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Takeda, Amylin ink weighty deal
December 2009
by David Hutton  |  Email the author
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SAN DIEGO—Osaka, Japan-based drugmaker Takeda Pharmaceutical Co., maker of the world's top-selling diabetes treatment, will pay as much as $1 billion to San Diego-based Amylin Pharmaceuticals Inc. to co-develop the company's obesity treatments, the companies announced in November.
 
Under the terms of the agreement, Amylin will be responsible for executing development activities for potential products through Phase II. Takeda will lead development activities beyond Phase II in the United States and all development activities elsewhere. In most instances, Amylin will be responsible for 20 percent of development costs associated with obtaining approval for products in the U.S., and Takeda will be responsible for 80 percent of such U.S. development costs. Takeda will be responsible for 100 percent of development costs associated with obtaining approval for products outside the U.S. Amylin will have the option to co-commercialize the first two approved products in the U.S. and any follow-on products containing the identical active ingredients.
 
Amylin will receive an upfront payment of $75 million from Takeda and, over the term of the agreement and in relation to the compounds involved in it, is eligible to receive additional payments upon achieving certain development, commercialization and sales-based milestones that could exceed $1 billion.
 
According to Anne Erickson, Amylin's senior director of corporate affairs, the agreement involves products to be developed from both companies' obesity pipelines. Specifically, the deal involes Amylin's pramlintide/metreleptin and davalintide, compounds currently in Phase II development for treatment of obesity. In the third quarter, Amylin announced positive top-line Phase II data from the pramlintide/metreleptin study.  
 
"That study is continuing, and data from the extension will be announced later this quarter," notes Erickson. "Additionally, Amylin will report data from a Phase II study of davalintide by the end of the year. The development strategy for each program will be determined by the outcome of these studies."  
 
Amylin as two products on the market for diabetes—Byetta (exenatide) injection and Symlin (pramlintide acetate) injection—as well as the investigational compound exenatide, a once-weekly investigational diabetes therapy injected subcutaneously that is currently in Phase III development. Exenatide is also the active ingredient in twice daily Byetta. The New Drug Application (NDA) for exenatide once weekly has been accepted by the U.S. Food and Drug Administration (FDA), with a PDUFA date set for early March.  
 
The agreement marks the first venture between the two companies. Erickson says Amylin sees Takeda as a leader in the field of metabolic diseases that "shares our philosophical belief that peptides and a multi-hormonal approach has the potential to provide a safe and effective way to treat obesity."
 
"This collaboration allows both companies to advance more programs for obesity treatments more quickly than either company could do alone," she notes. "It also provides an opportunity for the companies to combine assets in a way that would not be possible independently. For Amylin, this means that the programs are backed by a partner with the capability to develop these assets on a global basis. For Takeda, the programs accelerate and complement the company's efforts with this important metabolic disease."  
 
Yasuchika Hasegawa, president and CEO of Takeda, says the company looks forward to maximizing the potential of the products under the agreement.  
 
"Both Amylin and Takeda have extensive experience in the diabetes and metabolic disease area, and this collaboration should allow us to more quickly bring promising new treatments to patients in need," Hasegawa says.  
 
According to analysts, the purchase may help Takeda buffer losses after Actos, a type 2 diabetes drug and its top seller with $4 billion generated for the year ended March 31, loses patent protection in January 2011.
 
"The purchase will surely boost Takeda's product lineup," Takashi Akahane, a healthcare analyst at Tokai Tokyo Research Center Co. in Tokyo, says. "Still, this drug alone won't be enough to make up for the sales decline in Actos, and the company needs to make more acquisitions."  
 
Leerink Swann Research analyst Dr. Joshua Schimmer reaffirmed a "Market Perform" rating for Amylin, saying the obesity drug deal will help reduce future expenses. He says Amylin's costs for obesity drugs represented about 13 percent of second-quarter research and development costs.  
 
On Oct. 30, Amylin announced that the FDA expanded approval of Byetta as a stand-alone diabetes treatment. Previously, it was approved for use in combination with other diabetes drugs. Concerning the Byetta label extension, Schimmer says he does not see a big change in sales due to the expanded Byetta approval, since, he notes, "doctors have been already using it as monotherapy with due caution about pancreatitis."  
 
Cowen & Co. analyst Phil Nadeau agrees, writing in a research note that "the monotherapy claim itself is less notable as it is unlikely to change the way in which Byetta is prescribed, and will most likely not reaccelerate scripts growth."
 
The FDA also strengthened warning language on Byetta, following more than 60 reports of kidney failure with the drug between April 2005 and October 2008. While the previous label mentioned such side effects, the new language specifies that doctors should not prescribe Byetta to patients with severe kidney problems.  
 
"In our view, these developments are in line with expectations and we do not expect any impact to Byetta sales, as pancreatitis was first added as a precaution on the label in October 2007," Lazard Capital Markets analyst Michael O'Brien wrote in a note to investors.
 
Code: E120901

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