This is surprising because Bydureon is a long-acting version of an already approved drug, Byetta.
This drug will compete directly with both Byetta and Bydureon, which both contain exenatide.
Kliff believes that Byetta could "easily capture" 10% of the market within the first year.
The FDA also gave Byetta an "approvable letter" for its use as a single-agent therapy.
Lilly will receive royalties on sales of Byetta and Bydureon up to a cap.
WSJ: FDA Approves Amylin's Bydureon Diabetes Drug After Delays
Byetta (exenatide) is a relatively new drug and was approved to treat type 2 diabetes in 2005.
But the follow-up drug, Byetta LAR, would be given once a week instead of twice a day.
Another rival drug to watch is Byetta, an already approved treatment from Amylin Pharmaceuticals and Eli Lilly.
The Gila monster finding led to Byetta, a synthetic version of what is found in the lizards.
Bydureon is an injectable, extended-release version of Amylin's older diabetes drug, Byetta, which is injected twice daily.
WSJ: FDA Approves Amylin's Bydureon Diabetes Drug After Delays
One side effect of Byetta--in addition to nausea--is weight loss, which Kliff views as a positive for diabetics.
But the twice-a-day Byetta is already facing competition from Victoza, a once-a-day injection from insulin giant Novo Nordisk.
Amylin sells a diabetes drug, Byetta, with Eli Lilly (nyse: LLY - news - people ).
"It is thought that the main reason nausea occurs is the effects of Byetta on the stomach, " he says.
In 2007, Byetta was linked to a higher risk of acute pancreatitis, a potentially life-threatening inflammation of the pancreas.
Some patients already had kidney disease before they started the drug, but others developed kidney problems after taking Byetta.
In the case of Byetta, shares of Amylin dropped more than 6% on the day of the approval announcement.
Worries about pancreatitis became a concern shortly after Byetta was launched in 2005.
One worry is a handful of reports that Byetta may inflame the pancreas.
The FDA received 78 reports of kidney problems related to Byetta, including kidney failure, between April 2005 and October 2008.
Eighty percent stopped taking Byetta, and half of those patients had an improvement in kidney function after stopping the drug.
The FDA noted that some of the cases associated with Byetta appeared particularly severe, marked by dying tissue or bleeding.
And if the FDA thinks thyroid cancer is a real risk, does it also apply to other drugs like Byetta?
Ginger Graham , Amylin's chief executive, says that by educating doctors about GLP-1, she thinks Merck and Novartis might actually benefit Byetta.
Does the diabetes drug Byetta cause a dangerous swelling of the pancreas?
Byetta is a synthetic version of the Gila monster chemical he found.
Two weeks ago, for instance, Bristol Myers Squibb acquired Amylin Pharmaceuticals (NASDAQ:AMLN), which has won approval for two diabetes drugs, BYETTA and SYMLIN.
But worries about pancreatitis could actually make things difficult for a planned follow-up to Byetta, says Timothy Anderson, an analyst at Sanford C.
Worst hit will be Amylin Pharmaceuticals, which developed Bydureon and its predecessor, the twice-a-day Byetta, from a compound found in Gila monster saliva.
In November, Lilly and Amylin settled the dispute by agreeing to return global development and commercialization rights for Byetta and Bydureon to Amylin.
WSJ: FDA Approves Amylin's Bydureon Diabetes Drug After Delays
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