10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-19700

AMYLIN PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0266089
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)
9373 Towne Centre Drive, San Diego, California	92121
(Address of principal executive offices)	(Zip code)
(858) 552-2200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý        No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act)

Yes ý        No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 7, 2003
Common Stock, $.001 par value	92,772,345

AMYLIN PHARMACEUTICALS, INC.

TABLE OF CONTENTS

COVER PAGE
TABLE OF CONTENTS
PART I.  FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2003 (unaudited) and December 31, 2002
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 (unaudited)
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 (unaudited)
	Notes to Condensed Consolidated Financial Statements
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk
ITEM 4.	Controls and Procedures
PART II.  OTHER INFORMATION
ITEM 6.	Exhibits and Reports on Form 8-K
SIGNATURE
CERTIFICATIONS

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PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

AMYLIN PHARMACEUTICALS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

	March 31, 2003			December 31, 2002
	(unaudited)			(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	84,526		$	69,415
Short-term investments	179,907			77,943
Inventories	10,818			9,820
Other current assets	5,000			3,203
Total current assets	280,251			160,381
Property and equipment, net	5,758			4,469
Patents and other assets, net	3,860			3,695
	$	289,869		$	168,545
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	21,177		$	25,370
Current portion of deferred revenue	31,735			42,090
Current portion of notes payable and capital lease obligations	417			553
Total current liabilities	53,329			68,013
Capital lease obligations and other liabilities, net of current portion	1,352			811
Deferred revenue, net of current portion	23,443			24,515
Note payable, net of discount	64,443			62,908
Stockholders’ equity:
Common stock, $.001 par value, 200,000 shares authorized, 92,666 and 81,979 issued and outstanding at March 31, 2003 and December 31, 2002, respectively	93			82
Additional paid-in capital	695,667			530,023
Accumulated deficit	(548,341		)	(517,531		)
Deferred compensation	(361		)	(443		)
Accumulated other comprehensive income	244			167
Total stockholders’ equity	147,302			12,298
	$	289,869		$	168,545

See accompanying notes to condensed consolidated financial statements.

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AMYLIN PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	Three months ended March 31,
	2003			2002
Revenue under collaborative agreement	$	11,885		$	—
Operating expenses:
Research and development	28,122			16,523
Selling, general and administrative	10,515			4,697
Acquired in-process research and development	3,300			—
	41,937			21,220
Loss from operations	(30,052		)	(21,220		)
Interest and other income	827			603
Interest and other expense	(1,585		)	(1,481		)
Net loss	$	(30,810	)	$	(22,098	)
Net loss per share, basic and diluted	$	(0.34	)	$	(0.30	)
Shares used in computing net loss per share, basic and diluted	90,032			74,205

See accompanying notes to condensed consolidated financial statements.

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AMYLIN PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three months ended March 31,
	2003			2002
Operating activities:
Net loss	$	(30,810	)	$	(22,098	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	717			433
Amortization of deferred compensation	25			22
Amortization of debt discount	299			299
Accrued interest added to notes payable	1,236			1,160
Changes in operating assets and liabilities:
Inventories	(998		)	(907		)
Other current assets	(1,914		)	(66		)
Accounts payable and accrued liabilities	(4,282		)	3,193
Deferred revenue	(11,427		)	—
Other assets and liabilities, net	639			61
Net cash flows used for operating activities	(46,515		)	(17,903		)
Investing activities:
Purchases of short-term investments	(176,595		)	(55,134		)
Sales and maturities of short-term investments	74,825			20,468
Purchase of fixed assets, net	(1,871		)	(819		)
Increase in patents	(306		)	(96		)
Net cash flows used for investing activities	(103,947		)	(35,581		)
Financing activities:
Issuance of common stock, net	165,712			92,308
Principal payments on capital leases and notes payable	(139		)	(137		)
Net cash flows provided by financing activities	165,573			92,171
Change in cash and cash equivalents	15,111			38,687
Cash and cash equivalents at beginning of period	69,415			22,395
Cash and cash equivalents at end of period	$	84,526		$	61,082

See accompanying notes to condensed consolidated financial statements.

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AMYLIN PHARMACEUTICALS, INC.

Notes to Condensed Consolidated Financial Statements

March 31, 2003

(Unaudited)

1.     Summary of Significant Accounting Policies

Basis of Presentation

The information contained herein has been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X.  The information as of March 31, 2003 and for the three months ended March 31, 2003 and March 31, 2002 are unaudited. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. The balance sheet at December 31, 2002, has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For more complete financial information, these financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2002.

Revenue Recognition

Revenue is recognized when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectibility is reasonably assured.  In addition, the Company follows the provisions of the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101 (“SAB 101”), “Revenue Recognition,” which sets forth guidelines in the timing of revenue recognition based upon factors such as passage of title, installation, payments and customer acceptance.  Amounts received for upfront product and technology license fees under multiple-element arrangements are deferred and recognized over the period of such services or performance if such arrangements require on-going services or performance.  Amounts received for milestones are recognized upon achievement of the milestone, and the expiration of stock conversion rights, if any, associated with such payments. Any amounts received prior to satisfying these revenue recognition criteria will be recorded as deferred revenue in the accompanying consolidated balance sheets.

Per Share Data

Basic and diluted net loss applicable to common stock per share is computed using the weighted average number of common shares outstanding during the period.  Common stock equivalents from stock options and warrants of 2.9 million and 3.0 millionfor the three months ended March 31, 2003 and 2002, respectively, are excluded from the calculation of diluted loss per share for all periods presented because the effect is antidilutive.

Stock-Based Compensation

The Company records compensation expense for employee stock options based upon their intrinsic value on the date of grant pursuant to Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees.” Because the Company establishes the exercise price based on the fair market value of the Company’s stock at the date of grant, the options have no intrinsic value upon grant, and therefore no expense is recorded. Each quarter, the Company reports the potential dilutive impact of stock options in its diluted earnings per share using the treasury-stock method. Out-of-the-money stock options (i.e., the average stock price during the period is below the strike price of the option) are not included in diluted earnings per share.

As required under Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation,” and SFAS No. 148, “Accounting for Stock-Based Compensation Transition and Disclosure,” the pro forma effects of stock-based compensation on net income and net earnings per common share have been

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estimated at the date of grant using the Black-Scholes option pricing model based on the following assumptions for the quarters ended March 31, 2003 and 2002, respectively:  risk-free interest rate of 1.19% and 2.7%; dividend yield of 0%; volatility factors of the expected market price of the Company’s common stock of 55% and 73% and a weighted-average expected life of the option of 5 years.

For purposes of pro forma disclosures, the estimated fair value of the options is assumed to be amortized to expense over the options’ vesting periods.  These pro forma amounts may not be representative of the effects on reported net income (loss) for future periods due to the uncertainty of stock option grant volume and potential changes in assumptions driven by market factors. The pro forma effects of recognizing compensation expense under the fair value method on net income (loss) and net earnings per common share were as follows (in thousands, except for earnings per share):

	Quarters Ended March 31,
	2003			2002
Net loss, as reported	$	(30,810	)	$	(22,098	)
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	3,065			2,279
Pro forma net loss	$	(33,875	)	$	(24,377	)
Earnings per share:
Basic and diluted – as reported	$	(0.34	)	$	(0.30	)
Basic and diluted – pro forma	$	(0.38	)	$	(0.33	)

Consolidation

The consolidated financial statements include the accounts of Amylin and its wholly owned subsidiary, Amylin Europe Limited.  All significant intercompany transactions and balances have been eliminated in consolidation.

