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Amylin, Lilly and Alkermes Volatile All Week?

A handful of biopharma stocks could be pretty volatile this week and we're talking right up until Friday.

That’s when an FDA decision is expected to come down concerning the first ever once-a-week diabetes drug Byetta. The names in play are Amylin and Lilly as the drug’s makers – as well as Alkermes because they provided the technology to make the drug last longer.

According to CNBC’s Mike Huckman following are the possible outcomes for once a week Byetta.

- approved outright
- approved with a restrictive label,
- delayed for something minor
- delayed because the FDA will ask for another study and/or more data.

And the Street couldn’t be more conflicted about what the feds will say.

BMO Capital Markets biotech analyst Jason Zhang downgraded shares of Amylin Pharmaceuticals to the equivalent of "Sell" last week with a $12 price target because he thinks the FDA is going to punt.

He tells clients in the research note that he believes the agency will want more data about possible side effects, which will push approval of the drug until mid or late 2011.

But on the flip side, biotech analyst Thomas Wei at Jefferies put out a note which said, "we acknowledge a higher chance of approval of (once-a-week Byetta) on March 12 than we had previously factored....We see the risk-reward on AMLN as favorable." He has a $27 target on the shares.

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OTHER STOCKS TO WATCH

And going forward, Huckman suggests to expect news from Roche on its diabetes drug as well as Dendreon on its cancer drug.

What's the play?

If you want to play the space, I'd do it with Cephalon or Celgene, says Pete Najarian.


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Trader disclosure: On March 8th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (X), (BAC); Nations Owns (MSFT), (SPY); Kelly Owns (AMZN) Calls; Kelly Owns (ELX) Calls; Karabell Owns (C), (JPM), (UYG), (AAPL), (CSCO), (DRYS), (GOOG), (GE), (IBM), (RIMM), (MON); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), NUE); Karabell Owns (C), (JPM), (UYG), (AAPL), (CSCO), (DRYS), (GOOG), (GE), (IBM), (RIMM), (MON); Jon Najarian Owns (AAPL), Is Short (AAPL) Calls; Jon Najarian Owns (DIS), Is Short (DIS) Calls; Jon Najarian Owns (DRYS), Is Short (DRYS) Calls; Jon Najarian Owns (GE), Is Short (GE) Calls; Jon Najarian Owns (HPQ), Is Short (HPQ) Calls; Jon Najarian Owns (IBM), Is Short (IBM) Calls; Jon Najarian Owns (MCD), Is Short (MCD) Calls; Jon Najarian Owns (MON), Is Short (MON) Calls; Jon Najarian Owns (MOS), Is Short (MOS) Calls; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (GOOG) Call Spreads; Jon Najarian Owns (IMAX) Call Spreads; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (CSCO), Is Short (CSCO) Calls; Pete Najarian Owns (MCD) Call Spread; Pete Najarian Owns (AKAM) Call Spread; Pete Najarian Owns (BAC) Call Spread; Pete Najarian Owns (DF) Call spread; Pete Najarian Owns (DRYS) Calls; Pete Najarian Owns (F) Calls; Pete Najarian Owns (INTC) Calls; Pete Najarian Owns (ITMN) Call Spread; Pete Najarian Owns (MCD) Call Spread; Pete Najarian Owns (TIVO) Call Spread; Cortes Owns (GS), Is Short S&P 500; Cortes Owns (IAI); Cortes Is Short Treasuries; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (USO); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Own (BAC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm And Finerman Own (WFC); Fienrman's Firm Owns (YUM); Terranova Owns (GLD) March Puts; Terranova Owns (AAPL), (EMC), (DELL), (GOOG)

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