Posted on 09/01/2003 6:16:57 PM PDT by ATOMIC_PUNK
Amylin's Gila Monster Of A Diabetes Drug
NEW YORK - Seven years ago, San Diego's Amylin Pharmaceuticals licensed the rights to a potential diabetes drug derived from the saliva of the venomous Gila monster lizard.
Late yesterday, Amylin (nasdaq: AMLN - news - people ) unveiled the results of the first of three clinical trials that it and its partner Eli Lilly (nyse: LLY - news - people ) hope will lead to U.S. regulatory approval for the medicine, exenatide, to treat adult-onset diabetes. The positive results caused Amylin shares to leap 13% to $24 this morning.
Exenatide's potential is very real. The medicine lowers blood sugar, but it appears to act only when blood glucose levels rise too high--meaning that patients are much less likely to suffer low blood sugar as a result of taking the drug. It also may help patients lose weight. Current trials are designed to show that it works on top of existing medicines used to treat Type 2 diabetes, a condition in which people stop being able to control the amount of sugar in their blood. Historically, it has been a disease of overweight adults, although patients are getting younger. It affects about 16 million people.
The first animal data on the drug's action were presented by John Eng, an endocrinologist at Bronx Veterans Affairs Medical Center, in the mid-1990s. Eng had found that a protein in Gila monster saliva resembled glucagon-like peptide-1, or GLP-1, a hormone that humans and other mammals use to regulate the amount of sugar in the blood. He presented the data at a scientific meeting of the American Diabetes Association.
"One of our researchers saw this, and he phoned back to the labs here at Amylin," says Daniel Bradbury, Amylin's chief operating officer. Amylin licensed the rights to the drug in 1996.
There were rough spots over the intervening seven years. Amylin shares sunk to their lowest levels ever in 1998 when Johnson & Johnson (nyse: JNJ - news - people ) ended a collaboration on another diabetes drug, Symlin. But now Symlin looks as if it could be approved by the end of the year. Exenatide adds another bright spot to the picture. More than a year ago, Amylin was discussing partnerships on the drug with more than ten other drug companies.
Eli Lilly was not among them. But then a Lilly executive, John Leichleiter, sat in on a presentation by Amylin Chief Executive Joseph Cook Jr. at the Lehman Brothers Healthcare Conference. Previously, Lilly had appeared to be out of the running, because it had its own program targeted at the GLP-1 protein. Talks begun that day led to a $300 million deal announced in September 2002. Lilly and Amylin are splitting development costs and profits on what could be a $1 billion drug.
There are still hurdles ahead. The results announced today measured how well exenatide works when given on top of metformin, the active ingredient in Bristol-Myers Squibb's (nyse: BMY - news - people ) Glucophage. Another trial, wrapping up later this year, will test the drug when given alongside sulfonylureas, a class of diabetes medicines that include Pfizer's (nyse: PFE - news - people ) Glucotrol. A third trial, also wrapping up, will look at how exenatide works in patients receiving both of these classes of drugs.
For investors, there is another worry: Amylin shares may be fully valued. In a note in June, Banc of America Securities biotechnology analyst Michael King predicted that Amylin "may emerge as one of biotech's next leaders." But he rated the stock "neutral," saying it was already fully valued. Shares are now 5.4% higher than when King published that note. His bank has an investment banking relationship with Amylin
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