Icahn, Byetta Sales Boost Amylin (Update)

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.

Because Amylin's long-acting product is taken once a week, it's still likely to take the majority of the market even if it follows Novo Nordisk's product, liraglutide, by six months or a year, says Cowen's Nadeau. But it's important that Byetta LAR not be delayed by more than a year, because fellow competitor Roche is also bringing a product to market, "and then it starts to get close," he says.

Goldman Sachs analyst Meg Malloy, who has a buy rating for the stock, has estimated that the Byetta/Byetta LAR franchise could address a commercial opportunity of more than $2 billion to $3 billion after several years on the market.

But some stakeholders are running out of patience. Eastbourne Capital, which owned a nearly 13% stake in Amylin as of late August, said earlier in the month that it intended to hold discussions with management, other shareholders and third parties, regarding actions that could enhance shareholder value, including a possible sale of the company.