On a day when millions of Americans will exercise their right to vote, shareholders of Amylin (NASDAQ:AMLN) are exercising their right to sell. The reason comes from a statement made in an 8-k filing by Alkermes (NASDAQ:ALKS), Amylin’s partner for the once-a-week version of Byetta. According to the filing;
“Alkermes, Inc. is working with Amylin Pharmaceuticals, Inc., or Amylin, to develop exenatide once weekly, a long-acting formulation of exenatide. Amylin submitted data from its in vitro in vivo correlation studies to the U.S. Food and Drug Administration, or FDA, to demonstrate comparability between exenatide once weekly manufactured by Alkermes in its facility and used in previous clinical studies and exenatide once weekly manufactured on a commercial scale in Amylin’s Ohio facility. Amylin has recently received feedback from the FDA that such data have not met FDA requirements to demonstrate comparability. Amylin is in active discussions with the FDA regarding options to enable a New Drug Application, or NDA, submission by the end of the first half of 2009. If Amylin is required to initiate a new clinical study, the timing of the NDA submission would depend on the parameters of the new study, and the submission could be delayed beyond the previously stated filing timeline of by the end of the first half of 2009.”
It was also disclosed yesterday that Amylin’s largest shareholder, Eastbourne Capital filed a SC 13d/A which stated:
“The Filers have previously disclosed that they believe the Stock is substantially undervalued and that they are exploring ideas to enhance shareholder value. In that connection, the Filers intend from time to time to have discussions with management of the Issuer, other shareholders and third parties, regarding actions or transactions that, if effected, may enhance shareholder value, including a possible acquisition by a third party of the Issuer. The Filers can give no assurance that any of the foregoing parties will have interest in any of the actions or transactions that are raised during such discussions or that any such actions or transactions will ever be agreed upon or consummated by the relevant parties.”
Not surprisingly shares of Amylin are getting hammered on the news as everyone knows the important of Byetta LAR to the future of the company. Any delay with LAR would allow Novo Nordisk (NYSE:NVO) to gain traction in the GLP-1 market as their GLP-1 liraglutide is a once-daily injection compared to a twice daily injections of the current version of Byetta.
Diabetic Investor has long believed that Lilly (NYSE:LLY) would acquire Amylin once it became clear that LAR was going to the FDA. Should the company be unable to submit LAR to the FDA by mid-2009, all bets are off. As powerful as LAR is the market dynamics will change dramatically with any delay. Novo is already gearing up for a full court press once liraglutide receives FDA approval while Amylin struggles to maintain Byetta sales in the wake of the pancreatitis issue. As overblown as Diabetic Investor sees this issue there is absolutely no question Byetta sales have suffered.
Based on statements made by both Amylin and Lilly, it appeared the companies were placing all their chips on LAR. The companies seemed to believe they could hold off Novo while LAR went through the FDA. With the mid-2009 filing date in danger the real question is; is there a plan B. When your largest shareholder seeks to force a sale it’s rather obvious they have lost confidence in management.
There is no question LAR has the potential to be a game changer when it gets here, however the company cannot ignore the realities of the current market. Additionally it’s an open question what Amylin is worth without LAR. When it’s all said and done people could well look back at this day and say history was made. Unfortunately for shareholders of Amylin it’s not the history they were hoping for.