Amylin Surges After Roche Delays Rival Diabetes Drug

Amylin Pharmaceuticals Inc. rose the most in almost five years in Nasdaq trading after a competitor to its Byetta diabetes treatment was delayed over side effects.

Amylin rose $3.29, or 20 percent, to $19.80 at 4 p.m. New York time in Nasdaq Stock Market composite trading. It was the biggest single-day increase since August 2005.

Roche Holding AG (ROG) said it will postpone the experimental diabetes drug taspoglutide by at least 12 to 18 months after more people than expected had side effects led by skin reactions and digestive complications. Some patients also experienced heart and respiratory problems, though everyone recovered, the Basel, Switzerland-based company said today in an e-mail.

The Roche delay is a boon for San Diego-based Amylin and drug partner Eli Lilly & Co. (LLY), whose twice-weekly injection would compete with Roche’s once-weekly shot. Roche had planned to ask regulators to approve the diabetes drug, which it licensed from Ipsen SA (IPN) in 2006, next year. Byetta is Amylin’s top-selling product with $668 million in sales last year, or 88 percent of total revenue.

“This morning’s news is clearly a positive for Amylin, as it further hobbles taspoglutide, if not removes it from the competitive landscape entirely,” said Philip Nadeau, an analyst at Cowen & Co. in New York, in a note to clients. “There would seem to be a good chance that taspoglutide does not make it to market.”

Shares of Indianapolis-based Lilly rose 22 cents to $34.61 in New York Stock Exchange trading. Roche declined 3.9 Swiss francs, or 2.5 percent, to close at 155 francs in Zurich.

More Tests

Roche said it needs additional time to identify the people more likely to be sensitive to the medicine and to remove them from clinical trials.

The delay is a setback for Roche’s efforts to expand outside of cancer drugs, which account for the company’s three best-selling products and about 50 percent of pharmaceutical sales. The injection would compete with Byetta as well as Novo Nordisk A/S (NOVOB)’s Victoza.

“A delay of 12 to 18 months is not good,” Andrew Weiss, an analyst at Bank Vontobel AG in Zurich, said in an interview. “It’s an important drug for Roche and they need it on the market to balance out the oncology franchise, which is starting to slow down.” Weiss recommends buying the stock.

Shares Fall

Ipsen declined 4.88 euros, or 15 percent, to close at 27.08 euros in Paris, for the biggest drop in four and a half years. Novo Nordisk jumped 21.30 kroner, or 4.4 percent, to 510 kroner in Copenhagen.

Roche is seeking to determine which patients are most at risk through a test to identify anti-drug antibodies, which are the body’s immune response to a medicine and can result in allergic reactions. The company said it will remove patients whose levels of antibodies exceed a certain level. The incidence of the response, which is common in protein-based medicines, is less than 1 percent with taspoglutide, Roche said.

“Given the fact that the hypersensitivity is a low event rate, it’s OK, but anti-drug antibodies are something to be taken seriously,” Weiss said.

Lilly and Amylin have asked the U.S. Food and Drug Administration to approve a once-a-week version of Byetta called Bydureon. The FDA asked March 15 for clarification of manufacturing processes, labeling and a risk-management plan. Antibodies are also a concern for Bydureon, Weiss said.

Alkermes Technology

Alkermes Inc. (ALKS), developed the technology used to slow the absorption of Bydureon in the body and will receive 8 percent of royalties on worldwide sales, said Jennifer Viera, a spokeswoman for the Waltham, Massachusetts-based company, in a phone interview. Shares of Alkermes rose 9.4 percent to $12.65 in Nasdaq trading.

Roche wants to expand beyond its best-selling cancer drugs and take a share of the $24 billion-a-year diabetes market. The number of people with the condition is expected to rise to 366 million by 2030, according to the World Health Organization

Taspoglutide is a GLP-1 analogue, a newer class of diabetes medicine that boosts insulin production after meals. The Roche medicine helped lower blood sugar levels and promote weight loss in late-stage studies of patients with type-2 diabetes.

To contact the reporters on this story: Tom Randall in New York at trandall6@bloomberg.net; Dermot Doherty in Geneva at ddoherty9@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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