10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2009
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.)
9360 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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No x

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

Class	Outstanding on April 28, 2009
Common Stock, $.001 par value	140,909,635

AMYLIN PHARMACEUTICALS, INC.

TABLE OF CONTENTS

COVER PAGE
TABLE OF CONTENTS		2
PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008	3
	Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	27
ITEM 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	27
ITEM 1A.	Risk Factors	28
ITEM 6.	Exhibits	41
SIGNATURE		42

2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMYLIN PHARMACEUTICALS, INC.

Consolidated Balance Sheets

(in thousands, except per share data)

	March 31, 2009			December 31, 2008 (1)
	(unaudited)			(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	179,748		$	237,263
Short-term investments	531,667			579,575
Accounts receivable, net	62,065			62,369
Inventories, net	119,713			115,823
Other current assets	60,857			41,038
Total current assets	954,050			1,036,068
Property, plant and equipment, net	689,128			655,444
Other long-term assets	23,244			23,755
Debt issuance costs	11,025			11,786
	$	1,677,447		$	1,727,053
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	36,686		$	39,467
Accrued compensation	35,172			65,145
Payable to collaborative partner	67,359			60,470
Other current liabilities	92,257			90,125
Restructuring liability, current portion	14,772			24,235
Notes payable, current portion	31,250			31,250
Deferred revenue, current portion	2,015			3,086
Total current liabilities	279,511			313,778
Long-term deferred credit	125,000			125,000
Restructuring liability, net of current portion	19,545			22,503
Other long-term obligations, net of current portion	27,307			31,724
Notes payable, net of current portion	85,938			93,750
Convertible senior notes	626,511			621,021
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value, 7,500 shares authorized, none issued and outstanding at March 31, 2009 and December 31, 2008	—			—
Common stock, $.001 par value, 450,000 shares authorized, 140,862 and 137,623 issued and outstanding at March 31, 2009 and December 31, 2008, respectively	141			138
Additional paid-in capital	2,331,933			2,291,762
Accumulated deficit	(1,808,565		)	(1,761,611		)
Accumulated other comprehensive loss	(9,874		)	(11,012		)
Total stockholders’ equity	513,635			519,277
	$	1,677,447		$	1,727,053

(1)  Adjusted for the required retroactive adoption of FSP APB 14-1.

See accompanying notes to consolidated financial statements.

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AMYLIN PHARMACEUTICALS, INC.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	Three months ended March 31,
	2009			2008 (1)
Revenues:
Net product sales	$	179,332		$	178,721
Revenues under collaborative agreements	14,342			18,516
Total revenues	193,674			197,237
Costs and expenses:
Cost of goods sold	18,632			22,024
Selling, general and administrative	87,556			98,243
Research and development	60,019			77,206
Collaborative profit sharing	73,017			69,901
Total costs and expenses	239,224			267,374
Operating loss	(45,550		)	(70,137		)
Interest and other income	3,023			11,030
Interest and other expense	(4,427		)	(11,992		)
Net loss	$	(46,954	)	$	(71,099	)
Net loss per share, basic and diluted	$	(0.34	)	$	(0.52	)
Shares used in computing net loss per share, basic and diluted	138,804			135,859

(1)  Adjusted for the required retroactive adoption of FSP APB 14-1.

See accompanying notes to condensed consolidated financial statements.

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AMYLIN PHARMACEUTICALS, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three months ended March 31,
	2009			2008 (1)
Operating activities:
Net loss	$	(46,954	)	$	(71,099	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	8,722			6,484
Amortization debt discount and debt issuance costs	2,201			3,252
Employee stock-based compensation	10,954			14,062
Stock-settled compensation accruals	7,352			7,092
Other non-cash expenses, net	600			967
Changes in operating assets and liabilities:
Accounts receivable, net	304			8,067
Inventories, net	(3,890		)	2,148
Other current assets	(20,143		)	2,479
Accounts payable and accrued liabilities	(64		)	17,073
Accrued compensation	(11,971		)	(7,191		)
Payable to collaborative partner	6,889			521
Deferred revenue	(1,071		)	(1,071		)
Restructuring liabilities	(12,421		)	—
Other assets and liabilities, net	(4,369		)	3,217
Net cash flows used for operating activities	(63,861		)	(13,999		)
Investing activities:
Purchases of short-term investments	(242,256		)	(368,471		)
Sales and maturities of short-term investments	291,626			362,162
Purchases of property, plant and equipment, net	(38,833		)	(86,448		)
Increase in other long-term assets	(217		)	(339		)
Net cash flows provided by (used for) investing activities	10,320			(93,096		)
Financing activities:
Issuance of common stock, net	3,838			6,606
Repayment of notes payable	(7,812		)	—
Net cash flows (used for) provided by financing activities	(3,974		)	6,606
Change in cash and cash equivalents	(57,515		)	100,489
Cash and cash equivalents at beginning of period	237,263			422,232
Cash and cash equivalents at end of period	$	179,748		$	321,743
Supplemental disclosure of cash flow information:
Property, plant and equipment additions in other current liabilities	$	5,472		$	22,196
Non-cash interest capitalized to property, plant and equipment	$	4,055		$	2,518
Non-cash financing activities:
Issuance of common stock for contingent share settled obligation	$	—		$	30,000
Shares contributed as employer 401(k) match	$	5,104		$	4,283
Shares contributed to employee stock ownership plan	$	20,250		$	16,996

(1)  Adjusted for the required retroactive adoption of FSP APB 14-1.

See accompanying notes to consolidated financial statements.

5

AMYLIN PHARMACEUTICALS, INC.

Notes to Consolidated Financial Statements

March 31, 2009

(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, 2009, and for the three months ended March 31, 2009 and 2008, 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, 2008, has been derived from the audited consolidated financial statements at that date, adjusted for the retroactive adoption of  FSP APB No. 14-1 (see Note 2), but does not include all information and footnotes required by U.S. generally accepted accounting principles 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 Amylin Pharmaceuticals, Inc.’s (referred to as the Company or Amylin) Annual Report on Form 10-K for the year ended December 31, 2008.

Revenue Recognition

Net Product Sales

The Company sells BYETTA® (exenatide) injection for the treatment of type 2 diabetes and SYMLIN® (pramlintide acetate) injection for the treatment of type 1 and type 2 diabetes primarily to wholesale distributors, who, in turn, sell to retail pharmacies and government entities. Product sales are recognized when delivery of the products has occurred, title has passed to the customer, the selling price is fixed or determinable, collectability is reasonably assured and the Company has no further obligations. The Company records allowances for product returns, rebates, wholesaler chargebacks, wholesaler discounts and prescription vouchers at the time of sale and reports product sales net of such allowances. The Company must make significant judgments in determining these allowances. If actual results differ from the Company’s estimates, the Company will be required to make adjustments to these allowances in the future.  The Company recorded an allowance for rebates related to the DOD’s Tricare Retail Pharmacy program pursuant to a final rule that was issued in March 2009 and is effective on May 26, 2009.  The final rule implements the DOD’s revised interpretation of the National Defense Authorization Act of 2008, or NDAA, signed into law on January 28, 2008. The final rule changed the process by which rebate obligations for the Tricare Retail Pharmacy program are created such that a contractual agreement is no longer required and that obligation to pay such rebates emanates from the NDAA itself.  In consideration of this final rule the Company recorded an allowance of $5.8 million for such rebates in the three months ended March 31, 2009, of which $4.8 million represents a retroactive rebate assessment for sales made during 2008 that now appear probable of being assessed and paid.

The Company records all United States BYETTA and SYMLIN product sales. With respect to BYETTA, the Company has determined that it is qualified as a principal under the criteria set forth in Emerging Issues Task Force (EITF), Issue 99-19, “Reporting Gross Revenue as a Principal vs. Net as an Agent,” based on the Company’s responsibilities under its contracts with Eli Lilly and Company, or Lilly, which include manufacture of product for sale in the United States, responsibility for establishing pricing in the United States, distribution, ownership of product inventory and credit risk from customers.

Revenues Under Collaborative Agreements

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. Non-refundable amounts received for substantive milestones are recognized upon achievement of the milestone. Amounts received for sharing of development expenses are recognized in the period in which the related expenses are incurred. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue.

Collaborative Profit-Sharing

Collaborative profit-sharing represents Lilly’s 50% share of the gross margin for BYETTA sales in the United States.

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AccountsReceivable

Trade accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts, product returns and chargebacks. Allowances for rebate discounts and distribution fees are included in other current liabilities in the accompanying consolidated balance sheets. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns and individual customer circumstances.  The allowance for doubtful accounts was $0.7 million and $0.6 million at March 31, 2009 and December 31, 2008, respectively.

Investments in Unconsolidated Entities

The Company uses the equity method of accounting for investments in other companies that are not controlled by the Company and in which the Company’s interest is generally between 20% and 50% of the voting shares or the Company has significant influence over the entity, or both.  The Company’s share of the income or losses of these entities are included in interest and other income or interest and other expense, and the investments, which have a net book value of $4.2 million and $4.7 million at March 31, 2009 and December 31, 2008, respectively, are included in other long-term assets.  The Company recorded $0.6 million and $0.9 million for its share of equity method investee losses during the three months ended March 31, 2009 and 2008, respectively.

Fair Value Measurements

Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements,” provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. SFAS No. 157 prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3	Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair value measurements as of March 31, 2009
	Total			Level 1		Level 2			Level 3
Short-term investments	$	531,667		$	531,667	$	—		$	—
Cash and cash equivalents	179,748			179,748		—			—
Derivative financial instrument contracts, net liability	(4,024		)	—		(4,024		)	—
	$	707,391		$	711,415	$	(4,024	)	$	—

Research and Development Expenses

Research and development costs are expensed as incurred and include salaries and bonuses, benefits, non-cash stock-based compensation, license fees, milestones under license agreements and costs paid to third-party contractors to perform research, conduct clinical trials and develop drug materials and delivery devices; and associated overhead expenses and facilities costs. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. Invoicing from third-party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with such activities based on its estimate of management fees, site management and monitoring costs and data management costs. Actual clinical trial costs may differ from estimates and are adjusted in the period in which they become known.

7

Derivative Financial Instruments

The Company mitigates certain financial exposures, including currency risk and interest rate risk, through a controlled program of risk management that includes the use of derivative financial instruments. Derivatives are recorded on the balance sheet at fair value, with changes in value being recorded in interest and other expense. The fair value of the Company’s derivative financial instruments was a net liability of $4.0 million and $4.8 million at March 31, 2009 and December 31, 2008, respectively.  The Company has determined that its derivative financial instruments are defined as Level 2 in the fair value hierarchy. The Company recognized a gain of $0.7 million and a loss of $2.8 million on derivative financial instruments for the three months ended March 31, 2009 and 2008, respectively.

The following table summarizes the fair value and balance sheet classification of the Company’s derivative financial instruments (in thousands):

	March 31, 2009				December 31, 2008
	Fair Value			Balance sheet location	Fair Value			Balance sheet location
Foreign currency derivative contracts	$	413		Other current assets	$	160		Other current assets
Interest rate derivative contract (Note 11)	$	(4,437	)	Other long-term obligations, net of current portion	$	(4,991	)	Other long-term obligations, net of current portion
	$	(4,024	)		$	(4,831	)

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 0.3 million and 3.3 million for the three months ended March 31, 2009 and 2008, respectively, are excluded from the calculation of diluted loss per share for all periods presented because the effect is antidilutive. Common stock equivalents from shares underlying our convertible senior notes of 15.2 million for the three months ended March 31, 2009 and 2008 are also excluded from the calculation of diluted loss per share because the effect is antidilutive. In future periods, if the Company reports net income and the common share equivalents for our convertible senior notes are dilutive, the common stock equivalents will be included in the weighted average shares computation and interest expense related to the notes will be added back to net income to calculate diluted earnings per share.

Accounting for Stock-Based Compensation

Effective January 1, 2006, the Company adopted the fair value method of accounting for stock-based compensation arrangements in accordance with Financial Accounting Standards Board (FASB) revised Statement of Financial Accounting Standards (SFAS) No. 123 (SFAS 123R), “Share-Based Payment,” which establishes accounting for non-cash stock-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period, which for the Company is generally the vesting period. The Company adopted SFAS 123R using the modified prospective method. Under the modified prospective method, prior periods are not revised for comparative purposes. The valuation provisions of SFAS 123R apply to new awards and to awards that are outstanding on the effective date and subsequently modified or cancelled. Estimated non-cash stock-based compensation expense for awards outstanding at the effective date is being recognized over the remaining service period using the compensation cost calculated for pro-forma disclosure purposes under SFAS 123, “Accounting for Stock-Based Compensation.”

Total estimated stock-based compensation was as follows (in thousands, except per share data):

	Three months ended March 31,
	2009		2008
Selling, general and administrative expenses	$	7,305	$	8,332
Research and development expenses	3,649		5,730
	$	10,954	$	14,062
Net stock-based compensation expense, per common share:
Basic	$	0.08	$	0.10
Diluted	$	0.08	$	0.10

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The Company recorded $11.0 million and $14.1 million of total non-cash stock-based compensation expense during the three months ended March 31, 2009 and 2008, respectively, in all cases related to stock-based awards consisting of stock options and employee stock purchase rights.  At March 31, 2009, total unrecognized estimated compensation cost related to non-vested stock-based awards granted prior to that date was $81.6 million, which is expected to be recognized over a weighted-average period of 2.5 years.  The Company issued 0.1 million shares upon the exercise of stock options in the three months ended March 31, 2009.

In addition to the stock-based compensation discussed above, the Company also recorded $5.8 million and $5.4 million of expense associated with its Employee Stock Ownership Plan, or ESOP, for the three months ended March 31, 2009 and 2008, respectively.  The breakdown of non-cash ESOP expense by operating statement classification is presented below (in thousands):

	Three months ended March 31,
	2009		2008
Selling, general and administrative expenses	$	3,231	$	2,807
Research and development expenses	2,522		2,588
	$	5,753	$	5,395

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Amylin Ohio, LLC, and Amylin Investments, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Recently Issued Accounting Pronouncements

In April 2009, the FASB issued the following new accounting standards:

·FASB Staff Position (FSP) FAS 157-4, “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed,” (FSP FAS 157-4). FSP FAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157. FSP FAS 157-4 provides additional authoritative guidance in determining whether a market is active or inactive, and whether a transaction is distressed, is applicable to all assets and liabilities (i.e. financial and nonfinancial) and will require enhanced disclosures.

