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Zhang Downgrades Amylin Pharmaceuticals (AMLN) to UNDERPERFORM from MARKET PERFORM

March 4, 2010

Jason Zhang, PhD, senior research analyst covering Biotechnology, has today downgraded Amylin Pharmaceuticals (AMLN) to an UNDERPERFORM rating from MARKET PERFORM.

From Zhang's note: "We think the approval of exenatide LAR (LAR) could be delayed until mid- or late 2011 because the FDA is likely to request additional clinical data (baseline and long-term calcitonin levels in patients treated with LAR and comparators) and pre-clinical data (to explore the impact of the difference in PK exposure of LAR vs. Byetta). A delay in LAR's approval would significantly affect peak sales, because it would give Victoza (Novo Nordisk) more time to establish itself in the market and take Byetta share, making fewer patients available for LAR. A delay would also shorten the lead LAR has over another competitor, taspoglutide (Roche), a drug that is probably as effective as LAR but seemingly more convenient. With sustainable peak US sales of ~$1 billion, a very generous assumption in our view, the cumulative value of LAR's profits to AMLN is about $960 million or $6/share. Given the Street's high expectations for both the timing of LAR's approval (March 12, 2010) and the drug's value for Amylin, we believe the stock will underperform the peers."

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