2.     Investments

The Company has classified its debt securities as available-for-sale, and accordingly, carries its short-term investments at fair value, and unrealized holding gains or losses on these securities are carried as a separate component of stockholders’ equity.  The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity.  Such amortization is included in interest income.  Realized gains and losses and declines in value judged to be other-than-temporary (of which there have been none to date) on available-for-sale securities are included in interest income.  The cost of securities sold is based on the specific identification method.

3.     Inventories

Inventories are stated at the lower of cost (FIFO) or market and consist primarily of SYMLIN® (pramlintide acetate) bulk drug material, which will be used in the manufacture of finished SYMLIN® drug product in vials for syringe administration and cartridges for pen administration, pending regulatory approvals.  At March 31, 2003, total inventories were approximately $10.8 million, of which approximately $0.8 million, net of a valuation allowance of $1.0 million, was in finished form.

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4.     Comprehensive Income (Loss)

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, or SFAS 130, requires reporting and displaying comprehensive income (loss) and its components which, for the Company, includes net loss and unrealized gains and losses on investments.  In accordance with SFAS 130, the accumulated balance of other comprehensive income is disclosed as a separate component of stockholders’ equity.  For the three months ended March 31, 2003, and 2002, the comprehensive loss consisted of (in thousands):

	Three months ended March 31,
	2003			2002
Net loss	$	(30,810	)	$	(22,098	)
Other comprehensive gain (loss):
Unrealized gain (loss) on investments:	77			(384		)
Comprehensive loss	$	(30,733	)	$	(22,482	)

5.     Stockholders’ Equity

On January 23, 2003 the Company completed a public offering of approximately 10.5 million shares of its common stock at a price of $16.60 per share.  This offering was completed pursuant to a $175 million universal shelf registration statement initially filed with the Securities and Exchange Commission in November 2002.  This transaction generated net proceeds of approximately $165 million for the Company.  The Company intends to use the net proceeds for research and development and general corporate purposes.

6.     Acquired In-Process Research and Development

On January 29, 2003, the Company completed an acquisition from Restoragen, Inc. of a Phase 2 program utilizing continuous infusion of glucagon-like peptide 1, or GLP-1, targeted for the treatment of congestive heart failure.  In connection with the transaction, the Company also acquired rights to various GLP-1 related patents.  The Company paid Restoragen approximately $3.3 million at closing and will pay an additional $0.7 million upon receiving satisfactory results from an on-going Phase 2 clinical trial.

This compound is in early Phase 2 development and no alternative future use was identified.  As with many early Phase 2 compounds, launch of products, if approved is not expected in the near term.  Accordingly, the Company recorded a charge for acquired in-process research and development of $3.3 million in the quarter ended March 31, 2003.

ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except for the historical information contained herein, the discussion in this report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in this report due to a number of risks and uncertainties including, among other things, risks and uncertainties in the United States Food and Drug Administration’s, or FDA’s, review of New Drug Applications, generally, risks and uncertainties regarding the additional ongoing clinical testing of SYMLIN® (pramlintide acetate), risks and uncertainties that approvals of SYMLIN®, if obtained, may be delayed and/or limited to specific indications, uncertainties in the European regulatory process for SYMLIN®, our ability to commercialize SYMLIN®, if approved, our ability to enter into sales distribution, marketing and/or corporate partnering agreements with respect to SYMLIN®, the results of our preclinical and clinical studies of our drug candidates, including SYMLIN®, exenatide, exenatide LAR, AC2592 (GLP-1) and AC3056, risks associated with our exenatide collaboration with Eli Lilly and Company, or Lilly, including our ability to achieve development and commercialization milestones and objectives under the collaboration agreement, the timing for Lilly’s sharing in development cost for exenatide, and potential liability and indemnification obligations arising out of ongoing litigation.  Additional factors that could cause or contribute to such differences include, without limitation, those discussed in the section entitled “Liquidity

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and Capital Resources” herein as well as those discussed in our Annual Report on Form 10-K for the year ended December 31, 2002, under the heading “Risk Factors.”

Background

Amylin Pharmaceuticals, Inc. is a biopharmaceutical company engaged in the discovery, development and commercialization of drug candidates for the treatment of diabetes and other metabolic diseases. We currently have two lead drug candidates in late stage development for the treatment of diabetes, SYMLIN® and exenatide, formerly referred to as AC2993 (synthetic exendin-4).  In September 2002, we announced a collaboration agreement with Lilly for the global development and commercialization of exenatide, including sustained release formulations of the product candidate.  We have a third drug candidate, AC3056, for the treatment of atherosclerosis-related cardiovascular disease, in early stage clinical development.  We recently acquired a Phase 2 program utilizing continuous infusion of GLP-1, referred to as AC2592, for the treatment of patients with severe congestive heart failure.  We are studying AC162352 (Peptide YY 3-36), our preclinical candidate for the potential treatment of obesity.  We maintain a focused research and development program to discover and in-license additional drug candidates for metabolic diseases.

Since our inception in September 1987, we have devoted substantially all of our resources to our research and development programs. Substantially all of our revenues to date have been derived from fees and expense reimbursements under earlier SYMLIN® collaborative agreements, from interest income, and more recently, our exenatide collaboration agreement with Lilly. We currently have no product sales and have not received any revenues from the sale of our drug candidates. We have been unprofitable since inception, and expect to incur additional operating losses for at least the next few years.  As of March 31, 2003, our accumulated deficit was approximately $548 million.

In January 2003, we completed a public offering of approximately 10.5 million shares of our common stock generating net proceeds of approximately $165 million.

Results of Operations

Three Months Ended March 31, 2003

Revenue Under Collaborative Agreements

Revenue under collaborative agreements was $11.9 million for the quarter ended March 31, 2003.  We reported no such revenues for the comparable period in 2002.  The revenue in the current quarter consists primarily of the amortization to revenue of a portion of the $80 million non-refundable, up-front payment made by Lilly to us pursuant to our exenatide collaboration agreement entered into in September 2002.  In the quarter ended March 31, 2003, revenues under collaborative agreements also include amounts earned in connection with the Company’s co-promotion of Humatrope®, Lilly’s recombinant human growth hormone product.  We began actively co-promoting Humatrope during the first quarter of 2003.  We expect to see an increase in revenue under collaborative agreements during the remainder of 2003 as a result of the continued amortization of Lilly’s up-front payments, future payments from Lilly to us for a portion of development costs of exenatide, future payments from Lilly to us for our co-promotion of Humatrope and, pending further success of the exenatide development programs, future milestone payments from Lilly.  Recognition of the milestone payments to revenue will be subject to the completion of certain performance requirements and the expiration of stock conversion rights, if any, associated with such payments.

Operating Expenses

Our total operating expenses for the quarter ended March 31, 2003 increased to $41.9 million from $21.2 million for the comparable period in 2002.  Research and development expenses for the quarter ended March 31, 2002 increased to $28.1 million from $16.5 million for the comparable period in 2002. Selling, general and administrative expenses increased to $10.5 million from $4.7 million for the comparable period in 2002.  We incurred a $3.3 million charge for acquired in-process research and development in the quarter ended March 31, 2003 and had no such charge for the comparable period in 2002 (Note 6).

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The $11.6 million increase in research and development expenses in the current quarter, compared to the same period in 2002, reflects primarily costs associated with the three ongoing pivotal Phase 3 clinical trials for exenatide, open label extensions of these trials, an increase in our number of employees and to a lesser extent, costs associated with the recently completed dose titration trial and associated regulatory activities for SYMLIN®.

We expect that research and development expenses will increase from current levels during the remainder of 2003.  This expected increase will be driven primarily by the rate of further expansion of the exenatide and exenatide LAR development programs.  The planned increase includes additional clinical trials to support our NDA for exenatide, additional Phase 2 trials for exenatide LAR, costs associated with manufacturing scale-up for exenatide and exenatide LAR, costs to further develop drug delivery devices for exenatide and SYMLIN®, costs associated with a potential Phase 3B/4 clinical program for SYMLIN and an increase in our number of employees to support these activities.