·FSP FAS 115-2, FSP FAS 124-2, and EITF 99-20-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” (FSP FAS 115-2, FSP 124-2 AND EITF 99-20-2). FSP FAS 115-2, FSP FAS 124-2, and EITF 99-20-2 provides additional guidance to provide greater clarity about the credit and noncredit component of an other-than-temporary impairment event and to more effectively communicate when an other-than-temporary impairment event has occurred. This FSP applies to debt securities.

·FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and FSP APB 28-1, amends FASB Statement No. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in all interim financial statements.

These standards are effective for periods ending after June 15, 2009. The Company is evaluating the impact that these standards will have on its consolidated financial statements.

2.Adoption of FSP No. APB 14-1

Effective January 1, 2009, the Company adopted the provisions of FSP No. APB 14-1 “Accounting for Convertible Debt Instruments that may be Settled in Cash Upon Conversion (Including Partial Cash Settlement).”  FASP No. ABP 14-1 requires that the liability and equity components of convertible debt instruments within the scope of FSP APB No. 14-1 shall be separately accounted for in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The carrying amount of the liability component of the convertible debt instrument is determined by measuring the fair value of a similar liability that does not have an associated equity component. The carrying value of the equity component is determined by deducting the fair value of the liability component from the initial proceeds

9

ascribed to the convertible debt instrument as a whole. Related transaction costs are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense using the interest method.  FSP No. ABP 14-1 is applied retrospectively to all periods presented with the cumulative effect of the change in accounting principle on periods prior to those presented recognized as of the beginning of the first period presented.  Due to the Company’s option to elect net-share settlement upon conversion, the Company’s $575 million Senior Convertible Notes issued in June 2007 (the 2007 Notes) are within the scope of FSP No. APB 14-1.  The Company’s $200 million Convertible Senior Notes issued in 2004 (the 2004 Notes) are not within the scope of FSP No. APB 14-1 as they may only be settled in shares of the Company’s common stock upon conversion.

Upon adoption, the Company recorded a cumulative debt discount on the 2007 Notes of $185.6 million at inception, and an increase of $180.3 million to stockholders’ equity representing the gross value of the equity component of $185.6 million net of allocated transaction costs of $5.3 million.  The debt discount is being amortized to interest expense over the term of the 2007 Notes, net of interest capitalized, which resulted in a cumulative effect on retained earnings of the change in accounting principle of $5.4 million as of January 1, 2008.  As required by the provisions of FSP No. APB 14-1, the Company is retroactively adjusting its 2007 and 2008 financial statements.

The Company’s net loss for the quarter ended March 31, 2009 of $47.0 million, or $0.34 per share, includes $1.3 million, or $0.01 per share, of incremental net interest and other expense due to the adoption of FSP No. ABP 14-1.

The following table sets forth the effect of the retroactive adjustment of the applicable line items within the accompanying consolidated balance sheet as of December 31, 2008 (in thousands):

	As previously reported			Implementation adjustments			As adjusted
Property, plant and equipment, net	$	636,922		$	18,522		$	655,444
Debt issuance costs	$	15,884		$	(4,098	)	$	11,786
Convertible senior notes	$	775,000		$	(153,979	)	$	621,021
Additional paid-in capital	$	2,111,473		$	180,289		$	2,291,762
Accumulated deficit	$	(1,749,725	)	$	(11,886	)	$	(1,761,611	)

The following table sets forth the effect of the retroactive adjustment of the applicable line items within the accompanying consolidated statement of operations for the three months ended March 31, 2008 (in thousands, except per share amounts):

	As previously reported			Implementation adjustments			As adjusted
Interest and other expense	$	(9,690	)	$	(2,302	)	$	(11,992	)
Net loss	$	(68,797	)	$	(2,302	)	$	(71,099	)
Net loss per share	$	(0.51	)	$	(0.01	)	$	(0.52	)

The following table sets forth the effect of the retroactive adjustment of the applicable line items within the accompanying consolidated statement of cash flows for the three months ended March 31, 2008 (in thousands):

	As previously reported			Implementation adjustments			As adjusted
Net loss	$	(68,797	)	$	(2,302	)	$	(71,099	)
Amortization of debt discount and debt issuance costs	$	950		$	2,302		$	3,252

3.Short-term Investments

The Company’s short-term investments, consisting principally of debt securities, are classified as available-for-sale and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy). Unrealized holding gains or losses on these securities are included in other comprehensive loss. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. For investments in mortgage-backed securities,

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amortization of premiums and accretion of discounts are recognized in interest income using the interest method, adjusted for anticipated prepayments as applicable. Estimates of expected cash flows are updated periodically and changes are recognized in the calculated effective yield prospectively as appropriate. Such amortization is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in impairment loss on investments. In assessing potential impairment of its short-term investments, the Company evaluates the impact of interest rates, potential prepayments on mortgage-backed securities, changes in credit quality, the length of time and extent to which the market value has been less than cost, and the Company’s intent and ability to retain the security in order to allow for an anticipated recovery in fair value. The cost of securities sold is based on the specific-identification method.  The following is a summary of short-term investments as of March 31, 2009 and December 31, 2008 (in thousands):

	Available-for-Sale Securities
	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses(1)			Estimated Fair Value
March 31, 2009
U.S. Treasury securities	$	173,442	$	222	$	(6	)	$	173,658
Obligations of U.S. Government-sponsored enterprises	78,187		296		(842		)	77,641
Corporate debt securities	261,427		224		(2,758		)	258,893
Asset backed securities	24,849		113		(3,487		)	21,475
Total	$	537,905	$	855	$	(7,093	)	$	531,667
December 31, 2008
U.S. Treasury securities	$	130,193	$	449	$	—		$	130,642
Obligations of U.S. Government-sponsored enterprises	129,197		656		(1,494		)	128,359
Corporate debt securities	294,805		175		(4,090		)	290,890
Asset backed securities	33,081		4		(3,401		)	29,684
Total	$	587,276	$	1,284	$	(8,985	)	$	579,575

(1) Other comprehensive loss included a net unrealized loss of $3.6 million and $3.3 million on investments underlying the Company’s 2001 Non-Qualified Deferred Compensation Plan at March 31, 2009 and December 31, 2008, respectively.

The Company’s investments had gross unrealized losses of $7.1 million and $9.0 million at March 31, 2009 and December 31, 2008, respectively.  The unrealized losses on the Company’s investments in marketable securities is due in most instances to the increased volatility in the markets impacting the classes of securities the Company invests in and not a deterioration in credit ratings. The Company’s investments have a short effective duration, and since the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2009.

4.Inventories

Inventories are stated at the lower of cost (FIFO) or market and net of a valuation allowance for potential excess and/or obsolete material of $1.8 million and $5.1 million at March 31, 2009 and December 31, 2008, respectively. Raw materials consists of bulk drug material for BYETTA and SYMLIN, work-in-process consists of in-process BYETTA cartridges, in-process SYMLIN cartridges and in-process SYMLIN vials, and finished goods consists of BYETTA drug product in a disposable pen/cartridge delivery system, finished SYMLIN drug product in vials for syringe administration and finished SYMLIN drug product in a disposable pen/cartridge delivery system.  The reduction in the valuation allowance reflects the scrapping of material previously reserved for that the Company was unable to utilize.

Inventories consist of the following (in thousands):

	March 31, 2009		December 31, 2008
Raw materials	$	75,815	$	74,140
Work-in-process	21,173		21,382
Finished goods	22,725		20,301
	$	119,713	$	115,823

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5.Other Current Assets

Other current assets consist of the following (in thousands):

	March 31, 2009		December 31, 2008
Prepaid inventory	$	33,762	$	13,230
Prepaid expenses	22,761		23,623
Other current assets	4,334		4,185
	$	60,857	$	41,038

6.Debt Issuance Costs

Debt issuance costs relate to the $200 million principal amount of 2.5% convertible senior notes, due April 15, 2011, issued in April 2004, referred to as the 2004 Notes, the $575 million principal amount of 3.0% convertible senior notes, due June 15, 2014, issued in June 2007, referred to as the 2007 Notes, and a $125 million term loan entered into in December 2007, referred to as the Term Loan.  Amortization of debt issuance costs are recorded as interest expense in the consolidated statement of operations on a straight-line basis, which approximates the interest method over the contractual term of the related debt. The Company incurred total debt issuance costs of $19.1 million in connection with the 2004 Notes, the 2007 Notes and the Term Loan. Amortization expense of $0.8 million was recorded in each of the three months ended March 31, 2009 and 2008, respectively.

7.Other Current Liabilities

Other current liabilities consist of the following (in thousands):

	March 31, 2009		December 31, 2008
Accrued rebates	$	35,705	$	28,575
Accrued expenses	40,498		43,482
Other current liabilities	16,054		18,068
	$	92,257	$	90,125

8.Collaborative Agreements

The Company has entered into various collaborative agreements which provide it with rights to develop, produce and market products using certain know-how, technology and patent rights maintained by its collaborative partners. Terms of the various collaboration agreements may require the Company to make and/or receive milestone payments upon the achievement of certain product research and development objectives and pay and/or receive royalties on future sales, if any, of commercial products resulting from the collaboration.

Effective this quarter, the Company implemented EITF No. 07-01, “Accounting for Collaborative Arrangements,” or EITF 07-01, which prescribes that certain transactions between collaborators be recorded in the income statement on either a gross or net basis, depending on the characteristics of the collaboration relationship, and provides for enhanced disclosure of collaborative relationships. In accordance with EITF 07-01, the Company evaluated its collaborative agreements for proper income statement classification based on the nature of the underlying activity. If payments to and from the Company’s collaborative partners are not within the scope of other authoritative accounting literature, the income statement classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. Amounts due from the Company’s collaborative partners related to development activities are generally reflected as collaborative revenues and amounts due to the Company’s collaborative partners related to sharing of commercialization expenses are generally reflected as selling, general and administrative expenses.  Milestone payments and up-front payments received are generally reflected as collaborative revenue as discussed above in Note 1, and milestone payments and up-front payments made are generally recorded as research and development expenses if the payments relate to drug candidates that have not yet received regulatory approval.  Milestone payments and up-front payments made related to approved drugs (of which there have been none to date) will generally be capitalized and amortized to cost of goods sold over the economic life of the product.  Royalties received (of which there have been none to date) will generally be reflected as collaborative revenues and royalties paid are generally reflected as cost of goods sold.  The adoption of EITF 07-01 did not affect the Company’s financial position or results of operations.

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For collaborations with commercialized products, if we are the principal, as defined in EITF No. 99-19, “Reporting Revenue as a Principal versus Net as an Agent”, or EITF 99-19, we record revenue and the corresponding operating costs in their respective line items within our statement of income.  If the Company is not the principal, it records operating costs as a reduction of revenue. EITF 99-19 describes the principal as the party who is responsible for delivering the product or service to the customer, has latitude with establishing price and has the risks and rewards of providing product or service to the customer, including inventory and credit risk.

Collaboration with Eli Lilly and Company

In September 2002, the Company and Lilly entered into a collaboration agreement for the global development and commercialization of exenatide. The agreement was amended in 2006 and in 2009.

This agreement includes BYETTA and any sustained release formulations of exenatide such as exenatide once weekly, the Company’s once weekly formulation of exenatide for the treatment of type 2 diabetes. Under the terms of the agreement, operating profits from products sold in the United States are shared equally between Lilly and us. In 2005, the Company received United States Food and Drug Administration, or FDA, approval for the twice-daily formulation of exenatide, which is marketed in the United States under the trade name BYETTA. The agreement provides for tiered royalties payable to us by Lilly based upon the annual gross margin for all exenatide product sales, including any long-acting release formulations, outside of the United States. Royalty payments for exenatide product sales outside of the United States will commence after a one-time cumulative gross margin threshold amount has been met. Lilly is responsible for 100% of the costs related to development of exenatide once weekly and twice-daily BYETTA for sale outside of the United States.  Lilly is responsible for 100% of the costs related to commercialization of all exenatide products for sale outside of the United States.

At signing, Lilly made initial non-refundable payments to the Company totaling $80 million, of which $50 million was amortized to revenues under collaborative agreements prior to 2004. The remaining $30 million is being amortized to revenues ratably over a seven-year period ending in September 2009, which represents the Company’s estimate of the period of its performance of significant development activities under the agreement.

In addition to these up-front payments, Lilly agreed to make future milestone payments of up to $85 million upon the achievement of certain development milestones, including milestones relating to both twice daily and sustained release formulations of exenatide such as exenatide once weekly, of which $75 million have been paid through March 31, 2009, $30 million of which was converted into 0.8 million shares of the Company’s common stock in February 2008. No additional development milestones may be earned under the collaboration agreement.

Lilly also agreed to make additional future milestone payments of up to $130 million contingent upon the commercial launch of exenatide in selected territories throughout the world, including both twice-daily and sustained release formulations, of which $40 million have been paid and recorded as revenue through March 31, 2009.

The Company recorded $12.9 million and $17.1 million of cost sharing payments due from Lilly for the three months ended March 31, 2009 and 2008, respectively,  related to the sharing of BYETTA and exenatide once weekly development expenses, which are included in revenues under collaborative agreements in the accompanying consolidated statements of operations.  In addition, the Company recorded $4.8 million and $3.9 million of selling, general and administrative expenses for the three months ended March 31, 2009 and 2008, respectively, for amounts due to Lilly for sharing of sales force and external marketing expenses.

In October 2008, the Company and Lilly entered into an Exenatide Once Weekly Supply Agreement pursuant to which the Company will supply commercial quantities of exenatide once weekly for sale in the United States, if approved by the FDA. In addition, if Lilly receives approval to market the product in jurisdictions outside the United States, the Company will be required to manufacture the product intended for commercial sale by Lilly in those jurisdictions

Under the terms of the supply agreement, Lilly made a cash payment of $125 million to the Company, which represents an amount to compensate the Company for the cost of carrying Lilly’s share of the capital investment made in the Company’s manufacturing facility in Ohio. Under the terms of the supply agreement, the Company has agreed not to charge Lilly for Lilly’s share of the interest costs capitalized to the facility. Accordingly the Company has determined that a portion of the $125 million payment represents a reimbursement to the Company of Lilly’s share of interest costs capitalized to the facility that will be credited to Lilly for its share of the capitalized interest included in the cost of goods sold for exenatide once weekly as incurred. The Company has concluded that any excess amount represents deferred collaborative revenue that will be amortized ratably over the economic useful life of the exenatide once weekly product following its commercial launch. The ultimate allocation of the $125 million payment, which is classified as a long-term deferred credit in the accompanying Consolidated Balance Sheets at March 31, 2009, will be dependent upon the total amount of interest costs capitalized to the facility when it is placed in service. Under certain circumstances, including upon an impairment of the exenatide once weekly manufacturing facility, Lilly may receive a credit for the unearned portion of the $125 million payment which will be applied against Lilly’s share of the impairment charge.

