Amylin Pharmaceuticals (AMLN) reported a net loss of 24 cents per share in the first quarter of 2011, in line with the Zacks Consensus Estimate and 3 cents below the year-ago loss of 27 cents. Despite a decline in revenues, year-over-year loss declined due to lower expenses.
First quarter revenues declined 12.3% to $152.7 million. Revenues also missed the Zacks Consensus Estimate of $155 million.
Quarterly Details
Total revenues for the quarter declined 12.3% mainly due to lower net product sales. Quarterly revenues consisted of $150.8 million in product sales (down 12.5%) and $1.9 million in collaborative revenues, which consist of the amortization of upfront fees received under the company’s collaboration agreements with Eli Lilly (LLY) and Takeda.
Product revenues comprised $128 million in sales of Byetta (exenatide) and $22.8 million in sales of Symlin. While Byetta revenues declined 14.6% from the year-ago period, Symlin increased 1.3% from the year-ago period. Both Symlin and Byetta sales, however, declined on a sequential basis. Byetta sales declined 6.2% sequentially and Symlin declined 11.9% sequentially.
The sequential decline in Symlin sales doesn’t come as a surprise as Amylin has stopped marketing Symlin vials, which accounted for 30% of Symlin revenues in 2010. Symlin will be available in the pen-only version. Amylin reported a 14% sequential increase in SymlinPen sales.
Meanwhile, Byetta revenues have been under pressure over the past few quarters due to pancreatitis fears associated with the use of the drug. Amylin is looking to return Byetta to growth now that it is armed with US Food and Drug Administration (FDA) approval for the use of the drug as a first-line monotherapy for type II diabetes patients. Amylin also intends to expand the label so that Byetta can be used in combination with basal insulin. The company submitted a supplemental New Drug Application (sNDA) with the FDA for the label expansion. A response should be out by year end.
Selling, general and administrative (SG&A) expenses for the quarter declined to $64.6 million from $73.3 million in the year-earlier period. The decrease was mainly due to efficiencies driven by the company’s reduced cost structure and lower costs associated with pre-Bydureon launch activities.
Research and development (R&D) expenses declined to $41.9 million in the reported quarter from $45.3 million reported in the prior-year period. The decline primarily reflects the company’s cost-cutting efforts which were partially offset by higher spending on the lipodystrophy program.
2011 Guidance Reflects Tight Cost Control
For 2011, Amylin now expects its operating loss to be towards the lower end of its previously provided guidance range of $25 – $40 million. The company expects Bydureon to launch in the EU in 2011 and expects to earn a $15 million milestone for the same.
Amylin also expects to start receiving tiered royalties (amounting to less than $5 million) on ex-US sales of exenatide from the second quarter of 2011.
The company repaid $200 million convertible note due in April and has informed Eli Lilly of its intention to draw the $165 million credit facility.
Update on Bydureon
Amylin provided an update on its lead pipeline candidate, Bydureon (a once-weekly version of Byetta), which received a second complete response letter (CRL) from the FDA. Amylin and its partners, Eli Lilly and Alkermes, Inc. (ALKS), are looking to get Bydureon approved for the treatment of type II diabetes.
Amylin said that it has initiated the thorough QT (tQT) study as requested by the FDA. The FDA has also asked Amylin and its partners to submit data from the DURATION-5 study, which was conducted to compare the safety and efficacy of Bydureon versus Byetta. Amylin expects to submit a response to the CRL in the second half of 2011.
As far as EU approval is concerned, Bydureon recently received a positive opinion from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP). A final decision regarding the approvability of Bydureon should be delivered by the European Commission in 2-3 months. Approval would make Bydureon the first once-weekly type II diabetes treatment in the EU.
Amylin recently presented positive phase II data on its once-monthly suspension formulation of Bydureon. The company intends to meet with regulatory authorities to determine the development path for the suspension formulation. The pen device for Bydureon remains under development with a launch expected in late 2012/early 2013.
As far as other pipeline candidates are concerned, Amylin initiated the submission of a rolling Biologics License Application (BLA) for the use of metreleptin for the treatment of diabetes and/or hypertriglyceridemia in patients suffering from rare forms of lipodystrophy. The chemistry, manufacturing and controls (CMC) section of the BLA will be filed by year end. The candidate enjoys fast track status and a successful regulatory process could lead to the product launch in the second half of 2012.
During the first quarter, Amylin and partner Takeda announced the suspension of clinical activities associated with a phase II study of their obesity candidate. Amylin and Takeda were studying the safety and efficacy of pramlintide/metreleptin for the treatment of obesity. However, the companies decided to voluntarily halt the trial in order to study a new antibody-related laboratory finding associated with metreleptin in two patients. Amylin and Takeda are investigating the finding so as to determine the future development path for the candidate.
Neutral on Amylin
We currently have a Neutral recommendation on Amylin, which is supported by a Zacks #3 Rank (short-term “Hold” rating). We expect investor focus to remain on the outcome of the tQT study and the regulatory status of Bydureon in the US.
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