Amylin Sweepstakes Heats Up: AMLN, BMY, AZN, PFE

May 29, 2012, 10:46 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Our Trading Reports in this Article:

• AMLN
• BMY
• AZN
• PFE

The likelihood of a takeover of the biopharmaceutical company Amylin Pharmaceuticals (Nasdaq: AMLN) appears to be increasing by the day. The company’s stock priced surged 8.4% on Friday and is at its highest level since the summer of 2008. It has been said that the company has attracted multiple suitors in a reported bid to sell itself. Here is a look at how the rest of the story may play itself out.

Writing on the Wall

The writing has been on the wall that Amylin would be forced to the selling block ever since Bloomberg reported that the company had shunned a $22 per share offer from Bristol-Myers Squibb (NYSE: BMY). The unsolicited bid reportedly occurred in late February and has since set the wheels in motion.

Carl Icahn has not made matters any easier for Amylin. He only recently dropped a lawsuit against the company after meeting with its CEO. Icahn Associates is one of the top shareholders of Amylin with a stake of approximately 8.9%. Icahn has also been lobbying for a sale of the company.

It did not take long for Amylin to get the hint. Last month, it was reported that the company had hired Credit Suisse and Goldman Sachs to gauge interest. Bloomberg now is stating that initial bids for the drugmaker are due over the course of the next two weeks.

In the Hunt

There will be plenty of interest for Amylin and its coveted diabetes portfolio. In Q1 the company launched Bydureon, the first once-weekly treatment for type 2 diabetes. It also received approval from the European Commission for Byetta as a supplemental therapy to basal insulin.

AstraZeneca (NYSE: AZN) has been routinely mentioned as a possible candidate to purchase Amylin. The company’s management will be facing patent expirations from some of its top selling drugs in the not too distant future. Shareholders have also lost their patience with the company failing to execute a momentous acquisition. Amylin could be the answer. 

Another company that should have interest in Amylin is Pfizer (NYSE: PFE). In 2011, Lipitor accounted for approximately 14% of the company’s total revenue. However, Pfizer lost exclusivity for the drug in the U.S. in November and expects its revenue stream from Lipitor to be punished in 2012. Taking out Amylin could provide a spark for Pfizer. Shares of PFE are up 2.3% so far this year.

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.