November 18, 2008
Is the tide turning for Amylin?
Yesterday we learned that Carl Icahn increased his stake in Amylin (NASDAQ:AMLN) from nearly 7,000,000 shares at the end of June to nearly 11,000,000 shares as of September 30th, according to the latest Securities and Exchange Commission filing posted late last week. We also learned that sales of Byetta appear to have stabilized and are rebounding after the pancreatitis issue made headlines.
Today we learn that the panel meeting for Novo Nordisk (NYSE:NVO) GLP-1 liraglutide has been moved from March 2nd, 2009 to April 2nd or 3rd. According to a company issued press release; “Novo Nordisk submitted the New Drug Application (NDA) to the FDA on 23 May 2008, meaning that an action letter from the agency to the NDA could be expected on 23 March 2009 following a standard 10-month review period. In September, the agency indicated that it would most likely have to extend the date of completing its assessment by a couple of months. The FDA has informed Novo Nordisk that this is still the timeline it is targeting.”
Although we still have no idea what the FDA is looking for with liraglutide, this delay in the panel meeting is good news for Amylin. While the FDA has told Novo that they would extend the date “by a couple of months,” any delay at all gives Amylin time to get things straightened out with Byetta.
It’s also interesting to look at comments made by Alkermes (NASDAQ:ALKS), Amylin’s partner with the once-a-week version of Byetta, Byetta LAR, made during their earnings call back on November 6th. Take a look at this exchange between David Broecker, Alkermes President and CEO and William Ho an analyst from Bank of America.
“William Ho – Bank of America
Hi guys, thanks for taking my question. I was just wondering since we really haven’t had much opportunity to find out anything about the FDA’s concerns, can you give us any additional clarity as to why they did not deem I guess the IVIVC study equivalent, it seems to me from your analysis of it that it did seem equivalent to both parties involved. So any clue as to what the concern is from the FDA?
William, good questions, I mean I think that that is what is on the mind of a lot of people that obviously are following the program. Suffice it to say we see the material as comparable, when we have done the tech transfer and process scale up and then turning the manufacturing process over to Amylin, we had to have a basis of comparison and a basis of comparability. So when we look at the product and the product that comes out of the Amylin facility and compare that to the product that we manufactured in our site, it is comparable. The approach in the methodology obviously that we took in filing this with the FDA and trying to make some arguments that we could show them comparability based on some of that in vitro data and correlate it to some of the in vivo data that is what we were hoping to do when we filed that. I can’t go into the specifics of what the FDA’s questions and concerns were because that is really up to Amylin, they are the primary person when it comes to the discussions with the FDA. So as I mentioned, we were a little surprised obviously because we thought the package that has been put together was a compelling package but what we will do is Amylin going forward have conversations with the FDA and as soon as we can provide more clarity on that, we will let you know or they will let you know.”
As everyone knows the future of Amylin rests squarely on the shoulders of Byetta LAR. LAR has the potential to be paradigm shifting technology with mega-blockbuster potential. It is equally well known that Amylin still has several hurdles to overcome before LAR even gets to the FDA.
What Diabetic Investor finds so interesting here is how the FDA is proceeding. Now that the election is over there has been much speculation on who will run the FDA and which direction the agency will pursue. Based on the promises made by President elect Obama many believe greater government regulation will extend beyond the financial arena and into all government agencies including the FDA. Perhaps this is the reason the FDA is taking their time with liraglutide and taking a harder look at the LAR compatibility issue. The agency knows change is coming and could be trying to get ahead of the curve here.
Diabetic Investor also believes that one should not read too much into Mr. Icahn increasing his stake in the company. The facts of the matter are by any measure shares of Amylin are cheap and the potential of LAR remains unchanged. But with Lilly (NYSE:LLY) still digesting the ImClone acquisition it’s unlikely Carl can force Lilly to acquire the company in the near future. That doesn’t mean Amylin isn’t for sale, it is. The question is who, other than Lilly who already has a relationship with Amylin, could come in and buy the company.
Even with the hurdles they still face Diabetic Investor remains firm in our belief that it’s just a matter of time before Amylin is acquired. We just don’t think that time is now.