AMLN is an unbelievable story... here are the highlights:
1. The company develops ethical drugs for diabetics. It has just obtained the FDA APPROVAL for TWO (2!!!) drugs in the last 2 months or so: Byetta and Symlin
2. AMLN is marketing Byetta jointly with Eli Lilly (LLY) and are splitting the profits (AMLN gets 50% in the US and 15% in the rest of the world). I will not get deeply into science, but roughly speaking, Byetta is a new class of drug that will(?) replace Insulin. So once a diabetic fails the "basic" oral drugs, he typically turns to insulin, but now there is the Byetta choice. Why Byetta? well, it shows that it helps the regenration of beta-cells and it REDUCES body weight (whereas insulin increases). There are a bunch of other reasons to take Byetta (you can go to www.byetta.com to learn more about the drug).
3. Symlin can be used by either type 1 or 2 diabetics with or without insulin, and its effect is slightly different (weight reduction etc etc). AMLN has just released a study that Symlin could be a great drug against obesity, as its weight loss is equivalent to Acomplia (the new "magic drug" that will likely to be launched by SNY in 2006)
4. Analysts project the Symlin market at 200-500MM and Byetta at 500-1500MM. Since 65% of diabetics fail the oral treatment, they become potential Byetta users. Diabetics is a fast growing disease, and 10% of the failed-orals represent about $1bln in Byetta revenue.
5. Even if we take the low end of the estimates, we reach annual revenues (for AMLN) of 200+500/2 = 450MM. Typically, ethical companies are traded at sales multiple of 8-15, so in AMLN case, a mkt cap of $4bln will be fair.
6. AMLN is currently traded at $15 that represent a mkt cap of approx $1.5bln
why...???
Hedge Funds
7. The Hedgies are consistently shorting all of the small biotechs. They often succeed, as most small biotech never make it to the mkt. However, they missed judged AMLN (well, AMLN failed twice in getting the FDA approval, but not this time around).
AMLN was traded around $30 a year ago, $25 before both of the approvals... and then...
When Symlin was approved, the pps dropped to around $18
When Byetta was approved, the pps dropped down to $16
why???
Well, if one thinks that the drug sucks, he can wait for the "natural" pps pop following the approval (and this approval wasn't an easy one at all)... this was NOT the sell-on-the-news thing. The Hedgies didn't want to show any pop... they wanted to prevent any kind of price pop and sold at the 52-week low's.
Last week, when AMLN announced the Symlin (obesity related) news, the pps dropped right away...
The Short Interest has increased by 35% POST approval...
In the last year or so, I noticed several hedgies-related scams... but I think that this one is THE WORSE
The pps can continue to go down in the short term (AMLN is going to have 12 abstracts in the upcoming ADA conference: http://biz.yahoo.com/prnews/050606/nym049.html?.v=10 ) which will likely to include more excellent news... so the pps will go down more..
HOWEVER
Revenues are starting now... it is going to be a matter of 2-3 QUARTERS until we fully see the marketing success of these 2 products. By then, AMLN will reflect the actual market value of a PHARMA company - not an early stage biotech... when will the price action reverse??? who knows... but I think that AMLN is a great LT investment.
It is covered by a bunch of analysts, and if I am not mistaken, they give it a tgt price of around $28-30, which I think is fair and reflects the LOWER end of the revenue estimates.
There is a lot more to write about AMLN... I am going to check this MB later during the day and will be happy to take a few questions... feel free to visit Yahoo's MB for AMLN... exptwtness is a GREAT poster ... he knows a lot about the company
Good luck!
+4% now :o
The story looks great but I don't like the chart. A rebound in a bearish trend. But thank you and good luck !
I would IGNORE AMLN's chart... I know that it sucks :-\, but the fundamentals are great
AMLN is not for a (day) trade... it is over-manipulated (it drops on every good news, including the un-expected ones) and will eventually correct once the sales numbers are in
AMLN is showing a positive divergence...looks good if it can break the downward trendline
up another 5% today!
what do the charts say today?
now $17.25 -- nice call on this one.
broke the downtrendline...will be a heavy volume day. Thinkin of buying. Nicework stockpicker ;)
Great pick stockpicker ! I applaud you, this is what we need ... charts took a lot of time to see fundamentals ;) ... but my strategy requires fundamentals and technicals moving in tandem (sometimes just technicals are enough, but I can't buy a stock based only on fundamentals, I'm afraid I'm the only one who sees the good fundamentals ... the market must give a signal that he sees them too).
Keep up the good work, thanks !
Definitely on my watch now. Hard not to think alot of that pop to 17.33 was mostly short covering. In many examples like these, you'll get that quick correction back to right above where the trendline was busted .. in this case about 16.15 or so. Then the final bid searchers (like me) flock in. But so far, it appears that it doesn't want to wash. But it should.
