BOSTON (MarketWatch) - Apparent confusion over a drug approval for diabetes triggered a minor sell-off in shares of Amylin Pharmaceuticals on Friday, even pressuring shares of partner Eli Lilly at one point.
Shares of Amylin AMLN were down 5% at $17.34 Friday. Amylin's development partner, Eli Lilly LLY saw its stock rise marginally by late afternoon to $58.03.
Early Friday, Amylin and Lilly announced that the Food and Drug Administration had approved their drug Byetta, also known as exenatide, for the treatment of Type 2 diabetes in patients whose blood sugars are not being adequately controlled by other medications. Byetta was approved to be used in conjunction with the popular diabetes medications metformin and sulfonylurea.
Amylin and Lilly also said that the FDA had given the drug an approvable letter as a single agent therapy. With the approvable letter, the FDA would be obliged to make a decision on whether to approve the drug within six months of receiving its completed application, rather than the standard ten-month period.
But investors apparently had expected Byetta to be approved initially as a single agent, prompting a minor sell-off in the stocks.
Executives from both companies later told reporters that they had only sought approval for the drug as a combination therapy.
"Confusion is the right word," said Lilly executive Brian Cooley. "Byetta got approval for the primary indication we were look for."
Cooley added that the data the companies submitted to get the approvable letter as a single agent therapy "was just to explore a label expansion later."
Lilly executives said that while they were interested in pursuing eventual approval for Byetta as a single agent therapy, but were unsure when that application could be made. The executives added that such an approval would likely need an additional Phase III study. They said the company planned to talk to the FDA about what type of studies would be needed for such an approval.
Byetta is scheduled to be launched on June 1. The drug, which is injected, is administered twice a day around meal-time. Lilly said it was also exploring more convenient ways of administering the drug.
Lilly estimated that there are approximately 18 million diabetics in the U.S., up to 8 million of which use oral medications to control their conditions.
A chemical part of the saliva of a poisonous lizard, the Gila monster, has become an integral partner in the control of Type 2 diabetes. The U.S. Food and Drug Administration has approved its use for people who have not achieved adequate control of their diabetes with oral medications.

Byetta, or exenatide, is produced by Amylin Pharmaceuticals. It is injected before eating morning and evening meals as part of a combination treatment with oral drugs. The FDA said it could be approved as a stand-alone treatment if the drug companies can support such use with data.

Eli Lilly & Co. was the development partner in creation of the drug.

"With Byetta's demonstrated effects on blood sugar and its safety profile, physicians and patients now have a new approach to fight the growing diabetes epidemic," said Sidney Taurel, CEO of Lilly.