Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



There Are No Safe Biotech Investments

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

"While I'll plant my flag in the camp expecting an approval, I'd caution investors not to go all-in here. It's not unprecedented for minor issues to trip up companies multiple times. Worse yet, we've seen the FDA to come up with new issues even after having another six months to review the drug."

I wrote that yesterday in passing, knowing it was a possibility, but not really expecting it to become a reality. Turns out, my warning was more valid than I thought. Amylin Pharmaceuticals (Nasdaq: AMLN  ) and its partners, Eli Lilly (NYSE: LLY  ) and Alkermes (Nasdaq: ALKS  ) , announced yesterday evening that the Food and Drug Administration had asked for more data before approving its once-weekly diabetes drug Bydureon.

The first request is for the data from the Duration-5 trial. That should be simple enough to provide, since the trial is already complete. Duration-5 is essentially an identical design to the Duration-1 trial, which was used in the marketing application -- it compared Byetta to Bydureon -- but Duration-5 used Bydureon produced at commercial scale while the first trial used drug produced in smaller batches.

The second request will take more time to accomplish. The FDA now wants a thorough QT study which measures the effect of active ingredient in Byetta and Bydureon on heart rhythms.

It appears we can blame this one on GlaxoSmithKline's (NYSE: GSK  ) Avandia. After side effect issues arose with Avandia, the FDA became more safety conscious about potential heart problems caused by diabetes drugs. Why the FDA didn't ask for this study when it rejected Bydureon the first time is anyone's guess. It sure would have been nice for the company to have started the heart study six months ago.

Amylin is guiding for finishing the study by the end of next year, but it could potentially be done earlier depending on exactly what the FDA wants the study to look like. Typically these are single-dose studies, but Bydureon is an extended-release formulation, which may complicate the dosing. Ideally the FDA will let Amylin use Byetta to run the study, since they contain the same active ingredient. That would make things much simpler.

The big winner here is Novo Nordisk (NYSE: NVO  ) , which launched Victoza earlier this year. The drug is the same class as Byetta, but only has to be injected half as often. Victoza has been beating up Byetta in the marketplace; sales of Byetta fell 23% in the third quarter. Giving Novo Nordisk another 18 months to establish itself in the marketplace is a huge victory for Victoza and could make it harder for Bydureon to take market share back despite its once-weekly formulation.

Interested in keeping track of Amylin as it winds its way through the FDA approval process? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Amylin.

The Fool owns shares of GlaxoSmithKline, which is a Motley Fool Global Gains recommendation. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1338617, ~/Articles/ArticleHandler.aspx, 10/22/2016 1:30:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
ALKS $55.62 Up +12.11 +27.83%
Alkermes CAPS Rating: ****
AMLN.DL $0.00 Down +0.00 +0.00%
Amylin Pharmaceuti… CAPS Rating: **
GSK $41.13 Down -0.30 -0.72%
GlaxoSmithKline CAPS Rating: ***
LLY $78.25 Down -0.49 -0.62%
Eli Lilly and Co. CAPS Rating: ***
NVO $41.50 Up +0.46 +1.12%
Novo Nordisk CAPS Rating: *****