AMLN – Is this pullback a buying opportunity

AMLN – Is this pullback a buying opportunity

Welcome to the roller-coaster ride for shareholders of Amylin Pharmaceuticals (NASDAQ:AMLN). Just a few months ago shares of Amylin were trading in the low teens, closing at $14.65 back on June 8th. Fast forward to July 20th when shares closed at $22.04, that’s a 50% gain in just over a month’s time. Is it any wonder that investors have been taking profits and that shares are now trading just above $19. The question now becomes is this a buying opportunity or will there be more selling?

Diabetic Investor remains firm in our belief that investors should accumulate shares below the $25 price point. Here’s why:

1. 1. In the near term everyone will focus on Byetta prescription numbers. While early indications show Byetta is doing well, it is unlikely the numbers will live up to expectations set by analysts. From our perspective these early numbers are meaningless as physicians are still in the process of deciding how to use Byetta. There is a great deal of interest from physicians but it will take some time for interest to turn into prescriptions. Here as well we remain firm in our belief that Byetta will reach the $1 billion sales mark in the long term.
2. 2. The company has a rich pipeline and is in the sweet (excuse the terminology) spot for diabetes and obesity. Two disease groups that are growing at epidemic rates. The two hidden gems in the pipeline are the long acting version of Byetta and weight loss potential of pramlintide.
3. 3. Lilly will eventually buy the company as they are in desperate need to strength their faltering diabetes franchise.

Investors will continue to see this recent roller coaster ride continue until there are comparable quarters for Byetta prescription growth. Over the long term the data will confirm what Diabetic Investor has been saying all along. With Amylin it will be an enjoyable ride.

David Kliff
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224-715-3761 Mobile