The $5.8 million increase in selling, general and administrative expenses in the current quarter reflects primarily an increase in our number of employees, including the December 2002 hiring of a sales force consisting of 45 representatives to co-promote Humatrope®.  The increase in selling, general and administrative expenses also reflects costs associated with our commercialization plans for SYMLIN®, increased facilities and other infrastructure costs required to support our growth.  Selling, general and administrative expenses are expected to increase slightly in the next few quarters as the Company prepares for possible commercialization of SYMLIN®.  More significant increases are dependent upon the timing of regulatory approval of SYMLIN® in the United States, currently projected for the end of 2003.  The planned increase includes costs associated with a potential scale-up of our sales and marketing organization, the potential expansion of pre-marketing activities for SYMLIN® and infrastructure costs required to support these activities.

Other Income and Expense

Interest and other income was $0.8 million for the quarter ended March 31, 2003, compared to $0.6 million for the same period in 2002.  The $0.2 million increase in interest and other income in the current year reflects higher average balances available for investment, partially offset by lower market interest rates in the quarter ended March 31, 2003 as compared to the same period in 2002.

Interest and other expense was $1.6 million for the quarter ended March 31, 2003, compared to $1.5 million for the same period in 2002.  The slight increase in interest and other expense in the current quarter reflects a higher note payable balance due to accrued interest added to principal, partially offset by lower market interest rates in the quarter ended March 31, 2003 as compared to the same period in 2002.

Net Loss

The net loss for the quarter ended March 31, 2003 was $30.8 million compared to a net loss of $22.1 million for the same period in 2002.  The increase in the net loss primarily reflects the increased operating expenses partially offset by the increase in revenue under collaborative agreements discussed above.  The net loss for the quarter ended March 31, 2003 includes a non-recurring charge of $3.3 million for acquired in-process research and development.

We expect to incur substantial operating losses for at least the next two years due to ongoing expenses associated with the continuation and potential expansion of our research and development programs, including the clinical development of SYMLIN®, exenatide, exenatide LAR, AC2592 and AC3056, preparation for the planned commercialization of SYMLIN® and related general and administrative support.  Operating losses may fluctuate from quarter to quarter as a result of differences in the timing of expenses incurred and revenues recognized.

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through private placements of common stock and preferred stock, public offerings of common stock, reimbursement of SYMLIN® development expenses through earlier collaboration agreements, payments received pursuant to our September 2002 exenatide collaboration with

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Lilly and debt financings.  We will consider options to efficiently access capital markets to further fund the development and commercialization of our drug candidates.  The level at which we seek to access the capital markets and the timing of any action will depend on a number of factors including progress on our exenatide and SYMLIN® development programs and prevailing market conditions.

At March 31, 2003, we had $264.4 million in cash, cash equivalents and short-term investments as compared to $147.4 million at December 31, 2002.   The increase reflects the proceeds from a January 2003 public offering of common stock of approximately $165 million, partially offset by cash expenditures to fund our operations in the quarter ended March 31, 2003.

At March 31, 2003, we owed Johnson & Johnson approximately $65.9 million pursuant to debt incurred in connection with a collaboration agreement that terminated in 1998.  The amount presented under the caption “Note Payable” in the condensed consolidated balance sheet at March 31, 2003 of $64.4 million is net of a debt discount of $1.5 million, which represents the unamortized portion of the value assigned to warrants issued to Johnson & Johnson. Repayment obligations on this debt commence in June 2005; however, repayment may be accelerated in the event that we enter into certain specified change in control transactions, specified types of agreements for SYMLIN® or certain types of financing arrangements subsequent to approval of the SYMLIN® NDA by the FDA.  Additionally, we owe $0.4 million pursuant to an equipment financing arrangement, which is payable in equal monthly installments through December 2003.

We used cash of $46.5 million and $17.9 million for our operating activities in the quarters ended March 31, 2003 and 2002, respectively.  Investing activities used $103.9 million and $35.6 million in the quarter ended March 31, 2003 and 2002, respectively.  Investing activities in both periods consisted primarily of purchases and sales of short-term investments, purchases of laboratory and office equipment and increases in patents.  Financing activities provided $165.6 million and $92.2 million in the quarters ended March 31, 2003 and 2002, respectively.  These amounts consist of proceeds from the sale of common stock, offset by payments on capital leases and notes payable.    The majority of the cash provided from financing activities in the quarter ended March 31, 2003 was a public offering of common stock for net proceeds of approximately $165 million.

Our use of cash for our operating activities in the quarter ended March 31, 2003 was $46.5 million which was approximately $15.7 million greater than our net loss of $30.8 million.  This is due principally to the amortization of deferred revenue related to the exenatide collaboration of $11.4 million and a net use of cash from our other operating assets of approximately $6.6 million, partially offset by non-cash expenses of $2.3 million.  We expect that our operating cash flows will continue to exceed our net loss until Lilly actively begins to share in development costs for exenatide, currently projected for the second half of 2003.

Cash expenditures for research and development activities are expected to continue to increase in 2003, driven primarily by continued expenditures to complete the Phase 3 program for exenatide, planned expenditures associated with manufacturing scale-up for exenatide and exenatide LAR, costs associated with the acquisition and potential expansion of the Phase 2 GLP-1 development program and potential expansion of our earlier stage development programs.  Pursuant to our collaboration agreement with Lilly, we are responsible for the first $101.2 million of development costs for exenatide and exenatide LAR subsequent to the consummation of the collaboration agreement. We expect to reach this cumulative amount sometime in the second half of 2003.  Subsequent to the time that we reach this cumulative amount, Lilly will equally share with us in U.S. development costs for exenatide and exenatide LAR.

Cash expenditures for selling, general and administrative expenses are expected to continue to increase during 2003 as the Company prepares for the possible approval of SYMLIN®.  More significant cash expenditures are dependent on the timing of regulatory approval and possible launch of SYMLIN® in the United States and include costs associated with a potential scale-up of our sales and marketing organization, the potential expansion of pre-marketing activities for SYMLIN® and infrastructure costs required to support these activities.

At March 31, 2003, we are committed to purchase approximately $5.9 million of commercial grade bulk drug material in the subsequent twelve-month period.  If FDA approval for SYMLIN® is received, our expenditures to secure commercial grade bulk drug material will increase substantially, including a commitment to purchase

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approximately $9.0 million of additional material pursuant to an agreement with Johnson & Johnson.  We are also obligated to purchase this material if we enter into a collaboration agreement for SYMLIN® or if there is a change in control of the Company.  If none of these events occur, we have no obligation to purchase this material from Johnson & Johnson.

In 2001, several class action lawsuits were filed against us and certain of our officers and directors alleging securities fraud in connection with various statements and alleged omissions relating to the development of SYMLIN®.  These lawsuits were consolidated into a single action.    If we are not successful in our defense of this lawsuit, we may be required to make significant payments to our stockholders.  The lawsuit is at an early stage and the extent or range of possible damages, if any, cannot yet be reasonably estimated.

We anticipate continuing our ongoing development programs and may begin other long-term development projects.  These projects may require many years and substantial expenditures to complete and may ultimately be unsuccessful. Therefore, we may need to obtain additional funds from outside sources to continue research and development activities, fund operating expenses, pursue regulatory approvals and build sales and marketing capabilities as necessary.   These sources may include private and/or public offerings of common or preferred stock or debt, revenues and expense reimbursements from collaborative agreements for one or more of our drug candidates, or a combination thereof.  There can be no assurances that such financing will be available on reasonable terms, if at all.  If adequate funds are not available, we may be required to delay, scale back or eliminate one or more of our product development programs.

