Byetta Pen Pancreatitis Concerns Cause Amylin Stock to Fall

Over the eight weeks since concerns first emerged about a potential link between the Byetta pen and pancreatitis, the stock price for the drug’s maker, Amylin Pharmaceuticals, has fallen dramatically.
 
Byetta (exenatide) is a drug approved for treatment of Type 2 diabetes, which has been used by nearly one million people since it was approved in 2005. It is a twice daily injection which is sold in a pre-filled pen by Amylin Pharmaceuticals and Eli Lilly & Co.

On August 18, 2008, the FDA issued a warning to healthcare providers about 6 severe cases of pancreatitis among Byetta users. Prior FDA reports had indicated that at least 30 users had developed acute pancreatitis while using Byetta, but these 6 cases involved necrotizing pancreatitis and hemorrhagic pancreatitis, which resulted in at least 2 deaths.

Although the FDA has not reached any firm conclusions about whether Byetta side effects cause pancreatitis, these reports raised substantial concern among the medical community, diabetics and investors. The day of the announcement, the stock price for Amylin Pharmaceuticals, which is heavily dependent on sales of Byetta, dropped nearly 20%, from $35 per share to $28.10.

On August 25, 2008, Eli Lilly and Amylin held a conference call with investors and the public in an attempt to ease concerns about the potential Byetta pen pancreatitis risk. Although the manufacturers denied that the evidence supports a connection between Byetta side effects and pancreatitis, they disclosed that they were aware of at least four other deaths among users of the drug caused by severe cases of pancreatitis.

At the close of the market today, Amylin shares traded at $12.40, which is only about one-third what they were worth two months ago.

Analysts expect the third-quarter sales for the Byetta pen to be well below original estimates and the pending approval of a longer-acting version of Byetta could be delayed until 2011 as a result of the concerns about the association with pancreatitis.

At least one Byetta pancreatitis lawsuit has already been filed by a user of the drug. The case was filed in California State Court on August 20, 2008 alleging that Amylin and Eli Lilly failed to adequately test their product and did not properly warn about the serious and potentially life-threatening pancreatitis side effects.

Byetta lawyers throughout the country are reviewing and investigating additional cases, and many investors fear that Amylin could be facing one of the next big mass torts in the United States.