Amylin

What Amylin's Established Drugs are Worth Alone

05/13/2009 by Research Reloaded

Admittedly Research Reloaded has become a bit of a war room in regards to the special situation surrounding Amylin (AMLN)  shares these days. I personally find it to be an extremely interesting special situation and now have exposure to the shares. A lot of analysis of Carl Icahn and Eastbourne Capital's proxy fight with Amylin management has been done, and remains to be done, especially as to how these activist shareholders might be able deal with Amylin's poison puts. Though Dealbook has done a good job of explaining the situation.

If Mr. Icahn and Eastbourne are successful they could trigger poison put provisions in Amylin’s 2007 indenture for the company’s $575 million convertible notes due 2014 and Amylin’s 2007 credit agreement for its $125 million term loan.

But beyond speculation on the outcome of Mr. Icahn and Eastbourne's proxy fight with Amylin management, it is also useful to try and understand what kind of value Amylin has as a company to start with and where this value comes from, before considering whether activist shareholders have their way or not.

Along these lines, simple place to look for value is from the drugs Amylin already sells, on their own, without all the overhead Amylin has just to conduct R&D, grow future revenue streams etc. Basically, it is constructive to look at the potential value Amylin's established drugs might have if someone else justed wanted to buy the rights for these drugs alone, without the rest of Amylin's other costs or potential.

AMLN - Icahn's Proxy Damning for AMLN Management

05/09/2009 by Research Reloaded

More on the battle between shareholder activists and biotech company Amylin's (AMLN) management.

Carl Icahn's latest broadside is a set of powerpoint slides, which can be found as a proxy statement with the SEC, which are pretty damning for Amylin management. Amylin management's own presentation is also on the SEC site and is a bit less compelling than that of Mr. Icahn. Hat tip to BNET Pharma for the links.

Carl Icahn's main points are that Amylin's principal product Byetta has not achieved its full potential and has a bloated cost structure partly due to a failed strategy using in-house sales representatives to target primary care. He also argues for a renogiation of the Byetta relationship with Eli Lilly (LLY) and says plainly that its ridiculous Amylin isn't profitable given the drug it owns.

Amylin - A Discounted Option on Byetta's Outcome

04/22/2009 by Research Reloaded

Amylin (AMLN) presents a stock opportunity with substantial optionality, and is currently in the sights of activist investor Carl Icahn. I believe Mr. Icahn may not only be trying to make himself a profit, but may also be trying to get Eli Lilly (LLY) a good deal on AMLN at the same time. This may be the win-win genius of Mr. Icahn's deal making.

Regulatory risk surrounds AMLN's key drug Byetta, but if one can come to terms with this risk, then perhaps the stock is a cheap option on Byetta's outcome, and is an option that has a strong chance of ending up "in the money". And perhaps this is how Lilly would view AMLN should the company end up doing a deal via Mr. Icahn.

Afterall, any R&D investment in the pharma world has substantial optionality. Thus buying AMLN as a discounted option, even in the face of FDA risk for its key product, wouldn't be unreasonable for LLY. Should it then be unreasonable for investors?

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