Amylin – Concerns over Byetta Prescription Growth

Amylin – Concerns over Byetta Prescription Growth

This afternoon Amylin (NASDAQ:AMLN) presented at the Piper Jaffray Healthcare Conference and based on the presentation it’s clear the Street is concerned over the future of Byetta. While the product has performed very well the bulk of concern centers around whether or not prescriptions for Byetta have begun to level off and just what affect Januvia is having on prescription growth. As Diabetic Investor indicated earlier this week shares of Amylin have been falling since Januvia was approved.

Diabetic Investor does believe Januvia is having an impact on Byetta as Merck sales reps have been touting Januvia as an oral version of Byetta. While we don’t see physicians taking patients off Byetta and switching to Januvia, there is early evidence that physicians who would move patients off orals to Byetta are instead adding Januvia. In essence, physicians are following their typical preference for trying varying oral combinations before moving to Byetta. Being the new kid on the block Januvia is now the oral of choice to be added to a patient’s drug regimen. Diabetic Investor sees this as a temporary situation as Januvia produces inferior outcomes to patients on Byetta and Januvia is weight neutral while patients on Byetta experience progressive weight loss. The fact of the matter is both drugs can co-exist as they are targeted at different patient populations. However, in the near term look for new Byetta prescriptions to slow as physicians experiment with Januvia.

Lost in all the hype over Januvia and its impact on Byetta prescription growth is just how well Symlin, Amylin’s other product is doing. Unlike Byetta, Amylin does not share any profits for Symlin with their partner Lilly (NYSE:LLY). Although Symlin’s market is not as large as Byetta, it should be noted that 50% of new patient starts are coming from type 2 patients, a very encouraging sign. The company also has conducted studies with patients using Symlin at mealtime combined with a basal insulin which have shown 25% achieving an A1C of 7% or lower. (The American Diabetes Association (ADA) defines a patient being under good control when their A1C is 7% or less,) With all the attention over the type 2 market, Symlin’s usage here could be a hidden profit center for Amylin.

Symlin’s impact on Amylin’s bottom line also appears to be lost on the Street when it comes to valuing Amylin as a takeover candidate. Everyone is focused on Byetta and the long-acting once a week version of Byetta which is under development. While it is true this long acting version of Byetta will be a paradigm shifting technology and has mega-blockbuster potential, the impact of Symlin sales is totally ignored. Any company who buys Amylin would basically be getting the Symlin portfolio for free. This could well turn out to be a pleasant surprise as Symlin has equally solid potential in the obesity market.

Diabetic Investor continues to see Amylin as the most valuable property in the diabetes space and sees Januvia’s impact as short term. Investors would be wise to add to their Amylin holdings at these lower levels.

David Kliff
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