Shares in Amylin have been hit hard by the news that US regulators are seeking stronger warnings about the risk of acute pancreatitis after the deaths of two patients taking the firm’s injectable diabetes drug Byetta.

The US Food and Drug Administration says it has received six reports of haemorrhagic or necrotising pancreatitis of patients receiving Byetta (exenatide), which is co-marketed with Eli Lilly. Two of them died and the other four were recovering in hospital at the time of reporting.

The FDA stated that it was working with Amylin "to add stronger, more prominent warnings in the product label", though whether that will be a black-box warning is not clear. The move comes after the agency said in October that it had reviewed 30 postmarketing reports of acute pancreatitis in patients being treated with Byetta and at the time, Amylin agreed to add information about the risk on the label.

In response to the FDA’s missive, Amylin and Lilly said they are committed to working with the agency to ensure that Byetta’s label continues to provide information about the risk of pancreatitis. However they also note that patients taking the drug, and more than 700,000 have taken it since its June 2005 launch, have shown “very rare case reports of pancreatitis with complications or with a fatal outcome.” They added that diabetics are already at increased risk of the disease compared with healthy patients.

Nevertheless, Amylin shares ended the day down 13% at $29.76 amid fears that the news could have an adverse effect on the firm’s bid to get approval of a long-acting release formulation of Byetta. In a research note, Barbara Ryan at Deutsche Bank noted that demand for the drug has been “lacklustre” in the last couple of years and while the occurrence of pancreatitis appears to be rare, “in our view, there could potentially be heightened concern regarding pancreatic complications with the longer-acting version… for which the overall patient database is still fairly small”.

Indeed, only around 300 patients have been studied in Phase III studies of Byetta LAR, claimed Tim Anderson at Sanford Bernstein. The analyst issued a note saying that the FDA may worry about its effects once the drug is approved (likely in 2010) “and used in a broader, less closely-monitored, patient population. To us, this creates regulatory risk”.

The importance of Byetta is considerable to Amylin, as second-quarter sales of the drug were $177.5 million, out of total product turnover of $200.3 million.