Anemic Amylin's Signs of Recovery

• Email
• Share
• Print

Sales of Amylin Pharmaceuticals' (Nasdaq: AMLN) diabetes drug Byetta have slowed over the last few quarters, but the company seems to be turning things around. Can it continue that trend in the face of coming competition from Novo Nordisk (NYSE: NVO)?

Metric	March 2007	June 2007	Sept. 2007	Dec. 2007	March 2008	June 2008
Byetta sales (in millions)	$146.5	$152.1	$161.1	$176.3	$158.5	$177.5
Year-over-year growth	114%	54%	27%	29%	8%	17%

Amylin's other drug, diabetes treatment Symlin, saw a 50% increase in sales over the year-ago quarter, but since it's just 11% of total revenue, its growth didn't help overall revenue too much.

Amylin is trying to keep the momentum going, increasing its sales force by 40% through a reworking of its marketing partnership with Eli Lilly (NYSE: LLY). Its employees will now sell both Byetta and Lilly's erectile dysfunction drug Cialis. It may seem weird that the sales force is pushing two drugs for completely different diseases, but both erectile dysfunction and diabetes are mostly treated by general practitioners, so the co-promotion should work well for the two drugs.

Byetta's short-term performance probably isn't all that important, since Amylin's turn toward profitability depends on its once-weekly version of Byetta, developed using Alkermes' (Nasdaq: ALKS) extended-release technology. Amylin still expects to submit of a marketing application to the Food and Drug Administration before June of next year, since it just finished building a plant to make the new drug. There are several possible ways for Amylin to show that the extended-release drug made in the new plant is the same as that used in the clinical trials, which could potentially accelerate its application. But management continues to downplay these possibilities, and it's guiding for the most conservative date, the middle of next year.

In the meantime, Amylin continues to run clinical trials in hopes of amassing as much data as possible to support the sales of the drug once it's approved. It's testing once-weekly Byetta against Merck's (NYSE: MRK) Januvia, Takeda's Actos, and Sanofi-Aventis' (NYSE: SNY) Lantus.

The good news? Even if it has to wait until June of next year to submit, Amylin won't run out of money anytime soon. It still has more than $890 million in cash and short-term investments to tide it over.

More high-growth hoopla:

• Amylin's Down and Up on Diabetes
• This Drug Market Is Booming
• The Next Ultimate Growth Stock
• Hep C Drugs Slug It Out