1. Amylin Pharmaceuticals Inc. (AMLN)
®
COMPANY UPDATE Michael G. King, Jr.
212-430-1794
mking@rodm.com
LIFE SCIENCES
May 14, 2012 Market Underperform / Speculative
Risk
Bydureon Posts Flat NRx Market Share, While GLP-1 TRx Grow Over 5% Sequentially
Updated GLP-1 Rx data for the week ending May 4th. Wolters-Kluwer
MARKET DATA 5/11/2012
reported that there were 3,332 new starts (NRx) on Bydureon for the
Price $25.86 week of April 28th to May 4th (week 12 of the launch). On an absolute
Exchange NASDAQ basis, new starts were up 3.4% from the previous week’s total of 3,224.
Target Price $22.00 However, Bydureon NRx market shares was flat at 11.0%, as the entire
52 Wk Hi - Low $26.87 - $8.03
GLP-1 class had its largest sequential rise in NRx in more than two
Market Cap(MM) $4,211.4
EV(MM) $5,581.0
months, rising to 30,388 NRx from 29,220 the previous week. This is
Shares Out (MM) 162.9 also an all-time high for the class in terms of NRx.
Public Mkt Float (MM) 1,617.8
Avg. Daily Vol 4,123,688
NRx for the overall exenatide franchise rose again for the third
Short Interest 10,496,372
consecutive week. Exenatide NRx grew 3.6% this week, building upon
BALANCE SHEET METRICS last week’s of 3.8% to rise to 13,746 NRx. Exenatide NRx market share
Cash (MM) $204.1 rose dipped marginally to 45.2% from 45.4%. Table 1 details the
LTD (MM) $714.8 comparison of NRx results for the week compared to the 4-week moving
Total Debt/Capital NA averages prior to the launch. Figures 1 and 2 detail the NRx figures and
Cash/Share $1.39 market share.
Book Value(MM) NA
Book Value/Share $0.05
Exenatide total Rx (TRx) market share rises above ~45%. We
EARNINGS DATA ($) recommend investors focus on total Rx (TRx) as the key metric, as it
FY - Dec 2010A 2011A 2012E relates directly to revenues, to judge the exenatide franchise. Bydureon
Q1 (Mar) (0.27) (0.26) (0.66)A posted TRx of 5,155, up 8.6% from last week’s total of 4,746. TRx
Q2 (Jun) (0.31) (0.22) (0.51) market share rose modestly to 6.9% from 6.8%. Byetta TRx was 28,314
Q3 (Sep) (0.35) (0.09) (0.44) up 7% from last week’s results of to 26,379, however, still well below the
Q4 (Dec) (0.13) (3.16) (0.40) high of ~30,000 weekly Byetta TRx earlier this year. TRx market share
Full Year EPS (1.06) (3.73) (2.03)
for the exenatide franchise rose to 44.9% from 44.2%, as the franchise
Revenue (MM) 669.0 650.7 624.9
built upon last week’s gains. TRx for the entire GLP-1 class was 74,481,
up 5.9% from 70,363, and the highest total weekly total since the launch
VALUATION METRICS of Byetta. Table 2 details the comparison of TRx results for the week
Price/Earnings NM NM NM compared to the 4-week moving averages prior to the launch. We
EV/Revenue 8.3x 8.6x 8.9x compare the Bydureon launch to Victoza on the following page.
Y/Y EPS Growth 251.9% NM
EV/Sales
Bydureon fails to gain any ground on Victoza launch. In order to
INDICES compare the relative launches of Bydureon and Victoza, we pulled the
weekly Rx statistics from Victoza two years ago (Figure 3 and Table 5).
DJIA 12,820.6
SP-500 1,353.4
Despite the GLP-1 market growing some 20% in the two years since the
NASDAQ 2,616.0 launch of Victoza, the absolute NRx (3,332) generated by Bydureon is
NBI 1,313.5 41% lower than that achieved by Victoza (5,686) at the same point in the
respective launches.
1 Year Price History
30
25
20
We maintain our Market Underperform rating and a $22 target. We
15 continue to believe our skepticism is justified given the company’s history
10
5
of poor execution and the most recent quarter’s fair-to-middling (in our
Q1 Q2 Q3 Q1 Q2
2012
50
opinion) results. We continue to believe the exenatide franchise is
40
30
unwanted by those who already have a presence in the diabetes space
20
10 and a sub-optimal set of assets for those companies to gain a presence
0
Created by BlueMatrix in the diabetes/metabolic disease space. In our opinion, AMLN
management would have done well to accept the BMY offer of $22 per
share; justifying our price target on the shares.
For definitions and the distribution of analyst ratings, and other disclosures, please refer to pages 8 - 9 of this report.
