Diabetes Drug Results Drive Amylin Stock

Amylin Pharmaceuticals Inc.'s shares leaped 13 percent to $24 in trading the morning after the San Diego-based diabetes drug maker announced positive results from one of three late-stage trials, putting the firm on track to file for exenatide's approval with U.S. regulators in 2004.

On Aug.

6, Amylin and its partner Eli Lilly & Co. announced a seven-month Phase III 336-patient trial revealed that exenatide helped control blood glucose levels in Type 11 diabetics who failed to respond to common treatment. Exenatide also helped patients with weight-control, which is a big problem for Type II diabetics, Amylin said.

The results were consistent with previous findings, and thus, not surprising, said Dr. Russell Gilbertson, an analyst with Roth Capital Partners LLC in Orange County.

Consequently, the analyst said he did not revise his previous guidance for the company.

Gilbertson has a 12-month price target of $31 and a "buy" rating for Amylin's stock.

Exenatide is designed to lower blood sugar, but only when blood glucose levels rise too high. As a result, patients are less likely to suffer low blood sugar from taking the drug.

The drug seems to have an added benefit of weight-control.

Amylin hopes to file for exenatide's approval with the U.S. Food and Drug Administration in the first half of 2004.

Gilbertson expects the drug could be approved by the end of 2004. But that is up to the FDA.

A lot will also depend on two on going Phase III trials whose findings Amylin plans to report in the fourth quarter.

The data announced on Aug. 6 measured how well exenatide works when given with metformin, the active ingredient used in Bristol-Myers Squibb's drug Glucophage.

The second study seeks to evaluate how well exenatide works alongside sulfonylureas, another common drug made by Pfizer.

The third study compares exenatide to both existing drugs.

If approved, exenatide addresses a potentially huge market. Some 17 million Americans have diabetes with 95 percent being Type II diabetics. Half of those patients can't achieve adequate glucose control with available drugs, Gilbertson said.

Exenatide is aimed at 4 to 5 million patients.

At an annual cost of $1,000, the commercial potential for exenatide is in the "billions," Gilbertson said. The real market penetration rate however, is likely to be much lower.

For 2007, Gilbertson expects $300 million in sales for exenatide.

Amylin's stock was up 6.87 percent from the previous day, closing at $22.71 on Aug. 7.