Still i'll wait for that one hopeful big dip to low 16s and then watch it go vertical to the close. At least thats what i'm predicting. We'll see. I'll post my buy if it does.
Wow, still no real pullback. This strength is REALLY picking my interest now.
Bought $17.40.
The short cover is starting to look brutal. If this closes at or near it's hight today, $20 is not out of the question tomorrow or Wednesday. Seriously repressed stock prior to today.
Tight stop, $17.30.
GL, Bula
great call. as a sidenote, another way to have playes this if bullish would have been to but an option. I was considering it Friday but unfortunately did not get it. as an example, right now the stock is $17.52 so it has gone up like 10% for the day. If considering options, there are a whole bunch to consider and depends on time and strike price. I was considering the july 12.50 call which friday I could have bought for $3.6. Looking at that contract right now, i could have sold right now if want to at $5.00. Each call is 100 share so you multiply by 100. So each call would have cost you $360 on Friday and if you want to sell, can do so at $500. So the profit from buying one call would have been 38.9%. That is why sometimes when stocks are recommended here, I look at options first. But then people say they are riskier, but I think I am willing to give it a try. Anyone else in this board into options? If not, something to consider.
Bula, i think that was a perfect pickup at that spot. Great trading.(applaud) I hope to hear about some more plays ;)
Tnx stockpicker. Can't add anything. VPHM looks good, too. All insiders
are buying and at the market, too! Tnx, tnx! :D
This close is gonna be interesting. It's a tough hold right now personally, but i'll keep my stop in tight. It's 17.68 now and flagging between 17.6 and 17.77 for 90 minutes. OBV is at the high of the day but it is struggling to get past that key level of $17.78.
So the line is drawn. Stop at 17.55 and we'll see if that key level of 17.78 can pop.
Bula
mentioned positively, for a change, by Cramer... and up it goes to $18.50 AH
(do I trust Cramer? NO!)
--- my next call will be DNDN (riskier than AMLN, though), I'll write a few words about it tomorrow ---
Liking my 17.40 buy more and more. And it was a large position.
Looks like a nice multi-day runner here. Short cover, upgrades, MAJOR technical reversal events, cnbc pumps and finally the $18-$19 sheep buyers.
I keep moving up my stop, but I think $20 is not unlikely given the overflow of bidders now.
We'll see.
just bought a bunch of Call-20 June options for 5 cents
4 days to go and only $2 away
FWIW
Sold out 8500 +$1.25. This was a great call stockpicker. It may still continue to run, but I got my number so i'm happy.
On to the next gem......
one day rest, and here we go again!
looks like another nice day for AMLN :)
Scripts # are out for last week and they are awesome:
6/26/2005 15
6/25/2005 58
6/24/2005 657
6/23/2005 244
6/22/2005 284
6/21/2005 370
6/20/2005 322
6/19/2005 0
6/18/2005 66
6/17/2005 225
6/16/2005 259
6/15/2005 244
6/14/2005 304
6/13/2005 127
When Piper Jaffray gave their $32 target and outperform rating they said: "Byetta needs to exit June with a weekly prescription run rate of around 1,500 to be on track to meet the research firm's $57 million 2005 Byetta estimate". We had 1950 prescriptions last week!
Let's see how the market reacts on the numbers. There is a huge short position that needs to be covered so we will probably see a lot of damage control but I don't think they can hold it down for long!
Beautiful opening this morning - and without being the sharpest chart reader on this board even I can see that the chart looks nice!
As I said there will be a lot of damage control today but within the coming days you will see this one run IMHO.
Mike
here we pop again!
:)
axyx posted a comment about the weekly chart being a no-brainer (see chart below).
I have to say that I am normally looking at the daily chart so the weekly chart was an eye-opener for me!
The trend is working for us but the volume is lacking behind. I know this is worrying for a lot of the technicians here but I am not surprised. Everybody is looking forward for the script no. for Symlin and Byetta and you will se the volume pick up (and hopefully the price as well) when they are available.
Goldman Sachs has an outperform rating on AMLN: Amylin: (AMLN, Outperform). Early days, but so far so good on Byetta and Symlin We maintain our estimates on Amylin. As Amylin only began selling Byetta in June, we have not forecast sales for the second quarter. However, initial script trends suggest steady uptake.
Piper Jaffray has an "outperform" rating and $32 price target: after reviewing Byetta's daily prescription order data from IMS. "Given the broad range of Street estimates for Byetta ($35 million to $152 million), we expect daily trends to provide meaningful real-time insight into what has been a controversial launch."
