Byetta Sales Accelerating
As Diabetic Investor predicted sales of Byetta are accelerating as physicians see how well the drug works. According to IMS tracking data Byetta has a 1.7% share of the market for Type 2 medications. Not surprisingly shares of Amylin Pharmaceuticals (NASDAQ: AMLN) are once again on the move as the Street begins to take notice. With shares trading within an eyelash of its 52 week high the question becomes is it time to take profits or is there more upside ahead?
Diabetic Investor sees more upside and here’s why. Physicians have just begun to recommend Byetta to their broader diabetes patient population. Typically whenever a new medication hits the market physicians are reluctant to prescribe it frequently preferring instead to limit usage to a select group of patients. This initial limited usage allows physicians to more closely monitor a smaller group of patients. This is especially true for Byetta as it is an injectable and there have been concerns of possible side effects, namely nausea. Once comfortable with the drug usage expands. Based on early interviews with prescribing physicians, Diabetic Investor sees Byetta moving from limited usage to a frontline therapy.
The bottom line is physicians are looking for more ways to use the drug. Although Byetta is not yet approved as an immunotherapy, it is being used as such. It’s also not surprising that physicians are using the fact that patients on Byetta are showing progressive weight loss as a selling point to those patients who are reluctant to use any injectable drug. Byetta’s simple dosing regimen and pen delivery system have also added to physicians comfort zone.
There is no question Byetta is a winner with physicians and patients.
From an investment point of view Amylin’s biggest problem just might be managing expectations. It won’t be long before analysts begin raising sales estimates. Finally, there is the “Lilly” factor. Eli Lilly (NYSE:LLY) is partnered with Amylin on Byetta and many have speculated they would one day make a bid for the company. Before Byetta came along Lilly’s diabetes franchise was showing some serious signs of weakness. Simple put Novo Nordisk (NYSE:NVO) and Sanofi-Aventis (NYSE:SNY) were eating Lilly’s lunch in the insulin market. With no long acting insulin to compete with Lantus and Novo’s aggressive sales practices, Lilly was facing the prospect of becoming a minor player in the insulin market.
Byetta and the long-acting version of Byetta now under going clinical trials could vault Lilly back to leadership role they once held in diabetes. (Not to mention Amylin has an exciting pipeline of compounds under development.) By the time Byetta faces any serious competition the long acting, once a week dosing, version should be on the market. This is the gem in Amylin’s pipeline with mega-blockbuster potential. Given all this one could ask just why Lilly hasn’t made a move. That is an excellent question. The good news for Amylin shareholders is the longer Lilly waits the higher the price will be and that is good news indeed.
David Kliff
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