Our future capital requirements will depend on many factors; including the timing and costs involved in obtaining regulatory approvals for SYMLIN® and exenatide, whether regulatory approvals for the marketing of SYMLIN® and exenatide are received, our ability to receive milestone payments pursuant to our exenatide collaboration with Lilly, our ability and the extent to which we establish commercialization arrangements for SYMLIN®, our ability to progress with other ongoing and new preclinical and clinical trials, the extent of these trials, scientific progress in our other research and development programs, the magnitude of these programs, the costs involved in preparing, filing, prosecuting, maintaining, enforcing or defending ourselves against patents, competing technological and market developments, changes in collaborative relationships and any costs of manufacturing scale-up.

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

We invest our cash and short-term investments primarily in U.S. government securities and marketable securities of financial institutions and corporations with strong credit ratings.  These instruments have various short-term maturities.  We do not utilize derivative financial instruments, derivative commodity instruments or other market risk sensitive instruments, positions or transactions in any material fashion.  Accordingly, we believe that, while the instruments we hold are subject to changes in the financial standing of the issuer of such securities, we are not subject to any material risks arising from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices or other market changes that affect market risk sensitive investments.  Our debt is not subject to significant swings in valuation as interest rates on our debt approximate current market interest rates.

ITEM 4.  Controls and Procedures

As of March 31, 2003, an evaluation was performed under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer (our “CEO”) and our Vice President of Finance and Chief Financial Officer (our “CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, 2003.  There have been no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to March 31, 2003.

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PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits

Exhibit Number	Description
10.54	The Registrant’s 2001 Deferred Compensation Plan, as amended February 19, 2003.
99.1	Certifications Pursuant to U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002.

(b)   Reports on Form 8-K:

1.The Company filed a report on Form 8-K, dated January 17, 2003, which included the form of Underwriting Agreement with Goldman Sachs & Co., Lehman Brothers Inc., Morgan Stanley & Co., Inc., Banc of America Securities LLC and Fortis Securities Inc., used in connection with a public offering of stock completed in January 2003.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Amylin Pharmaceuticals, Inc.
Date:  May 14, 2003	By:	/s/ MARK G. FOLETTA
		Mark G. Foletta,
		Vice President, Finance and Chief Financial Officer (on behalf of the registrant and as the registrant’s principal financial officer)

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CERTIFICATIONS

I, Mark G. Foletta, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Amylin Pharmaceuticals, Inc.;

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c.presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003
	By:	/s/ MARK G. FOLETTA
		Vice President, Finance and Chief Financial Officer

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I, Joseph C. Cook, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Amylin Pharmaceuticals, Inc.;

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c.presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003
	By:	/s/ JOSEPH C. COOK, JR.
		Chairman and Chief Executive Officer

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EX-10.54

Exhibit 10.54

Amylin Pharmaceuticals, Inc.

2001 Deferred Compensation Plan

Effective April 1, 2001

Amended February 19, 2003

Table Of Contents

SECTION 1	DEFINITIONS
SECTION 2	ELIGIBILITY
2.1	Eligibility
SECTION 3	DEFERRED COMPENSATION
3.1	Deferred Compensation
3.2	Payment of Account Balances
3.3	Election to Defer Compensation
3.4	Distribution Election
3.5	Hardship
3.6	Service Provider’s Right Unsecured
3.7	Investment of Contribution
3.8	Distribution with Penalty
SECTION 4	DESIGNATION OF BENEFICIARY
4.1	Designation of Beneficiary
SECTION 5	TRUST PROVISIONS
5.1	Trust Agreement
SECTION 6	AMENDMENT, TERMINATION AND TRANSFERS BY COMMITTEE
6.1	Amendment
6.2	Termination
6.3	Transfers by Committee
SECTION 7	ADMINISTRATION
7.1	Administration
7.2	Liability of Committee; Indemnification
7.3	Expenses
SECTION 8	GENERAL AND MISCELLANEOUS
8.1	Rights against Employer
8.2	Assignment or Transfer
8.3	Severability
8.4	Construction. The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Plan

8.5	Governing Law
8.6	Payment Due to Incompetence
8.7	Tax
8.8	Attorney’s Fees
8.9	Plan Binding on Successors/Assignees

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Amylin Pharmaceuticals, Inc.

2001 Deferred Compensation Plan

Effective April 1, 2001

Amended February 19, 2003

Amylin Pharmaceuticals, Inc., a Delaware Corporation (referred to hereafter as the “Employer”) established, effective April 1, 2001, the Amylin Pharmaceuticals, Inc. 2001 Deferred Compensation Plan (the “Plan”), an unfunded plan for the purpose of providing deferred compensation for a select group of management and highly compensated executives and other persons as described herein.

RECITALS

Whereas, those persons identified by the Board of Directors of the Employer, the Compensation Committee of the Board of Directors of the Employer or any other committee designated by the Board of Directors of the Employer to administer this Plan in accordance with Section 8 hereof (hereinafter referred to as the “Committee”) as eligible to participate in this Plan (each of whom are referred to hereafter as a “Service Provider” or collectively as the “Service Providers”);

Whereas, Employer desires to adopt an unfunded deferred compensation plan and the Service Providers desire the Employer to pay certain deferred compensation and/or related benefits to or for the benefit of Service Providers, or a designated Beneficiary or both; and

Whereas, Employer believes it is in the best interest of Service Providers and their Beneficiaries to adopt the Plan;

Whereas, Employer believes it is in its best interest to amend the Plan to allow Service Providers who are Non-Employee Directors to invest his or her deferred Compensation in Common Stock.

Now, Therefore, the Employer hereby amends the Plan effective as of February 19, 2003.

SECTION 1

Definitions

1.1          “Account” shall mean the separate account(s) established under this Plan and the Trust for each participating Service Provider.

1.2          “Base Salary” shall mean, for a given semi-annual period, an Employee’s regular compensation payable during the semi-annual period, excluding bonuses, commissions, overtime, incentive payments, non-monetary awards, compensation deferred pursuant to all Section 125 (cafeteria) or Section 401(k) (savings) plans of the Employer and other special compensation, and reduced by the tax withholding obligations imposed on the Employer and any other withholding requirements imposed by law with respect to such amounts.

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1.3          “Beneficiary” or “Beneficiaries” shall mean a person or persons designated by the Service Provider to receive such Service Provider’s deferred compensation benefits in the event of his or her death.

1.4          “Cash Bonus” shall mean amounts (if any) awarded under the bonus policies maintained by the Employer and any commissions earned on sales.

1.5          “Change in Control” shall mean the happening of any of the following:

(a)           any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended from time to time, and any successor statute (the “Exchange Act”) (other than the Employer, a subsidiary, an affiliate, or an Employer employee benefit plan, including any trustee of such plan acting as trustee) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Employer representing 50% or more of the combined voting power of the Employer’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

(b)           there is consummated a sale or other disposition of all or substantially of assets of the Employer (other than a sale to an entity where at least 50% of the combined voting power of the voting securities of such entity are owned by the stockholders of the Employer in substantially the same proportions as their ownership of the Employer immediately prior to such sale);

(c)           there is consummated a merger, consolidation or similar transaction involving the Employer and, immediately after the consummation of such transaction, the stockholders of Employer immediately prior to the consummation of such transaction do not own, directly or indirectly, outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving entity in such transaction or more than 50% of the combined outstanding voting power of the parent of the surviving entity in such transaction.

1.6          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder.

