More Reasons To Like Amylin
“A1C, a measure of glucose control, improved approximately 2 percent for subjects receiving the high dose of exenatide LAR, compared to placebo. At the beginning of the study, the average A1C of study participants was approximately 8.5 percent. The decrease in A1C was progressive with no evidence of a plateau at week 15. Twelve of the 14 high-dose subjects who entered the study with an A1C greater than 7 percent achieved an A1C of 7 percent or less at 15 weeks. None of the 14 subjects receiving placebo achieved that target. The American Diabetes Association recommends a target A1C of less than 7 percent.” – Amylin (NASDAQ:AMLN) press release August 22, 2005 shares rise nearly 30%.
“Once-weekly exenatide, an investigational drug, showed a statistically significant improvement in A1C of approximately 1.9 percentage points from baseline, compared to an improvement of approximately 1.5 percentage points for BYETTA. Approximately three out of four subjects treated with once-weekly exenatide achieved an A1C of 7 percent or less. A1C of less than 7 percent is the target for good glucose control as recommended by the American Diabetes Association.” Amylin press release October 31, 2007 shares fall almost 3%
Although these two statements are nearly identical the reaction on the Street was about as different as dogs and cats. And why? All because a diabetes drug didn’t produce more weight loss. Never mind that at best competing therapies are weight neutral and most actually lead to weight gain. None of that seems to matter to the Street who all of sudden believes that producing excellent improvements in A1c isn’t enough for a diabetes drug. Now they want more weight loss. Are these the same people who at one time where telling us that Exubera would be a multi-billion dollar drug?
Let’s keep our eye on the ball here folks. Byetta LAR is a diabetes drug that has the added benefit of helping patients lose weight.
Yesterday Diabetic Investor outlined 10 reasons why Byetta LAR has the potential to be a mega-blockbuster. Today we’ll give two more reason to take advantage of the Street’s ignorance and scope up some shares of Amylin.
1. 1. Prasugrel and Zyprexa- one is a drug under development at Lilly (NYSE:LLY), the other accounts for nearly 25% of Lilly’s revenue and will come of patent in 2011. Last week Lilly suspended two prasugrel trials and sent shares of the company down almost 7%. The company had high hopes for the drug and some believe if approved it could reach $5 billion in sales. New study data for prasugrel is expected to be released this weekend, data which should tell us if Lilly really has a hit on their hands or another drug that needs more work.
2. 2. According to a report released by IMS Health, Inc. it forecasts that U.S. sales of branded and generic prescription drugs will grow between 4% and 5% next year, to as much as $305 billion. That is a deceleration from a rate of between 5% and 6% this year, and the slowest pace since 1963. Several major players have already begun to hunker down announcing job cuts and other cost saving measures. With several major branded therapies coming off patent in the next few years, companies are looking for the next blockbuster to emerge.
Both items are good news for Amylin as they already have a relationship with Lilly and should this weekend’s data on prasugrel prove disappointing Amylin becomes more valuable to Lilly’s future. Even if the data is positive nearly every major company would benefit by acquiring Amylin.
As important as LAR is to Amylin’s future, their promising pipeline of obesity drugs often times gets overlooked. The fact’s for Amylin really haven’t changed much as they remain the most valuable property in the diabesity (diabetes and obesity) market. This would be a good time for investor to take advantage of the Street’s unwarranted reaction to yesterday’s good news from Amylin.
The bottom line for Amylin is the Street has rarely been right. These are the same people who bailed on the stock after Byetta was approved giving investors one of the best buying opportunities. Since Byetta was approved back on April 29,2005 shares of Amylin have risen nearly160%, while all the major market averages are up less than 50% over the same time frame.
Perhaps with Exubera off the market, the Street can use the delivery device for another non-legal drug. This might make them feel a little better and take some of the sting out of missing the boat on Amylin