Wednesday, November 29, 2006

Calls of Note Part 4

- Piper Jaffray is somewhat cautious on Amylin Pharma (NASDAQ:AMLN) in the s-t saying that with 7 weeks of Rx data available for 4Q, they are lowering their Byetta sales estimate for 4Q from $147m to $135m. Street consensus for 4Q was $148m, with only 1 of 20 analysts below $140m in 4Q sales.

The most important contribution to firm's estimate revision today is the magnitude of the live sample program (distribution of free 5 ug pens) restarted in late September. Relative to initial projections, they may have underestimated this effect and, while they have focused on the long-term potential for these live samples to stimulate future revenue growth as they convert to revenue-generating 10 ug refills, they may have overlooked the effect of the lost revenue from these pens on 4Q sales. Other Factors To Consider: Channel Fill, Gross-To-Net Adjustments And Holidays.

While the firm acknowledges that the current Byetta run-rate for 4Q will likely fall short of prior estimate, they remain convinced that this is not related to the recent launch of Merck's Januvia, a central bear argument raised against AMLN.

Firm would use any short-term weakness in the stock on revisions to consensus numbers as a buying opportunity.

Notablecalls: Expect to see weakness in AMLN today. Think they are giving the 5ug pens away for no reason or bc they expect to see competition from Januvia. Or are they already seeing weakness after stuffing the channel?

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