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One More Day For Once-A-Week Byetta

Thursday, 11 Mar 2010 | 12:19 PM ET

I can’t recall this much disagreement on Wall Street specifically about the timing and outcome of an FDA decision on whether to approve a drug.

Tomorrow is the day the agency is scheduled to announce if the first once-a-week diabetes treatment, a rejiggered version of the now twice-a-day Byetta, can come to market.

Lilly, Amylin and Alkermes are partners on it.

Some analysts and investors think the injection will get full-on approval. Others believe it’ll get the green light, but with safety warnings. Still others predict the FDA will ask for more data resulting in a relatively short delay. And there’s another camp that says the agency wants more study results which would put off a ruling even longer.

I don’t get involved in making predictions about stuff like this, especially when it involves the FDA.

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However, analysts are busy laying all sorts of odds about which scenario is the most likely to play out. The day before the decision and the day after shares of AMLN hit a new high, Merriman Curhan Ford started coverage of the stock with a “buy” rating. In a 27-page research note to clients, veteran biotech analyst Mike King writes, “We still think AMLN has room to run.” He says there’s “increasing likelihood” the FDA approves the drug tomorrow because of recent decisions by the agency to okay a similar drug, Victoza, from Novo Nordisk and to allow stand-alone use of twice-a-day Byetta.

Volatility is high.

At first, AMLN shares hit another new high this morning, but then they started to sell off. Citi analyst Dr. Yaron Werber is talking about a survey his team did of more than 50 buy-side clients. 65 percent of them said they don’t think the FDA will say yes on Friday. “This is in-line with our thesis as we believe the FDA may require additional data….,” Dr. Werber writes. He’s telling buyers to wait for a pullback in the stock.

For what it’s worth, David Kliff, a type 2 diabetic who’s been following this story for eons in his “Diabetic Investor” newsletter, writes to subscribers today that he believes the agency will approve once-a-week Byetta tomorrow and that it won’t come with a severe safety warning. “Diabetic Investor suspects the folks at Amylin , Lilly and Alkermes are like a nervous husband awaiting the birth of their child,” Kliff quips.

I will be flying to L.A. tomorrow for my dad’s 80th birthday party this weekend. My flight is scheduled to land just before the market closes, so assuming I get in on time and the FDA doesn’t make a surprise announcement during trading hours I should be available to call in the news for CNBC and tweet it. Especially when FDA decision days fall on a Friday, the announcement usually isn’t made until late in the day. And sometimes when the FDA lets a company know its decision too late in the day, the firm waits until the following business day to put out a press release. So, it’s entirely possible we might not find out until Monday morning. But again, we’re talking about the unpredictable FDA, which marches to the beat of its own drummer.

Anything can happen. And probably will.

More on CNBC.com including:

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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