"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.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.