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

To: D.Right who wrote (1261)	3/9/1998 1:39:00 PM
From: Rudy Saucillo	Read Replies (1) \| Respond to of 2173

Although JNJ hasn't commented, the decision to go with ERGO seems straightforward looking at development risk vs. potential benefits. ERGO has an NDA on file and Phase III data compatible with other oral glucose control agents. There's also extensive market experience with bromocriptine used at much higher doses for other indications. ERGO's targeted market - initially early (non-insulin using) Type IIs and eventually insulin-using Type IIs - is huge (roughly 10x the size of the Type I market). Although there's much competition in this market, these drugs are typically used in combination. No doubt JNJ believes Ergoset has significant potential used alone or as an adjunct. AMLN, with numerous Phase II trials and 2 Phase III trials completed, has yet to establish efficacy necessary for approval in either Type I or Type II. The Phase III data to date is marginal for Type I and negative for Type II (irrespective of AMLN's 'spin' on the data). The recent change in protocol in 3 of the 4 ongoing Phase III studies is a clear sign that AMLN is concerned about the successful outcome of the trials. This is never a good sign. Given the data to date, it's not clear that the ongoing trials will be positive even with the protocol mods. Also, taking an overall look at their clinical program, a good question is "Why 6 Phase III trials?". This is extraordinary and should be a concern in and of itself. Finally pramlintide, arguably, is a Type I drug only - a market a small fraction the size of the Type II market. Assuming that pramlintide is approved in the U.S. and Europe for Type I, the $300 - $400 million per year sales estimate is not even close to being realistic. I hope the upcoming Type I data is stronger than what we've seen and that pramlintide is eventually approved in the U.S. (only because other Type I drug therapies have failed in development). But I don't see pramlintide being anything but a marginal drug. Rudy