Exenatide Approved – Why is then is Amylin taking a hit.
This morning Amylin (NASDAQ:AMLN) announced they have received approval for Exenatide. While Diabetic Investor had accurately predicted the drug would receive approval, shares of Amylin are down nearly 9% on the news. This seemingly strange reaction can be attributed to the fact that the drug was approved for use in combination with oral medications and not as a stand alone treatment. There is also some speculation that Lilly (NYSE:LLY), Amylin’s partner on Exenatide, is not fully committed to the drug. Earlier this week there was an article in the Wall Street Journal that outlined the rocky road both companies experienced in getting this relationship off the ground. Finally, analysts have always been concerned with the fact that Exenatide is an injectable which they see as limiting sales.
Diabetic Investor believes that Exenatide will be a commercial success for both companies and sees this recent weakness in Amylin shares as a major buying opportunity.
There are over 6 million patients taking oral medications and it is widely known that the majority of these patients are not under good control. Exenatide has proven ability to not only help these patients achieve better control but has the added bonus of promoting weight loss. This is one reason why physicians have been eagerly awaiting the approval of Exenatide as they are aware that the combination of better control and weight loss will be attractive to their diabetes patients. We also disagree with the belief that because the drug is an injectable it will limit sales. Anyone who believes that just because a drug has to been injected its sales will be limited should look at the success of Lantus, Sanofi-Aventis long acting insulin which also is an injectable. Lantus has achieved blockbuster status and is the number one selling insulin in the United States. Lantus owes a great deal of its success to the fact that physicians are prescribing Lantus to their Type 2 patients who are also on oral medications.
As far as the relationship with Lilly we see little cause for concern as Lilly desperately needs Exenatide as their diabetes franchise has been floundering.
The bottom line here is that both Exenatide and Amylin will be successful. This is a buying opportunity.
David Kliff
Publisher
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