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In addition to the $125 million cash payment, the Company will recover Lilly’s share of the over $500 million capital investment in the facility through an allocation of depreciation to cost of goods sold in accordance with the collaboration agreement. The total amount of the capital investment that will ultimately be recovered from Lilly will be dependent upon the proportion of product supplied for sale in the United States, the cost of which is shared equally by the parties, and the proportion of product supplied for sale outside of the United States, the cost of which is paid for 100% by Lilly.

In October 2008, the Company and Lilly also entered into a loan agreement pursuant to which Lilly will make available to Amylin a $165 million unsecured line of credit that Amylin can draw upon from time to time beginning on December 1, 2009 and ending on June 30, 2011. Any interest due under the credit facility will bear interest at the five-day average three-month LIBOR rate immediately prior to the date of the advance plus 5.25% and shall be due and payable quarterly in arrears on the first business day of each quarter. All outstanding principal, together with all accrued and unpaid interest shall be due and payable the earlier of 36 months following the date on which the loan commitment is fully advanced or June 30, 2014.

9.Restructuring

In November 2008 the Company announced a corporate restructuring, (referred to as “the Restructuring”) that reduced its San Diego work force by approximately 25 percent or 330 employees. In connection with the Restructuring, the Company recorded restructuring charges of $54.9 million, consisting primarily of facility related charges, employee separation costs and asset impairments which were recorded in the quarter ended December 31, 2008.

The following table sets forth activity in the restructuring liability (in thousands):

	Employee separation costs			Facilities related charges			Other restructuring Charges		Total
Balance at December 31, 2008	$	8,291		$	38,447		$	—	$	46,738
Accruals	—			—			—		—
Payments	(8,192		)	(4,229		)	—		(12,421		)
Balance at March 31, 2009	$	99		$	34,218		$	—	$	34,317

The $12.4 million reduction in the restructuring liability during the three months ended March 31, 2009 consists of $8.2 million of employee separation costs, reflecting severance and other separation benefit payments and $4.2 million of facilities related charges reflecting ongoing rental payments for abandoned facility leases. The Company records restructuring activities in accordance with FASB Statement No. 44, “Accounting for the Impairment and Disposal of Long-Lived Assets” and FASB Statement No. 146 “Accounting for Costs Associated with Exit or Disposal Activities.”

10.Comprehensive Loss

SFAS No. 130, “Reporting Comprehensive Income,” 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 No. 130, the accumulated balance of other comprehensive income (loss) is disclosed as a separate component of stockholders’ equity. For the three months ended March 31, 2009 and 2008, comprehensive loss consisted of (in thousands):

	Three months ended March 31,
	2009			2008
Net loss	$	(46,954	)	$	(71,099	)
Other comprehensive loss:
Unrealized gain (loss) on investments	1,138			(3,145		)
Comprehensive loss	$	(45,816	)	$	(74,244	)

11.Convertible Senior Notes

In June 2007, the Company issued the 2007 Notes in a private placement, which have an aggregate principal amount of $575 million, and are due June 15, 2014. The 2007 Notes are senior unsecured obligations and rank equally with all other existing and future senior unsecured debt. The 2007 Notes bear interest at 3.0% per year, payable in cash semi-annually, and are initially convertible into a total of up to 9.4 million shares of common stock at a conversion price of $61.07 per share,

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subject to the customary adjustment for stock dividends and other dilutive transactions. The Company may not redeem the 2007 Notes prior to maturity. In addition, if a “fundamental change” (as defined in the associated indenture agreement) occurs prior to the maturity date, the Company will in some cases increase the conversion rate for a holder of notes that elects to convert its notes in connection with such fundamental change. The maximum conversion rate is 22.9252 ($43.62 per share), which would result in a maximum issuance 13.2 million shares of common stock if all holders converted at the maximum conversion rate.  The principal amount of the 2007 Notes exceeds the current if-converted value.

The 2007 Notes will be convertible into shares of the Company’s common stock unless the Company elects net-share settlement. If net-share settlement is elected by the Company, the Company will satisfy the accreted value of the obligation in cash and will satisfy the excess of conversion value over the accreted value in shares of the Company’s common stock based on a daily conversion value, determined in accordance with the associated indenture agreement, calculated on a proportionate basis for each day of the relevant 20-day observation period. Holders may convert the 2007 Notes only in the following circumstances and to the following extent: (1) during the five business-day period after any five consecutive trading day period (the measurement period) in which the trading price per note for each day of such measurement period was less than 97% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such day; (2) during any calendar quarter after the calendar quarter ending March 31, 2007, if the last reported sale price of the Company’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the applicable conversion price in effect on the last trading day of the immediately preceding calendar quarter; (3) upon the occurrence of specified events; and (4) the 2007 Notes will be convertible at any time on or after April 15, 2014 through the scheduled trading day immediately preceding the maturity date.

Subject to certain exceptions, if the Company undergoes a “designated event” (as defined in the associated indenture agreement) including a “fundamental change,” such as if a majority of the Company’s Board of Directors ceases to be composed of the existing directors or other individuals approved by a majority of the existing directors, holders of the 2007 Notes will, for the duration of the notes, have the option to require the Company to repurchase all or any portion of their 2007 Notes. The designated event repurchase price will be 100% of the principal amount of the 2007 Notes to be purchased plus any accrued interest up to but excluding the relevant repurchase date. The Company will pay cash for all notes so repurchased. The 2007 Notes have been registered under the Securities Act of 1933, as amended, to permit registered resale of the 2007 Notes and of the common stock issuable upon conversion of the 2007 Notes. Subject to certain limitations, the Company will be required to pay the holders of the 2007 Notes special interest on the 2007 Notes if the Company fails to keep such registration statement effective during specified time periods. The 2007 Notes pay interest in cash, semi-annually in arrears on June 15 and December 15 of each year, which began on December 15, 2007.

The fair value of the 2007 Notes, determined by observed market prices, was $347.0 and $260.4 million at March 31, 2009 and December 31, 2008, respectively.

As discussed in Note 2, the 2007 Notes are within the scope of FSP No. APB 14-1which the Company adopted effective January 1, 2009.

The following table summarizes the principal amount of the liability component, the unamortized discount and the net carrying amount of the 2007 Notes (in thousands):

	March 31, 2009			December 31, 2008
Principal amount	$	575,000		$	575,000
Unamortized debt discount	(148,489		)	(153,979		)
Net carrying amount	$	426,511		$	421,021

The carrying amount of the equity component of the 2007 Notes was $180.3 million at March 31, 2009 and December 31, 2008.  At March 31, 2009, the unamortized balance of the debt discount will be amortized over the remaining life of the 2007 Notes, approximately five years.  The effective interest rate on the net carrying value of the 2007 Notes was 9.3% in the three months ended March 31, 2009 and 2008.

In April 2004, the Company issued the 2004 Notes, which have an aggregate principal amount of $200 million, and are due April 15, 2011, in a private placement. The 2004 Notes are senior unsecured obligations and rank equally with all other existing and future senior unsecured debt. The 2004 Notes bear interest at 2.5% per year, payable in cash semi-annually and are convertible into a total of up to 5.8 million shares of common stock at a conversion price of $34.35 per share, subject to customary adjustments for stock dividends and other dilutive transactions. The Company may not redeem the 2004 Notes prior to maturity.  As discussed in Note 2, the 2004 Notes are not within the scope of FSP No. APB 14-1 as they can only be settled in shares of the Company’s common stock upon conversion.

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Upon a change in control, the holders of the 2004 Notes may elect to require the Company to repurchase the 2004 Notes. The Company may elect to pay the purchase price in common stock instead of cash, or a combination thereof. If paid with common stock, the number of shares of common stock a holder will receive will be valued at 95% of the closing prices of the Company’s common stock for the five trading day period ending on the third day before the purchase date.

The 2004 Notes have been registered under the Securities Act of 1933, as amended, to permit registered resale of the 2004 Notes and of the common stock issuable upon conversion of the 2004 Notes.

The fair value of the 2004 Notes, determined by observed market prices, was $173.0 and $150.0 million at March 31, 2009 and December 31, 2008, respectively.

The Company capitalized $3.7 million, and $2.3 million of coupon interest expense and $4.0 million and $2.5 million of non-cash interest in debt discount in the three months ended March 31, 2009  and 2008, respectively, associated with construction in progress.

12.Long-Term Note Payable

In December 2007, the Company entered into a $140 million credit agreement with Bank of America, N.A., as administrative agent, collateral agent and letter of credit issuer, Silicon Valley Bank and RBS Asset Finance, Inc., as syndication agents, and Comerica Bank and BMO Capital Markets Financing, Inc., as documentation agents.  The credit agreement provides for a $125 million Term Loan and a $15 million revolving credit facility.  The proceeds of both loans will be used for general corporate purposes.  The revolving credit facility also provides for the issuance of letters of credit and foreign exchange hedging up to the $15 million borrowing limit.  The Company had an outstanding balance of $117.2 million and $125.0 million under the Term Loan at March 31, 2009 and December 31, 2008, respectively and had issued $7.1 million and $5.6 million of stand-by letters of credit under the revolving credit facility primarily in connection with office leases, at March 31, 2009 and December 31, 2008, respectively.

The Company’s domestic subsidiaries, Amylin Ohio LLC and Amylin Investments LLC, are co-borrowers under the credit agreement.  The loans under the revolving credit facility are secured by substantially all of the Company’s and the two domestic subsidiaries’ assets (other than intellectual property and certain other excluded collateral).  The Term Loan is repayable on a quarterly basis, with no principal payments due quarters one through four, 6.25% of the outstanding principal due quarters five through eleven, and 56.25% of the outstanding principal due in quarter twelve.  Interest on the Term Loan will be paid quarterly on the unpaid principal balance at 1.75% above the London Interbank Offered Rate, or LIBOR, based on the Company’s election of either one, two, three or six months LIBOR term, and payable at the end of the selected interest period but no less frequently than quarterly as of the first business day of the quarter prior to the period in which the quarterly installment is due.  The Company has elected to use the three month LIBOR rate, which was 1.16% and 1.44% at March 31, 2009 and December 31, 2008, respectively.  Interest periods on the revolving credit facility may be either one, two, three or six months, and payable at the end of the selected interest period but no less frequently than quarterly, and the interest rate will be either LIBOR plus 1.0% or the Bank of America prime rate, as selected by the Company.  Both loans have a final maturity date of December 21, 2010.

The credit agreement contains certain covenants, including a requirement to maintain minimum unrestricted cash and cash equivalents balances, as defined in the agreement, in excess of $400 million, below which certain limitations provided for in the agreement become effective. The credit agreement also contains certain events of default including unrestricted cash and cash equivalents balances, as defined in the agreement, falling below $280 million, nonpayment of principal, interest, fees or other amounts, violation of covenants, inaccuracy of representations and warranties and default under other indebtedness that would permit the administrative agent to accelerate the Company’s outstanding obligations if not cured within applicable grace periods. In addition, the credit agreement provides for automatic acceleration upon the occurrence of bankruptcy, other insolvency events and a change in control, as defined in the credit agreement as amended (see Note 16). There is an annual commitment fee associated with the revolving credit facility of 0.25%.

Maturities of long-term notes payable for periods ending after March 31, 2009 are as follows (in thousands):

Nine months ending December 31, 2009	$	23,438
Year ending December 31, 2010	93,750
Total minimum long-term debt payments	$	117,188

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In connection with the execution of the Term Loan, the Company entered into an interest rate swap with an initial notional amount of $125 million on December 21, 2007 that has resulted in a net fixed rate of 5.717% and matures on December 21, 2010.  The Company determined that the interest rate swap agreement is defined as Level 2 in the fair value hierarchy.  The fair value of the interest rate swap agreement was a liability of $4.4 million and $5.0 million at March 31, 2009 and December 31, 2008, respectively.  The Company recognized a gain on the interest rate swap, which is included in interest and other expense, of $0.6 million for the three months ended March 31, 2009, and the Company recognized a loss on the interest rate swap, which is included in interest and other expense, of $3.7 million for the three months ended March 31, 2008.

13.Stockholders’ Equity

In March 2009, the Company contributed approximately 2.2 million newly issued shares of its common stock, valued at $9.02 per share, to the Company’s ESOP for amounts earned by participants during the year ended December 31, 2008.

In March 2009, the Company contributed approximately 0.4 million newly issued shares of its common stock, valued at $11.80 per share, to the Company’s 401(k) plan for amounts earned by participants during the year ended December 31, 2008.

14.Commitments and Contingencies

Other Commitments

The Company has committed to make potential future milestone payments to third parties as part of in-licensing and development programs primarily related to research and development agreements. Potential future payments generally become due and payable only upon the achievement of certain developmental, regulatory and/or commercial milestones, such as achievement of regulatory approval, successful development and commercialization of products, and subsequent product sales. Because the achievement of these milestones is neither probable nor reasonably estimable, the Company has not recorded a liability on the balance sheet for any such contingencies.

As of March 31, 2009, if all such milestones are successfully achieved, the potential future milestone and other contingency payments due under certain contractual agreements are approximately $285.7 million in aggregate, of which $1.8 million would be due within the next 12 months.

The Company has committed to make future minimum payments to third parties for certain inventories in the normal course of business. The minimum purchase commitments total approximately $292.8 million as of March 31, 2009. The majority of these inventory commitments relate to exenatide once weekly and BYETTA, including minimum inventory purchases for exenatide once weekly of $266.8 million that are contingent upon FDA approval of exenatide once weekly.

15.Litigation

From time-to-time the Company becomes involved in various lawsuits, claims and proceedings relating to the conduct of its business, including those pertaining to product liability, patent infringement and employment claims. For example, the Company is currently involved in nine product liability cases.  On March 4, 2009, the Supreme Court held in Wyeth v. Levine that federal law does not preempt state product liability claims involving pharmaceuticals.  This could result in an increase in the number of state product liability claims filed against pharmaceutical companies, including the Company.  The Company has also been notified of additional claimants who may file product liability complaints. While the Company cannot predict the outcome of any lawsuit, claim or proceeding, the Company believes the disposition of the current lawsuits is not likely to have a material effect on its financial condition or liquidity.

