Lilly, Amylin seek OK for weekly Byetta

By Ransdell Pierson and Lewis Krauskopf

NEW YORK (Reuters) - Amylin Pharmaceuticals Inc and Eli Lilly and Co said on Tuesday they had asked U.S. regulators to approve a once-weekly form of their injected Byetta diabetes treatment.

The new form of Byetta, whose chemical name is exenatide, was developed with technology from Alkermes Inc (ALKS.O) that releases the drug at a controlled rate. Alkermes shares rose 16 percent, while Lilly (LLY.N) and Amylin (AMLN.O) rose 1.75 percent and 1.8 percent, respectively.

Amylin and Lilly had predicted they would file the marketing application in the first half of 2009. They are hoping the longer-acting version of Byetta, currently given twice daily, will draw more patients and fend off future competition. Both drugs treat type 2 diabetes, the most common form of the disease, which is closely linked to obesity.

Although the regulatory filing was expected, J.P. Morgan analyst Cory Kasimov said the submission represents a "key milestone" for Amylin and Lilly.

"But (the) regulatory path is fraught with uncertainty," Kasimov said in a research note, predicting the U.S. Food and Drug Administration would closely scrutinize Byetta LAR given safety concerns with Byetta and a similar drug being developed by Novo Nordisk (NOVOb.CO) called liraglutide.

Lilly's global share of revenue from Byetta rose 18 percent in the first quarter to $98 million on growing overseas sales. But U.S. sales were flat, as some doctors and patients steered clear of the drug following reports last summer that it may increase risk of potentially fatal inflammation of the pancreas.

Amylin said on Monday it would cut 35 percent of its salesforce, or 200 jobs, as it takes a new approach to the diabetes market.

In a recently completed six-month trial of Byetta LAR, no cases of pancreatitis were seen. The most frequently reported adverse events were nausea and diarrhea.

Shares of Lilly were up 58 cents to $34.39 in late morning trading on the New York Stock Exchange, while Amylin rose 21 cents to $11.79 on the Nasdaq.

(Reporting by Ransdell Pierson and Lewis Krauskopf, editing by Dave Zimmerman and Gunna Dickson)