2. Amylin Pharmaceuticals Inc. May 14, 2012
Figure 1. NRx Absolute Figures by Week
Figure 2. NRx Market Share by Week
RODMAN & RENSHAW EQUITY RESEARCH 2
3. Amylin Pharmaceuticals Inc. May 14, 2012
Figure 3. Comparison of Victoza and Bydureon Launches (Absolute NRx)
Figure 4. Absolute TRx by Week
RODMAN & RENSHAW EQUITY RESEARCH 3
4. Amylin Pharmaceuticals Inc. May 14, 2012
Table 1. Changes in NRx from Week Ending 5/4/12 Vs. Moving Avgs. Prior to Bydureon Approval
4-week
Moving
Changes in NRx 5/4/2012 Variance
Averages
1/27/2012
BYDUREON 3,332 3,332
BYETTA 11,412 10,414 (998)
Total Exenetide Franchise 11,412 13,746 2,334
VICTOZA 15,063 16,642 1,579
TOTAL GLP-1 New Rx 26,475 30,388 3,913
Market Share % of NRx
BYDUREON 11.0% 11.0%
BYETTA 43.1% 34.3% -8.8%
Total Exenetide % 43.1% 45.2% 2.1%
VICTOZA 56.9% 54.8% -2.1%
Table 2. Changes in TRx from Week Ending 5/4/12 Vs. Moving Avgs. Prior to Bydureon Approval
4-week
Moving
Changes in TRx 5/4/2012 Variance
Averages
1/27/2012
BYDUREON 5,155 5,155
BYETTA 28,429 28,314 (115)
Total Exenetide Franchise 28,429 33,469 5,041
VICTOZA 36,009 41,012 5,004
TOTAL GLP-1 Rx 64,437 74,481 10,044
Market Share % of TRx
BYDUREON 6.9% 6.9%
BYETTA 43.8% 38.0% -5.8%
Total Exenetide % 43.8% 44.9% 1.1%
VICTOZA 56.2% 55.1% -1.1%
Upcoming Milestones
Product Event Timing
Corporate Annual meeting and proxy fight May 24, 2012
Bydureon Secure EU partner 2012
Metreleptin Potential EU orphan designation 1H12
Exenatide suspension Once-weekly Phase III initiation 2Q12/3Q12
Bydureon Launch pen/device 4Q12/1Q13
Exenatide suspension Once-monthly Phase III initiation 2013
RODMAN & RENSHAW EQUITY RESEARCH 4
8. Amylin Pharmaceuticals Inc. May 14, 2012
RODMAN & RENSHAW RATING SYSTEM: Rodman & Renshaw employs a three tier rating system for evaluating both the potential
return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a
RELATIVE basis of other companies in the same sector, as defined by First Call. The price objective is calculated to estimate the potential
movement in price a given equity could achieve given certain targets are met over a defined time horizon. Price objectives are subject to
exogenous factors including industry events and market volatility. The risk assessment evaluates the company specific risk and accounts
for the following factors, maturity of market, maturity of technology, maturity of firm, cash utilization, and valuation considerations.
Potential factors contributing to risk: relatively undefined market, new technologies, immature firm, high cash burn rates, intrinsic value
weighted toward future earnings or events.
RETURN ASSESSMENT
q
Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the
common stock of companies within the same sector, as defined by First Call.
q
Market Perform (Hold): The common stock of the company is expected to mimic the performance of a passive index comprised
of all the common stock of companies within the same sector, as defined by First Call.
q
Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of all
the common stock of companies within the same sector, as defined by First Call.
RISK ASSESSMENT
q
Speculative - The common stock risk level is significantly greater than market risk. The stock price of these equities is
exceptionally volatile.
q
Aggressive - The common stock risk level is materially higher than market level risk. The stock price is typically more volatile
than the general market.
q
Moderate - The common stock is moderately risky, or equivalent to stock market risk. The stock price volatility is typically in-line
with movements in the general market.
Rating and Price Target History for: Amylin Pharmaceuticals Inc. (AMLN) as of 05-11-2012
01/05/12 04/27/12
I:MU:$8 MU:$22
30
25
20
15
10
5
Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2
2010 2011 2012
Created by BlueMatrix
RATING SUMMARY
Distribution of Ratings Table
IB Serv./Past 12 Mos
Rating Count Percent Count Percent
Market Outperform(MO) 73 62.39% 10 13.70%
Market Perform(MP) 28 23.93% 3 10.71%
Market Underperform(MU) 6 5.13% 0 0.00%
Under Review(UR) 10 8.55% 3 30.00%
Total 117 100% 16 100%
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of
securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its
RODMAN & RENSHAW EQUITY RESEARCH 8
9. Amylin Pharmaceuticals Inc. May 14, 2012
affiliates or subsidiaries within the past 12 months.
ADDITIONAL DISCLOSURES
Rodman & Renshaw, LLC. (the "Firm") is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
ANALYST CERTIFICATION
I, Michael G. King, Jr., hereby certify that the views expressed in this research report accurately reflect my personal views about the
subject company(ies) and its (their) securities.
None of the research analysts or the research analyst's household has a financial interest in the securities of Amylin Pharmaceuticals Inc.
(including, without limitation, any option, right, warrant, future, long or short position).
As of Apr 30 2012 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Amylin
Pharmaceuticals Inc..
Neither the research analyst nor the Firm has any material conflict of interest with Amylin Pharmaceuticals Inc., of which the research
analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific
investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a
substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Amylin Pharmaceuticals Inc. for any investment banking services within twelve
months before, but intends to seek compensation from the companies mentioned in this report for investment banking services within
three months, following publication of the research report.
Neither the research analyst nor any member of the research analyst's household nor the Firm serves as an officer, director or advisory
board member of Amylin Pharmaceuticals Inc..
The Firm does make a market in Amylin Pharmaceuticals Inc. securities as of the date of this research report.
Any opinions expressed herein are statements of our judgment as of the date of publication and are subject to change without notice.
Reproduction without written permission is prohibited. The closing prices of securities mentioned in this report are as of May 11 2012.
Additional information is available to clients upon written request. For complete research report on Amylin Pharmaceuticals Inc., please
call (212) 356-0500.
Readers are advised that this analysis report is issued solely for informational purposes and is not to be construed as an offer to sell or
the solicitation of an offer to buy. The information contained herein is based on sources which we believe to be reliable but is not
guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Past performance
is no guarantee of future results.
RODMAN & RENSHAW EQUITY RESEARCH 9