Go to Top

The next item up for bid: Amylin Pharmaceuticals, who, if anyone, wants them?

The rumor mill has cranked up once again with a leaked story that Amylin has brought Goldman Sachs and Credit Suisse aboard to market the sale of the company.  

The usual suspects have been identified by the anointed experts analyst world: BMS, Sanofi, Takeda, Merck, AstraZeneca.

Has Amylin leaked their interests to sell in order to pacify Carl Icahn, when they have little intention of selling?

Or has the trajectory of Bydureon, the burden of their balance sheet, and the lack of interest in OUS partnership have forced their hand, and acquisition is the only path for shareholder value creation?    It is interesting to note that the roughly 50% appreciation in value is on takeover rumors only.  This Thursday, April 26, Amylin will announce first quarter earnings.  The investor call will be fascinating to listen how Amylin positions the early Bydureon sales and addresses, or more likely avoids, the acquisition rumors.

Is it possible that despite considerable rumor-mongering and arm-chair strategic planning, Amylin will not be sold?  It would be somewhat hard to imagine that a company with three approved products in a competitive, but growing disease category, could not find a suitor.  As mentioned, Amylin has appreciated 50% in the last  month on takeover speculation, driving the market capitalization to $4.2 billion.  Add a balance sheet that lists $1.6 Billion in long term debt, and is Amylin really that attractive?  Symlin has struggled historically, Byetta is holding onto market share, for now, but has had its well known issues over the years, and Bydureon's potential is debatable at best in the presence of increased competition.  All of the potential acquirers have large presences in primary care, but do any of them want to sell injectable agents with those sales forces with their essentially oral portfolios?  And Sanofi, how would they reconcile two GLP-1 agents against Lantus, while developing their own GLP-1 for much less than what Amylin would cost, and the ability to control the positioning?  Balance Amylin's challenges with the desperation of big-pharma to fill revenue holes, and we may see an acquisition that makes little sense.

There is a potential third path, that I have called for years the "Back to the Future Strategy."  What if they sell off the rights to exenatide only, restructure the balance sheet, return cash to shareholders through a special one-time dividend, and essentially re-start the company again around Symlin and soon to come Metre-leptin?  What is left of Amylin is much of what people loved years ago: a small, but passionate group of employees, a small commercial presence in niche disease categories that command ultra-high premium pricing, going back to where Amylin began, and where biotech does very well.

Any betting is for sport only, but feel free to pass along your predictions to me at aaron@metabolicmarkets.com.