative treatment for diabetes. On Tuesday, Amylin received approval to market Byetta, its treatment for type 2 diabetes, in the European Union.

For those wondering why shares of Amylin were down on a day that it received approval to market a new drug, it is because Byetta already received a positive opinion for marketing by the EMEA back in September, so its approval was never in doubt. Now that it has been formally approved, though, Amylin and marketing partner Eli Lilly (NYSE: LLY) can get down to the arduous task of individually negotiating reimbursement rates for Byetta with each individual EU country. This process tends to take several months, so it will be no earlier than the middle of 2007 when sales of Byetta will start to ramp up in the EU.

Sales of Byetta in the U.S. have approached nearly $300 million in the first nine months of the year. The disease is less prevalent in western Europe than the U.S., and reimbursement rates will most likely be less as well. But opening up these markets will still result in meaningful Byetta revenue growth to Amylin, even with strong competing drugs on the horizon.

For more on Amylin, check out the following articles:

• A Cure for Amylin's Stock?
• Amylin's One-Drug Wonder
• Hope for Diabetics -- and Investors

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy .