Amylin's Stock Plunges 46% After FDA Rejects New Diabetes Injection

Strategic Insights -

San Diego-based Amylin's stock took a devastating hit on Wednesday after the company announced that federal regulators had rejected its new weekly diabetes injection. The shares fell $9.46, or 46%, to close at $11.03, marking the company's largest single-day decline in 12 years. The rejection also dealt a significant blow to Amylin's partners, Alkermes and Eli Lilly, with Alkermes shares dropping 28% and Lilly shares falling nearly 4%. Most shareholders had been expecting FDA approval of the once-a-week version of Amylin's bestselling prescription drug, Byetta, but instead, the agency asked the company to conduct additional research on the treatment's effect on heart muscle before resubmitting the drug for market consideration.

Key Takeaways:

  • Amylin's stock plunged 46% to $11.03 after FDA rejected its new weekly diabetes injection, marking the company's largest single-day decline in 12 years.
  • The rejection dealt a significant blow to Amylin's partners, Alkermes and Eli Lilly, with Alkermes shares falling 28% and Lilly shares dropping nearly 4%.
  • The FDA request for additional research on the treatment's effect on heart muscle could take at least a year and a half to complete.
  • Analysts Phil Nadeau and Ryan Isaac pointed fingers at Amylin's misjudging of the FDA's expectations, while others, like Phil Nadeau, expressed surprise at the rejection.
  • Amylin is counting on the new prescription therapy to make up for a steady drop in sales of its bestselling drug, Byetta, which must be injected twice a day.

Statistics:

  • $9.46: The dollar amount by which Amylin's stock fell.
  • 46%: The percentage decline in Amylin's share price.
  • 12 years: The length of time since Amylin's last single-day decline of this magnitude.
  • $1.55 billion: The amount by which Amylin's market value was slashed due to the rejection.
  • 28%: The decline in Alkermes' share price.
  • Nearly 4%: The decline in Eli Lilly's share price.
  • At least 18 months: The estimated time it will take to complete the requested research and regulatory review.

Sources:

  • Bloomberg News
  • San Diego Union-Tribune
  • McClatchy-Tribune Information Services (MCT)
  • Cowen & Co.
  • Robert W. Baird & Co.