1.7          “Consultant” shall mean a person who:  (i) is providing consulting services to the Employer, (ii) was previously employed by the Employer as an officer, vice-president, or equivalent title and (iii) was identified by the Committee as eligible to participate in this Plan while employed by the Employer.

1.8          “Consulting Fees” shall mean, for a given semi-annual period, the consulting fees payable to a Consultant by the Employer during the semi-annual period.

1.9          “Committee” shall mean the Compensation Committee of the Board of Directors of the Employer or any other committee designated by the Board of Directors of the Employer to administer this Plan in accordance with Section 7 hereof.

1.10        “Common Stock” shall mean the common stock of Amylin Pharmaceuticals, Inc.

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1.11        “Compensation” shall mean the Base Salary, Cash Bonuses, Consulting Fees and Director Fees as defined herein.

1.12        “Directors Fees” shall mean, for a given semi-annual period, the retainer, per meeting fees, committee meeting fees, and consulting fees payable to a Non-Employee Director by the Employer during the semi-annual period.

1.13        “Effective Date” of the Plan shall mean April 1, 2001.

1.14        “Eligible Compensation” shall mean projected annual compensation from the Employer determined on an annual basis by the Employer at or before the beginning of the Plan, which may consist of salary, bonus, and/or incentive payments, determined before any deductions under any qualified plan of the Employer (including a Section 401(k) plan or a Section 125 plan) and excluding any special or non-recurring compensatory payments such as moving or relocation bonuses or automobile allowances.

1.15        “Employee” shall mean each employee of Employer.

1.16        “Employer” shall mean Amylin Pharmaceuticals, Inc., a Delaware corporation, and any successor organization thereto, and any Subsidiary of the Company.

1.17        “Employer Contributions” shall mean the Employer’s discretionary contribution, if any, pursuant to Section 3.1(b) of the Plan.

1.18        “Hardship” shall have the meaning set forth in Section 3.5 of the Plan.

1.19        “Non-Employee Director” shall mean a director of the Employer who is not otherwise an Employee of the Employer.

1.20        “Plan Year” shall mean the year beginning each January 1 and ending December 31; notwithstanding the foregoing, the initial Plan Year shall mean the period beginning with the Effective Date and ending on December 31, 2001.

1.21        “Plan” shall mean the Amylin Pharmaceuticals, Inc. 2001 Deferred Compensation Plan, including any amendments thereto.

1.22        “Permanent Disability” shall mean that the Service Provider is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or otherwise meets the definition of “Permanent Disability” as set forth in the Employer’s Long Term Disability Plan as in effect on the date of such determination.  A Service Provider will not be considered to have a Permanent Disability unless he or she furnishes proof of such condition sufficient to satisfy the Employer, in its sole discretion.

1.23        “Service” shall mean employment as a common law employee, service as a Consultant or service as a Non-Employee Director of the Employer, as applicable.  An Employee shall not be deemed to terminate Service if the Employee converts from a Non-Employee

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Director to a common law employee from a common law employee to a Consultant or any combination thereof.

1.24        “Service Provider” shall mean an Employee, Non-Employee Director and Consultant of the Employer, and a Service Provider’s Beneficiary where the context so requires.

1.25        “Subsidiary” shall mean any corporation (other than the Employer) in an unbroken chain of corporations beginning with the Employer, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty (50) percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

1.26        “Transferee Plan” shall mean an unfunded, nonqualified deferred compensation plan described in Section 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974 (“ERISA”).

1.27        “Trust” or “Trust Agreement” shall mean the Amylin Pharmaceuticals, Inc. 2001 Deferred Compensation Plan Rabbi Trust Agreement, including any amendments thereto, entered into between the Employer and the Trustee to carry out the provisions of the Plan.

1.28        “Trust Fund” shall mean the cash and other assets and/or properties held and administered by Trustee pursuant to the Trust to carry out the provisions of the Plan.

1.29        “Trustee” shall mean the designated Trustee acting at any time under the Trust.

SECTION 2

Eligibility

2.1          Eligibility.  Eligibility to participate in the Plan shall be limited to Service Providers of the Employer who: (1) (a) are (or were) classified as officers, vice-presidents, or an equivalent title, and (b) have been selected by the Committee to participate in the Plan, or (2) are Non-Employee Directors.  The Committee shall designate Service Providers who shall be covered by this Plan in a separate Acknowledgment (in the form attached hereto as Appendix 1) for each such Service Provider.  Participation in the Plan shall commence as of the date such Acknowledgment is signed by the Service Provider and delivered to the Employer, provided that deferral of Compensation under the Plan shall not commence until the Service Provider has complied with the election procedures set forth in Section 3.3.  Nothing in the Plan or in the Acknowledgment should be construed to require any contributions to the Plan on behalf of the Service Provider by Employer.

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SECTION 3

Deferred Compensation

3.1          Deferred Compensation.

(a)           Each participating Service Provider may elect, in accordance with Section 3.3 of this Plan, to defer semi-annually the receipt of all or a portion of the Compensation for active Service otherwise payable to him or her by Employer during each semi-annual period or portion of a semi-annual period during the Service Provider’s Service to the Employer.  Any Compensation deferred by Service Provider pursuant to Section 3.3 shall be recorded by the Employer in an Account, maintained in the name of the Service Provider, which Account shall be credited with a dollar amount equal to the total amount of Compensation deferred during each semi-annual period under the Plan, together with earnings thereon credited in accordance with Section 3.7.  The amount or percentage of Compensation that Service Provider elects to defer under Section 3.3 will remain constant for the semi-annual period and shall not be subject to change during such semi-annual period.  Each such deferral election by a Non-Employee Director as to Directors Fees or discontinuance of a deferral election as to Directors Fees will continue in force for each successive semi-annual period until or unless suspended or modified by the filing of a subsequent election with the Employer by the Non-Employee Director in accordance with Section 3.3 of the Plan.  Each deferral election as to an Employee’s Base Compensation or a Consultant’s Consulting Fees shall continue in force only for the semi-annual period to which such election applies, and shall not apply to any successive semi-annual periods.  Each deferral election as to an Employee’s Cash Bonus shall continue in force only for the single semi-annual period in which it is paid, regardless of the period of time as to which it is awarded, and shall not apply to any successive semi-annual periods.  Any deferral election with respect to a Cash Bonus must be made prior to the time the amount of the bonus is determined, prior to the end of the period of time as to which the bonus is awarded, and at a time that the amount of any such bonus remains substantially uncertain.  All deferrals pursuant to this Section 3.1 shall be fully vested at all times.  Deferral elections shall be subject to a minimum dollar and maximum percentage amounts as follows: (i) the minimum semi-annual deferral amount is $2,500, which shall be withheld from the Employee’s Compensation, and (ii) the maximum deferral percentage amounts for each Plan Year shall be determined by the Committee prior to the commencement of such Plan Year; but in no event shall the maximum deferral percentage exceed the maximum amount of the Employee’s Base Salary which may be deferred under applicable federal and state labor and employment laws (including wage and hour laws), 100% of the Employee’s Cash Bonus, 100% of the Consultant’s Consulting Fees and 100% of the Non-Employee Director’s Directors Fees.

(b)           Employer shall not be obligated to make any other contribution to the Plan on behalf of any Service Provider at any time.  Employer may make Employer Contributions to the Plan on behalf of one or more Service Providers.  Employer Contributions, if any, made to Accounts of Service Providers shall be determined in the sole and absolute discretion of the Employer, and may be made without regard to whether the Service Provider to whose Account such contribution is credited has made, or is making, contributions pursuant to Section 3.1(a).  The Employer shall not be bound or obligated to apply any specific formula or basis for calculating the amount of any Employer Contributions and Employer shall have sole and

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absolute discretion as to the allocation of Employer Contributions among participating Service Provider Accounts.  The use of any particular formula or basis for making an Employer Contribution in one year shall not bind or obligate the Employer to use such formula or basis in any other year.  Employer Contributions may be subject to a substantial risk of forfeiture in accordance with the terms of a vesting schedule, which may be selected by the Employer in its sole and absolute discretion.

