Amylin has two key problems that investors bullish on the stock are either ignoring or downplaying too much:
1. Bydureon has a questionable clinical benefit over its competitors in a crowded Type 2 diabetes market. Even Wall Street's lowered sales targets project that Amylin's diabetes franchise (Bydureon and Byetta) will more than double. For that to happen, Amylin must grow its market share meaningfully, yet Bydureon seems poorly positioned to move earlier in the diabetes treatment algorithm. Bydureon is less convenient than oral DPP-IV inhibitors like Merck's (MRK) Januvia (patients almost always prefer pills over injections) and Bydureon doesn't lower blood sugar levels as effectively as Novo's Victoza. Doctors will likely struggle to justify prescribing Bydureon over these alternatives.
2. Bydureon's formulation creates problems for patients. Bulls have long believed Bydureon's once-per-week injection schedule is a critical advantage over competing diabetes drugs. If all else were equal, I might be inclined to agree. Unfortunately, I suspect the benefits of less frequent injections (Victoza is injected once-daily and Byetta twice-daily) will be offset by the disadvantages of Bydureon's formulation -- a viscous slurry that must be reconstituted prior to injection.
Victoza and Byetta are injected using a pre-mixed pen-like device. Patients select the appropriate dose and inject. Simple. In contrast, Bydureon patients receive a kit that includes a vial filled with powdered drug, a saline-filled syringe, a special adapter for transferring the syringe liquid into the powdered-drug vial, and two needles (the second serves as a backup should the first get clogged.) Before injecting Bydureon, patients have to connect the vial to the syringe with the adapter, mix the two ingredients, shake vigorously, detach the adapter, attach needle to syringe, pull the viscous drug into syringe, and then, finally, inject. Not so simple, even for experienced diabetic patients.Amylin insists injecting a sizable volume (2 mg) of Bydureon causes few issues for patients but the data suggest otherwise. The needle used is larger and more painful than the tiny needles typically used to inject insulin or Victoza. Bydureon also caused far more injection-site reactions than Byetta in Amylin's own head-to-head studies (and of course, patients in clinical trials are extensively coached in the best way to inject the drug, something that doesn't happen in the real world).
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