Amylin Rises on Byetta Sales Data

"The company was burning a lot of money -- it would have been hard to see how they were funded through profitability without making these cuts," says Cowen and Co. analyst Phil Nadeau. "But it's not the type of move that's going to get people excited about the stock."

If there's an upside to Amylin's bottomed-out valuation, it's that investors now appear to have priced in a further deceleration of Byetta's prescription growth. With expectations low, any upside to Byetta sales could work in Amylin's favor -- as evidenced by the stock's move today.

What would really get investor confidence in Amylin moving in a positive direction would be progress in bringing the next-generation Byetta LAR to market.

Amylin's partner, Alkermes (ALKS Quote) disclosed in a filing with the Securities and Exchange Commission earlier this month that the drug may face a regulatory hiccup.

The FDA has indicated that data Amylin submitted -- to show that the drug manufactured in Alkermes' facility and used in clinical trials was the same as that manufactured on a commercial scale in Amylin's facilty -- did not meet the agency's requirements. Amylin is still hoping the application will be filed by the end of the first half of 2009, but if required, additional trials could delay the drug's approval and launch.

Investors are aware of looming competition: Novo Nordisk(NVO Quote) has submitted its application for a once-daily injection, the first potential direct competitor to Byetta, and depending on the outcome of a panel in March, could have its product approved by mid-2009.