(c)           Amounts deferred under the Plan shall be calculated and withheld from the Employee’s base salary and/or cash bonus after such compensation has been reduced to reflect salary reduction contributions to the Employer’s Code Section 125 (cafeteria) and Code Section 401(k) (savings) plans, and after any reductions for contributions to the Code Section 423 (employee stock purchase) plan.

3.2          Payment of Account Balances.

(a)           The Service Provider shall elect whether he or she will receive distribution of his or her entire Account, subject to tax withholding requirements, (i) upon reaching a specified age, (ii) upon passage of a specified number of years, (iii) upon a Change in Control (iv) upon termination of Service with Employer, (v) upon the earlier to occur of (A) termination of Service with Employer (B) passage of a specified number of years or attainment of a specified age, or (C) upon a Change in Control (vi) upon the later to occur of (A) termination of Service with Employer (B) passage of a specified number of years or attainment of a specified age or (C) upon a Change in Control, as elected by Service Provider in accordance with the form established by the Committee.  Such form may permit an election among some or all of the alternatives listed in this Section 3.2(a), as determined in the Committee’s sole discretion.  A designation of the time of distribution shall be required as a condition of participation under this Plan.  The Service Provider shall also elect to receive all amounts payable to him or her in a lump sum or in equal monthly installments over a designated period of five or ten years, pursuant to the provisions of Section 3.2(e).  These elections shall be made in accordance with Section 3.4 of this Plan.

(b)           Distributions shall be made to the maximum extent allowable under the election made by Service Provider, except that no distribution shall be made to the extent that the receipt of such distribution, when combined with the receipt of all other “applicable employee remuneration” (as defined in Code Section 162(m)(4)) would cause any remuneration received by an Employee to be nondeductible by the Employer under Code Section 162(m)(1).  The portion of any distributable amount that is not distributed by operation of this Section 3.2(b) shall be distributed in subsequent years in the manner elected by the Service Provider until the Service Provider’s Account has been fully liquidated.  The commencement date of the lump sum payment or the five- or ten-year period (whichever is applicable) shall be automatically extended, when necessary to satisfy the requirements of this subsection, for one-year periods until all Account balances have been distributed in the manner elected by the Service Provider.

(c)           Upon termination of Service Provider’s Service with Employer by reason of death or Permanent Disability prior to the time when payment of Account balances otherwise would commence under the provisions of Section 3.2(a), Service Provider or Service Provider’s designated Beneficiary will be entitled to receive all amounts credited to the Account of Service

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Provider as of the date of his or her death or Permanent Disability (notwithstanding any contrary election to receive distributions under the first sentence of Section 3.2(a)).  Upon termination of Service Provider’s Service with Employer by reason other than death or Permanent Disability prior to the date when payment of Account balances otherwise would commence under the provisions of Section 3.2(a), the Employer may, in the sole discretion of the Committee, distribute to Service Provider or Service Provider’s designated Beneficiary all amounts credited to the Service Provider’s Account as of the date of such termination (notwithstanding any contrary election to receive distributions under the first sentence of Section 3.2(a)); provided, however, that to the extent such distribution involves the distribution of a portion of the Service Provider’s Account that is invested in Common Stock, then no such distribution shall be made unless and until the distribution is exempt from Section 16(b) of the Exchange Act because the conditions of Rule 16b-3(d) of the Exchange Act have been satisfied with respect to such distribution.  Said amounts shall be payable in the form determined pursuant to the provisions of Section 3.2(e).

(d)           Upon the death of Service Provider prior to complete distribution to him or her of the entire balance of his or her Account (and after the date of termination of employment with Employer), the balance of his or her Account on the date of death shall be payable to Service Provider’s designated Beneficiary pursuant to Section 3.2(e).  Notwithstanding any other provision of the Plan to the contrary, the Service Provider’s designated Beneficiary may receive the distribution of the remaining portion of such deceased Service Provider’s Account in the form of a lump sum if the Beneficiary requests such a distribution and the Committee, in its sole discretion, consents to such a distribution.

(e)           The Employer shall distribute or direct distribution of the balance of amounts previously credited to Service Provider’s Account, in a lump sum, or in monthly installments over a period of five (5) years or ten (10) years as Service Provider shall designate.  A designation of the form of distribution shall be required as a condition of participation under this Plan.  Distribution of the lump sum or the first installment shall be made or commence within ninety (90) days following the date specified in the first sentence of Section 3.2(a), or as otherwise provided in 3.2(c).  Subsequent installments, if any, shall be made on the first day of each month following the last installment as determined by Employer.  The amount of each installment shall be calculated by dividing the Account balance as of the date of the distribution by the number of installments remaining pursuant to the Service Provider’s distribution election.  Each such installment, if any, shall take into account earnings credited to the balance of the Account remaining unpaid.  The Service Provider’s distribution election shall be made on a form provided by Employer. Each distribution shall be made in cash.  Notwithstanding the foregoing or anything to the contrary contained herein or in the Service Provider’s distribution election form, to the extent that a Participant’s Account is invested in Common Stock, the Employer shall distribute or direct distribution of the balance of amounts previously credited to Service Provider’s Account in such Common Stock and in a lump sum within ninety (90) days following the date specified in the first sentence of Section 3.2(a), or as otherwise provided in 3.2(c).

3.3          Election to Defer Compensation.  Each election of a Service Provider to defer compensation as provided in Section 3.1 of this Plan shall be in writing, signed by the Service Provider, and delivered to Employer, together with all other documents required under the provisions of this Plan, within such time as determined by the Committee and communicated to

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those Service Providers who are eligible to participate in the Plan; provided, however, that such deferral elections must be delivered to Employer at least three (3) months prior to the beginning of the semi-annual period during each Plan Year with respect to which the Compensation to be deferred is otherwise payable to Service Provider; provided, further, that for the Plan Year in which this Plan is first implemented, and in the case of an Employee who is hired or promoted to a position of eligibility for participation in the Plan or a Non-Employee Director who is elected to become a Non-Employee Director during a semi-annual period, such Service Provider shall have thirty (30) days from the date of notification of eligibility for participation in the Plan in which to submit the required election documents for the then current semi-annual period.   Any deferral election made by Service Provider shall be irrevocable with respect to any Compensation covered by such election, including Compensation payable in the semi-annual period in which the election suspending or modifying the prior deferral election is delivered to Employer. The Employer shall withhold the amount or percentage of Base Salary specified to be deferred in equal amounts for each payroll period and shall withhold the amount or percentage of each Cash Bonus specified to be deferred at the time or times such Cash Bonus is or otherwise would be paid to the Employee.  The election to defer Compensation shall be made on the form provided by Employer.  The Employer shall withhold the amount or percentage of Consulting Fees and/or Directors Fees specified to be deferred at the time or times such Consulting Fees and/or Directors Fees are or otherwise would be paid to the Service Provider.

