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Biotech / Medical : AMLN (DIABETES DRUGS) -- Ignore unavailable to you. Want to Upgrade?

To: Harry Ehrlich who wrote (1242)	3/4/1998 2:35:00 PM
From: celeryroot.com	Respond to of 2173

Murphy

To: Harry Ehrlich who wrote (1242)	3/4/1998 6:01:00 PM
From: Henry Niman	Respond to of 2173

Here's what the San Diego Union-Tribune had to say yesterday: J&J severs ties to struggling Amylin \| Surprise may leave biotech short of cash Thomas Kupper STAFF WRITER 03-Mar-1998 Tuesday Amylin Pharmaceuticals said yesterday it had been jilted by its partner, Johnson & Johnson, and will fire a quarter of its employees to conserve cash. J&J had been covering half the cost of developing the San Diego biotech's diabetes drug Pramlintide, an expensive program that analysts said would be difficult for Amylin to shoulder alone. The company also reported a fourth-quarter loss yesterday. Amylin shares, which already had lost two-thirds of their value since Amylin reported disappointing trial results last summer, are likely to get slashed again when markets open today. The shares closed before the announcement at $5.06 1/4 , down 18 3/4 cents, and analysts said they could fall to $3 or lower. "This is a very negative announcement," said Christopher Kim of Van Kasper & Co. in Los Angeles. "You get the impression that J&J wasn't satisfied with Pramlintide." Skepticism about the drug had grown since August, when Amylin reported studies did not show significant benefits over 12 months in adult-onset diabetics, the majority of patients. Nonetheless, Amylin said that J&J's decision came as a surprise and that there was no indication of dissatisfaction. The company said it will press forward with testing. Pramlintide is in phase three tests, the final and most expensive phase, but the company said it has enough cash to carry on for at least a year. "People have to recognize that this is only a financial setback, not a setback for the drug," said Amylin spokesman Richard Krawiec. Johnson & Johnson was required to give six months' notice, so Amylin expects to receive about $12 million more from the partnership. Krawiec said that will give Amylin time to consider its options. Analyst Albert Rauch of Everen Securities in Chicago said, however, that he had thought even before the J&J split-up that Amylin might need to raise additional capital. With the falling stock price, that could become more difficult. "They're in serious trouble," Rauch said. "What they're going to have to do is find another company to fund this." Amylin yesterday reported a fourth-quarter loss of $21.5 million, or 67 cents a share, reflecting the high cost of the Pramlintide program. For the year, the company lost $54.6 million, or $1.70 a share. Rauch said the company could burn through its cash, $52.7 million as of year-end, quickly. "It's going to be very problematic for them to fund the rest of the trials," he said. "Once you get below a year's worth of cash, it becomes very tenuous and puts a lot more risk into the stock." In the tests Amylin reported in August, the drug helped juvenile-onset diabetics control blood-sugar levels when measured after both six and 12 months. It showed similar results in adult-onset patients after six months but not 12. Krawiec said the company is counting on positive European trial results, which could come out late this year, to revive interest among investors and other potential sources of funds. In the near term, the company, said the decision to fire about 25 percent of its 262 employees will slow its other research programs, aside from Pramlintide. Amylin, long a one-drug company, said it plans to move a second drug candidate, the hormone-like compound exendin, into human trials in this year's second quarter. The drug is for adult-onset diabetes. After last year's disappointing results, Amylin extended some of the Pramlintide trials and said it did not expect to apply for government approvals until 2000. J&J's departure will change the timetable again. While J&J had planned a single, worldwide launch, Amylin said it will have enough data to apply for European approval in juvenile-onset diabetes in the first half of next year. Other regulatory submissions, including in the United States, still are not planned until 2000.