Amylin Pharmaceuticals, Inc. (AMLN)

NetscribeBiotech (76.22) Submitted: 2/09/07 7:53 AM : Start Price: $41.58 AMLN Score: -25.16

Amylin Pharmaceuticals (AMLN) is a biopharmaceutical company engaged in the discovery, development and commercialization of medicines for the treatment of diabetes, obesity and cardiovascular disease. With two approved product offerings include Byetta injection and Symlin injection, its development pipeline include late-stage programs for diabetes and obesity, and a Phase-II program in cardiovascular disease.

The company’s flagship product Byetta is recognized as first in its class product, which besides having glucose lowering effect also causes weight loss. Since its launch in mid-2005 it has successfully penetrated the fiercely competitive diabetes care market. Going ahead, the main driver for Amylin would be Byetta and its improved variant Byetta LAR, which is in its Phase-III trials.

Byetta, which generated almost half a billion in sales during its first full year of commercialization i.e. fiscal 2006, contributes more than 90% to the company’s topline. Its target market in U.S. is about 2.2 million patients and the peak sales could be as high as $ 2 billion. However the company gets only half of the pie from Byetta’s sale in the U.S. and 20% of revenues from its global sales, as per its agreement with Eli-Lilly, their marketing partners.

The risk the company faces includes the developmental risks associated with Byetta LAR and of other drugs with similar characteristics. With market capitalization of more than $5 billion, all the good news seems to be discounted. However, despite the risks attached to single product driven company and rich valuations, if Byetta LAR comes through as expected in the second half of fiscal 2007 there is still a big potential upside simply because of its unique offering and the consequential pricing power.

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