Amylin Pharmaceuticals Shares Plummeted: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Amylin Pharmaceuticals (NAS: AMLN) plunged more than 18% in early trading after the company ended a long-standing partnership with Eli Lilly (NYS: LLY) to settle litigation. The stock closed off about 11% while shares of Lilly rallied more than 1.5%.

So what: With the partnership dissolving, Amylin faces higher costs for marketing diabetes treatment Byetta and inherits rights to the drug Bydureon, which, if approved, could allow diabetes sufferers to cut injections to just once weekly. Lilly's linagliptin is designed to compete with both Byetta and Bydureon, Bloomberg reports.

Now what: Investors are selling into the unknowns -- specifically, what higher costs will do Amylin's improving profit margins. Do you agree with the skeptics? Or would you buy shares of Amylin Pharmaceuticals at current prices? Please weigh in using the comments box below.

Interested in more information about Amylin Pharmaceuticals? Add it to yourwatchlist.

At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners