3SOF

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 

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!