Move Over Insulin, Here Comes Byetta

Sometimes, as an investor, you cannot win for winning.

Translation: sometimes I really hate Wall Street. If there ain't enough new molecules, Wall Street often overlooks the obvious -- sort of like ignoring a beautiful woman (or man) because they aren't wearing the right clothes.

The American Diabetes Association (ADA) just wrapped up its annual confab and to me -- as an investor looking at fundamentals -- the real news out of the conference came from Amylin Pharmaceuticals (AMLN).

The company has two diabetes drugs on the market - Symlin and Byetta - with the latter a blockbuster and the only Type 2 diabetes that induces weight loss and truly improves the ability of patients to manage their glucose levels. But that's not the real news. The real news was trail data showing Byetta, plus two oral medications, controlled glucose as well as insulin and those two medications.

That is serious news!

The FDA will require a much bigger trial, but docs already familiar with Byetta will jump on the news and, once a larger trial is completed, you can assume AMLN will go for a new FDA label (approval to market) for Byetta. That label will say that doctors can prescribe it with these two trial meds before moving a patient to insulin.

If you didn't know, the Holy Grail in diabetes treatments is to keep patients away from insulin for as along as possible.

The stock actually traded down on the news. What were those guys on the Street looking for, that Byetta was better than insulin?

Well, actually it is, as insulin induces weight gain and Byetta induces weight loss. More importantly insulin creates a wide variation in glucose levels and often induces hypoglycemia, which requires treatments from orange juice to more meds to fix.

A lot of other noise occurred at the ADA confab, including heated discussion about GlaxoSmithKline's (GSK) drug Avandia, much of it negative as physicians felt betrayed that they had recommended and prescribed a drug that looks like it created a lot more problems than it was worth.

"Noise" does move stocks - but I like fundamentals and the news about Byetta was fundamentally terrific.