Amylin’s Byetta Plant Faulted Over Quality Control (Update3)

March 12 (Bloomberg) -- Amylin Pharmaceuticals Inc.’s plant that makes a proposed new version of the diabetes drug Byetta had inadequate quality control and training for employees, U.S. regulators said.

The San Diego-based company didn’t test materials for quality or purity, according to a Food and Drug Administration inspection report posted today on the agency’s Web site. Amylin had referred in a Feb. 26 financial report and Jan. 27 earnings call to a pre-approval inspection and said issues raised by the agency could be fixed. The report details what inspectors found.

The plant, in Cincinnati, makes a once-weekly version of Byetta, said Michael G. King, an analyst for Merriman Curhan Ford & Co. Amylin and partners Alkermes Inc. and Eli Lilly & Co. are expecting FDA action today on their application to sell the medicine, chemically known as exanatide, in the U.S. as a replacement for the current twice-daily shot.

“This isn’t minor, but it’s not something that would necessarily derail the approval process,” King said in a telephone interview today. “This is from December. It’s mid- March now. The company’s been working hammer and tongs to get this resolved.”

Amylin fell 93 cents, or 4.4 percent, to $20.26 at 4:12 p.m. New York time in Nasdaq Stock Market composite trading. The shares fell earlier as much as 14 percent, their biggest intraday decline since April 3. Alkermes, of Waltham, Massachusetts, dropped 43 cents, or 3.4 percent, to $12.21 after falling as much as 4.9 percent in Nasdaq trading. The shares of Lilly, based in Indianapolis, rose 11 cents to $35.93 on the New York Stock Exchange.

‘Addressable’ Observations

“We’ve previously indicated that we believe these observations are addressable,” said Kindra Strupp, a Lilly spokeswoman, in an e-mail today, speaking for Amylin as well. “As for the exanatide once-weekly action letter, we do not have an update at this time.”

Rebecca Peterson, an Alkermes spokeswoman, didn’t immediately return calls requesting comment.

“Amylin would not comment on if the facility needed to be reinspected or whether it has addressed the observation,” said Yaron Werber, an analyst at Citigroup Global Markets in New York, in a note to clients today. The company told him that the issues were “minor” and “would not hinder the FDA from completing its decision on today’s” deadline, he said.

Worldwide Sales

Byetta had worldwide sales of $796.5 million last year. Lilly markets the drug outside the U.S. and co-markets it in the U.S. with Amylin. The technology for the longer-acting form was developed by Alkermes.

Almost 24 million Americans have diabetes, caused by a lack of insulin needed to convert blood sugar into energy, according to the National Institutes of Health. About 90 to 95 percent have the Type 2 form of the disease linked to older age, being overweight and physical inactivity.

Byetta is from a newer class of Type 2 diabetes drugs that imitate a hormone called GLP-1 to stimulate the pancreas to produce more insulin after meals. Novo Nordisk A/S, of Bagsvaerd, Denmark, won FDA approval Jan. 25 for Victoza, a once-daily shot that imitates GLP-1.

To contact the reporters on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net; Elizabeth Lopatto in New York at elopatto@bloomberg.net.