3.4          Distribution Election.  The initial distribution election of a Service Provider as provided in Section 3.2 of this Plan shall be in writing, signed by the Service Provider, and delivered to Employer, together with all other documents required under the provisions of this Plan, within such period of time determined by the Committee and communicated to those Service Providers who are eligible to participate in the Plan.  Such distribution elections must be delivered to the Employer prior to the beginning of the first Plan Year in which Service Provider is eligible to participate in the Plan; provided however, that a Service Provider who is hired or promoted to a position of eligibility for participation in the Plan or a Non-Employee Director who is elected to become a Non-Employee Director during a Plan Year shall have thirty (30) days from the date of notification of eligibility for participation in the Plan in which to submit the required distribution election documents. If permitted by the Committee, a Service Provider may change the terms of his or her initial distribution election by making a new election, and any such new election will be effective as of the date that is twenty-five (25) months following the date the new election is made and such new election will apply to the Service Provider’s entire account; provided, however, that a Service Provider may not change the terms of his or her initial distribution election with respect to that portion of his or her Account that has been invested in Common Stock.  A Service Provider may not make a new election once distributions from the Plan have commenced or which would first become effective at a time when distributions from the Plan have commenced.  A Service Provider’s distribution election shall be in the form established by the Committee in accordance with the terms of the Plan.

3.5          Hardship.

(a)           A Service Provider may apply for distributions from his or her Account to the extent that the Service Provider demonstrates to the reasonable satisfaction of the Committee that he or she needs the funds due to Hardship; provided, however, that a Service Provider may not receive a distribution of the portion of his or her Account that is invested in Common Stock

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on account of a Hardship, unless and until the distribution is exempt from Section 16(b) of the Exchange Act because the conditions of Rule 16b-3(e) of the Exchange Act have been satisfied with respect to such distribution. For purposes of this Section 3.5, a distribution is made on account of “Hardship” only if the distribution is made on account of an unforeseeable immediate and heavy emergency financial need of the Service Provider and is necessary to satisfy that emergency financial need.  Whether a Service Provider has an immediate and heavy emergency financial need shall be determined by the Committee based on all relevant facts and circumstances, and shall include, but not be limited to: the need to pay funeral expenses of a family member; the need to pay expenses for medical care for Service Provider, the Service Provider’s spouse or any dependent of Service Provider resulting from sudden unexpected illness or accident; payments necessary to prevent the eviction of Service Provider from Service Provider’s principal residence or foreclosure on the mortgage on that residence; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of Service Provider.  A Hardship distribution shall not exceed the amount required to relieve the financial need of the Service Provider, nor shall a Hardship distribution be made if the need may be satisfied from other resources reasonably available to the Service Provider.  For purposes of this paragraph, a Service Provider’s resources shall be deemed to include those assets of the Service Provider’s spouse and minor children that are reasonably available to the Service Provider.  Prior to approving a Hardship distribution, Employer shall require the Service Provider to certify in writing that the Service Provider’s financial need cannot reasonably be relieved:

(i)            through reimbursement or compensation by insurance or otherwise; or

(ii)           by other distributions or nontaxable (at the time of the loan) loans from plans maintained by the Employer or by any other employer, or by borrowing from commercial sources on reasonable commercial terms, in an amount sufficient to satisfy the need.

(b)           Any Service Provider receiving a Hardship distribution under this section shall be ineligible to defer any additional Compensation under the Plan until the first day of the Plan Year following the second anniversary of the date of the Hardship distribution.  In addition, a new deferred election must be submitted to the Employer as a condition of participation in the Plan.

3.6          Service Provider’s Right Unsecured.  The right of the Service Provider or his or her designated Beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Employer, and neither the Service Provider nor his or her designated Beneficiary shall have any rights in or against any amount credited to his or her Account or any other specific assets of the Employer, except as otherwise provided in the Trust.  Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between the Plan and the Employer or any other person.

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3.7          Investment of Contribution.

(a)           The investment options available to each Service Provider shall be determined by the Employer and set forth in a separate written document or in a manner acceptable to the Committee, a copy of which shall be attached hereto and by this reference is incorporated herein.  Each Service Provider shall have the sole and exclusive right to direct the Trustee as to the investment of his or her Accounts in accordance with policies and procedures implemented by the Trustee.A Service Provider who is a Non-Employee Director may invest deferred Compensation in Common Stock, provided that the investment election occurs prior to the time such Compensation is deferred.  Once a Service Provider has directed the investment of a contribution into Common Stock, the Service Provider may not thereafter change the investment of that portion of his or her Account.  The right of a Service Provider to direct the investment of his or her Account into one or more of the available investment options shall not in any way be considered to alter the fact that an Account is a bookkeeping account only that measures the Employer’s obligation to pay benefits hereunder, that the assets being invested at the direction of a Service Provider are assets of the Employer and that the Service Provider’s rights under the Plan remain those of an unsecured, general creditor of the Employer.  Employer shall not be liable for any investment decision made by any Service Provider while such funds are held by the Trustee.

(b)           Accounts shall be credited with the actual financial performance or earnings generated by such investments directed by the Service Provider and made by the Trustee, until the Account has been fully distributed to the Service Provider or to the Service Provider’s designated Beneficiary.  Notwithstanding the foregoing, if a Service Provider directs the investment of a contribution into Common Stock and the Company (or the Trustee, if applicable) is unable to effect a purchase of Common Stock and pursuant to Rule 10b-18 of the Exchange Act and in a manner that does not violate Section 10(b) or Rule 10b-5 of the Exchange Act, then the Service Provider’s Account shall be credited with the actual financial performance or earnings generated by a money market account until such time as the Company (or the Trustee, if applicable) is able to effect a purchase of Common Stock in accordance with the Service Provider’s direction and pursuant to Rule 10b-18 of the Exchange Act and in a manner that does not violate Section 10(b) or Rule 10b-5 of the Exchange Act.

(c)           Employer shall furnish each participant with a statement of his or her account balance at least annually.

3.8          Distribution with Penalty.  Notwithstanding the foregoing, a Service Provider may elect to receive a distribution of his or her Account at any time, upon ten (10) days’ notice to Employer; provided that upon such distribution ten percent (10%) of such Service Provider’s Account shall be forfeited to Employer and may not be recontributed by Employer to Service Provider’s Account; provided further that a Service Provider receiving a distribution under this Section shall be ineligible to defer any additional Compensation under the Plan until the first day of the Plan Year following the date of such distribution.  In addition a new deferral election must be submitted to Employer as a condition of participation in the Plan.Notwithstanding anything to the contrary in this Section 3.8, a Service Provider may not elect to receive a distribution of that portion of his or her Account that is invested in Common Stock unless and until the distribution is exempt from Section 16(b) of the Exchange Act because the conditions of Rule 16b-3(e) of the Exchange Act have been satisfied with respect to such distribution.

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SECTION 4

Designation Of Beneficiary

4.1          Designation of Beneficiary.  Service Provider may designate a Beneficiary or Beneficiaries to receive any amount due hereunder by Service Provider by written notice thereof to Employer at any time prior to Service Provider’s death and may revoke or change the Beneficiary designated therein without the Beneficiary’s consent by written notice delivered to Employer at any time and from time to time prior to Service Provider’s death.  If Service Provider is married and a resident of a community property state, one half of any amount due hereunder which is the result of an amount contributed to the Plan during such marriage is the community property of the Service Provider’s spouse and Service Provider may designate a Beneficiary or Beneficiaries to receive only the Service Provider’s one-half interest.  If Service Provider shall have failed to designate a Beneficiary, or if no such Beneficiary shall survive him or her, then such amount shall be paid to his or her estate.  Designations of Beneficiaries shall be made on the form provided by Employer.

SECTION 5

Trust Provisions

5.1          Trust Agreement.  The Employer may establish the Trust for the purpose of retaining assets set aside by Employer pursuant to the Trust Agreement for payment of all or a portion of the amounts payable pursuant to the Plan.  Any benefits not paid from the Trust shall be paid solely from Employer’s general funds, and any benefits paid from the Trust shall be credited against and reduce by a corresponding amount the Employer’s liability to Service Providers under the Plan.  No special or separate fund, other than the Trust Agreement, shall be established and no other segregation of assets shall be made to assure the payment of any benefits hereunder.  All Trust Funds shall be subject to the claims of general creditors of the Employer in the event the Employer is Insolvent as defined in Section 3 of the Trust Agreement.  The obligations of the Employer to pay benefits under the Plan constitute an unfunded, unsecured promise to pay and Service Providers shall have no greater rights than general creditors of the Employer.