S & P has Amylin rated 5 stars with a 12 month price target of $30: "Following AMLN's first quarter conference call, we continue to maintain our strong buy recommendation on the shares. We remain bullish based on AMLN's first mover advantage, especially regarding Byetta. While the stock has shown weakness, we view the recent pullback as a buying opportunity. With two recent approvals, our confidence that exenatide LAR can be successfully developed has increased. AMLN is conducting a Phase II multi-dose study of LAR. Patients are receiving one of four different dose levels or a placebo. We target potential approval of LAR by the end of 2008."
I have tried to forecast the year end prescription of both Symlin and Byetta (I might post the spreadsheet if I can find out how!) and the analysts forecast seems not only realistic but even conservative.
30 seems to be in the bag. There might be some resistance at 23 though.
Mike
for the T/A folks around, please note that last week's 22.5 high was a single trade of 100 (or 1000) shares. it seems more likely than not that the purpose of that trade was to add a virtual resistance point in the chart for the techies. please (try to) ignore it.
"Price by volume" is getting pretty thin above current price levels allowing great price improvemtent on modest volume.
Quote from: stockpicker on July 10, 2005, 03:22:38 PM
for the T/A folks around, please note that last week's 22.5 high was a single trade of 100 (or 1000) shares. it seems more likely than not that the purpose of that trade was to add a virtual resistance point in the chart for the techies. please (try to) ignore it.
Dear Stockpicker,
Good observation, I also remember that odd trade but didn't pay much attention to it as I didn't see much resistance at 2.5.
Now read thestreet.com today: http://biz.yahoo.com/ts/050711/10231663.html?.v=1
Suddenly they see resistance at 2.5 even though they have been very bullish on the stock. This one smells having in mind that thestreet is known to be very well connected to the short community and AMLN has a big short position that needs to be covered!
I don't think they will be successful though. The big players that follows this stock will look through this kind of manipulation.
The resistance at 22.5 as "discovered" by thestreet.com was indeed artificial, the stock at least surged through it and have never looked back again. Now it might serve as a support (even though it might be an artificial support!)
Instead it seems like we have three young and vigilant white soldiers in the chart, which is a bullish reversal sign from the small retreat we had at the start of last week. (Hmmm... wonder if we actually can talk about a reversal in such a bullish trend! Decide for yourself - you can read about the three white soldiers here: http://stockcharts.com/education/GlossaryT.html)
This up trend started in June when AMLN received FDA approval for Symlin and Byetta against diabetes. The analysts are very positive for the future of these drugs and have quite aggressive sales targets (I posted those in a previous post). This is hardly surprising if you look at the profile of the drugs: they decrease HbA1c, decrease postprandial glucose peaks, help patients lose weight, decrease the inflammatory response that is implicated in many diabetes complications, decrease the dependency on insulin, and only have their effect when they are needed. No other class of diabetes drugs, approved or in trials, can make all those claims.
Byetta has one more bullish effect: it RESTORES the islet function, which is responsible for the body's production of Insulin.
Byetta has a very interesting history, which involves the Gila Monster, a large pharmaceutical company that made the mistake of the century and another large pharmaceutical company that was close to do the same. But I have told too many long stories lately......
You might have overlooked an interesting side effect. Most patients who are on the drugs experience weight loss. Now this is interesting because there are only very light side effects of the drug. AMLN is therefore performing test to prepare it for approval against Obesity. So AMLN has two drugs with a very promising future in two of the largest and fastest growing segments in the pharmaceutical universe. Well from my point of view that explains the chart below!
Anyhow prescription numbers has started to come in. They seem to be even more bullish than the analyst's forecasts. The week-on-week revenue growth is more than 40%. (yes - week-on-week not year-on-year!). I have made a small spreadsheet that forecast revenue based on subscriptions numbers (it would still like to post this if I can figure out how – it comes in handy when you want to check the analysts updates). The revenue will reach more than $1 billion in November this year if the weekly growth continues at 40%.
The growth will start to slow down but you still have a very attractive company with world-class products in the largest and fastest growing segments of the drug market so I expect the present up trend to continue for some time. The analyst's targets are in the thirties but I would expect to see some reiteration of these when the prescription numbers comes in.
Michael,
Thanks for your AMLN report and I would like to add a couple of more words about the fundamentals.
Most diabetic start on oral (pills) treatment. Unfortunately, over 60% of the patients eventually fail the oral treatment, and Insulin was their only choice. Over a million Americans are diagnosed with high sugar level every year (and this number quickly grows due to the obesity problem), so today, they can choose between Byetta (AMLN's largest drug) and Insulin. So:
Insulin: weight gain
Byetta: weight loss
Insulin: the dose is adjusted based on the consumption of carbs
Byetta: the drug action adjusts to the current body need so the patient doesn't need to adjust the dose
Cardiovascular: Byetta increases HDL ("good cholesterol") and reduced the bad cholesterol
(I am not sure if Insuling has any effect about this)
Beta cells regenration: It is becoming more and more aparent that Byetta restores the regeneration of the beta cells -- if this will be approved -- HOME RUN. Insulin has no such effect whatsoever.
