The drugmaker has scheduleda teleconference call for 5 pm EST today about last week's FDA advisory on Byetta, the diabetes med that is marketed with Amylin Pharmaceuticals. The agency found that deaths continue to be reported despite earlier government warnings. The latest - six new reports were received of patients developing a dangerous form of pancreatitis, with two actually dying.
Participating in the call will be Don Therasse, Lilly's vp of global patient safety, Dan Bradbury, Amylin’s ceo and president, and Orville Kolterman, Amylin's senior vp of R&D. However, the direction the call will take was not disclosed, prompting Catherine Arnold of Credit Suisse to write in an investor note this morning that the move may cause apprehension among investors. Why? Byetta generated $640 million in worldwide sales last year and Lilly is dependent, in part, on a new once-a-week version.
"Recall that the FDA issued a notice on August 18 that there were 6 cases of hemorrhagic (bleeding) or necrotizing (a form that destroys some cells in the pancreas) pancreatitis that have occurred since the last FDA pancreatitis update in October 2007. In October 2007, 30 cases of pancreatititis were revealed but none were hemorrhagic or necrotizing," Arnold writes. "Diabetics do have higher rates of pancreatitis so drug causation is unclear...
"Investors will wonder if the conference call will bring incremental negative news on Byetta and the FDA filing for LAR (the line extension offering 1x/week dosing vs. the current 2x/day dose) or if the update will just clarify the added warnings that are expected...
"We suspect we will get little information on the LAR filing and the call will focus more on Byetta, with the most important points being the monotherapy indication, label revisions on pancreatitis safety concerns and whether a Risk Evaluation and Management plan will be implemented and whether that is restrictive to use."
"There may be risk that the monotherapy indication is delayed (FDA action expected end of September) if the FDA wants to further analyze or toughen risk evaluation and management. The logic here is that monotherapy use will expand access to earlier diagnosed diabetic patients, a broadening of the market that would increase the need for risk evaluation and management. There may also be a request by FDA for Lilly and Amylin to do a large study evaluating pancreatitis in a comparative setting.
And Arnold notes that Lilly stock is down 2.6 percent since last week’s announcement, while Amylin were "much more severely punished," falling 18.8 percent, although they were off as much 22.3 percent since the FDA announcement.