On March 24, 2009, a putative class action titled San Antonio Fire & Police Fund v. Bradbury et al. (Case No. 4446-VCL) was filed by a stockholder of ours in the Court of Chancery of the State of Delaware.  The original complaint asserted claims for breach of fiduciary duty against us and our current directors arising out of certain provisions contained in the Company’s outstanding debt instruments relating to a change in a majority of the directors of the Board.  The plaintiff subsequently amended the complaint adding the indenture trustee under the 2007 Notes and the administrative agent under the Credit Agreement as defendants.  The complaint seeks to invalidate those debt instrument provisions or permit the Company’s Board to “approve” shareholder nominees, thus nullifying any potential default which might force the Company to repay the outstanding balance.  On April 13, 2009, a settlement was reached with the plaintiff to withdraw all allegations that the Company’s Board has not acted in good faith or has acted to entrench itself or interfere with stockholder voting rights.  The plaintiff also withdrew all claims that the Board is breaching its ongoing duties to its stockholders.

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16.Subsequent Events

On April 16, 2009, The Company and Lilly announced the restructuring of its exenatide operations in order to improve alliance effectiveness, increase financial and operational efficiencies and maximize the value of BYETTA and exenatide once weekly.  Additionally, the Company and Lilly amended their Collaboration Agreement to require one year’s notice for termination of the agreement without cause. Previously, the agreement required only a six-month notice. In addition, the Company and Lilly also agreed that internal marketing costs, which were previously not shared, are now shared within the alliance.

On April 29, 2009 the Company and Lilly announced that the companies have agreed in principle to the terms of a joint supply agreement for an exenatide once weekly pen device.  The Company and Lilly have agreed in principle to cooperate in the development, manufacturing and marketing of exenatide once weekly in a dual chamber cartridge pen configuration.  The companies will share the capital and development costs of the pen, including the initial capital investment of approximately $216 million over the next few years. The Company and Lilly have agreed that the cost of the initial capital investment will be allocated 60 percent to Lilly and 40 percent to the Company.  The Company’s also announced efforts to examine a new exenatide formulation.

On May 4, 2009, the Company and Lilly entered into a cost allocation agreement, or the Cost Allocation Agreement, which amends the exenatide development and commercialization cost-sharing provisions contained in the companies’ Collaboration Agreement, dated September 19, 2002, as amended, and Exenatide Once Weekly Supply Agreement, dated October 16, 2008, or the Agreements.

Under the terms of the Cost Allocation Agreement, the following changes will be applied with respect to the cost-sharing provisions of the Agreements retroactively as of January 1, 2009:

·Lilly will be responsible for 53% of shared exenatide global development and commercialization expenses that generate utility both in the United States and outside the United States, including global manufacturing development expenses.  The Company will be responsible for 47% of these expenses;

·Lilly will assume 100% of all exenatide development and commercialization expenses that generate utility predominantly outside the United States.  Under the previous cost-sharing arrangement, the Company was responsible for 20% of some of these expenses; and

·The royalty structure for exenatide revenues generated outside the United States has been modified to reflect Lilly’s revised expense burden, with a reduction in Lilly’s royalty payments to the Company.

The companies will continue to equally share all exenatide development and commercialization expenses that generate utility predominately in the United States.

On May 4, 2009, the Company announced that it is restructuring its sales force to merge its existing primary care and specialty sales forces into a single organization.  This restructuring will reduce the total number of Amylin sales representatives by 200 employees.  The Company expects to incur charges under the corporate restructuring during the second quarter, including an estimated restructuring charge of $13 to $15 million, of which approximately $11 to $13 million will result in future cash expenditures, consisting primarily of one-time severance and other employee-related costs.

On May 5, 2009, the Company submitted its New Drug Application for exenatide once weekly to the United States Food and Drug Administration.

On May 6, 2009, the Company and certain of its subsidiaries entered into an amendment, or the Amendment, to its Credit Agreement, dated December 21, 2007, among Bank of America, N.A., as administrative agent, collateral agent and letter of credit issuer, Silicon Valley Bank and RBS Asset Finance, Inc., as syndication agents, and Comerica Bank and BMO Capital Markets Financing, Inc., as documentation agents.  As negotiated by the Company, the Amendment provides that lenders under the Credit Agreement agreed to consent to a Specified Change of Control, defined in the Amendment as the election of six or more shareholder nominees to the Company’s Board of Directors at the Company’s 2009 Annual Meeting of Stockholders, and that such Specified Change of Control will not result in an event of default under the Credit Agreement, in each case upon the satisfaction or waiver of certain conditions as set forth in the Amendment.  The Amendment also provides for a waiver of any potential default arising from existing litigation contesting the validity or enforceability of any provision of the Credit Agreement.

Under the terms of the Amendment, the Company will not pay any upfront fee for the consent or waiver granted by the lenders who are a party to the Amendment.  In the event that a Specified Change of Control occurs, if the Company has not paid off the loan commitments under the Credit Agreement within ten days of such event, the Company will pay 0.50% of the then outstanding loan commitments under the Credit Agreement in consideration of the consent and will pay 0.25% to Bank of America Leasing and Capital, LLC for managing the request to obtain the necessary lender consent to the Amendment.

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

Except for the historical information herein, the discussion in this quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements include projections about our accounting and finances, plans and objectives for the future, future operating and economic performance and other statements regarding future performance. These statements are not guarantees of future performance or events. Our actual results may differ materially from those discussed here. Factors that could cause or contribute to differences in our actual results include those discussed under the caption “Cautionary Factors That May Affect Future Results,” as well as those discussed elsewhere in this quarterly report on Form 10-Q or in our other public disclosures. You should consider carefully those cautionary factors, together with all of the other information included in this quarterly report on Form 10-Q. Each of the cautionary factors, either alone or taken together, could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common stock. There may be additional risks that we are not presently aware of or that we currently believe are immaterial which could also impair our business and financial position. We disclaim any obligation to update these forward-looking statements.

Overview

We are a biopharmaceutical company committed to improving the lives of people with diabetes, obesity and other diseases through the discovery, development and commercialization of innovative medicines. We have developed and gained approval for two first-in-class medicines to treat diabetes, BYETTA® (exenatide) injection and SYMLIN® (pramlintide acetate) injection, both of which were commercially launched in the United States during the second quarter of 2005. BYETTA was approved in the European Union, or EU, in 2006 and our collaboration partner, Eli Lilly and Company, or Lilly, has commercially launched BYETTA in 51countries as of March 31, 2009. Our near-term business strategy is to create value for patients and our stockholders by capitalizing on market drivers, such as the recent inclusion by the American Diabetes Association, or ADA, of BYETTA as the only new addition to their treatment guidelines. Our focus remains on increasing BYETTA and SYMLIN revenue, preparing for the successful launch of exenatide once weekly, if approved, significantly improving operating results and progressing toward positive operating cash flow by the end of 2010. Our long-term strategy is focused on making prudent investment decisions based on strong clinical data to advance our obesity program. We intend to finalize our obesity funding and development strategy by the end of 2009.

BYETTA is the first and only approved medicine in a new class of compounds called glucagon-like peptide-1, or GLP-1, receptor agonists. We began selling BYETTA in the United States in June 2005. BYETTA is approved in the United States for the treatment of patients with type 2 diabetes who have not achieved adequate glycemic control and are using metformin, a sulfonylurea and/or a thiazolidinediene, or TZD, three common oral therapies for type 2 diabetes. In October 2008, the ADA and the European Association for the Study of Diabetes, or EASD, updated their type 2 diabetes treatment guidelines, placing the GLP-1 receptor agonist class, of which BYETTA is the only approved product, as a secondary treatment option for type 2 diabetes patients. In August 2008, the Food and Drug Administration, or FDA, updated a prior alert for BYETTA referencing pancreatitis. Prescriptions declined in the second half of 2008. During that time period we committed our field resources to educating the medical community on the facts about BYETTA, pancreatitis and the product’s safety profile. We believe the decline in BYETTA prescriptions and demand for the products stabilized during the quarter ended March 31, 2009.  Net product sales of BYETTA were $157.7 million and $158.5 million for the three months ended March 31, 2009 and 2008, respectively.

We have an agreement with Lilly for the global development and commercialization of exenatide. This agreement includes BYETTA and any sustained-release formulations of exenatide such as exenatide once weekly, our once weekly formulation of exenatide for the treatment of type 2 diabetes. Under the terms of the agreement, operating profits from products sold in the United States are shared equally between Lilly and us. The agreement provides for tiered royalties payable to us by Lilly based upon the annual gross margin for all exenatide product sales, including any long-acting release formulations, outside of the United States. Royalty payments for exenatide product sales outside of the United States will commence after a one-time cumulative gross margin threshold amount has been met. We expect royalty payments to commence in 2010. Lilly is responsible for 100% of the costs related to development of exenatide once weekly and twice-daily BYETTA for sale outside of the United States. Lilly is responsible for commercialization and all of the costs related to commercialization of all exenatide products for sale outside of the United States.

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On April 16, 2009, we and Lilly announced the restructuring of our exenatide operations in order to improve alliance effectiveness, increase financial and operational efficiencies and maximize the value of BYETTA and exenatide once weekly as discussed in Note 16 to the accompanying financial statements.  On May 4, 2009 we and Lilly entered into a cost allocation agreement which amends the exenatide development and commercialization cost-sharing provisions contained in the collaboration agreement as discussed in Note 16 to the accompanying financial statements.

SYMLIN is the first and only approved medicine in a new class of compounds called amylinomimetics. We began selling SYMLIN in the United States in April 2005. Symlin is approved in the United States for the treatment of patients with either type 1 or type 2 diabetes who are treated with mealtime insulin but who have not achieved adequate glycemic control. In early 2008, we commercially launched the SymlinPen® 120 and SymlinPen® 60 pen injector devices in the United States. These new pre-filled pen-injector devices feature simple, fixed dosing to improve mealtime glucose control. Net product sales of SYMLIN were $21.6 million and $20.2 million for the three months ended March 31, 2009 and 2008, respectively.

We currently have a field force of approximately 600 people dedicated to marketing BYETTA and SYMLIN in the United States. Our field force includes our specialty and primary care sales forces, and a managed care and government affairs organization. In addition, Lilly co-promotes BYETTA in the United States.  On May 4, 2009, we announced that we are restructuring our sales force to merge our existing primary care and specialty sales forces into a single organization.  This restructuring will reduce our total number of sales representatives by 200 employees.  The Company expects to incur charges under the corporate restructuring during the second quarter, including an estimated restructuring charge of $13 to $15 million, of which approximately $11 to $13 million will result in future cash expenditures, consisting primarily of one-time severance and other employee-related costs.

In addition to our marketed products, we are working with Lilly and Alkermes to develop exenatide once weekly. We are also working with Parsons on the construction of a manufacturing facility for exenatide once weekly in Ohio. We substantially completed the construction of this facility in 2008. We are now manufacturing exenatide once weekly at commercial scale in this facility and using this material in clinical trials.  In March 2009, we reported that analysis of data from the ongoing extension of our DURATION-1 study designed to provide the data required to demonstrate comparability of commercial and development drug lots to support the regulatory submission of exenatide once weekly have been successfully completed and are part of the NDA submitted to FDA.   In March 2009, we also announced that a meta-analysis of primary cardiovascular events across controlled clinical studies of three months or greater, from the BYETTA database, showed no increased risk of cardiovascular events associated with exenatide use and that these findings will be used to support the cardiovascular safety of exenatide once weekly.  On May 5, 2009, we submitted our NDA for exenatide once weekly to the FDA.

On April 29, 2009 we and Lilly announced that the companies have agreed in principle to the terms of a joint supply agreement for an exenatide once weekly pen device and to evaluate a new exenatide formulation as discussed in Note 16 to the accompanying financial statements.

In October 2008 we entered into a commercial supply agreement with Lilly, pursuant to which we will supply exenatide once weekly for sale in the United States, if approved. In addition we will supply Lilly with commercial quantities of exenatide once weekly for sale by Lilly outside of the United States, if approved. Under the terms of this agreement, Lilly made a $125 million cash payment to us in October 2008 representing an amount to compensate us for our cost of carrying Lilly’s share of the capital investment in our exenatide once weekly manufacturing facility in Ohio. In addition to the $125 million cash payment, we will recover Lilly’s share of the over $500 million capital investment in the facility through an allocation of depreciation to cost of goods sold in accordance with our collaboration agreement with Lilly. The total amount that will ultimately be recovered from Lilly will be dependent upon the proportion of product supplied for sale in the United States, the cost of which is shared equally by the parties, and the proportion of the product supplied for sale outside the United States, the cost of which is paid for 100% by Lilly. We also entered into a loan agreement with Lilly under which we may borrow up to $165 million beginning on December 1, 2009 and ending on June 30, 2011, with maturity no later than June 30, 2014.

During the remainder of 2009, we will continue to focus on building a superior profile for exenatide once weekly by conducting three more clinical trials that will compare exenatide once weekly against competing products. The objective of these studies is to support the launch of exenatide once weekly and demonstrate superiority and the transformational nature of our exenatide once weekly therapy.  In March 2009, we announced positive results from DURATION-2, the second in a series of five studies designed to test the superiority of exenatide once weekly, an investigational diabetes therapy, as compared to other diabetes therapies.   In this study exenatide once weekly demonstrated superior glucose control with weight loss and no increase in hypoglycemia compared to maximum doses of sitagliptin or pioglitazone.

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In November 2008, we announced a strategic restructuring and workforce reduction that reduced the size of our San Diego workforce by approximately 25%, or 330 employees. The goal of the restructuring was to better align our cost structure with anticipated revenues and is part of our business plan to achieve positive operating cash flow by the end of 2010. Additionally, on May 4, 2009, we announced the restructuring of our sales force as discussed above.  We continue to believe we have the appropriate resources to market BYETTA and SYMLIN, bring exenatide once weekly to market as soon as possible, and continue to advance our obesity programs.

