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Amylin, Alkermes Fall After Bydureon Fails in Diabetes Test

Amylin Pharmaceuticals Inc. CEO Daniel Bradbury
Daniel Bradbury, president and chief executive officer of Amylin Pharmaceuticals Inc. Photographer: David Maxwell/Bloomberg

Amylin Pharmaceuticals Inc. and Alkermes Inc. plunged after the companies’ diabetes drug Bydureon didn’t control the disease better than Novo Nordisk A/S’ Victoza in a study.

The shares of San Diego-based Amylin fell 25 percent, or $3.81, to $11.20 at 4 p.m. New York time in Nasdaq Stock Market composite trading, while Waltham, Massachusetts-based Alkermes declined 11 percent, or $1.54, to $12.56, the worst day for both stocks since October. Bydureon marketing partner Eli Lilly & Co., based in Indianapolis, rose 11 cents to $34.39 in New York Stock Exchange composite trading.

Bydureon lowered average blood-sugar levels by 1.3 percentage points, compared with 1.5 percentage points for Victoza, its developers said in a statement today. The drug is a weekly version of Byetta, which is injected twice daily. Victoza, approved in the U.S. in 2010, is taken once daily and generated $433 million in sales last year.

“We thought that Bydureon would look at least as good as Victoza,” Phil Nadeau, an analyst with Cowen & Co. in New York, said today in a report. “These data give Novo a very powerful marketing message to use against Bydureon when it is launched.”

Novo Nordisk rose 8.50 kroner, or 1.3 percent, to 678.50 at the 5 p.m. close of Copenhagen trading, after climbing as high as 703 kroner.

‘Robust Effect’

“We didn’t hit the primary endpoint, but the results do actually reinforce the fact that this product has a very robust effect,” Amylin Chief Executive Officer Dan Bradbury said today in a telephone interview. “If approved, Bydureon could help millions of people with Type 2 diabetes.”

The study, funded by Amylin and Lilly, isn’t part of the companies’ regulatory submission, Bradbury said.

“They wouldn’t have done this study if they felt it would have come out like this,” Jack Scannell, an analyst at Sanford C. Bernstein Ltd., said today in a telephone interview. “Why would you put a patient on a less effective drug?”

Almost 24 million Americans have diabetes, which occurs when people don’t have sufficient amounts of the hormone insulin, or are resistant to it, hampering their ability to convert blood sugar to energy.

Heart Study

Amylin lost about half its market value Oct. 20 after saying the U.S. Food and Drug Administration wanted a study assessing Bydureon’s heart risks. Alkermes lost 28 percent that day. Amylin and its marketing partners plan to submit a response to the FDA in the second half of 2011, the companies said today in a statement.

Bydureon’s entrance to the U.S. market “may be more challenged than some expect, particularly given Victoza’s strong launch and the multiple once-daily oral medications approved and in development,” said Robert Hazlett, an analyst with BMO Capital Markets in New York, in a note to clients today. He maintained his peak sales estimate of $1 billion for Bydureon.

Ami Fadia, a UBS analyst in New York, cut his estimate for the drug’s peak annual sales from $1.2 billion to $500 million, in a research note today.

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