Shares of Amylin Pharmaceuticals jumped 13 percent Monday as the Food and Drug Administration asked for more information on its potential diabetes treatment.
Amylin, along with partners Eli Lilly & Co. and Alkermes Inc., were not asked to conduct additional studies on the much anticipated drug exenatide LAR, or Bydureon. It is a once-weekly version of the twice-daily Byetta injection. The FDA request focuses on product labeling for Bydureon, along with risk mitigation and manufacturing information.
Amylin Pharmaceuticals Inc., based in San Diego, said it plans on responding to the FDA request within the next few weeks.
Company shares rose $2.59 to $22.85
Bydureon is part of the broader GLP-1 class of drugs, which work by increasing the body's insulin production.
The FDA approved Novo Nordisk's once-daily GLP-1 drug Victoza in January. That drug had been under review for two years as safety concerns slowed regulatory approval. The FDA did eventual give the go-ahead, with a warning about the risk of thyroid cancer.
On Friday, Jefferies & Co. analyst Thomas Wei said the FDA could eventually issue a similar warning for Bydureon, but that is priced into the stock.
"The risk-reward on Amylin remains attractive at current levels, given what we believe would be modest and short-lived downside risk on a complete response letter and significant upside on potential approval," he said, in a note to investors.
Barclays Capital analyst Dr. Jim Birchenough reaffirmed a "Overweight" rating on Monday, saying he expects a rapid response from Amylin and the complete response could support approval by June.
Meanwhile, shares Alkermes jumped rose $1.46, or 12 percent, to $13.67, after reaching a new 52-week high of $14.19. The company is providing the long-acting technology for Bydureon.
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