Eli Lilly gets EU approval for long-acting diabetes drug Bydureon

In what was excellent news for all three companies following rejections of the drug by US regulators, US drug major Eli Lilly (NYSE: LLY), along with partners with Amylin Pharmaceuticals (Nasdaq: AMLN) and Alkermes (Nasdaq: ALKS), announced yesterday that the European Commission has granted marketing authorization for their type 2 diabetes drug Bydureon (exenatide 2mg powder and solvent for prolonged release suspension for injection).

Bydureon is a long-acting version of Byetta, a twice daily drug from Lilly and Amylin that was approved in 2005, but sales of which have been falling (to just $559 billion last year) as patients have switched to new diabetes drugs. The US Food and Drug Administration first rejected approval of Bydureon early last year, later calling for additional clinical data (The Pharma Letter October 20, 2010). The companies expect to submit that data and re-apply for approval in the second half of the year.

Bydureon is crucial to the future revenue growth of Amylin, which unsuccessfully sought to stop Lilly’s deal with Germany’s Boehringer Ingelheim on a competitive diabetes drug Tradjenta (linagliptin: TPLs passim). Also, loss-making Alkermes, which provided the biodegradable microsphere technology for the drug, is counting on the drug to reverse its fortunes. Analysts at Credit Suisse have put a net present value for Bydureon of $24.52 a share for Amylin and $2.76/share for Eli Lilly.