Amylin Pharmaceuticals (NASDAQ: AMLN) co-founder and original CEO Howard Greene is urging shareholders to vote for Carl Icahn’s or Eastbourne Capital Management’s proposed slate of directors, the Associated Press is reporting today. Greene’s support for dissident nominees adds new twist to a hot proxy fight at the diabetes drug maker.

In a letter to shareholders of the San Diego company, Greene says owners of the company’s stock have suffered with disappointing sales of its products, and argues that the directors responsible for the company’s marketing should be replaced. He adds that big stockholders should be better represented in Amylin board. Greene himself resigned from the board in April.

Amylin is scheduled to hold its annual meeting on May 27. The company says its sales strategy is working. It charges that Icahn and Eastbourne want to sell the company, and that any sale in the near term would undervalue the company. Amylin recently announced layoffs among its sales force, and last Tuesday it introduced a new diabetes drug, a once-a-week medicine called Byetta.

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Amylin Pharmaceuticals (NASDAQ: AMLN) became one of San Diego’s Cinderella success stories in 2005, when the U.S. Food and Drug Administration approved two of its diabetes drugs—some 18 years after the biotech was founded. But the company has been buffeted by some unusual challenges in recent months.

Demand for exenatide, Amylin’s lead diabetes drug, has slumped since last summer, when the FDA reported that six patients using the drug marketed as Byetta had developed pancreatitis, an inflammation of the pancreas that in some cases can be fatal. The agency didn’t link those cases to exenatide, in fact, diabetic patients are at greater risk for such infections. But the warning put a big question mark over Amylin, which gets almost 90 percent of its product revenue from this drug. The price of Amylin shares have tumbled by two thirds since Aug. 18, when the FDA issued its warning .

Since then, a more significant question has arisen, which is whether the pancreatitis issue will affect Amylin’s request for FDA approval of a longer-lasting version of exenatide that requires injections only once-a-week, instead of twice daily. The company has been working on winning FDA approval with Eli Lilly(NYSE: LLY), which also markets Byetta in a partnership with Amylin. The progress of their application once seemed assured, but now the course is much more uncertain. After a setback with the FDA in November, when the price of Amylin shares fell to a seven year low, the company cut 340 employees, or 16 percent of its workforce. Amylin said the move was intended to save about $100 million and put the company in a stronger financial position for 2010.

In the meantime, the decline in Amylin’s stock price also stoked trouble on a different front with a couple of dissident shareholder groups, including one headed by Carl Icahn, the billionaire investor and corporate raider. Icahn began to significantly increase his stake after Amylin’s plunge last August, and now owns a 9.4 percent stake in the company.

In January, Icahn disclosed plans to nominate five directors to Amylin’s board. That was a sign to some analysts that Icahn wants to shake up Amylin and possibly even push …Next Page »

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Venture and private equity firms apparently have clamped down on much of their funding activities in San Diego, but some local firms were able to take advantage of state and federal sources of cash last week. We also saw the Food and Drug Administration give Amylin a break and Qualcomm’s top executives offer their outlook for next year.

—One significant development for San Diego’s biotech community is that the state’s stem cell agency, the California Institute for Regenerative Medicine, opened its spigot for funding business ventures. The change is important because the institute has doled out more than $614 million through 229 grants since it was created in 2005, with all but one grant going to academic scientists at non-profit universities and research centers. Last week the institute awarded six grants to life science companies, and four with operations in San Diego got a total of more than $3.3 million.

—San Diego’s Cohu, which has traditionally been one of the most cautious players in the semiconductor industry, agreed to pay $80 million in cash to buy German rival Rasco from Dover Corp. Cohu makes thermal pick-and-place test handling machines used by chipmakers to test the performance of semiconductors with wire leads. Rasco specializes in gravity-feed machines that test smaller chips used increasingly …Next Page »

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Leptin was hailed as a magic bullet for obesity based on rat studies in the 1990s, and then it failed miserably when Amgen took it into clinical trials. Now Amylin Pharmaceuticals thinks it has found a way to bring leptin back to life as a weight-loss drug, as part of a new combination with Symlin, a drug it markets for diabetes.

San Diego-based Amylin (NASDAQ: AMLN) is presenting data on its new combination weight-loss drug this weekend at The Obesity Society’s annual meeting in Phoenix, AZ. I got an overview of what Amylin will present there about its experimental treatment during an interview with Christian Weyer, the company’s vice president of corporate development for diabetes and obesity.

The opportunity, and risk, here is huge. About two-thirds of American adults are overweight or obese, according to the Centers for Disease Control and Prevention. The pharmaceutical industry has a history of failures here, and the most-prescribed treatment is still an appetite suppressant from the 1950s that causes side effects like nervousness and sleep problems, Weyer said. Since any new obesity drug will be taken by millions on a chronic basis, its safety has be squeaky clean. Madison, NJ-based Wyeth learned the hard way what happens when it’s not. The drugmaker has shelled out more than $21 billion in legal settlements after its fen-phen obesity drug combination was found to damage heart valves in some patients in the 1990s, according to its most recent quarterly report. And France-based Sanofi-Aventis had its Acomplia medicine rejected by FDA advisers last year after reports of suicidal thinking were linked to the drug.

“Safety is absolutely paramount in obesity drug development,” Weyer says.

The ideal profile that Amylin has in mind is a medicine that can help patients lose 10 percent or more of their body weight, keep it off, and do it without any serious side effects like suicidal thoughts, cognitive impairment, or depression, Weyer says.

Amylin’s game plan is unlike other companies, which tend to develop small-molecule drugs, taken as oral pills, that hit receptors on brain cells that control whether people feel full. The problem with those medicines is that they tend to hit other cells in the brain that control moods, leading to side effects, Weyer says.

The Amylin approach is to use pramlintide, a genetically modified version of a hormone that’s secreted from the pancreas to slow down stomach emptying. It’s combined with metreleptin, a genetically modified version of the leptin hormone that’s secreted from fat cells, which sends a signal to the brain that it’s time to stop eating, Weyer says. The company’s scientists believe the drugs have complementary action, which is greater than the sum of either individual part, Weyer says. Since they are relatively large molecules, they are too big to cross the blood-brain barrier, and shouldn’t cause mood-altering side effects, he adds.

Results from a company-sponsored clinical trial in November 2007 seem to back up this hypothesis. It showed that pramlintide on its own helped patients lose 8.4 percent of their body weight after almost six months, which Weyer says “is probably sufficient to get the drug approved, but we’re aiming for greater weight loss.” When given in combination with metreleptin, though, patients lost 12.7 percent of their body weight, or about 25 pounds from the beginning of the study, compared with 17 pounds for those on pramlintide alone. The side effects included injection site reactions and nausea, which were mild to moderate in severity, and didn’t last long, researchers said.

Since these are genetically engineered protein drugs, they need to be given via injection just under the skin twice daily, Weyer says. This sounds like a drawback to me since most patients would prefer an oral pill, but Weyer brushed off the question. …Next Page »

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