Amylin has a big regulatory event coming up later this month, with the US Food and Drug Administration (FDA) expected to deliver a decision on its type II diabetes candidate, Bydureon (exenatide once-weekly). While Bydureon gained approval in the EU in 2011, the US regulatory path for the candidate has not been smooth with the FDA issuing two "complete response" letters.
Amylin is set for the potential US launch of Bydureon in the first quarter of 2012. The company intends to have two commercial units -- one focused on exenatide and the other on specialty and orphan diseases.
While the exenatide team will consist of 650 diabetes sales specialists, the specialty and orphan disease team will initially focus on promoting Symlin. However, we note that once launched, Bydureon will face intense competition from Novo Nordisk's ( NVO ) Victoza, which already has a significant head-start in the GLP-1 market.
Amylin also intends to commence a phase III study with a once-weekly suspension formulation of exenatide in mid-2012. A phase III program for the monthly suspension formulation of exenatide is scheduled to commence in 2013.
Amylin is looking to further strengthen its exenatide franchise by focusing on driving Byetta (exenatide) sales. The company, which terminated its exenatide agreement with Eli Lilly and Company ( LLY ) in November 2011, is currently looking for an ex-US partner. Partnering exenatide should maximize the value of the product.
As far as metreleptin is concerned, the company intends to finish submitting a rolling biologics license application ("BLA") for the use of metreleptin for the treatment of diabetes and/or hypertriglyceridemia in patients suffering from rare forms of lipodystrophy in the first half of 2012. Approval could result in the product launch in 2013.
Besides working on advancing its pipeline, Amylin said that it intends to continue working on controlling costs. Although the company expects to spend an additional $150 million - $170 million in cash operating expenses on the Bydureon launch, a major part of the expenses will be funded by improved gross profit economics.
Neutral on Amylin
We currently have a Neutral recommendation on Amylin, which carries a Zacks #3 Rank (short-term Hold rating). Amylin has had its share of ups and downs over the past few quarters. While the EU approval of Bydureon was a positive for the company, the delay in gaining FDA approval for the candidate has weighed on the stock. Byetta's performance has also been disappointing.
Bydureon's US approval would be a major boost for Amylin. However, it remains to be seen whether it will be third time's the charm for Bydureon on Jan 28, 2012 (the FDA action date).