Saturday, October 9, 2010

Will Amylin Succeed Where Other Obesity Drugs Fail?

With Vivus (Nasdaq: VVUS) and Arena (Nasdaq: ARNA) going down in flames during FDA panel meetings for their obesity drugs, and Orexigen (Nasdaq: OREX) widely expected to incur a similar fate, the near-term outlook for effective obesity drugs is poor.

Enter Amylin (Nasdaq: AMLN).

Amylin is best known for Byetta, the first-of-its-kind GLP-1 receptor agonist analog. Also known as exenatide, Byetta was derived from research on gila monster spit and has been a relatively successful drug for Amylin and its partner Lilly (NYSE: LLY). Now investor attention has moved on to the company's long-acting version of exenatide called Bydureon. Due to be approved by the FDA any day now, this should be a formidable competitor in a billion-dollar-plus market.

But that is not all that makes Amylin interesting. The company has a promising combination drug therapy for obesity that is currently not getting very much attention. In a 26-week Phase 2 study, a combination of pramlintide and metreleptin showed significant weight loss efficacy - patients in the highest dose group had an average weight loss of 11% (about 22 lbs). Better still, the effect endured in a subsequent 26-week follow-up, while placebo patients experience weight re-gain.

Takeda partnered with Amylin for obesity drugs back in 2009, and the companies are putting this combo therapy into a Phase 3 trial. What makes this even more encouraging is that side-effects were pretty moderate (some injection site reactions and nausea) and there was apparently none of the psychological or cardiovascular effects that so worry the FDA. On top of that, half of the active combination (pramlintide) has been on the market for years, marketed as Symlin by Amylin for Type 1 and Type 2 diabetes. It is not a very successful drug, but the safety profile is pretty well known now, and that should help the FDA's comfort level if the drug makes it that far. 

Now, this is an injected drug combo and that is going to limit the popularity to some extent. Still, I have to think that an effective weight loss aid is going to overcome needle-fear for a meaningful percentage of the target population.

Best of all, this could be the *only* new approved drug (if it gets approved, of course) on the market ... and that could be worth literally billions. So even if Amylin has to deal with competition in the GLP-1 space (and they do), they could have an arguably more lucrative drug on their hands if this combo works.

Oh, and for those who might be wondering ... yes, metreleptin is related to the work on the leptin hormone that Amgen (Nasdaq: AMGN) did years ago (remember the "fat mouse" and the "skinny mouse"?). As it turns out, leptin is not very helpful or effective as monotherapy, but it seems to have some pretty compelling synergies when given with some other compounds. If this works, Amgen will get a piece of the pie, though not a very large one.

I am not sure that I would buy Amylin just for this obesity drug candidate. Then again, it could very well be an important answer to the inevitable question of "ok, now what?" that will spring up once Bydureon is on the market. Of course, Lilly may just elect to take them out before then.

All in all, I think you can buy Amylin here and do pretty well. And who knows? Amylin wouldn't be the first example of a company to win a battle (in this case, a next-gen obesity drug) when most handicappers didn't even have them in the running.

Disclosure - I own shares of Amylin.

No comments: