Amylin Braces for Proxy Battle Amid Flurry of Filings

Amylin Pharmaceuticals (NASDAQ: [[ticker:AMLN]]) became one of San Diego’s Cinderella success stories in 2005, when the U.S. Food and Drug Administration approved two of its diabetes drugs—some 18 years after the biotech was founded. But the company has been buffeted by some unusual challenges in recent months.

Demand for exenatide, Amylin’s lead diabetes drug, has slumped since last summer, when the FDA reported that six patients using the drug marketed as Byetta had developed pancreatitis, an inflammation of the pancreas that in some cases can be fatal. The agency didn’t link those cases to exenatide, in fact, diabetic patients are at greater risk for such infections. But the warning put a big question mark over Amylin, which gets almost 90 percent of its product revenue from this drug. The price of Amylin shares have tumbled by two thirds since Aug. 18, when the FDA issued its warning .

Since then, a more significant question has arisen, which is whether the pancreatitis issue will affect Amylin’s request for FDA approval of a longer-lasting version of exenatide that requires injections only once-a-week, instead of twice daily. The company has been working on winning FDA approval with Eli Lilly(NYSE: [[ticker:LLY]]), which also markets Byetta in a partnership with Amylin. The progress of their application once seemed assured, but now the course is much more uncertain. After a setback with the FDA in November, when the price of Amylin shares fell to a seven year low, the company cut 340 employees, or 16 percent of its workforce. Amylin said the move was intended to save about $100 million and put the company in a stronger financial position for 2010.

In the meantime, the decline in Amylin’s stock price also stoked trouble on a different front with a couple of dissident shareholder groups, including one headed by Carl Icahn, the billionaire investor and corporate raider. Icahn began to significantly increase his stake after Amylin’s plunge last August, and now owns a 9.4 percent stake in the company.

In January, Icahn disclosed plans to nominate five directors to Amylin’s board. That was a sign to some analysts that Icahn wants to shake up Amylin and possibly even push

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.