So.. will a "new diabetic" take Byetta or Insulin?
Let's examine AMLN's mkt cap. Non-generic pharmas are traded at 8-15 revenues, so today's mkt cap of $2.4B "represent" peak revenues of $240MM (assuming a moderate 10X sales). I will further assume that Symlin revenues is going to be 20% of Byetta revenues, and since AMLN splits the US revenue of Byetta with LLY, the market currently assumes that Byetta revenues will be LESS than $400MM and that Symlin will sell less than $100MM.
The annual revenue/patient of these drugs is roughly $2000, so don't you think that more than 200,000 patients will eventually use Byetta???? I think that MOST of the "new diabetic" will take Byetta, so it is more likely than not that AMLN's revenues are going to be MUCH MUCH higher than today's expectations of $400MM.
HI Stockpicker,
What is there more to say except a sincere thank you to the Gila Monster. I guess we both owe this little cute animal a small fortune ;D
I thought i had lost all credibility after the sell off of AMLN when I recommended it.
Today S&P mentioned AMLN as one of their four top picks so at least I am not alone: http://www.forbes.com/markets/2005/07/15/genentech-amylin-biotechnology-0715markets07.html?partner=yahootix
QuoteStandard & Poor's Equity Research raised its fundamental outlook for the biotech sector to "positive" from "neutral," saying 2006 should see more product approvals over 2005 levels. "We expect a major theme for the biotech sector to be new product and supplemental approvals for the industry," S&P Equity Research said. Over the next 12 months, the research firm expects sector price appreciation of about 20% and believes the sector could sustain high-teen earnings-per-share growth over the next three years. S&P Equity Research's top recommendations are Genentech, Amylin Pharmaceuticals, Renovis and Invitrogen, all rated at "strong buy."
Don't lose track of AMLN. Short intrest has increased from 14M to 25M, these guys are committed, are they over extended? It seems they didn't bother to cover on the run up from $14.50 to the recent high of $23.47. AMLN is currently trading about $19, second day it finds support at this level. While you may not want to buy at this level, you will not want to lose track with 25% short, they are going to have to cover at some point.
http://www.nasdaq.com/asp/quotes_full.asp?mode=&kind=shortint&symbol=AMLN&FormType=&mkttype=&pathname=&page=short&selected=amln&64761
Hi axyx,
Who can lose track of our little Gila Monster (http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=3070;image) .This is still one of the best picks in my portfolio!
Scripts numbers are out for the Week ending July 22 and the street loves them:
Byetta total 3877, new 3656. Symlin total 1132, new 925
Piper Jaffray has also been out with a comment: "Street underestimating benefits of Byetta..."
and finally A Morgan Stanley report has just hit the wire covering Byetta and AMLN. Morgan is lowering there 2005 revenue forecast for Byetta but suggests long-term fundementals intact.
Hmmm...... I think the short is out for a surprise!
positive results in phase ii trials. up 20% after hours today. whoever is in this, congrats.
up more than 5.50 after hours now. Having run so fast, might alks be a play here? it has only risen 7% after hours and they jointly develop byetta with amln right? might be a matter of short covering too in amln. what an opportunity this would have been in restrospect. wow no post on amln since early this month.
AMLN ON FIRE!!
BIG NEWS out !!
UPGRADES
up to 29 $ in premarket !!
;D
:o :o :o
at hight 27's low 28's still think an ok place to get in? still a large short interest and potential. but then it has run like 30%. like eould you get in here or alks?
I am still in and not selling a single share
Very pretty triple top breakout here. This one could eventually see triple digits.
Worth an updated look at the thread and chart....... 8)
PHARMA CATALYST: Amylin Pharma (AMLN) absolutely destroyed after the FDA surprised the market by asking for more data on a key drug
Read more: http://www.businessinsider.com/10-unusual-stocks-20-october-2010#pharma-catalyst-amylin-pharma-amln-absolutely-destroyed-after-the-fda-surprised-the-market-by-asking-for-more-data-on-a-key-drug-1#ixzz12vtLXglo
Alkermes (ALKS) dropping hard, they were a partner with Amylin on the treatment
Read more: http://www.businessinsider.com/10-unusual-stocks-20-october-2010#alkermes-alks-dropping-hard-they-were-a-partner-with-amylin-on-the-treatment-2#ixzz12vuK4V84