Our long-term growth strategy is focused on making prudent investment decisions based on strong clinical data to advance our obesity program and includes our Integrated Neurohormonal Therapies for Obesity strategy. In November 2007, we announced that overweight or obese subjects in a 24-week proof-of-concept study treated with a combination of pramlintide, an analog of human amylin and the same active ingredient in SYMLIN, and metreleptin, an analog of human leptin, lost an average of 25 pounds from baseline, resulting in reduced body weight on average of 12.7%. In 2009 we plan to continue the development of a potential obesity medicine that is a combination of pramlintide and metreleptin and the development of a second generation amylinomimetic, now known as davalintide (formerly known as AC2307), which we have now moved into Phase 2 clinical trials. By the end of 2009, we intend to finalize our obesity funding and development strategy.

Although our efforts will remain primarily focused on our near-term opportunities including BYETTA, SYMLIN and exenatide once weekly and select investments in our obesity programs, we also maintain an active discovery research program focused on novel peptide and protein therapeutics and are actively seeking to in-license additional drug candidates. We have also made a number of strategic investments and collaborations for the potential development of additional drug candidates.

Since our inception in September 1987, we have devoted substantially all of our resources to our research and development programs and, more recently, to the commercialization of our products. All of our revenues prior to May 2005 were derived from fees and expense reimbursements under our BYETTA collaboration agreement with Lilly, previous SYMLIN collaborative agreements and previous co-promotion agreements. During the second quarter of 2005, we began to derive revenues from product sales of BYETTA and SYMLIN.  At March 31, 2009, our accumulated deficit was approximately $1.8 billion.

At March 31, 2009, we had approximately $711.4 million in cash, cash equivalents and short-term investments.  Additionally we have future availability of $165 million beginning December 1, 2009 pursuant to the loan agreement with Lilly. Although we may not generate positive operating cash flows for the next few of years, we intend to improve our operating results and reduce our use of cash for operating activities from current levels to achieve our goal to be operating cash flow positive by the end of 2010. Additionally, we expect that our use of cash for capital expenditures will decrease significantly from 2008 levels following the substantial completion of our manufacturing facility in Ohio in 2008. Refer to the discussions under the headings “Liquidity and Capital Resources” below and “Cautionary Factors That May Affect Future Results” in Part I, Item 1A for further discussion regarding our anticipated future capital requirements.

Application of Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an on-going basis, our actual results may differ significantly from our estimates.

There were no significant changes in critical accounting policies from those at December 31, 2008, other than the adoption of FSP No. ABP 14-1 which required the estimation of the non-convertible borrowing rate for our 2007 Notes.  The financial information as of March 31, 2009, should be read in conjunction with the financial statements for the year ended December 31, 2008, contained in our annual report on Form 10-K filed on February 27, 2009.

For a discussion of our critical accounting policies, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K filed on February 27, 2009.

Results of Operations

Comparison of Three Months Ended March 31, 2009 to Three Months Ended March 31, 2008

Net Product Sales

Net product sales for the three months ended March 31, 2009 and 2008 were $179.3 million and $178.7 million, respectively, and consisted of shipments of BYETTA and SYMLIN, less allowances for product returns, rebates, wholesaler chargebacks, wholesaler discounts and prescription vouchers.

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The following table provides information regarding net product sales (in millions):

	Three months ended March 31,
	2009		2008
BYETTA	$	157.7	$	158.5
SYMLIN	21.6		20.2
	$	179.3	$	178.7

The decrease in net product sales for BYETTA in the current period primarily reflects a $5.4 million allowance for rebates related to the U.S. Department of Defense’s (DOD) Tricare Retail Pharmacy program, of which $4.4 million relates to a retroactive rebate assessment for sales during 2008, partially offset by higher prices in the three months ended March 31, 2009 as compared to the same period in 2008.

The increases in net product sales for SYMLIN in the current period primarily reflects continued growth in patient demand and higher prices partially offset by a reserve of $0.4 million for the DOD’s Tricare Retail Pharmacy program, of which $0.4 million relates to a retroactive rebate assessment for sales during 2008.

As discussed above, we recorded an allowance for rebates related to the DOD’s Tricare Retail Pharmacy program pursuant to a final rule that was issued in March 2009, and is effective May 26, 2009.  The final rule implements the DOD’s revised interpretation of the National Defense Authorization Act of 2008, or NDAA, signed into law on January 28, 2008.  The final rule changed the process by which rebate obligations for the Tricare Retail Pharmacy program are created such that a contractual agreement is no longer required and that obligation to pay such rebates emanates from the NDAA itself.  In consideration of this final rule we recorded an allowance of $5.8 million for such rebates in the three months ended March 31, 2009, of which $4.8 million represents a retroactive rebate assessment for sales made during 2008 that now appear probable of being assessed and paid.

Sales of our products in future periods may be impacted by numerous factors, including potential competition, the potential approval of additional products including exenatide once weekly, regulatory matters, including expected label changes for BYETTA, economic factors and other environmental factors.

Revenues Under Collaborative Agreements

Revenues under collaborative agreements for the three months ended March 31, 2009 were $14.3 million, compared to $18.5 million for the same period in 2008. Substantially all of the revenue recorded in these periods consists of amounts earned pursuant to our BYETTA collaboration agreement with Lilly. The $4.2 million decrease in revenues under collaborative agreements in the current quarter compared to the same period in 2008 reflects lower cost-sharing payments from Lilly for exenatide once weekly and BYETTA due to lower development expenses for exenatide once weekly and BYETTA.

The following table summarizes the components of revenues under collaborative agreements for the three months ended March 31, 2009 and 2008 (in millions):

	Three months ended March 31,
	2009		2008
Amortization of up-front payments	$	1.1	$	1.1
Cost-sharing payments	13.2		17.4
	$	14.3	$	18.5

In future periods, we expect that revenues under collaborative agreements will consist of ongoing cost-sharing payments from Lilly for sharing of development costs, possible future milestone payments, continued amortization of the $30 million portion of the up-front payment received from Lilly upon signing of our collaboration agreement in 2002 and, following the commercial launch of exenatide once weekly, the amortization of a portion of the $125 million cash payment received in connection with the exenatide once weekly supply agreement discussed above. The amount of cost-sharing revenue recorded will be dependent on the timing, extent and relative proportion of total development costs for the exenatide once weekly and BYETTA development programs incurred by us and by Lilly. The receipt and recognition as revenue of future milestone payments is subject to the achievement of performance requirements underlying such milestone payments.

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Cost of Goods Sold

Cost of goods sold was $18.6 million, representing a gross margin of 90%, and $22.0 million, representing a gross margin of 88%, for the three months ended March 31, 2009 and 2008, respectively, and is comprised primarily of manufacturing costs associated with BYETTA and SYMLIN sales during the period.  The improvement in gross margin for the three months ended March 31, 2009, compared to the same period in 2008, primarily reflects higher net sales prices for BYETTA and SYMLIN. Quarterly fluctuations in gross margins may be influenced by product mix, pricing and the level of sales allowances.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased to $87.6 million for the three months ended March 31, 2009 from $98.2 million for the same period in 2008. The decrease primarily reflects lower promotional spending for BYETTA and SYMLIN and the Company’s reduced cost structure following its restructuring at the end of 2008.  We expect that selling, general and administrative expenses for 2009 will decrease from 2008 levels due to our reduced cost structure following our strategic restructuring implemented during the quarter ended December 31, 2008, and both the implementation of the restructuring of our exenatide alliance operations and the restructuring of our sales force discussed above.

We, along with Lilly, are jointly responsible for the co-promotion of BYETTA within the United States, and share equally in sales force costs and external marketing expenses. Accordingly, our selling, general and administrative expenses include our 50% share of these costs in the United States.

Research and Development Expenses

Our research and development costs are comprised of salaries and bonuses, benefits and non-cash stock-based compensation; license fees, milestones under license agreements and costs paid to third-party contractors to perform research, conduct clinical trials and develop drug materials and delivery devices; and associated overhead expenses and facilities costs. We charge direct internal and external program costs to the respective development programs. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist primarily of facilities costs and other internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs.

Our research and development efforts are focused on diabetes, obesity and other diseases.  We also maintain an active discovery research program.  In diabetes, we have two approved products, BYETTA and SYMLIN, and we are developing exenatide once weekly, a long-acting release formulation of exenatide, the active pharmaceutical ingredient in BYETTA.  In obesity, we have a number of compounds in development for the potential treatment of obesity, which are part of a broader program, which we refer to as INTO: Integrated Neurohormonal Therapies for Obesity.  As part of this program, we are currently conducting clinical trials of our drug candidates, or combinations of our drug candidates.

The following table provides information regarding our research and development expenses for our major projects (in millions):

	Three months ended March 31,
	2009		2008		Increase/(Decrease)
Diabetes (1)	$	31.0	$	40.4	$	(9.4	)
Obesity	8.2		17.0		(8.8		)
Research and early-stage programs	6.3		7.5		(1.2		)
Indirect costs	14.5		12.3		2.2
	$	60.0	$	77.2	$	17.2

(1)  Research and development expenses for our diabetes programs consist primarily of costs associated with BYETTA and exenatide once weekly which are shared by Lilly pursuant to our collaboration agreement.  Cost-sharing payments received by Lilly are included in revenues under collaborative agreements.  Expenditures for our diabetes development programs are generally partially offset by an increase in cost-sharing payments from Lilly.  Cost-sharing payments from Lilly for BYETTA and exenatide once weekly development expenses were $12.9 million and $17.1 million for the three months ended March 31, 2009 and 2008, respectively.

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The $17.2 million decrease in research and development expenses for the three months ended March 31, 2009 as compared to the same period in 2008 primarily reflects decreased expenses of $9.4 million for our diabetes programs and decreased expenses of $8.8 million for our obesity development programs.  The decrease in expenses for our diabetes programs primarily reflects lower expenses associated with manufacturing scale up for exenatide once weekly following the substantial completion of our Ohio manufacturing facility in 2008.  The decrease in expenses in our obesity programs reflects the fact that research and development expenses for our obesity programs for the three months ended March 31, 2008 included an $8 million license payment for drug delivery technology.   We expect research and development expenses for 2009 will decrease from 2008 levels due to our reduced cost structure following our strategic restructuring implemented during the quarter ended December 31, 2008 and the implementation of the restructuring of our exenatide alliance operations discussed above.

Collaborative Profit Sharing

Collaborative profit sharing was $73.0 million and $69.9 million for the three months ended March 31, 2009 and 2008, respectively, and consists of Lilly’s 50% share of the gross margin for BYETTA in the United States.

Interest and Other Income and Expense

Interest and other income consist primarily of interest income from investment of cash and other investments. Interest and other income decreased to $3.0 million for the three months ended March 31, 2009 from $11.0 million for the same period in 2008.  The decrease primarily reflects lower average balances available for investment and lower interest rates earned on our short-term investments in the three months ended March 31, 2009 as compared to the same period in 2008.

Interest and other expense consist primarily of interest expense resulting from our long-term debt obligations. Interest expense in the three months ended March 31, 2009 consists of interest on our $775 million par value of outstanding convertible senior notes and our $125 million of outstanding long-term note payable, the amortization of associated debt issuance costs and recognized gains and losses associated with recording economic hedge transactions at fair value. Interest and other expense was $4.4 million and $12.0 million for the three months ended March 31, 2009 and 2008, respectively.  The decrease in interest and other expense for the three months ended March 31, 2009 primarily reflects an increase in capitalized interest associated with our Ohio manufacturing facility, and a reduction in recognized losses associated with economic hedge transactions partially offset by increased non-cash interest expense from the amortization of the debt discount on our 2007 Notes discussed in Note 2 to the accompanying financial statements.

Net Loss

Our net loss for the three months ended March 31, 2009 was $47.0 million compared to a net loss of $71.1 million for the same period in 2008. The decrease in net loss primarily reflects the decreased selling, general and administrative expenses and decreased research and development expenses and increased net product sales, partially offset by the decreased revenue under collaborative agreements and increased collaborative profit-sharing discussed above.  We may incur operating losses for the next few years. In November 2008 we announced our restructuring and our business plan to become operating cash flow positive by the end of 2010.  In addition, on May 4, 2009 we announced the restructuring of our sales force as discussed above.  However, our ability to reach profitability in the future will be heavily dependent upon the amount of product sales that we achieve for BYETTA, SYMLIN and exenatide once weekly, if approved.  Our ability to achieve profitability in the future will also depend our ability to continue to control our operating expenses, including ongoing expenses associated with the continued commercialization of BYETTA and SYMLIN, costs associated with the development and commercialization of exenatide once weekly, if approved, and expenses associated with our research and development programs, including our obesity and our early-stage development programs and related support infrastructure. Our operating results 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 public sales and private placements of our common and preferred stock, debt financings, payments received pursuant to our BYETTA collaboration with Lilly, reimbursement of SYMLIN development expenses through earlier collaboration agreements and, since the second quarter of 2005, through product sales of BYETTA and SYMLIN.

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At March 31, 2009, we had approximately $711.4 million in cash, cash equivalents and short-term investments, compared to $816.8 million at December 31, 2008, and we have future availability of $165 million beginning December 1, 2009 pursuant to the loan agreement with Lilly. In November 2008, following our restructuring, we announced our business plan to be operating cash flow positive by the end of 2010. Additionally, we expect that our use of cash for capital expenditures will decrease significantly in 2009 as compared to 2008 following the substantial completion of our manufacturing facility in Ohio in 2008.  Therefore our current business plan does not contemplate a need to raise additional funds from outside sources however we will continue to evaluate the performance of our business and strategic opportunities which may require us to raise additional funds from outside sources in the future. If we require additional financing in the future, we cannot assure you that it will be available to us on favorable terms, or at all. Although we have previously been successful in obtaining financing through our debt and equity securities offerings, there can be no assurance that we will be able to do so in the future, especially given the current adverse economic and credit conditions.

We used cash of $63.9 million and $14.0 million for our operating activities in the three months ended March 31, 2009 and 2008, respectively.   Our cash used for operating activities in the three months ended March 31, 2009 included uses of cash due to increases in other current assets and inventories of $20.1 million and $3.9 million, respectively, and decreases in restructuring liabilities and accrued compensation of $12.4 million and $12.0 million, respectively.  The increase in other current assets reflects prepayments for raw material inventory and the increase in inventories reflects inventory purchases in accordance with contractual agreements.  The decrease in restructuring liabilities reflects payment of employee separation costs associated with our restructuring at the end of 2008 and rental payments on vacated facilities that we are actively seeking to sublease.  The decrease in accrued compensation primarily reflects the payment of annual compensation accruals in the three months ended March 31, 2009.   Working capital changes may fluctuate from quarter to quarter due to timing of inventory and other current asset purchases and the timing of payments of accounts payable, accrued compensation and other current liabilities.

