No Sickness for Amylin

One of the biggest health concerns in the U.S. is the increasing prevalence of diabetes. According to the Centers For Disease Control, diabetes affects more than 21 million Americans. The much more common and preventable type 2 adult-onset version of the disease accounts for an estimated 90% of all diabetes cases, and as this disease has rapidly spread, so has the market for drugs and medical devices to treat it. This is where drug developers like Amylin Pharmaceuticals (NASDAQ:AMLN) come in. Yesterday, Amylin released its fourth-quarter financial results, which showed the kind of sales growth that a drugmaker with a solid product for this indication can achieve.

Revenue for the quarter, primarily from sales of its type 2 diabetes treatments Byetta and Symlin, jumped over 160% year over year to $150 million. Ever since its launch in Q2 last year, sales of Byetta have been on a tear.

Despite the expansion in sales numbers, Amylin hasn't yet seen positive earnings -- it had a $58 million net loss for the quarter. Since Byetta is still in its early growth phase, Amylin has been increasing its SG&A expenses heavily to hire a larger sales and marketing force. Research and development spending on the longer-acting version of the drug is still under way, and the $21 million in extra spending here also contributed to the loss for the quarter.

We'll get an update today on how the competition is proceeding with their compounds in development, when Novo Nordisk (NYSE:NVO) releases its quarterly earnings. 2007 will be an exciting year for Amylin shareholders, as partner Eli Lilly (NYSE:LLY) launches Byetta in Europe and clinical trial results from the once-a-week version of Byetta come out in the second half of the year.

Eli Lilly is an Income Investor recommendation. Check out our entire suite of newsletters by clicking here.

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