Amylin Pharmaceuticals Inc. (AMLN)

[SeriousMoney]

Amylin's Exenatide LAR Pricing In Half Of Stock's Value
Forbes, Peter Kang, 02.13.06, 3:20 PM ET

Merrill Lynch upgraded Amylin Pharmaceuticals to "neutral" from "sell," citing more reasonable share prices, but said it continues to be wary of risks related to experimental drug exenatide LAR.

"We remain cautious on the stock as optimism over strong Byetta sales is offset by the company's uncertainty about the clinical trials that will be required by the FDA for seeking approval of exenatide LAR, the once weekly version of Byetta, for type 2 diabetes," wrote Merrill Lynch analyst Thomas McGahren.

The analyst estimates about half of Amylin's stock price is attributed to the future success of exenatide LAR, in development with Eli Lilly (nyse: LLY - news - people ), and trades on the assumption the drug will hit the market by 2009.

"Any delays in the clinical development and launch would adversely impact the stock," he said.

Amylin (nasdaq: AMLN - news - people ) will provide an update on whether the U.S. Food and Drug Administration will allow an open label clinical trial of exenatide LAR, set to begin in the second quarter, to serve as the "line extension" registration trial.

"If not, then the clinical path for exenatide LAR will take longer, thus hurting valuation."

McGahren values Amylin stock at approximately $36 per share, assuming a 65% probability exenatide LAR launches in the April 2009 time frame with peak sales of $2 billion.

Byetta is co-marketed by Eli Lilly and was approved last April.

http://www.forbes.com/markets/2006/02/13/amylin-exenatide-0213markets10.html