Our investing activities provided cash of $10.3 million and used cash of $93.1 million for the three months ended March 31, 2009 and 2008, respectively. Investing activities in both quarters consisted primarily of purchases and sales of short-term investments and purchases of property, plant and equipment and increases in other long-term assets.   Purchases of property, plant and equipment decreased to $38.8 million for the three months ended March 31, 2009 from $86.4 million for the three months ended March 31, 2008.  The decrease in purchases of property, plant and equipment primarily reflects reduced expenditures for our Ohio manufacturing facility following its substantial completion in the year ended December 31, 2008. Through March 31, 2009, we had expended in excess of $581 million associated with the construction of this facility, which includes costs associated with the construction of the facility, purchase and installation of equipment and capitalized labor and materials required to validate the facility.  Additionally, we expect that our use of cash for capital expenditures will decrease significantly in 2009 as compared to 2008 following the substantial completion of our manufacturing facility in Ohio in 2008, partially offset by capital investments associated with the dual chamber cartridge pen configuration for exenatide once weekly discussed above.  The initial capital investment for the pen is expected to be $216 million over the next few years, which will be funded 60% by Lilly and 40% by us.  We will continue to evaluate potential additional investments in our Ohio manufacturing facility during the product lifecycle for exenatide once weekly.

Financing activities used cash of $4.0 million and provided cash of $6.6 million for the three months ended March 31, 2009 and 2008, respectively.  Financing activities in the three months ended March 31, 2009 include $7.8 million in principal payments on our $125 million term loan, partially offset by proceeds from the exercise of stock options and proceeds from our employee stock purchase plan. Financing activities for the three months ended March 31, 2008 include proceeds from the exercise of stock options and proceeds from our employee stock purchase plan.

At December 31, 2008, we had $200 million in aggregate principal amount of convertible senior notes due 2011, or the 2004 Notes, and $575 million of the convertible senior notes due 2014, or the 2007 Notes, outstanding. The 2004 Notes are currently convertible into a total of up to 5.8 million shares of our common stock at approximately $34.35 per share and are not redeemable at our option. The 2007 Notes are currently convertible into a total of up to 9.4 million shares of our common stock at approximately $61.07 per share and are not redeemable at our option.  Subject to certain exceptions, if we undergo a “designated event” (as defined in the associated indenture agreement) including a “fundamental change,” such as if a majority of our Board of Directors ceases to be composed of the existing directors or other individuals approved by a majority of the existing directors, holders of the 2007 Notes will, for the duration of the notes, have the option to require the Company to repurchase all or any portion of their 2007 Notes.

In December 2007, we entered into a $140 million credit agreement. The credit agreement provides for a $125 million term loan and a $15 million revolving credit facility. The revolving credit facility also provides for the issuance of letters of credit and foreign exchange hedging up to the $15 million borrowing limit. The term loan is repayable on a quarterly basis, with no payments due quarters one through four, 6.25% of the outstanding principal due quarters five through eleven, and 56.25% of the outstanding principal due in quarter twelve. At March 31, 2009 we had an outstanding balance of

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$117.2 million under the term loan and had issued $7.1 million of standby letters of credit under the revolving credit facility. Both loans have a final maturity date of December 21, 2010. Interest on the term loan is payable quarterly in arrears at a rate equal to 1.75% above the London Interbank Offered Rate, or LIBOR, of either one, two, three or six months LIBOR term at our election. We have entered into an interest rate swap agreement which resulted in a net fixed interest rate of 5.717% under the term loan. The interest rate on the credit facility is LIBOR plus 1.0% or the Bank of America prime rate, at our election.  The credit agreement provides for automatic acceleration upon the occurrence of bankruptcy, other insolvency events and a change in control as defined in the credit agreement, as amended (see Note 16 to the accompanying financial statements).

In October 2008, we entered into a loan agreement with Lilly pursuant to which Lilly will make available to us a $165 million unsecured line of credit that we can draw upon from time to time beginning on December 1, 2009 and ending on June 30, 2011. Any interest due under this credit facility will bear interest at the five-day average three-month LIBOR rate immediately prior to the date of the advance plus 5.25% and shall be due and payable quarterly in arrears on the first business day of each quarter. All outstanding principal, together with all accrued and unpaid interest, shall be due and payable the earlier of 36 months following the date on which the loan commitment is fully advanced or June 30, 2014.

The following table summarizes our contractual obligations and maturity dates as of March 31, 2009 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term convertible debt	$	775,000	$	—	$	200,000	$	—	$	575,000
Interest on long-term convertible debt	107,375		22,250		42,000		34,500		8,625
Long-term note payable	117,188		31,250		85,938		—		—
Interest on long-term note payable, net of swap transactions (1)	9,379		6,030		3,349		—		—
Inventory purchase obligations(2)	313,478		57,427		121,821		134,230		—
Construction contracts	21,600		21,600		—		—		—
Operating lease obligations	205,036		23,281		47,293		49,807		84,655
Total(3)	$	1,549,056	$	161,838	$	500,401	$	218,537	$	668,280

(1)  The interest payments shown were calculated using a rate of 5.717%, the combined net rate of the term loan and interest rate swap, on the outstanding principal balance of the term loan.

(2)Includes $20.6 million of outstanding purchase orders, cancelable by us upon 30 days’ written notice, subject to reimbursement of costs incurred through the date of cancellation.

(3)Excludes long-term obligation of $6.4 million related to deferred compensation, the payment of which is subject to elections made by participants that are subject to change.

In addition, under certain license and collaboration agreements we are required to pay royalties and/or milestone payments upon the successful development and commercialization of related products.  We expect to make development milestone payments up to $1.8 million associated with licensing agreements in the next 12 months.  Additional milestones of up to approximately $283.9 million could be paid over the next 10 to 15 years if development and commercialization of all our early stage programs continue and are successful.  The significant majority of these milestones relate to potential future regulatory approvals and subsequent sales thresholds.  Given the inherent risk in pharmaceutical development, it is highly unlikely that we will ultimately make all of these milestone payments; however, we would consider these payments as positive because they would signify that the related products are moving successfully through development and commercialization.

Our future capital requirements will depend on many factors, including: the amount of product sales we and Lilly achieve for BYETTA and exenatide once weekly, if approved, and we achieve for SYMLIN; costs associated with the continued commercialization of BYETTA and SYMLIN; costs associated with the establishment of our exenatide once weekly manufacturing facility; costs of potential licenses or acquisitions; the potential need to repay existing indebtedness; our ability to receive or need to make milestone payments; our ability, and the extent to which we establish collaborative arrangements for SYMLIN or any of our product candidates; progress in our research and development programs and the magnitude of these programs; costs involved in preparing, filing, prosecuting, maintaining, enforcing or defending our patents; competing technological and market developments; and costs of manufacturing, including costs associated with establishing our own manufacturing capabilities or obtaining and validating additional manufacturers of our products; and scale-up costs for our drug candidates.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are currently or reasonably likely to be material to our consolidated financial position or results of operations.

ITEM 3.Quantitative and Qualitative Disclosures about Market Risk

We invest our excess cash primarily in United States Government securities, asset-backed securities, and debt instruments of financial institutions and corporations with investment-grade 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 held 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 due to changes in interest rates as interest rates on our debt are fixed.  The fair value of our 2004 Notes and 2007 Notes at March 31, 2009 was approximately $173 million and $347 million, respectively.  We have entered into an interest rate swap in connection with our $125 million term loan.  The fair value of the interest rate swap at March 31, 2009 was a liability of $4.4 million.  A hypothetical 1% adverse move in interest rates along the entire interest rate yield curve would not materially affect the fair value of our financial instruments that are exposed to changes in interest rates.

ITEM 4.Controls and Procedures

As of March 31, 2009, an evaluation was performed under the supervision and with the participation of our management, including our President and Chief Executive Officer (referred to as our CEO) and our Senior Vice President, Finance and Chief Financial Officer (referred to as our CFO), of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of March 31, 2009.

Our management does not expect that our disclosure control and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, or misstatements due to error, if any, within the company have been detected. While we believe that our disclosure controls and procedures and internal control over financial reporting are and have been effective, in light of the foregoing we intend to continue to examine and refine our disclosure controls and procedures and internal control over financial reporting.

An evaluation was also performed under the supervision and with the participation of our management, including our CEO and CFO, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. That evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

From time-to-time we become involved in various lawsuits, claims and proceedings relating to the conduct of our business, including those pertaining to product liability, patent infringement and employment claims. For example, we are currently involved in nine product liability cases.  On March 4, 2009, the Supreme Court held in Wyeth v. Levine that federal law does not preempt state product liability claims involving pharmaceuticals.  This could result in an increase in the number of state product liability claims filed against pharmaceutical companies, including Amylin.  We have also been notified of additional claimants who may file product liability complaints. While we cannot predict the outcome of any lawsuit, claim or proceeding, we believe the disposition of the current lawsuits is not likely to have a material effect on our financial condition or liquidity.

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On March 24, 2009, a putative class action titled San Antonio Fire & Police Fund v. Bradbury et al. (Case No. 4446-VCL) was filed by a stockholder of ours in the Court of Chancery of the State of Delaware.  The original complaint asserted claims for breach of fiduciary duty against us and our current directors arising out of certain provisions contained in our outstanding debt instruments relating to a change in a majority of the directors of the Board.  The plaintiff subsequently amended the complaint adding the indenture trustee under the 2007 Notes and the administrative agent under the Credit Agreement as defendants.  The complaint seeks to invalidate those debt instrument provisions or permit our Board to “approve” shareholder nominees, thus nullifying any potential default which might force us to repay the outstanding balance.  On April 13, 2009, a settlement was reached with the plaintiff to withdraw all allegations that our Board has not acted in good faith or has acted to entrench itself or interfere with stockholder voting rights.  The plaintiff also withdrew all claims that the Board is breaching its ongoing duties to our stockholders.

On May 6, 2009, we entered into an amendment of the Credit Agreement.  The amendment provides that lenders under the Credit Agreement agree to consent to the election of six or more stockholder nominees to our Board at our 2009 annual meeting of stockholders upon payment of a fee and the satisfaction of certain conditions as set forth in the amendment.  A hearing of this case was held on May 4, 2009.  As of May 5, 2009, shareholders filing their own slate of director nominees are seeking to place a combined total of five nominees on our Board.  The election of these five nominees out of twelve Board seats at this year’s annual meeting will not trigger the relevant provisions in our debt instruments.

Item 1A.  Risk Factors

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

The following sets forth cautionary factors that may affect our future results, including clarifications to the cautionary factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

We have a history of operating losses, anticipate future losses and may never become profitable.

We have experienced significant operating losses since our inception in 1987, including losses of $47.0 million for the three months ended March 31, 2009, $321.9 million in 2008, $216.5 million in 2007 and $218.9 million in 2006. As of March 31, 2009, we had an accumulated deficit of approximately $1.8 billion. The extent of our future losses and the timing of potential profitability are uncertain, and we may never achieve profitable operations. We have been engaged in discovering and developing drugs since inception, which has required, and will continue to require, significant research and development expenditures. We derived substantially all of our revenues prior to 2005 from development funding, fees and milestone payments under collaborative agreements and from interest income. BYETTA and SYMLIN may not be as commercially successful as we expect and we may not succeed in commercializing any of our other drug candidates. We may incur substantial operating losses for at least the next few years. These losses, among other things, have had and will have an adverse effect on our stockholders’ equity and working capital. Even if we become profitable, we may not remain profitable.

We began selling, marketing and distributing our first products, BYETTA and SYMLIN, in 2005 and we will depend heavily on the success of those products in the marketplace.

Prior to the launch of BYETTA and SYMLIN in 2005, we had never sold or marketed our own products. Our ability to generate product revenue for the next few years will depend solely on the success of these products. The ability of BYETTA and SYMLIN to generate revenue at the levels we expect will depend on many factors, including the following:

·the ability of patients in the current uncertain economic climate to be able to afford our medications or obtain health care coverage that covers our products;

·acceptance of and ongoing satisfaction with these first-in-class medicines in the United States and foreign markets by the medical community, patients receiving therapy and third party payers;

·a satisfactory efficacy and safety profile as demonstrated in a broad patient population;

·successfully expanding and sustaining manufacturing capacity to meet demand;

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·safety concerns in the marketplace for diabetes therapies;

·the competitive landscape for approved and developing therapies that will compete with the products; and

·our ability to expand the indications for which we can market the products.

If we encounter safety issues with BYETTA or SYMLIN or any other drugs we market or fail to comply with extensive continuing regulations enforced by domestic and foreign regulatory authorities, it could cause us to discontinue marketing those drugs, reduce our revenues and harm our ability to generate future revenues, which would negatively impact our financial position.

BYETTA and SYMLIN, in addition to any other of our drug candidates that may be approved by the FDA, will be subject to continual review by the FDA, and we cannot assure you that newly discovered or developed safety issues will not arise. With the use of any of our marketed drugs by a wide patient population, serious adverse events may occur from time to time that initially do not appear to relate to the drug itself, and only if the specific event occurs with some regularity over a period of time does the drug become suspect as having a causal relationship to the adverse event. Some patients taking BYETTA have reported developing pancreatitis. We are working to better understand the relationship between BYETTA and pancreatitis described in some spontaneously reported cases. In keeping with our focus on patient safety, we continue to pursue our drug safety program that includes thorough investigation of individual spontaneous case reports along with clinical and epidemiologic studies. Within the detection limits of an initial epidemiology study which we provided to the FDA, we have not observed an increased incidence of pancreatitis associated with BYETTA compared to other treatments for diabetes and thus believe a definite causal relationship between BYETTA and pancreatitis has not been proved. Any safety issues could cause us to suspend or cease marketing of our approved products, cause us to modify how we market our approved products, subject us to substantial liabilities, and adversely affect our revenues and financial condition.

