Amylin Reports – Assessing the damage
Amylin (NASDAQ:AMLN) was finally able to conduct their third quarter conference call and not surprisingly the call focused mainly on the FDA’s decision on Bydureon, their once-weekly GLP-1. While the company did their best to put on a brave face, listening to the call Diabetic Investor couldn’t help but think that management felt like President Obama the day after the mid-term elections. The main difference between Amylin management and President Obama is that Bydureon problems were not created by Amylin whereas President Obama is largely responsible for the election results.
Given all the questions surrounding Bydureon and what will happen next, Diabetic Investor has some advice, forget about handicapping what the FDA will do or why. Frankly it will be easier to handicap this weekend’s Breeder Cups races than what will happen at the FDA. The stark reality here is that barring a miracle and the FDA acknowledges they made mistake, and quite frankly the FDA has banned miracles, the best anyone can hope for is that the FDA works diligently with Amylin and Bydureon makes it to market in a reasonable amount of time.
Looking at the stock which has recovered slightly from the FDA’s announcement, Diabetic Investor believes investor should add to their holdings while the stock is below $15. Patient investor willing to take a long term view will be amply rewarded as Bydureon is still a paradigm changing technology. It would be unwise to believe the FDA decision in anyway indicates there is something wrong with Bydureon. The bottom line, as uncomfortable as it may be, is that the FDA erred on the side of extreme caution.
Diabetic Investor anticipates the ride for Amylin will be a bumpy one as they work to satisfy the FDA. It is also true their current product Byetta will continue to experience difficultly with once-daily Victoza now on the market. As we have said from day one, once-daily is better than twice-daily administration and once-weekly trumps once-daily. This fact has never changed and will not change.
