Amylin Pharmaceuticals Inc. (AMLN)

[SeriousMoney]

AMYLIN PHARMACEUTICALS INC Files SEC form 10-Q, Quarterly Report
For the quarterly period ended September 30, 2005 (excerpts)

Our net loss for the quarter ended September 30, 2005, was $69.5 million compared to a net loss of $34.1 million for the same period in 2004. The increase in the net loss primarily reflects the increased selling, general and administrative expenses and decreased revenue under collaborative agreements partially offset by the addition of net product sales discussed above.

Overview

Amylin Pharmaceuticals, Inc. is a biopharmaceutical company engaged in the discovery, development and commercialization of innovative medicines to improve the lives of people with diabetes, obesity and cardiovascular disease. We have two approved products, BYETTA® (exenatide) injection, and SYMLIN® (pramlintide acetate) injection, both of which were commercially launched in the United States during the second quarter of 2005.

BYETTA is the first and only approved medicine in a new class of compounds called incretin mimetics. We began selling BYETTA in the United States in June 2005 after receiving approval from the FDA in April 2005 to market BYETTA as adjunctive therapy to improve glycemic control in patients with type 2 diabetes who are taking metformin and/or sulfonylurea, two common oral therapies, but have not achieved adequate glycemic control.

We have a global development and commercialization agreement for exenatide, including BYETTA and any sustained-release formulations of BYETTA, including exenatide LAR, with Eli Lilly & Company, or Lilly. Under the terms of the agreement, operating profits in the United States are shared equally and operating profits outside of the United States are split 80% to Lilly and 20% to us.

SYMLIN is the first and only approved medicine in a new class of compounds called amylinomimetics. We began selling SYMLIN in the United States in April 2005 after receiving approval from the FDA in March 2005 to market SYMLIN as adjunctive therapy to mealtime insulin to treat diabetes.

We have a field force of approximately 400 people dedicated to marketing BYETTA and SYMLIN in the United States. Lilly also co-promotes BYETTA in the United States. In addition to our sales force, our field force includes a managed care organization actively working with managed care and government payor groups for reimbursement of BYETTA and SYMLIN and a medical science organization supporting broad medical education programs for both products. Lilly has primary responsibility for developing and commercializing BYETTA, including any sustained release formulations of BYETTA, outside of the United States.

In addition to our marketed products we have a pipeline including a Phase 2 program for each of the therapeutic areas of diabetes, obesity and cardiovascular disease. Additionally, we have an early stage program and maintain a discovery research program focused on peptide therapeutics and are actively seeking to in-license additional drug candidates.

Since our inception in September 1987, we have devoted substantially all of our resources to our research and development programs. All of our revenues prior to May 2005 were derived from fees and expense reimbursements under our BYETTA collaboration agreement with Lilly, previous SYMLIN collaborative agreements and co-promotion agreements with each of Lilly and Reliant Pharmaceuticals, Inc. During the second quarter of 2005, we began to derive revenues from product sales of BYETTA and SYMLIN. We have been unprofitable since inception and may incur additional operating losses for at least the next few years. At September 30, 2005, our accumulated deficit was approximately $937 million.

At September 30, 2005, we had approximately $491.0 million in cash, cash equivalents and short-term investments. In February and September 2005 we completed public offerings of our common stock, generating net proceeds to us of approximately $190 million and $152 million, respectively. We do not expect to generate positive operating cash flows for at least the next few years and accordingly, we may need to raise additional funds from outside sources. Refer to the discussions under the headings “Liquidity and Capital Resources” and “Cautionary Factors That May Affect Future Results” for further discussion regarding our anticipated future capital requirements.

BYETTA

On April 28, 2005, the FDA approved BYETTA as adjunctive therapy in patients with type 2 diabetes who have not achieved adequate control on metformin and/or sulfonylurea, two common oral therapies. Our planned 2005 development activities for BYETTA include the continuation of ongoing studies, including those to support regulatory submissions outside of the United States and an ongoing study in patients who are currently not achieving target blood glucose concentrations using thiazolidinediones, or TZDs, another common oral therapy used to treat type 2 diabetes.

The timing of material net cash inflows from our BYETTA development program is dependent upon market acceptance following its commercial launch in the second quarter of 2005 and the other factors described in this report.

SYMLIN

On March 16, 2005, the FDA approved SYMLIN to be used in conjunction with mealtime insulin to treat diabetes. We have commenced a controlled, open-label study to evaluate SYMLIN use in clinical practice, and intend to enroll approximately 1,200 patients over two years. We recently initiated a clinical study to evaluate the addition of SYMLIN at mealtime for patients treated only with basal insulin-glargine. In addition, we intend to continue the development of SYMLIN in a disposable pen injection system.

The timing of material net cash inflows from SYMLIN is dependent upon market acceptance following its commercial launch in the second quarter of 2005 and the other factors described in this report.

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