SECTION 6

Amendment, Termination And Transfers By Committee

6.1          Amendment.  The Committee shall have the right to amend this Plan at any time and from time to time, including a retroactive amendment.  Any such amendment shall come effective upon the date stated therein, and shall be binding on all Service Providers, except as otherwise provided in such amendment; provided, however, that said amendment shall not affect adversely benefits payable to an affected Service Provider without the Service Provider’s written approval.

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6.2          Termination.  The Committee shall have the right to terminate this Plan at any time and direct the lump sum payments of all assets held by the Trust if the Employer is not Insolvent (as defined in Section 3 of the Trust Agreement) at that time.

6.3          Transfers by Committee.

(a)           In the event that a Service Provider transfers employment from the Employer to a Subsidiary, the Committee shall have the right, but no obligation, to direct the Trustee to transfer funds in an amount equal to the amount credited to such Service Provider’s Account (the “Transferred Account”) to a trust established under a Transferee Plan maintained by such Subsidiary.  The Committee shall determine, in its sole discretion, whether such transfer shall be made and the timing of such transfer.  Such transfer shall be made only if, and to the extent, approval of such transfer is obtained from the Trustee.

(b)           No transfer shall be made under this Section 6.3 unless the Service Provider for whose benefit the Transferred Account is held executes a written waiver of all of such Service Provider’s rights and benefits under this Plan in such form as shall be acceptable to the Committee.

SECTION 7

Administration

7.1          Administration.  The Committee shall administer and interpret this Plan in accordance with the provisions of the Plan and the Trust Agreement.  Any determination or decision by the Committee shall be conclusive and binding on all persons who at any time have or claim to have any interest whatever under this Plan.  The Committee may employ legal counsel, consultants, actuaries and agents as it may deem desirable in the administration of the Plan and may rely on the opinion of such counsel or the computations of such consultant or other agent.  The Committee shall have the authority to delegate some or all of the powers and responsibilities under the Plan and the Trust Agreement to such person or persons as it shall deem necessary, desirable or appropriate for administration of the Plan.

7.2          Liability of Committee; Indemnification.  To the maximum extent not prohibited by law, no member of the Committee shall be liable to any person and in any event shall be indemnified by the Employer for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to his or her own bad faith or willful misconduct.

7.3          Expenses.  The costs of the establishment of the Plan and the adoption of the Plan by Employer, including but not limited to legal and accounting fees, shall be borne by Employer.  The expenses of administering the Plan and the Trust shall be borne by the Trust unless the Employer elects in its sole discretion to pay some or all of those expenses; provided, however, that Employer shall bear, and shall not be reimbursed by, the Trust for any tax liability of Employer associated with the investment of assets by the Trust.

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SECTION 8

General And Miscellaneous

8.1          Rights against Employer.  Except as expressly provided by the Plan, the establishment of this Plan shall not be construed as giving to any Service Provider or to any person whomsoever, any legal, equitable or other rights against the Employer, or against its officers, directors, agents or shareholders, or as giving to any Service Provider or Beneficiary any equity or other interest in the assets, business or shares of Employer stock or giving any Service Provider the right to be retained in the employment of the Employer.  Neither this plan nor any action taken hereunder shall be construed as giving to any Service Provider the right to be retained in the employ of the Employer or as affecting the right of the Employer to dismiss any Service Provider.  Any benefit payable under the Plan shall not be deemed salary or other compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of the Employer for the benefit of its Employees.  Nothing in the Plan or in any instrument executed pursuant thereto shall confer upon any Consultant any right to continue in the service of the Employer in any capacity.  Nothing in the Plan or in any instrument executed pursuant thereto shall confer upon any Non-Employee Director any right to continue in the service of the Employer in any capacity or shall affect any right of the Employer, its Board of Directors or stockholders to remove any Non-Employee Director pursuant to the Employer’s Bylaws and the provisions of the Delaware General Corporation Law.

8.2          Assignment or Transfer.  No right, title or interest of any kind in the Plan shall be transferable or assignable by any Service Provider or Beneficiary or be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, whether voluntary or involuntary, nor subject to the debts, contracts, liabilities, engagements, or torts of the Service Provider or Beneficiary.  Any attempt to alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or encumber or dispose of any interest in the Plan shall be void.

8.3          Severability.  If any provision of this Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable, and this Plan shall be construed and enforced as if said illegal or invalid provision had never been inserted herein.

8.4          Construction. The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Plan.  Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular.  When used herein, the masculine gender includes the feminine gender.

8.5          Governing Law.  The validity and effect of this Plan and the rights and obligations of all persons affected hereby shall be construed and determined in accordance with the laws of the State of California unless superseded by federal law.

8.6          Payment Due to Incompetence.  If the Committee receives evidence that a Service Provider or Beneficiary entitled to receive any payment under the Plan is physically or

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mentally incompetent to receive such payment, the Committee may, in its sole and absolute discretion, direct the payment to any other person or Trust which has been legally appointed by the courts or to any other person determined by the Employer to be a proper recipient on behalf of such person otherwise entitled to payment, or any of them, in such manner and proportion as the Employer may deem proper.  Any such payment shall be in complete discharge of the Employer’s obligations under this Plan.

8.7          Tax.  The Employer may withhold from any benefits payable under this Plan, all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

8.8          Attorney’s Fees.  Employer shall pay the reasonable attorney’s fees incurred by any Service Provider in an action brought against Employer to enforce Service Provider’s rights under the Plan, provided that such fees shall only be payable in the event that the Service Provider prevails in. such action.

8.9          Plan Binding on Successors/Assignees.  This Plan shall be binding upon and inure to the benefit of the Employer and its successor and assigns and the Service Provider and the Service Provider’s designee and estate.

The Employer has caused its authorized officer to execute this Plan this 19^th day of February, 2003.

Amylin Pharmaceuticals, Inc.
By:
	Joseph C. Cook, Jr.
	Chief Executive Officer and Chairman of the Board

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Appendix 1

ACKNOWLEDGMENT

The undersigned Service Provider hereby acknowledges that Employer has selected him or her as a participant in the Amylin Pharmaceuticals, Inc. 2001 Deferred Compensation Plan, subject to all terms and conditions of the Plan, a copy of which has been received, read, and understood by the Service Provider in conjunction with executing this Acknowledgment.  Service Provider acknowledges that he or she has had satisfactory opportunity to ask questions regarding his or her participation in the Plan and has received satisfactory answers to any questions asked.  Service Provider also acknowledges that he or she has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of participation in the Plan.  Service Provider understands that his or her participation in the Plan shall not begin until this Acknowledgment has been signed by Service Provider and returned to Employer.

Dated:
Signed:
	Service Provider
Dated:
	AMYLIN PHARMACEUTICALS, INC.
Signed:
	[Officer]

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EX-99.1

Exhibit 99.1

CERTIFICATION

Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. § 1350, as adopted), Joseph C. Cook, Jr., the Chief Executive Officer and Chairman of the Board of Amylin Pharmaceuticals, Inc. (the “Company”), and Mark G. Foletta, the Vice President and Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2003, to which this Certification is attached as Exhibit 99.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.

Dated: May 14, 2003

/s/ JOSEPH C. COOK, JR.	/s/ MARK G. FOLETTA
Joseph C. Cook, Jr.	Mark G. Foletta
Chief Executive Officer and Chairman of the Board	Vice President and Chief Financial Officer