March 12, 2010 / 4:47 PM / 9 years ago

UPDATE 2-US FDA releases Amylin inspection report

* Amylin, Lilly await ruling on key diabetes drug Friday

* Report details December inspection of Ohio plant

* Amylin shares fall 2.6 pct

(Adds analyst comment, background)

WASHINGTON, March 12 (Reuters) - U.S. regulators found shortcomings at an Amylin Pharmaceuticals Inc AMLN.O manufacturing plant during a December inspection, according to a report released on Friday ahead of an expected decision on the company’s key drug.

The Food and Drug Administration listed 10 observations made during a visit to an Amylin plant in West Chester, Ohio. Among them, the agency said “procedures designed to prevent microbiological contamination of drug products purporting to be sterile are not established and followed.”

Amylin and Eli Lilly and Co (LLY.N) have said they are expecting the FDA to decide by Friday whether to approve a once-weekly version of diabetes drug Byetta. The drug is made at the Ohio facility.

In January, Amylin Chief Executive Daniel Bradbury told Reuters the FDA had inspected the company’s Ohio manufacturing plant in December and made observations that Amylin believed it could address by the review deadline for Byetta LAR.

The FDA report notes the inspection findings are “observations, and do not represent a final agency determination regarding your compliance.”

“We’ve addressed these findings in previous public statements, indicating that we believe these observations are addressable,” Amylin spokeswoman Alice Izzo said in an emailed statement.

Jefferies & Co analyst Thomas Wei said he would caution against reading into the timing of the posting of the inspection report as it relates to the decision on the new form of Byetta.

The 10 observations in the inspection are “minor and readily addressable” Wei said in a research note,

“We remain confident that manufacturing issues are unlikely to delay approval,” Wei said, although he added that other factors could lead to delays and that Wall Street is split on whether Amylin will gain full approval on the drug on Friday.

Amylin shares fell 2.6 percent to $20.64 in afternoon trading on Nasdaq. Shares of Lilly were off 0.1 percent, while shares of Alkermes Inc (ALKS.O), whose technology was involved in the development of the once-weekly version, fell 1.8 percent.

Byetta, a twice-daily injection, had sales last year of $797 million. The new version, also known as exenatide LAR, uses the technology from Alkermes to release the drug at a controlled rate.

In clinical trials, patients treated with once-weekly Byetta showed a statistically superior reduction in blood sugar than those taking standard Byetta.

Byetta is also widely used because it leads to weight reduction, in contrast to many other diabetes treatments that tend to cause weight gain.

The report was posted on the inspection report on the agency's website here

Reporting by Lisa Richwine; additional reporting by Lewis Krauskopf in New York and Deena Beasley in Los Angeles; Editing by Dave Zimmerman, Phil Berlowitz

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