UPDATE 2-U.S. seeks more warnings for Amylin diabetes drug
(Recasts first paragraph, adds analyst comment, background, updates shares)
By Susan Heavey
WASHINGTON, Aug 18 (Reuters) - U.S. health regulators warned of more cases of dangerous pancreas inflammation in patients taking Amylin Pharmaceuticals Inc's (AMLN.O) diabetes drug, Byetta, pounding company shares on fears of lower sales and doubts about a new version of the medicine.
The Food and Drug Administration said on Monday it received six reports of hemorrhagic or necrotizing pancreatitis requiring hospitalization, including two deaths. The four others were recovering at the time of the reports.
The FDA said it was working "to add stronger, more prominent warnings in the product label" with Amylin, which co-markets the drug -- one of the most promising new diabetes medicines in recent years -- with Eli Lilly and Co (LLY.N).
Amylin's shares closed down 13 percent at $29.76 on the Nasdaq, while Eli Lilly's shares were down 1.5 percent at $48.05 on the New York Stock Exchange.
It was not immediately clear if the FDA would order new so- called "black box" warnings, the strongest type available, and representatives for the agency did not immediately return calls seeking comment.
The companies said they would work with the agency to update the drug's label.
The new reports follow an earlier warning last October, when the FDA cited 30 reports of pancreatitis in Byetta patients. At the time, it said the drug was suspected in some of the cases, and Amylin agreed to add information about the risk to its drug label and to alert doctors about the problem.
Analysts said on Monday the additional cases could pressure doctors into discontinuing use of the drug, which has already seen prescription growth slacken in recent months, in part because of difficulty adhering to twice-daily injections.
Launched in mid-2005, Byetta was thought to have wide potential use, in part because of its ability to help type II diabetes patients lose weight.
"This is very negative and damaging news for Amylin," BMO Capital Markets analyst Jason Zhang wrote in a research note.
"Growth in demand for Byetta has been lackluster in the last couple of years ... and this development obviously can't help," Deutsche Bank analyst Barbara Ryan said in a note.
The FDA's ongoing concerns also signal a potentially stormy approval path for the experimental, once-a-week version of Byetta. The companies have said they plan to file for U.S. approval by mid 2009.
While the complication seems rare, fewer than 300 patients have been studied in advanced trials, according to Timothy Anderson, an analyst with Sanford C. Bernstein & Co.
"FDA may worry about LAR's effects once it is approved and used in a broader, less closely-monitored, patient population. To us, this creates regulatory risk with Byetta LAR," he said in a research note.
Lilly spokeswoman Kindra Strupp said no link had been established between Byetta and pancreatitis.
"We do remain very confident in the development program of our once-weekly" formulation of Byetta, she told Reuters.
No pancreatitis cases have been seen in Byetta LAR trials so far, she said.
The shares of Alkermes Inc (ALKS.O), maker of technology used to develop the new version, known as Byetta LAR, closed down 10 percent at $14.73 on Nasdaq.
Byetta, also know by its chemical name, exenatide, is taken with other diabetes medicines to help lower blood sugar levels by regulating insulin production. The first in a new class of drugs called incretin memetics, it posted $636 million in 2007 net product sales, according to Amylin.
Pancreatitis is an inflammation of the pancreas, which helps aid in digestion by releasing vital hormones. The condition usually subsides within a week, according to the National Institutes of Health.
But in some patients taking Byetta, the condition worsened.
"There are no signs or symptoms that distinguish acute hemorrhagic or necrotizing pancreatitis associated with Byetta from the less severe form of pancreatitis," the FDA said.
Doctors should discontinue use of the drug and monitor patients carefully, it added. (Additional reporting by Ransdell Pierson in New York and Toni Clarke in Boston; Editing by Maureen Bavdek and Andre Grenon)
