Amylin Pharmaceuticals ( AMLN) is trying to halt a sliding stock price by asserting that its long-acting diabetes drug does not share the same cancer risk observed in a similar drug from competitor Novo Nordisk.

Shares of the San Diego-based drug maker have fallen 22% to $9.32 in the last three trading days after a link between thyroid cancer in animals and Novo Nordisk's liraglutide was brought to light during a meeting of a Food and Drug Administration advisory panel last week.

Liraglutide and a long-acting version of Amylin's Byetta belong to the class of diabetes drugs known as GLP-1 agonists. This has investors worried that the approval of both drugs could be significantly delayed if the FDA deems the cancer risk too high.

Amylin's future rests largely on the once-weekly version of Byetta, which will be submitted for FDA approval later this quarter. Sales of Amylin's current version of Byetta, which requires twice-daily injections, have been sluggish, rising just 7% in 2008 to $678.5 million.

Eli Lilly ( LLY) is Amylin's marketing partner for both versions of Byetta and shares the drug's revenue.

Monday, Amylin dispatched its scientists on a media tour armed with data showing that Byetta does not carry the same cancer risk as Novo Nordisk's liraglutide.

"Exenatide and liraglutide are different molecules even if they belong to the same class of drugs," said Amylin's senior director of medical affairs, Ken Wilhelm, in an interview with TheStreet.com.

No cases of thyroid cancer have been documented in patients enrolled in clinical trials of Byetta or long-acting Byetta, according to Wilhelm.

Amylin conducted a two-year cancer study of long-acting Byetta in rats and mice and found a statistically significant increase in tumors only in female rates treated with doses of long-acting Byetta four-fold higher than what would be given to humans.

By comparison, says Wilhelm, Novo Nordisk's liraglutide was found to cause tumors in male and female rats, sometimes at human-equivalent doses.

Nine cases of "spontaneous" thyroid cancer have been reported in the approximate 1 million diabetes patients taking Byetta, according to FDA records, but none of these tumors were fatal nor of the type under FDA scrutiny with liraglutide.

"The FDA asked us for this information last year. At the time we weren't sure why, but looking back now, it makes sense," says Wilhelm, adding that the FDA has not asked for any follow-up data regarding Byetta and tumor risk.

Amylin may have cleaner animal safety data, but it remains to be seen whether the FDA will, regardless, consider thyroid tumor risk to be a class effect of the GLP-1 agonist drugs. And even if the FDA gives long-acting Byetta a clean bill of health, the agency could still place restrictions on the drug that would hurt its commercial prospects.

Byetta not only faces competition from Novo Nordisk's liraglutide, but from other classes of diabetes drugs like Merck's ( MRK) Januvia and saxagliptin from Bristol-Myer Squibb ( BMY) and AstraZeneca ( AZN).

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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