Amylin Rises on Byetta Sales Data

Amylin Pharmaceuticals' (AMLN Quote) shares rose Monday as investors reacted favorably to an uptick in prescription numbers for diabetes drug Byetta.

Overall prescriptions of Byetta increased 3.9% during the first week of November, according to new IMS data. The news sent Amylin's shares up 70 cents, or 11%, to $7.11 in recent trading.

Piper Jaffray analyst Thomas Wei notes that Byetta's week-over-week increases were not as large as other name-brand diabetes drugs like Avandia (up 6.6%), Actos (up 7.8%), Januvia/Janumet (up 5.9%) and Lantus up 6.2%). "However, given two weeks of Byetta prescription growth exceeding 3%," wrote Wei, "we believe it remains unclear if media dissemination of what we regard as misleading headlines on pancreatitis risk will have a long-term negative impact on the company's new sales effort to expand Byetta prescriptions." Wei has a buy rating on Amylin stock.

The biotech company lastely has been taking much-needed steps toward profitability, but restoring investor confidence in the struggling diabetes-drug maker is still very much a work in progress.

Shares of San Diego, Calif.-based Amylin have fallen more than 75% in the past three months to around $6.50. The company's enterprise value today is just over $1 billion, or about 2 times Amylin's share of sales from Byetta, the diabetes drug co-marketed with Eli Lilly (LLY Quote).

Amylin's slide started Food and Drug Administration concerns regarding instances of pancreatitis, a sudden inflammation of the pancreas that can cause severe complications and possibly death, in diabetes patients who took Byetta. There is no known link between the drug and the incidence of pancreatitis, and the incidence is still in line with the broader diabetes population. But the emergence of a possible safety risk with Byetta had pinched prescriptions, leading to a wider third-quarter loss for the company.

In a move aimed at sparking a turnaround, Amylin last week announced a corporate retooling that will involve the dismissal of 340 of the company's 2,140 employees. The goal is to reduce 2009 spending by more than $80 million without sacrificing Byetta's commercial operations and get the company to cash flow-positive by the end of 2010.