NEW YORK (AP) – Shares of Amylin Pharmaceuticals Inc. rose on Nov. 14 after a Robert W. Baird & Co. analyst said Amylin should benefit from ending a partnership with Eli Lilly and Co., and the split might make it more attractive to bigger companies.
Robert W. Baird & Co. analyst Thomas Russo upgraded shares of Amylin to “Outperform” from “Neutral.” He said the end of the partnership removes a conflict of interest and despite concerns from investors, it is better for Amylin.
On Nov. 8, Amylin and Lilly announced they were ending a diabetes drug development partnership. Amylin will take over sales of the drugs Byetta and of Bydureon, which has not yet been approved in the United States. The company agreed to pay Lilly $250 million upfront and will make royalty payments on sales of both products.
Amylin also agreed to drop a lawsuit against Lilly. The lawsuit was related to a new diabetes drug collaboration between Eli Lilly and Boehringer Ingelheim. “The agreement ended a relationship no one ever seemed happy about in the first place and that got more problematic when Lilly hooked up with Boehringer Ingelheim in January,” Russo said. He added that some larger drugmakers may have become interested in acquiring Amylin when it sued Lilly, and Amylin could now be free to make a deal.
Amylin did not immediately respond to a request for comment.
Russo said he thinks the Food and Drug Administration will approve Bydureon in late January. The drug is a once-per-week injection designed to help patients with Type 2 diabetes manage their blood sugar. It is a longer-lasted version of Byetta, which has to be taken twice a day. The drug was approved in Europe in June, but the Food and Drug Administration has not approved it. The agency asked the companies for more data in October 2010, and is expected to make a ruling by Jan. 28.
The Associated Press
