UPDATE 1-Amylin shares fall on FDA diabetes trial proposals

(Adds company, analyst comments)

LOS ANGELES, March 3 (Reuters) - Shares of Amylin Pharmaceuticals Inc AMLN.O fell 5 percent on Monday after U.S. regulators suggested changes to diabetes studies that some analysts said could delay approval of a long-acting version of the company's diabetes drug.

Lazard Capital Markets analyst Matthew Osborne downgraded the shares “hold” from “buy,” citing draft proposals from the U.S. Food and Drug Administration posted on the agency’s Web site on Friday.

“The bottom line for diabetes drugs in development with a safety concern or questionable safety is riskier endpoints based on reduction of macrovascular events and costlier trials,” the analyst said in a research note.

San Diego-based Amylin is developing, along with partners Eli Lilly and Co LLY.N and Alkermes Inc ALKS.O, a once-weekly version of its popular diabetes drug Byetta, also known as exenatide.

The company has already unveiled successful pivotal-stage trial results for the long-acting version but has said it does not expect to file for FDA approval before mid-2009, the timeframe for when it expects a new manufacturing plant to be approved to produce the drug.

In the meantime, Amylin is enrolling patients in additional trials of the drug.

“We remain confident in our development plans supporting a filing for exenatide once-weekly,” said Amylin spokeswoman Alice Izzo.

She said the FDA has agreed that the already-completed Phase III study of 300 patients is enough to support Amylin’s submission.

Merrill Lynch analyst Thomas McGahren said the agency’s draft guidance calls for a year of pivotal-stage trial data on at least 2,500 patients and 18 months or more of data from at least 300 to 500 patients.

Morgan Stanley analyst Steven Harr said the fact that Byetta is already on the market mitigates the risk of safety concerns for the long-acting version of the drug.

“Net-net, we see more opportunity for an acceleration of filing/approval timelines than risk of a setback, and while it may take time for our thesis to play out, we think the market is misinterpreting these documents,” he said in a research note.

Osborne also said it remains unclear whether the FDA views exenatide once-weekly as a drug in which substantial safety issues or questions arise.

Byetta has been linked to acute pancreatitis in some patients.

Shares of Amylin were down $1.44, or 5.4 percent, to $25.03 in afternoon trading on Nasdaq. (Reporting by Deena Beasley; Editing by Braden Reddall and John Wallace)