Adam Feuerstein
Editor's note: In the coming weeks be on the lookout for a brand new product from Adam Feuerstein and TheStreet.com! Should you wish to hear more about this special invitation and how you can take advantage of some exciting pre-launch offers please email.
The Biotech Mailbag is open. Amylin Pharmaceuticals'(AMLN Quote - Cramer on AMLN - Stock Picks) diabetes drug Byetta appears to have a more serious safety problem with pancreatitis (severe swelling of the pancreas) than previously believed. Six new cases were disclosed this week, and all required hospitalization. Two of the patients died. The Food and Drug Administration is considering strengthening the Byetta label to warn doctors and patients about the pancreatitis risk. The news prompted a couple of emails. Glenn Y. wants to know how bad this is going to get for Amylin, and what impact it may have on Novo Nordisk(NVO Quote - Cramer on NVO - Stock Picks) and its drug liraglutide, which is currently being reviewed by the FDA. John G. wants to know if it's smart to start building a position in Amylin today (the stock was at $28 when his email hit my inbox), or if it is better to wait for any further weakness. I don't see the need to rush into buying Amylin on the premise that the stock is being unfairly pounded to ground by the Byetta safety issue. I'm no expert chart reader, but it looks like there's support for the stock around $24, so I'd at least wait for it to get down there before thinking about a buy. From a fundamental perspective, how do these latest case reports of pancreatitis (and yes, it's a serious safety issue -- two patients died) not affect Byetta prescriptions in a negative way? Let's not forget that Byetta scripts weren't exactly going gangbusters before this renewed worry about pancreatitis. Byetta is an effective drug, and the number of pancreatitis cases compared to overall Byetta patients is still small, but diabetes is a very competitive drug market that gives doctors and patients a lot of choices. The 21% drop in Amylin's value from Monday through Wednesday (where it closed at $26.91) may price in whatever loss in Byetta sales are to come, so I can understand the rationale of investors like John G. who want to buy now. I'd still be cautious, however, because the bigger looming worry, to me, remains the FDA.
RSS
