Washington Editor

Amylin Pharmaceuticals Inc.'s stock took a hit again Tuesday following Monday's 13 percent drop after the late afternoon revelation by the FDA that two patients taking the firm's Type II diabetes product Byetta (exenatide) died of acute pancreatitis and four other patients were hospitalized with the illness.

Shares of the San Diego-based firm (NASDAQ:AMLN) closed Tuesday at $28.51, down $1.25.

Danish drugmaker Novo Nordisk AS, which is developing a drug expected to compete with Byetta in the glucagon-like peptide-1 (GLP-1) market, also took a hit Tuesday, with shares (NYSE:NVO) dropping $2.46, to close at $58.05.

The FDA last October had issued an alert about a possible link between acute pancreatitis and Byetta, a synthetic peptide that has incretin-mimetic actions.

The agency, which then said it was reviewing 30 postmarketing reports of acute pancreatitis, had advised physicians to stop the drug in patients suspected of experiencing the illness.

In its latest advisory, the FDA warned that Byetta and other potentially suspect drugs should be halted immediately if pancreatitis is suspected.

Regulators noted that there are no signs or symptoms that distinguish acute hemorrhagic or necrotizing pancreatitis associated with Byetta from the less severe form of the illness.

Before last fall's alert, Byetta's labeling already warned that pancreatitis was a known adverse effect of taking the drug. After the October alert, the labeling was revised with a bolded warning in the "Precautions" section to make prescribers and patients aware of the postmarketing reports of acute pancreatitis.

Amylin and its partner Indianapolis-based Eli Lilly and Co. said in a letter to prescribers last October that since the drug had entered the U.S. market in June 2005, the cumulative spontaneous reporting rate for pancreatitis was 0.20 events per 1,000 patient years of exposure. The firms noted that the onset of the illness after initiation of treatment with Byetta was variable, ranging from one day to more than one year.

The FDA said Monday that it was working with Amylin to add even stronger and more prominent warnings to Byetta's labeling.

Analyst Biren Amin, of Stanford Group Co., said he believed those new warnings will come in the form of a black box - the agency's strongest warning.

"To simply add another warning in the Precautions section of the label could open the FDA to criticism in the future in the presence of two known fatalities," he said in a research note.

Furthermore, Amin said, "critics could argue that the FDA did not do enough to educate the physician community on these events."

Analyst Thomas Russo, of R.W. Baird & Co., noted that Amylin commented in a May 1 article published in the New England Journal of Medicine that "cases with a fatal outcome involving pancreatitis have been reported at a rate that is similar to that expected in the general population of patients with pancreatitis."

Therefore, he said, "this is not entirely new news."

However, Russo said, since the severe cases of acute pancreatitis and deaths were not highlighted to investors, Amylin's credibility "could take some hit."

The newly reported pancreatitis deaths also could mean more studies required for Amylin's once-weekly exenatide product, which could delay its approval beyond 2010, Stanford's Amin projected. Lilly and Amylin teamed with Cambridge, Mass.-based Alkermes Inc. to develop exenatide LAR, the sustained-release, subcutaneous injectable form of the drug.

Because exenatide LAR has such a long half-life, with patients unable to quickly get the drug out of their systems, the FDA is likely to scrutinize the pancreatitis issue more with the once-weekly drug, said analyst Jon LeCroy, of Natixis Bleichroeder.

Some on Wall Street had speculated that the reports of acute pancreatitis in patients taking Byetta could have a negative impact on the approval process for other GLP-1 drugs, such as Bagsvaerd, Denmark-based Novo Nordisk's liraglutide, a once-daily human analogue GLP-1.

The Danish firm filed applications in May with the FDA and the European Medicines Agency for liraglutide to treat Type II diabetes.

"We are fully aware of the fact that there can be the allusion that this is a class effect, and henceforth, that this is something that could be in the label also for liraglutide and other drugs in that class," said Mads Krogsgaard Thomsen, chief scientific officer at Novo Nordisk.

From an agency perspective, he told BioWorld Today, "the burden of proof is on the sponsor of any other drug that is going to come to the market in the GLP class to prove that that drug either does or does not have a minute risk of pancreatitis."

The FDA, Krogsgaard Thomsen said, "might argue that since we don't have hundreds of thousands of patient years of exposure, we cannot rule out whether we do or do not have an increase of pancreatitis compared to other old agents."

In the case of liraglutide, he said, "it can actually be pretty tough to prove that point, that there's no risk at all of a very rare side effect."

Bear in mind, Krogsgaard Thomsen said, that the number of deaths from pancreatitis in patients taking Byetta was relatively low, given that the drug has been used in close to 1 million patients.

In a joint statement, Amylin and Lilly noted that reports of pancreatitis in the general population are considered rare, with 15 to 20 percent of patients with the illness experiencing complications. However, patients with Type II diabetes are at an increased risk of pancreatitis.

The companies argued that the proportion of cases reporting fatal outcomes in patients taking Byetta "is similar to that observed in the general population with pancreatitis."

"What we have not seen is a statistically significant difference in the class with pancreatitis," Novo Nordisk's Krogsgaard Thomsen contended.

Nevertheless, he said, there is a likelihood that the FDA will argue that there is a class effect of acute pancreatitis in GLP-1 drugs, "until we can prove otherwise."

If regulators do determine that all GLP-1 Type II diabetes agents increase the risk of acute pancreatitis, Krogsgaard Thomsen said he would not perceive that finding to be detrimental to Novo Nordisk's liraglutide.

"The notion that this could be a class-related effect mentioned in the label, whether or not we actually end up having the side effect, is something that I think we can clearly live with," he said. "We have to accept that the agency may argue that this is a class effect, but I don't see it as that big of an issue."

Krogsgaard Thomsen said he based his assumption on the fact that most of the drugs currently on the market to treat Type II diabetes, such as thiazolidinediones, which includes GlaxoSmithKline plc's Avandia (rosiglitazone) and Takeda Pharmaceuticals NA Inc.'s Actos (pioglitazone), carry the black-box warning.

Novo Nordisk, he said, is "of course willing to discuss with the agency even the mentioning of pancreatitis in our label, as I think any other company is doing or might have to do."

However, Krogsgaard Thomsen said, to monitor for "a rare side effect" like acute pancreatitis in clinical trials "is extremely difficult."

He argued that the benefits of liraglutide of controlling blood sugar and lowering weight far outweigh any risks of rare adverse events.