Clearing the way
While most
of the country was watching football or the World Series, Amylin (NASDAQ:AMLN)
announced they had signed an agreement with Takeda to co-develop and
commercialize Amylin’s obesity compounds. According to a joint press release; “The
agreement includes products to be developed from Amylin’s pipeline, including
pramlintide/metreleptin and davalintide, which are compounds currently in phase
2 development for treatment of obesity. The agreement also includes additional
compounds from both companies’ obesity research programs. Amylin will receive a
one-time up-front payment of $75 million from Takeda and, over the term of the
agreement and in relation to the compounds under the agreement, is eligible to
receive additional payments upon achieving certain development,
commercialization and sales-based milestones that could exceed $1 billion. The
agreement also provides for future tiered, double-digit royalty payments to
Amylin based on global product sales.”
Diabetic
Investor has long believed that the Amylin story was more than just Byetta and
Byetta LAR, as the company has one of the most promising pipelines in the
industry. This move isn’t that surprising and comes as the company is awaiting
approval for their highly anticipated compound Byetta LAR.
Considering
how Novo Nordisk (NYSE:NVO) plans to market Victoza® when it receives FDA, this
relationship with Takeda provides the company with some additional marketing
clout when the obesity compounds come to market. It also puts Amylin squarely
into a drug category that is gaining momentum and increased attention.
Diabetic
Investor has been closely following the race between Vivus (NASDAQ:VVUS),
Orexigen (NASDAQ:OREX) and Arena (NASDAQ:ARNA) and their various obesity
compounds. While this appears to be a two-way race between Vivus and Orexigen,
Diabetic Investor has not been overly impressed with the data coming out of the
various clinical trials. Looking over the data from all three compounds promote
weight loss to varying degrees. The real problem comes when you look at the
less than impressive completion rates for these trials. While all three
compounds are delivered orally trial completion rates fail to crack the 70% threshold.
Just by way of comparison trials for Byetta LAR, an injectable compound consistently
topped the 90% level. This low completion rate for the three major obesity
drugs, all delivered orally, is not a promising sign.
Given the
FDA’s new guidelines for approving diabetes drugs, Diabetic Investor has
speculated that companies would try and backdoor their way into the diabetes
market by showing the positive benefits weight loss has on patients with
diabetes. This is exactly what has happened as Vivus, Orexigen and Arena have
all examined the positive impact their drugs have on patients with diabetes.
Perhaps anticipating that the FDA will see this connection as well all three companies
are preparing to submit cardiovascular data when the drugs go before the FDA.
Needless to
say the diabetes and obesity markets are closely linked. Looking over all available
data Diabetic Investor believes Amylin and Novo are in a better position to
capture the obesity market even though their drugs are taken via injection. As
Diabetic Investor has said many times when Byetta first came to market physicians
will overcome the fear of injection by telling their patients that in addition
to controlling their diabetes Byetta promotes weight loss. This is exactly what
has happened. The fact is patients will do almost anything to lose weight and
it really doesn’t matter much how the drug is delivered as long as they see
results.
Still, the
real value of this deal for Amylin is that it clears the way for the company to
concentrate on LAR.
Just a few
months ago it appeared that Amylin had nothing but hurdles to clear. Today the
company stands poised to clear their last remaining hurdle; making LAR the success
it should be. The proxy fight is over, LAR awaits approval at the FDA, Byetta
has been approved as a monotherapy and the company has partnered to develop
their rich pipeline. Simply put the company has done what they said they were
going to do.
Looking towards
the future Diabetic Investor remains convinced that Amylin is the most valuable
property in the diabetes/obesity space. There is still a one hurdle to overcome;
however given the way management has successfully navigated this difficult
period Diabetic Investor is confident they will clear that last hurdle. And
that’s when the real fun begins for the company, their shareholders and the
many patients who will benefit from using LAR. Considering how many companies
in the diabetes space have screwed things up lately it’s nice to see a company
actually do what they say they are going to do.
