Amylin and Lilly Report

Amylin and Lilly Report

While it’s not all the unusual for Amylin (NASAQ:AMLN) and Lilly (NYSE:LLY) to report their earnings on the same day, today was a little unusual as the two calls overlapping each other with Amylin going first and Lilly second. Diabetic Investor isn’t reading anything into this fact no matter how unusual it may be. The reality is with Bydureon awaiting FDA approval the companies are already joined at the hip. The simple fact is this product and how the FDA handles the approval will likely determine if Lilly finally makes the plunge and acquires Amylin.

Those listening to the Amylin call really had one thing on their mind and one thing only, when will Bydureon be approved and will it carry a black-box warning. Given that both Amylin and Lilly noted that the response to the FDA will be submitted this week we will soon find out. Yet in strange way early sales results for Victoza® from Novo Nordisk (NYSE:NVO) might provide some clues to how Bydureon will be received with and without a black box warning. While it’s still early it appears Victoza is off to a good start as endocrinologists are prescribing the drug and don’t seem overly concerned with the black box warning.

This does not surprise Diabetic Investor as endocrinologists understand there is little evidence that the c-cell issue that came to light in the Victoza panel meeting extends beyond rats or mice. Diabetic Investor suspects these endo’s and some primary care provides see the same thing in Victoza as Diabetic Investor does, a drug that does a solid job of controlling glucose, has the additional benefit of promoting weight loss and is administered just once a day. As we have been saying all along the less frequently a patient needs to take their medications the better and there is no doubt that once-daily tops twice-daily and that once-weekly will top once daily.

Perhaps this is the reason Amylin is playing overly safe when it comes to the Bydureon label questions. While there may be little evidence to support a black box warning the company correctly understands they are really in a no lose situation. Should the FDA purse an overly conservative path and give Bydureon the same black box warning as Victoza, Amylin knows that once-weekly administration will trump once-daily. Should the FDA purse a more reasonable path and approve Bydureon without a black box warning, the company wins as well. Amylin is also well aware that when it comes to public statements and the FDA, the less said the better.

For their part Lilly continues their schizophrenic relationship with Amylin. Today’s call was another perfect example of this strange partnership when the company’s statements regarding Bydureon were lukewarm. And once again the company noted they are moving forward with their own GLP-1 which is in early stage development.  Perhaps Lilly did not want to steal Amylin’s thunder knowing the Amylin call was overlapping the Lilly call. Lilly also knows follows the less said the better approach when it comes to the FDA.

Frankly it really doesn’t matter all that much as the fact remains these two companies need each other and if all goes as Diabetic Investor thinks it will these two will eventually be one. While the current focus is Bydureon, many seem to forget that Amylin has a solid pipeline which fits nicely into Lilly’s business units. Diabetic Investor was also pleased to see that Amylin is moving forward with the once-monthly version of Bydureon, once again setting the standard for the competition to meet.

The bottom line here is that the future for Amylin and Lilly is now in the hands of the FDA. Diabetic Investor remains firm in our belief that no matter what the outcome once-weekly will top once-daily and for practical purposes the story here really hasn’t changed.