This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Curse of Amylin's Diabetes Drug Approval

Stocks in this article: AMLN LLY NVO ALKS

Correction: Amylin's newly approved diabetes drug Bydureon is priced at an 11% premium to Byetta, not a 20% premium as previously stated.

SAN DIEGO ( TheStreet) -- Last week, after more than two and a half years, two FDA rejection letters, and at least a dozen amendments to the application, Amylin Pharmaceuticals (AMLN) received FDA approval for Bydureon, a once-weekly formulation of its existing diabetes drug Byetta.

Bydureon's approval reminds me of a favorite healthcare aphorism: "The worst thing a company can do is bring a drug to market." Commercialization means hope must yield to reality. For Amylin and Bydureon, reality isn't pretty.

Investors can be forgiven for only dimly remembering the rapturous excitement over Bydureon's initial phase II data, announced in August 2005, which implied the drug might be vastly more effective than Byetta with fewer side effects. Unfortunately, subsequent pivotal studies failed to replicate these early results. One of Amylin's Phase III studies even showed Bydureon to be less effective than Novo Nordisk's (NVO) Victoza, a key competitor. Oops.

Wall Street peak sales estimates for Bydureon have followed a similar trajectory, sliding from $2 billion to about $900 million now ($1.3 billion if you include Byetta sales).

Although Amylin and formulation partner Alkermes (ALKS) deserve congratulations for winning Bydureon's approval, I believe the drug will miss even analysts' lowered sales targets.

Before I dissect the drug's potential, let's note a few minor positives. First, the company successfully avoids mention of the failed study against Victoza in the FDA-approved label (though you can bet Novo's sales reps will make these data well known to doctors). In fact, the only efficacy data in the Bydureon label are from the solidly successful first Phase III trial, which showed improved efficacy versus Byetta. That makes Bydureon's labeled efficacy look okay, but only if you're a doctor who hasn't done extracurricular reading.

Second, the drug is priced at an 11% premium to Byetta. If Amylin only switched existing patients, Bydureon would generate sales of $575 million (based on Byetta's $518 million run rate.) Third, Bydureon causes less nausea and vomiting than Byetta (though other adverse effects do occur more frequently; some meaningfully so.)

So it's not all bad news for Amylin. However, the key question remains: Can Bydureon reignite physician excitement and reverse the ongoing decline of Amylin's diabetes franchise? I think the answer is no.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs