* FDA asks for heart rate study
* Companies say FDA decision now pushed to mid-2012
* Amylin cancels Wednesday earnings conference call
(Adds byline, company comments, background)
By Deena Beasley
LOS ANGELES, Oct 19 (Reuters) - U.S. health regulators declined on Tuesday to approve a diabetes drug being developed by Amylin Pharmaceuticals Inc’s AMLN.O and Eli Lilly and Co (LLY.N), citing the need for further studies, including the drug’s effect on heart rate.
The companies said they aim to reply to the Food and Drug Administration by the end of next year. They expect the next review of the drug, Bydureon, to have a six-month clock -- meaning a final FDA decision could come by mid-2012.
Shares of Amylin, which fell 3.4 percent in regular trading, were halted after hours. Shares of Lilly were down 2.5 percent after hours at $36.50.
Analysts have projected annual sales of over $1 billion if Bydureon is approved by regulators.
The FDA requested in a “complete response letter” a thorough study of the impact of the drug’s main component, exenatide, on heart muscle, Amylin and Lilly said in a statement.
In addition, the agency has requested results from an ongoing study of the drug.
“In preclinical and clinical trials ... exenatide has not demonstrated any increase in cardiovascular complications due to QT prolongation or arrhythmia disorders,” Amylin Chief Executive Daniel Bradbury said on a conference call.
Bydureon, which employs technology from Alkermes Inc (ALKS.O), is a once-weekly version of diabetes drug Byetta, which is currently sold by Amylin and Lilly.
Byetta, also known as exenatide, is approved for the treatment of type II diabetes -- the more common form of the disease that is closely linked to obesity.
The companies had resubmitted Bydureon to the FDA in May after the agency sent the company a previous complete response letter in March requesting final information for the drug’s label as well as a risk evaluation and mitigation strategy.
Separately, Amylin said its unaudited third quarter net product sales fell to $154 million, including $132.4 million for Byetta, from the year earlier period’s $192.9 million, including $171 million for Byetta.
The company, which had been slated to report full results for the quarter on Wednesday, said it will issue the report within the next few weeks.
Bradbury said he believes that Amylin has adequate financial resources to take the company through to the launch of Bydureon. (Reporting by Deena Beasley; editing by Sofina Mirza-Reid and Carol Bishopric)