Based in San Diego, Amylin Pharmaceuticals Inc. (AMLN) is focused on the treatment of diabetes and other metabolic disorders. We have been cautious on Amylin since the beginning of the year, and we are still unconvinced that the sustained release formulation of Byetta, known as exenatide LAR, will be approved on its first cycle FDA review.

However, with the shares trading at multi-year lows, and the stock down 70% YTD, the worst may be over for Amylin. Eli Lilly’s (LLY) obvious commitment to Byetta and LAR will probably put a floor under further price declines. News that Lilly will move forward with the LAR filing in 2009 is a positive, but we are still unconvinced the drug will be approved on first cycle review due to lingering safety concerns.  

In the meantime, an FDA decision on Byetta as a monotherapy could provide a boost to the shares in early 2009. And looking forward, we are optimistic on the mid-stage obesity pipeline. We see $14 as fair value.

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“AMLN” Free Stock Analysis: Buy? Sell? Hold?
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