Departed Amylin Co-Founder Greene Says Company in ‘Perfect Storm,’ But Confident in Management

4/13/09Follow @bvbigelow

Amylin Pharmaceuticals (NASDAQ: AMLN) co-founder Howard E. “Ted” Greene, long a leading figure in San Diego’s biotech community, said today that Amylin has encountered a “perfect storm” of events that have caused its share price to drop precipitously and unleashed a proxy battle—but that he’ll seek other ways to help the company since he has resigned from the board of directors.

The value of Amylin’s shares has dropped by more than two-thirds since last summer, when the company began dealing with FDA concerns over cases of pancreatitis among some patients taking Byetta, its lead diabetes drug. The plunge in valuation also triggered a proxy fight with Carl Icahn and Eastbourne Capital management. More recently, Amylin shares have weakened again on reports that some mice given Novo Nordisk’s drug candidate liraglutide developed thyroid tumors. Analysts reasoned the tumors seen in the liraglutide studies could slow Amylin’s plans to launch a long-acting version of Byetta because the two drugs are from the same class of diabetes medications.

When Greene submitted his letter resigning from Amylin’s board, he indicated that he disagreed with the way Chairman Joseph Cook’s moved to nominate two outside directors. “A majority of you decided we could not win our proxy fight if we did not replace two ex-CEO Board members, including me,” Greene wrote. “Even if I agreed, the obvious and appropriate choice to not stand for election would be our Chairman, who has presided over the loss of shareholder value that sparked the proxy fight.”

Reading between the lines, it occurred to me that Greene had more to say. So I sent him an email over the weekend. He declined my invitation to stir the pot, saying, “I wouldn’t want to say anything that might distract Dan Bradbury from the job at hand.”

But Greene added this perspective on Amylin’s predicament:

“AMLN has unfortunately encountered the “perfect storm” of events: Unsubstantiated pancreatitis concerns about BYETTA, an FDA operating in a phase of increased safety emphasis, a competitor perceived to have a slightly better product coming, and most recently getting splattered with that competitor’s preclinical rat data and safety worries about a “class effect.” Not to mention a stock market crash for pharmaceuticals and especially unprofitable biotechs! As the song goes, ‘when it rains, it pours…’

“I’m confident that AMLN management is up to the task of meeting these challenges, but sorry I no longer have my board level oar to pull on. I’ll look to find other ways to help my favorite company…”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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