They have partnered with the giant Eli Lilly (LLY) and have been working on improving their diabetes drug, including a dosage that would need to be taken only once a week. Additionally, the company has obesity drugs in their pipeline, which makes them an attractive takeover target.
A recent study conducted by Amylin and Eli Lilly showed that diabetics taking the blood-sugar drug Byetta had about one-sixth the risk of hypoglycemia, compared to those taking insulin.
The market for diabetes is huge, but Amylin, after a huge run in 2005, has been flat for 18 months. The short ratio on the stock is around 17% and with triple digit quarterly revenue growth, the stock is poised for a move. I still like the stock at current levels even if there is no buy-out.
AMLN/LLY 1-yr comparison chart
Disclosure: I do not own AMLN but my position can change anytime without notice.