Amylin Pharmaceuticals () reported a first quarter loss of 58 cents per share, wider than the year-ago loss of 24 cents. First quarter revenues, which increased 0.6% to $153.7 million, were well below the Zacks Consensus Estimate of $164 million. Significantly higher costs led to the higher year-over-year loss.

Quarterly Details

Quarterly revenues consisted of $150.6 million in product sales (flat from the year-ago period) and $3.1 million in collaborative revenues, which consist of the amortization of upfront fees received under the company's collaboration agreements.

Product revenues comprised $120.6 million in sales of Byetta (exenatide), $23.1 million in sales of Symlin and $6.9 million in Bydureon sales. While Byetta revenues declined 5.8% from the year-ago period, Symlin increased 1.3% from the year-ago period.

However, Byetta and Symlin sales declined 9.0% and 18.4%, respectively, on a sequential basis. While the sequential decline in Byetta sales was attributed to a 4% decline in prescription volume and adjustments in wholesale inventory levels, the sequential decline in Symlin sales was attributed to a 10% decrease in prescription volume and variations in wholesale inventory levels.

Symlin was also impacted by Amylin’s focus on the Bydureon launch and the restructuring of the company’s field sales force. Symlin prescription trends will continue fluctuating as the new 65-person specialty sales team familiarizes itself with Amylin’s products and physician targets.

Amylin is looking to return Byetta to growth now that it is armed with FDA approval for the use of the drug as a first-line monotherapy for type II diabetes patients.

Byetta should also benefit from the recent approval under which it can be used in combination with insulin glargine, with or without metformin and/or a TZD, for the treatment of type II diabetes in patients who are not achieving adequate glycemic control on insulin glargine alone.

Meanwhile, Amylin said that Bydureon has gained a share of more than 5% of the GLP-1 market, ten weeks into the launch. Amylin said that most of the scrips represent patients naïve to GLP-1 treatment.

With the termination of the Eli Lilly (LLY - Analyst Report) agreement, Amylin’s selling, general and administrative (SG&A) &A spend shot up significantly. SG&A expenses for the quarter increased to $110.3 million from $64.6 million in the year-earlier period. The launch of Bydureon in the US also drove expenses.

Research and development (R&D) expenses increased to $51.2 million in the reported quarter from $41.9 million in the prior-year period. Once again, the termination of the Eli Lilly agreement drove the increase in expenses.

2012 Outlook Unchanged

The company expects a non-GAAP operating loss of $20 million - $40 million in 2012. Selling, general, and administrative, and research and development expenses are expected in the range of $600 million - $625 million.

Amylin said that it remains in talks regarding an ex-US partner for exenatide.

Neutral on Amylin

We currently have a Neutral recommendation on Amylin, which carries a Zacks #3 Rank (short-term ‘Hold’ rating).Amylin was in the news recently with rumors circulating regarding a take-over bid by Bristol-Myers Squibb (BMY - Analyst Report). According to Bloomberg, which cited unnamed sources, Bristol-Myers had made an offer of $22 per share ($3.5 billion). However, the offer was said to have been rejected by Amylin’s board of directors.

Amylin could be an attractive takeover target for companies with a focus on the diabetes market.