Recently Alkermes Inc. (ALKS), Amylin Pharmaceuticals Inc. (AMLN) and Eli Lilly & Co. (LLY), the co-developers of type II diabetes candidate Bydureon (exenatide once weekly), presented pooled safety data on the candidate. The companies presented the data at the 70th Annual Scientific Sessions of the American Diabetes Association held in Orlando.

The data came from an analysis of the results of three randomized, double-blind studies, which revealed that Bydureon was well tolerated. The studies involved patients treated with either Bydureon (n=541) or other diabetes treatments such as Merck’s (MRK) Januvia, Takeda’s Actos or Sanofi-Aventis’ (SNY) Lantus (n=554). The number of patients opting out of the studies due to serious adverse events was low.

Severe hypersensitivity reactions such as serious skin reactions or anaphylaxis were not observed in any of the three studies, thereby re-enforcing the safety profile of Bydureon, a glucagon-like peptide-1 (GLP-1) molecule. Furthermore, the adverse events observed in type II diabetes patients treated with Bydureon were similar to those observed in patients treated with the drugs of the competitors.

Bydureon is currently under review by the US Food and Drug Administration (FDA). A response from the agency should be out in October this year (target date: October 22). However, we believe that the final label is likely to contain warnings regarding the risk of pancreatitis and thyroid cancer.

Tough Competition Ahead

Bydureon has enormous potential in the lucrative type II diabetes market, which has a huge unmet need. According to the data released by GlobalData, the market was worth $21.9 billion in 2009 across the globe. This represented a compounded annual growth rate of 11.2% between 2001 and 2009. The prevalence of diabetes in the US and major European countries is on the rise. However, on approval, Bydureon will have to compete with Novo Nordisk’s (NVO) Victoza, a once-daily injection, a new entrant apart from existing players.

GlaxoSmithKline’s (GSK) Syncria (albiglutide) and Roche (RHHBY)/Ipsen’s taspoglutide, currently under development, will also give tough competition to Bydureon, on approval.

Our Recommendation

Currently we are Neutral on both Alkermes and Amylin. However, we have an Underperform rating on Eli Lilly since we remain concerned about the lack of a significant enough pipeline to offset key patent expirations.

Zacks Investment Research

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