Moreover, the marketing of our approved products will be subject to extensive regulatory requirements administered by the FDA and other regulatory bodies, including adverse event reporting requirements and the FDA’s general prohibition against promoting products for unapproved uses. The manufacturing facilities for our approved products are also subject to continual review and periodic inspection and approval of manufacturing modifications. Manufacturing facilities that manufacture drug products for the United States market, whether they are located inside or outside the United States, are subject to biennial inspections by the FDA and must comply with the FDA’s current good manufacturing practice, or cGMP, regulations. The FDA stringently applies regulatory standards for manufacturing. Failure to comply with any of these post-approval requirements can, among other things, result in warning letters, product seizures, recalls, fines, injunctions, suspensions or revocations of marketing licenses, operating restrictions and criminal prosecutions. Any of these enforcement actions, any unanticipated changes in existing regulatory requirements or the adoption of new requirements, or any safety issues that arise with any approved products, could adversely affect our ability to market products and generate revenues and thus adversely affect our ability to continue our business.

The manufacturers of our products and drug candidates also are subject to numerous federal, state, local and foreign laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and hazardous substance disposal. In the future, our manufacturers may incur significant costs to comply with those laws and regulations, which could increase our manufacturing costs and reduce our ability to operate profitably.

We currently do not manufacture our own drug products or some of our drug candidates and may not be able to obtain adequate supplies, which could cause delays, subject us to product shortages, or reduce product sales.

The manufacturing of sufficient quantities of newly-approved drug products and drug candidates is a time-consuming and complex process. We currently have no manufacturing capabilities. In order to successfully commercialize our products, including BYETTA and SYMLIN, and continue to develop our drug candidates, including exenatide once weekly, we rely on various third parties to provide the necessary manufacturing.

There are a limited number of manufacturers that operate under the FDA’s cGMP regulations capable of manufacturing for us. In addition, there are a limited number of bulk drug substance suppliers, cartridge manufacturers and disposable pen manufacturers. If we are not able to arrange for and maintain third-party manufacturing on commercially reasonable terms, or we lose one of our sole source suppliers used for our existing products or for some components of our manufacturing processes for our products or drug candidates, we may not be able to market our products or complete development of our drug candidates on a timely basis, if at all.

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Reliance on third-party suppliers limits our ability to control certain aspects of the manufacturing process and therefore exposes us to a variety of significant risks, including, but not limited to, risks to our ability to commercialize our products or conduct clinical trials, risks of reliance on the third-party for regulatory compliance and quality assurance, third-party refusal to supply on a long-term basis, or at all, the possibility of breach of the manufacturing agreement by the third-party and the possibility of termination or non-renewal of the agreement by the third-party, based on its business priorities, at a time that is costly or inconvenient for us. In addition, reliance on single-source suppliers subjects us to the risk of price increases by these suppliers which could negatively impact our operating margins. If any of these risks occur, our product supply will be interrupted resulting in lost or delayed revenues and delayed clinical trials. Our reliance on third-party manufacturers for the production of our two commercial products is described in more detail below.

We rely on Bachem and Mallinckrodt to manufacture our long-term commercial supply of bulk exenatide, the active ingredient in BYETTA. In addition, we rely on single-source manufacturers for some of our raw materials used by Bachem and Mallinckrodt to produce bulk exenatide. We also rely on Wockhardt and Baxter to manufacture the dosage form of BYETTA in cartridges. We are further dependent upon Lilly to supply pens for delivery of BYETTA in cartridges.

We rely on Bachem and Lonza to manufacture our commercial supply of bulk pramlintide acetate, the active ingredient contained in SYMLIN. In addition, we rely on Baxter to manufacture the dosage form of SYMLIN in vials. We have received FDA approval of a disposable pen for the delivery of SYMLIN in cartridges. We rely on Wockhardt for the dosage form of SYMLIN in cartridges and Ypsomed AG to manufacture the components for the SYMLIN disposable pen. We also rely on Hollister-Stier Laboratories LLC for the assembly of the SYMLIN pen.

If any of our existing or future manufacturers cease to manufacture or are otherwise unable to timely deliver sufficient quantities of BYETTA or SYMLIN, in either bulk or dosage form, or other product components, including pens for the delivery of these products, it could disrupt our ability to market our products, subject us to product shortages, reduce product sales and/or reduce our profit margins. Any delay or disruption in the manufacturing of bulk product, the dosage form of our products or other product components, including pens for delivery of our products, could also harm our reputation in the medical and patient communities. In addition, we may need to engage additional manufacturers so that we will be able to continue our commercialization and development efforts for these products or drug candidates. The cost and time to establish these new manufacturing facilities would be substantial.

Our manufacturers have produced BYETTA and SYMLIN for commercial use for approximately four years, however, unforeseeable risks related to environmental, economic, technical or other issues may be encountered as we, together with our manufacturers, continue to develop familiarity and experience with regard to manufacturing our products. Furthermore, we and the other manufacturers used for our drug candidates may not be able to produce supplies in commercial quantities if our drug candidates are approved. While we believe that business relations between us and our manufacturers are generally good, we cannot predict whether any of the manufacturers that we may use will meet our requirements for quality, quantity or timeliness for the manufacture of bulk exenatide or pramlintide acetate, dosage form of BYETTA or SYMLIN, or pens. Therefore, we may not be able to obtain necessary supplies of products with acceptable quality, on acceptable terms or in sufficient quantities, if at all. Our dependence on third parties for the manufacture of products may also reduce our gross profit margins and our ability to develop and deliver products in a timely manner.

In order to manufacture exenatide once weekly on a commercial scale, if it is approved by the FDA, we must complete construction of and commission a new facility and validate the manufacturing process. We are dependent on Alkermes and Parsons to assist us in the construction and commissioning of the manufacturing facility. We have never established, validated, and operated a manufacturing facility and cannot assure you that we will be able to successfully establish or operate such a facility in a timely or economical manner, or at all. In addition, we are dependent on Alkermes to successfully develop and transfer to us its technology for manufacturing exenatide once weekly and to supply us with commercial quantities of the polymer required to manufacture exenatide once weekly. We also will need to obtain sufficient supplies of diluents, solvents, devices, packaging and other components necessary for commercial manufacture of exenatide once weekly.   If exenatide once weekly is approved, we will be dependent upon Bachem, Mallinckrodt and Lonza to manufacture our long-term commercial supply of bulk exenatide, the active ingredient in exenatide once weekly, and upon single suppliers to produce components for packaging exenatide once weekly.  Although we are working diligently to qualify the commercial-scale manufacturing process at this facility, we cannot be assured that we will be able to demonstrate comparability of product manufactured at development scale and product manufactured at commercial scale. If we are unable to demonstrate comparability of product, we may not be able to commercially launch exenatide once weekly in a timely manner or at all.

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Our ability to generate revenues will be diminished if we fail to obtain acceptable prices or an adequate level of reimbursement for our products from third-party payers.

The continuing efforts of government, private health insurers and other third-party payers to contain or reduce the costs of health care through various means, including efforts to increase the amount of patient co-pay obligations, may limit our commercial opportunity. In the United States, we expect that there will continue to be a number of federal and state proposals to implement government control over the pricing of prescription pharmaceuticals. In addition, increasing emphasis on managed care in the United States will continue to put pressure on the rate of adoption and pricing of pharmaceutical products.

Significant uncertainty exists as to the reimbursement status of health care products. Third-party payers, including Medicare, are challenging the prices charged for medical products and services. Government and other third-party payers increasingly are attempting to contain health care costs by limiting both coverage and the level of reimbursement for new drugs and by refusing to provide coverage for uses of approved products for disease indications for which the FDA has not granted labeling approval. Third-party insurance coverage may not be available to patients for BYETTA and/or SYMLIN or any other products we discover and develop. If government and other third-party payers do not provide adequate coverage and reimbursement levels for our products, the market acceptance of these products may be reduced.

Competition in the biotechnology and pharmaceutical industries may result in competing products, superior marketing of other products and lower revenues or profits for us.

There are many companies that are seeking to develop products and therapies for the treatment of diabetes and other metabolic disorders. Our competitors include multinational pharmaceutical and chemical companies, specialized biotechnology firms and universities and other research institutions. A number of our largest competitors, including AstraZeneca, Bristol-Myers Squibb, GlaxoSmithKline, Lilly, Merck & Co., Novartis, Novo Nordisk, Pfizer, Sanofi-Aventis and Takeda Pharmaceuticals, are pursuing the development or marketing of pharmaceuticals that target the same diseases that we are targeting, and it is possible that the number of companies seeking to develop products and therapies for the treatment of diabetes, obesity and other metabolic disorders will increase. Many of our competitors have substantially greater financial, technical, human and other resources than we do and may be better equipped to develop, manufacture and market technologically superior products. In addition, many of these competitors have significantly greater experience than we do in undertaking preclinical testing and human clinical studies of new pharmaceutical products and in obtaining regulatory approvals of human therapeutic products. Accordingly, our competitors may succeed in obtaining FDA approval for superior products. Furthermore, now that we have received FDA approval for BYETTA and SYMLIN, we may also be competing against other companies with respect to our manufacturing and product distribution efficiency and sales and marketing capabilities, areas in which we have limited or no experience as an organization.

Our target patient population for BYETTA includes people with diabetes who have not achieved adequate glycemic control using metformin, sulfonylurea and/or a TZD, three common oral therapies for type 2 diabetes. Our target population for SYMLIN is people with either type 2 or type 1 diabetes whose therapy includes multiple mealtime insulin injections daily. Other products are currently in development or exist in the market that may compete directly with the products that we are developing or marketing. Various other products are available or in development to treat type 2 diabetes, including:

·sulfonylureas;

·metformin;

·insulins, including injectable and inhaled versions;

·TZDs;

·glinides;

·DPP-IV inhibitors;

·incretin/GLP-1 agonists;

·PPARs; and

·alpha-glucosidase inhibitors.

In addition, several companies are developing various approaches, including alternative delivery methods, to improve treatments for type 1 and type 2 diabetes. We cannot predict whether our products will have sufficient advantages to cause health care professionals to adopt them over other products or that our products will offer an economically feasible alternative to other products. Our products could become obsolete before we recover expenses incurred in developing these products.

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Delays in the conduct or completion of our clinical trials, the analysis of the data from our clinical trials or our manufacturing scale-up activities may result in delays in our planned filings for regulatory approvals, and may adversely affect our ability to enter into new collaborative arrangements.

We cannot predict whether we will encounter problems with any of our completed, ongoing or planned clinical studies that will cause us to delay or suspend our ongoing and planned clinical studies, delay the analysis of data from our completed or ongoing clinical studies or perform additional clinical studies prior to receiving necessary regulatory approvals. We also cannot predict whether we will encounter delays or an inability to create manufacturing processes for drug candidates that allow us to produce drug product in sufficient quantities to be economical, otherwise known as manufacturing scale-up.

If the results of our ongoing or planned clinical studies for our drug candidates are not available when we expect or if we encounter any delay in the analysis of data from our clinical studies or if we encounter delays in our ability to scale-up our manufacturing processes:

·we may be unable to complete our development programs for exenatide once weekly or our obesity clinical trials;

·we may have to delay or terminate our planned filings for regulatory approval;

·we may not have the financial resources to continue research and development of any of our drug candidates; and

·we may not be able to enter into, if we chose to do so, any additional collaborative arrangements.

Any of the following could delay the completion of our ongoing and planned clinical studies:

·ongoing discussions with the FDA or comparable foreign authorities regarding the scope or design of our clinical trials;

·delays in enrolling volunteers;

·lower than anticipated retention rate of volunteers in a clinical trial;

·negative results of clinical studies;

·insufficient supply or deficient quality of drug candidate materials or other materials necessary for the performance of clinical trials;

·our inability to reach agreement with Lilly regarding the scope, design, conduct or costs of clinical trials with respect to BYETTA, exenatide once weekly or nasal exenatide; or

·serious side effects experienced by study participants relating to a drug candidate.

We are substantially dependent on our collaboration with Lilly for the development and commercialization of BYETTA and dependent on Lilly and Alkermes for the development of exenatide once weekly.

We have entered into a collaborative arrangement with Lilly, who currently markets diabetes therapies and is developing additional diabetes drug candidates, to commercialize BYETTA and further develop sustained-release formulations of BYETTA, including exenatide once weekly. We entered into this collaboration in order to:

·fund some of our research and development activities;

·assist us in seeking and obtaining regulatory approvals; and

·assist us in the successful commercialization of BYETTA and exenatide once weekly.

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In general, we cannot control the amount and timing of resources that Lilly may devote to our collaboration. If Lilly fails to assist in the further development of exenatide once weekly or the commercialization of BYETTA, or if Lilly’s efforts are not effective, our business may be negatively affected. We are relying on Lilly to obtain regulatory approvals for and successfully commercialize BYETTA and exenatide once weekly outside the United States. Our collaboration with Lilly may not continue or result in additional successfully commercialized drugs. Lilly can terminate our collaboration at any time upon twelve months’ notice. If Lilly ceased funding and/or developing and commercializing BYETTA or exenatide once weekly, we would have to seek additional sources for funding and may have to delay, reduce or eliminate one or more of our commercialization and development programs for these compounds. If Lilly does not successfully commercialize BYETTA outside the United States we may receive limited or no revenues from them. In addition, we are dependent on Alkermes to successfully develop and transfer to us its technology for manufacturing exenatide once weekly. If Alkermes’ technology is not successfully developed to effectively deliver exenatide in a sustained release formulation, or Alkermes does not devote sufficient resources to the collaboration, our efforts to develop sustained release formulations of exenatide could be delayed or curtailed.

If our patents are determined to be unenforceable or if we are unable to obtain new patents based on current patent applications or for future inventions, we may not be able to prevent others from using our intellectual property. If we are unable to obtain licenses to third party patent rights for required technologies, we could be adversely affected.

We own or hold exclusive rights to many issued United States patents and pending United States patent applications related to the development and commercialization of exenatide, including BYETTA and exenatide once weekly, SYMLIN and our other drug candidates. These patents and applications cover composition-of-matter, medical indications, methods of use, formulations and other inventive results. We have issued and pending applications for formulations of BYETTA and exenatide once weekly, but we do not have a composition-of-matter patent covering exenatide. We also own or hold exclusive rights to various foreign patent applications that correspond to issued United States patents or pending United States patent applications.

