What’s more important delivery system or results?
Yesterday Amylin (NASDAQ:AMLN) held their annual R&D day for investors. During the presentation the company released results from a study that compared Byetta to the once-weekly version of Byetta (Byetta LAR). Patients on LAR lowered their A1c by an average of 1.9%, 3 of 4 patients achieved an A1c level of 7% or lower, while 2 of 4 patients achieved an A1c of 6.5% or lower. In addition patients on LAR lost an average of eight pounds. It was also noted that patients using LAR experienced 30% less nausea compared to those on Byetta. Finally, the company indicated that it is possible LAR could be submitted to the FDA early in 2009 perhaps even late 2008.
All in all this would appear to be very good news. So how did the street react? Amylin shares fell $1.58. In fact over the past three months shares of Amylin have fallen over 20%. What gives here?
Looking back over the presentation and question and answer session Diabetic Investor suspects the main culprit for the decline in Amylin shares comes from the answer to question about LAR delivery system. For the first time the company publicly stated that the needle used for LAR was a 23g ¼ inch. For those who have never injected themselves needle gauge measures circumference, the higher the gauge the smaller the hole made during an injection. The company did not state this would be the final needle size for LAR merely this is what they have been using.
The street also appears concerned that patients will have to mix LAR prior to injecting and patients on LAR don’t lose as much weight as those on Byetta. Let’s take the second concern first, LAR is not a weight loss drug it’s a diabetes drug. The fact that there is any weight loss is major plus as patients on most other therapies experience weight gain. The primary goal of a DIABETES drug is to lower A1c and LAR does that very well.
The fact the with the initial launch of LAR patients will have to mix the drug prior to injection is a minor obstacle. While this will require some training, the company stated that over 90% of the patients completed the study and mixing did not appear to be an issue.
Getting back to the needle size it is true that a would better if LAR used a 29g or higher. However this does not take into consideration that patients using LAR inject the drug just once a week. By way of comparison consider the following, a type 2 patient using a combination of Lantus and oral medications injects 7 times per week or 364 times per year. In the most recent issue of Diabetic Investor we posted a chart that indicated there were 1,286,500 type 2 patients on Multiple Daily Injection (MDI) therapy. MDI is defined as 3 or more insulin injections per day. That means for a patient taking 3 injections per day they would inject themselves 1,095 times per year.
The street also forgets that patients on insulin therapy must also check their glucose levels each time they administer insulin. For a type 2 MDI patient that adds another 1,095 fingersticks each year, a process which is actually more painful than the insulin injections. Unlike insulin which is dose dependent patients on LAR are on a fixed dose therefore there is no need to check glucose levels.
Finally, and this fact cannot be understated, the threat of a hypoglycemic event is virtually non-existent with LAR and common with insulin. This fact alone is a major reason more physicians do not prescribe insulin therapy for their type 2 patients. Insulin therapy requires a fair amount of patient education, something the majority of physicians are not equipped to handle. Once a patient learns how to mix LAR there is little if any education needed.
Diabetic Investor listens to hundreds of presentations each year and besides being reminded that diabetes is a global epidemic another fact mentioned with regularity; nearly two-thirds of patients with diabetes are not achieving control. While there are a number of reasons for this a contributing factor is that patients are non-compliant with their therapy. Simply put, patients are not taking their medications on a regular basis and it does not matter if that medication is taken orally, injected or both.
To illustrate just how difficult managing diabetes can be look at a study published in Diabetes Care by Dr. Elbert S. Huang of the University of Chicago. The study found that patients find treating their diabetes was as bad as the complications that can come from poorly controlled diabetes. There are no off days with diabetes, getting it under control is 24 hour a day 7 day a week 365 days a year job. The fact is controlling diabetes is work, hard work.
The bottom line is the positives for LAR far outweigh any of the so-called negatives. Even without the simplicity of once a week delivery, the drug has superior results. Given the choice physicians will prefer a drug that is taken just 52 per year. These physicians understand that compliance is critical to better outcomes and the fewer times a patient must delivery their medications the better.
LAR is a winner and so are shares of Amylin. At current levels this stock extremely attractive.