UPDATED: FDA (finally) stamps an approval on Amylin's Bydureon

After being rejected twice by regulatory officials, Amylin has finally won FDA approval to sell Bydureon, its once-weekly diabetes jab. The news sent Amylin's shares up 16% while Alkermes ($ALKS), which wins a royalty stream on the approval, gained about 4%.

The weekly diabetes injection is intended to replace standard twice-a-day injections, and the NHS has already issued its approval in the U.K., with NICE officials stamping an OK on the price earlier this week. In the U.S. the focus will now shift from the regulatory decision to the market reaction as Amylin rolls out a drug that has earned a wide range of peak sales forecasts. Most analysts now expect the drug to earn a blockbuster billion dollars a year, about half of what they had projected before the latest rejection in October, 2010.

Those forecasts weren't improved for Amylin after a head-to-head study with Victoza earlier this year showed the rival Novo Nordisk ($NVO) drug had a superior result. Now analysts will be studying whether Amylin's pricing strategy--it intends to charge $323 for a month's supply, compared to $421 for the high-dose version of Victoza--will help it scoop up market share.

Repeatedly stiff-armed with one disappointing delay after the other, with the two primary partners on the exenatide franchise--Amylin ($AMLN) and Eli Lilly ($LLY)--breaking up under the accumulated stress of a difficult relationship, the U.S. development program and long-running regulatory campaign has been one of the longest running sagas on the R&D side of the biopharma business.

Eli Lilly had some boasting rights based on the approval. In their breakup, Lilly gained $1.2 billion as its part of the sales cut--provided an approval arrived in a timely fashion. At the very least an approval finally ended the periodic hits it stock took every time Bydureon experienced a fresh setback.

- here's the approval letter
- here's a feature from Dow Jones

Special Report:  Bydureon - 15 top blockbuster contenders

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