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Friday August 10, 2007
ChangeWave Biotech: 'A love affair with Amylin'
“Not only is it up a whopping 169%+ since I put it on the Buy List, it's also a hidden-value play -- more so than at any time in the past year. Simply put, Amylin is a great pick for patient investor.” ”Amylin no longer appears sexy or hot to some investors. It has a market cap north of $5 billion and its two newest drugs have been on the market for a couple of years, so the story on the stock appears to be over in terms of upside potential, right? 
”Wrong. Amylin is going to benefit in the coming months from a string of good news, beginning with the strong earnings it announced two weeks ago. The diabetes marketplace is exploding and Amylin is ‘the’ leading diabetes company. ”Its position is strengthened by the problems GlaxoSmithKline had with Avandia and AstraZeneca's removal of Galida (both diabetes drugs) from the approval process. AMLN's market share is expanding as the market itself is growing just as fast as American and European waistlines. ”Long-lasting Byetta LAR (aka, Exenatide LAR) is the once-a-week (versus twice-a-day) version of the company's blockbuster Byetta. Trial data is due out at the end of this year, and I believe performance and efficacy will be superior to the daily-dosing version of the drug. Injection via pen cartridge will also boost usage of the drug. ”Pramlintide for obesity is the first and only obesity drug that actually demonstrates ongoing weight loss, in trial, without hitting a plateau. It is now undergoing several trials on its own and in combination with other treatments, with data expected out at the end of this year. ”The company has a huge amount of cash -- just shy of $700 million -- and could be cash-flow positive if it didn't choose to pour so much money into research and development. Further, it can burn dough almost forever in support of its growth. ”Amylin not only has the right products, it also has the right marketing partner. Eli Lilly is a leader in the diabetes marketplace, and LLY has done everything right so far and should continue to do so. ”Why do I like AMLN so much, now? Because even though it appears fully valued, it is not, and the pause by investors in buying the stock is a great opportunity for us. I don't believe anything near the full value of Amylin's obesity treatment, pramlintide, is priced into the stock. “Earnings next quarter and the following quarter will surprise many investors, and those people not in-the-know will be surprised and impressed with the Byetta LAR data that becomes available at year-end. ”The bottom line is: Buy it now and ride it over the bumps and dips. There are few rapid-growers with the kinds of upcoming catalysts that Amylin has, and there is also virtually no risk to AMLN's business.” 
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