Amylin -Are the shorts at it yet again?

Amylin -Are the shorts at it yet again?

Back in August while attending the American Association of Diabetes Educators (AADE) Conference in Los Angeles. Diabetic Investor heard rumors surrounding a possible link between Byetta and pancreatitis. Although we had not heard of any major problems with Byetta, Diabetic Investor investigated the issue and didn’t find any cause for concern. Seeing no need to write anything on what we believed was an effort by the short community to have Diabetic Investor write a negative piece on Amylin (NASDAQ:AMLN).

Some may recall that Diabetic Investor was the only publication advising investors to buy the stock when Byetta was approved by the FDA. With the stock trading around $14 per share at the time Diabetic Investor saw this as an excellent opportunity and once again we were right.

Apparently the short community has found someone else to do their dirty work on Amylin and it’s none other than Bear Stearns who on Monday issued a report entitled, Type II Diabetes: Our thoughts on the GLP-1 Opportunity. Here are some quotes form the report, “Shortly after the ADA, concerns that Byetta might cause pancreatitis emerged.”

“Our literature review identifies several hints of a ‘plausible biology’ that point to a Byetta-specific effect: this includes preclinical evidence of immune system activation.”

“Screens based on FDA AERS data using data-mining techniques highlight a safety signal – but any screening result in our view will remain inconclusive. Hence we developed a list of case profiles for Byetta and two comparator drugs (Lantus and Lyrica). In our view, these case profiles turn what might be a “yellow flag” from the screening results into ‘dark orange’.

The report concludes by stating, “Our literature analysis reveals several hints about potential ‘plausible biology’ which would help explain the serious adverse events in the AERS database. We think that the mechanism we highlighted in this note applies only to Ex-4 and should not extend to human GLP-1 analogues.”

Diabetic Investor sees the report as a clear attempt by the short community to create a dark cloud over Amylin’s truly bright future. While we not really sure just what plausible biology is or how you can compare Byetta to Lantus or Lyrica there are some things we are sure of.

1. 1. Byetta is not some new drug that just hit the market. Byetta has been on the market for nearly 18 months and is used by nearly 500,000 patients.
2. 2. Byetta prescription growth continues to accelerate.
3. 3. While there are adverse events associated with Byetta, in the many interviews Diabetic Investor has done with physician’s who prescribe the drug and patients who use the drug, pancreatitis has never come up.
4. 4. In late September a European Commission medical panel issued a positive opinion recommending approval of exenatide for the treatment of type 2 diabetes .
5. 5. All clinical evidence to date shows Byetta to be safe and effective.

Some may recall when Rezulin, an oral medication for type 2 patients, was pulled from the market due to liver toxicity problems. There was overwhelming evidence and the issue was brought to the FDA’s attention by the medical community.

If there is a link between Byetta usage and pancreantitis one would think that we would see some concrete evidence and not mere innuendo. Surly the many physicians who prescribe Byetta would stop or at least slow down the number of the patients they place on Byetta. There is no evidence of this as prescription growth continues to accelerate.

Diabetic Investor sees Bear Stearns playing to investors fears that the FDA has approved another potentially dangerous drug. And it is possible that Diabetic Investor is wrong about Byetta and Amylin. Based on the facts we remain firm in our belief that Amylin is the most valuable property in the diabetes sector. It will take real and credible evidence not rumor and innuendo to change our mind.

Diabetic Investor has been right on Amylin because we don’t have a hidden agenda, not sure the same can be said for Bear Stearns.

David Kliff
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