Our success will depend in part on our ability to obtain patent protection for our products and drug candidates and technologies both in the United States and other countries. We cannot guarantee that any patents will issue from any pending or future patent applications owned by or licensed to us. Alternatively, a third party may successfully challenge or circumvent our patents. Our rights under any issued patents may not provide us with sufficient protection against competitive products or otherwise cover commercially valuable products or processes. For example, our SYMLIN and BYETTA products are subject to the provisions of the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the “Hatch-Waxman Act,” which provides data exclusivity for a certain period of time. Once this exclusivity period expires, the Hatch-Waxman Act allows generic manufacturers to file Abbreviated New Drug Applications, or ANDAs, with the FDA requesting approval of generic versions of previously-approved products. For example, a generic pharmaceutical manufacturer could file an ANDA for SYMLIN as early as March 2009 and for BYETTA as early as April 2009. If an ANDA is filed for one of our approved products prior to expiration of the patents covering those products, it could result in our initiating patent infringement litigation to enforce our rights. We can provide no assurances that we would prevail in such an action or in any challenge related to our patent rights.

In addition, because patent applications in the United States are maintained, in general, in secrecy for 18 months after the filing of the applications, and publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be sure that the inventors of subject matter covered by our patents and patent applications were the first to invent or the first to file patent applications for these inventions. Third parties have filed, and in the future are likely to file, patent applications on inventions similar to ours. From time-to-time we have participated in, and in the future are likely to participate in, interference proceedings declared by the United States Patent and Trademark Office to determine priority of invention, which could result in a loss of our patent position. We have also participated in, and in the future are likely to participate in, opposition proceedings against our patents in other jurisdictions, such as Europe and Australia. Furthermore, we may not have identified all United States and foreign patents that pose a risk of infringement.

We also rely upon licensing opportunities for some of our technologies. We cannot be certain that we will not lose our rights to certain patented technologies under existing licenses or that we will be able to obtain a license to any required third-party technology. If we lose our licensed technology rights or if we are not able to obtain a required license, we could be adversely affected.

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We may be unable to obtain regulatory clearance to market our drug candidates in the United States or foreign countries on a timely basis, or at all.

Our drug candidates are subject to extensive government regulations related to development, clinical trials, manufacturing and commercialization. The process of obtaining FDA and other regulatory approvals is costly, time-consuming, uncertain and subject to unanticipated delays. Regulatory authorities may refuse to approve an application for approval of a drug candidate if they believe that applicable regulatory criteria are not satisfied. Regulatory authorities may also require additional testing for safety and efficacy. Moreover, if the FDA grants regulatory approval of a product, the approval may be limited to specific indications or limited with respect to its distribution, and expanded or additional indications for approved drugs may not be approved, which could limit our revenues. Foreign regulatory authorities may apply similar limitations or may refuse to grant any approval. Unexpected changes to the FDA or foreign regulatory approval process could also delay or prevent the approval of our drug candidates.

The data collected from our clinical trials may not be sufficient to support approval of our drug candidates or additional or expanded indications by the FDA or any foreign regulatory authorities. Biotechnology stock prices have declined significantly in certain instances where companies have failed to meet expectations with respect to FDA approval or the timing for FDA approval. If the FDA’s or any foreign regulatory authority’s response is delayed or not favorable for any of our drug candidates, our stock price could decline significantly.

Moreover, manufacturing facilities operated by us or by the third-party manufacturers with whom we may contract to manufacture our unapproved drug candidates may not pass an FDA or other regulatory authority preapproval inspection. Any failure or delay in obtaining these approvals could prohibit or delay us or any of our business partners from marketing these drug candidates.

Consequently, even if we believe that preclinical and clinical data are sufficient to support regulatory approval for our drug candidates, the FDA and foreign regulatory authorities may not ultimately approve our drug candidates for commercial sale in any jurisdiction. If our drug candidates are not approved, our ability to generate revenues may be limited and our business will be adversely affected.

Litigation regarding patents and other proprietary rights may be expensive, cause delays in bringing products to market and harm our ability to operate.

Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties and preventing others from infringing our patents. Challenges by pharmaceutical companies against the patents of competitors are common. Legal standards relating to the validity of patents covering pharmaceutical and biotechnological inventions and the scope of claims made under these patents are still developing. As a result, our ability to obtain and enforce patents is uncertain and involves complex legal and factual questions. Third parties may challenge, in courts or through patent office proceedings, or infringe upon, existing or future patents. In the event that a third party challenges a patent, a court or patent office may invalidate the patent or determine that the patent is not enforceable. Proceedings involving our patents or patent applications or those of others could result in adverse decisions about:

·the patentability of our inventions, products and drug candidates; and/or

·the enforceability, validity or scope of protection offered by our patents.

The manufacture, use or sale of any of our products or drug candidates may infringe on the patent rights of others. If we are unable to avoid infringement of the patent rights of others, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to successfully defend an infringement action or have infringing patents declared invalid, we may:

·incur substantial monetary damages;

·encounter significant delays in bringing our drug candidates to market; and/or

·be precluded from participating in the manufacture, use or sale of our products or drug candidates or methods of treatment requiring licenses.

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We are subject to “fraud and abuse” and similar laws and regulations, and a failure to comply with such regulations or prevail in any litigation related to noncompliance could harm our business.

Upon approval of BYETTA and SYMLIN by the FDA, we became subject to various health care “fraud and abuse” laws, such as the Federal False Claims Act, the federal anti-kickback statute and other state and federal laws and regulations. Pharmaceutical companies have faced lawsuits and investigations pertaining to violations of these laws and regulations. We cannot guarantee that measures that we have taken to prevent such violations, including our corporate compliance program, will protect us from future violations, lawsuits or investigations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Our financial results will fluctuate, and these fluctuations may cause our stock price to fall.

Forecasting future revenues is difficult, especially since we launched our first products in 2005 and the level of market acceptance of these products may change rapidly. In addition, our customer base is highly concentrated with four customers accounting for most of our net product sales. Fluctuations in the buying patterns of these customers, which may result from seasonality, wholesaler buying decisions or other factors outside of our control, could significantly affect the level of our net sales on a period to period basis. As a result, it is reasonably likely that our financial results will fluctuate to an extent that may not meet with market expectations and that also may adversely affect our stock price. There are a number of other factors that could cause our financial results to fluctuate unexpectedly, including:

·product sales;

·cost of product sales;

·achievement and timing of research and development milestones;

·collaboration revenues;

·cost and timing of clinical trials, regulatory approvals and product launches;

·marketing and other expenses;

·manufacturing or supply issues; and

·potential acquisitions of businesses and technologies and our ability to successfully integrate any such acquisitions into our existing business.

We may require additional financing in the future, which may not be available to us on favorable terms, or at all.

We intend to use our available cash for:

·Commercialization of BYETTA and SYMLIN;

·Establishment of additional manufacturing sources, including our Ohio manufacturing facility;

·Development of exenatide once weekly and other pipeline candidates;

·Executing our INTO strategy;

·Our other research and development activities;

·Other operating expenses;

·Potential acquisitions or investments in complementary technologies or businesses; and

·Other general corporate purposes.

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We may also be required to use our cash to pay principal and interest on outstanding debt, including a $125 million term loan due in 2010, referred to as the Term Loan, and $775 million in outstanding principal amount of convertible senior notes, of which $200 million is due in 2011, referred to as the 2004 Notes, and $575 million is due in 2014, referred to as the 2007 Notes.

If we require additional financing in the future, we cannot assure you that it will be available to us on favorable terms, or at all. Although we have previously been successful in obtaining financing through our debt and equity securities offerings, there can be no assurance that we will be able to so in the future, especially given the current adverse economic and credit conditions.

Our investments in marketable debt securities are subject to credit and market risks that may adversely affect their fair value.

We maintain a portfolio of investments in marketable debt securities which are recorded at fair value. Although we have established investment guidelines relative to diversification and maturity with the objective of maintaining safety of principal and liquidity, credit rating agencies may reduce the credit quality of our individual holdings which could adversely affect their value. Lower credit quality and other market events, such as increases in interest rates, and further deterioration in the credit markets may have an adverse effect on the fair value of our investment holdings and cash position.

Our business has a substantial risk of product liability claims, and insurance may not be adequate to cover these claims.

Our business exposes us to potential product liability risks that are inherent in the testing, manufacturing and marketing of human therapeutic products. For example, we are currently involved in ten product liability cases.  On March 4, 2009, the Supreme Court held in Wyeth v. Levine that federal law does not preempt state product liability claims involving pharmaceuticals.  This could result in an increase in the number of state product liability claims filed against pharmaceutical companies, including Amylin. We have also been notified of additional claimants who may file product liability complaints. Product liability claims could result in the imposition of substantial defense costs and liability on us, a recall of products, or a change in the indications for which they may be used. We currently have limited product liability insurance coverage. We cannot assure you that our insurance will provide adequate coverage against potential liabilities.

Our ability to enter into and maintain third-party relationships is important to our successful development and commercialization of BYETTA, SYMLIN and our other drug candidates and to our potential profitability.

With respect to sales, marketing and distribution outside the United States, we will be substantially dependent on Lilly for activities relating to BYETTA and sustained-release formulations of BYETTA, including exenatide once weekly. We believe that we will likely need to enter into marketing and distribution arrangements with third parties for, or find a corporate partner who can provide support for, the development and commercialization of SYMLIN or our other drug candidates outside the United States. We may also enter into arrangements with third parties for the commercialization of SYMLIN or any of our other drug candidates within the United States.

With respect to BYETTA and, if approved, exenatide once weekly, Lilly is co-promoting within the United States. If Lilly ceased commercializing BYETTA or, if approved, exenatide once weekly, for any reason, we would likely need to either enter into a marketing and distribution arrangement with a third party for those products or significantly increase our internal sales and commercialization infrastructure.

We may not be able to enter into marketing and distribution arrangements or find a corporate partner for SYMLIN or our other drug candidates as we deem necessary. If we are not able to enter into a marketing or distribution arrangement or find a corporate partner who can provide support for commercialization of our drug candidates as we deem necessary, we may not be able to successfully perform these marketing or distribution activities. Moreover, any new marketer or distributor or corporate partner for our drug candidates, including Lilly, with whom we choose to contract may not establish adequate sales and distribution capabilities or gain market acceptance for our products, if any.

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We have a significant amount of indebtedness. We may not be able to make payments on our indebtedness, and we may incur additional indebtedness in the future, which could adversely affect our operations.

In April 2004, we issued $200 million of the 2004 Notes and in June 2007, we issued $575 million of the 2007 Notes. In December 2007, we entered into the $125 million Term Loan due in December 2010. Our ability to make payments on our debt, including the 2004 and 2007 Notes and the Term Loan, will depend on our future operating performance and ability to generate cash and may also depend on our ability to obtain additional debt or equity financing. During each of the last five years, our operating cash flows were negative and insufficient to cover our fixed charges. We may need to use our cash to pay principal and interest on our debt, thereby reducing the funds available to fund our research and development programs, strategic initiatives and working capital requirements. Our ability to generate sufficient operating cash flow to service our indebtedness, including the 2004 and 2007 Notes and the Term Loan, and fund our operating requirements will depend on our ability, alone or with others, to successfully develop, manufacture, obtain required regulatory approvals for and market our drug candidates, as well as other factors, including general economic, financial, competitive, legislative and regulatory conditions, some of which are beyond our control. Our debt service obligations increase our vulnerabilities to competitive pressures, because many of our competitors are less leveraged than we are. If we are unable to generate sufficient operating cash flow to service our indebtedness and fund our operating requirements, we may be forced to reduce or defer our development programs, sell assets or seek additional debt or equity financing, which may not be available to us on satisfactory terms or at all. Our level of indebtedness may make us more vulnerable to economic or industry downturns. If we incur new indebtedness, the risks relating to our business and our ability to service our indebtedness will intensify.

We may be required to redeem our convertible senior notes upon a designated event or repay the Term Loan upon an event of default.

Holders of the 2004 and 2007 Notes may require us to redeem all or any portion of their notes upon the occurrence of certain designated events which generally involve a change in control of our company. The lenders under the Term Loan may require us to repay outstanding principal and accrued interest due under the Term Loan upon the occurrence of an event of default, which could include, among other things, nonpayment of principle and interest, violation of covenants and a change in control. We have received notices from each of Icahn Partners LP and certain of its affiliates, referred to as the Icahn Group and Eastbourne Capital Management, L.L.C., referred to as Eastbourne and certain of its affiliates, announcing their intent to each nominate five individuals for election to our Board of Directors at the 2009 annual meeting and, in the case of the Icahn Group, to submit a proposal for shareholder approval requesting that we reincorporate in the state of North Dakota. If as a result of this proxy contest a majority of our Board of Directors ceases to be composed of the existing directors or other individuals approved by a majority of the existing directors, then a “change of control” under the Term Loan and a “fundamental change” under the indenture for 2007 Notes will be triggered. If triggered, the lenders under the Term Loan may terminate their commitments and accelerate our outstanding debt and the holders of our 2007 Notes may require us to repurchase the notes. We may not have the liquidity or financial resources to do so at the times required or at all.

We may not have sufficient cash funds to redeem the 2004 and 2007 Notes upon a designated event or repay the Term Loan upon an event of default. We may elect, subject to certain conditions, to pay the redemption price for the 2004 Notes in our common stock or a combination of cash and our common stock. We may be unable to satisfy the requisite conditions to enable us to pay some or all of the redemption price for the 2004 Notes in our common stock. If we are prohibited from redeeming the 2004 or 2007 Notes, we could seek consent from our lenders to redeem the 2004 or 2007 notes. If we are unable to obtain their consent, we could attempt to refinance the 2004 or 2007 Notes. If we were unable to obtain a consent or refinance, we would be prohibited from redeeming the 2004 or 2007 Notes. If we were unable to redeem the 2004 or 2007 Notes upon a designated event, it would result in an event of default under the indentures governing the 2004 or 2007 Notes. An event of default under the indentures could result in a further event of default under our other then-existing debt, including the Term Loan. In addition, the occurrence of a designated event may be an event of default under our other debt. Further, an event of default under the Term Loan could result in an event of default under the indentures governing the 2004 or 2007 Notes.

If our research and development programs fail to result in additional drug candidates, the growth of our business could be impaired.

Certain of our research and development programs for drug candidates are at an early stage and will require significant research, development, preclinical and clinical testing, manufacturing scale-up activities, regulatory approval and/or commitments of resources before commercialization. We cannot predict whether our research will lead to the discovery of any additional drug candidates that could generate additional revenues for us.

Our future success depends on our chief executive officer, and other key executives and our ability to attract, retain and motivate qualified personnel.

We are highly dependent on our chief executive officer, and the other principal members of our executive and scientific teams. The unexpected loss of the services of any of these persons might impede the achievement of our research, development and commercialization objectives. Recruiting and retaining qualified sales, marketing, regulatory, scientific and other personnel and consultants will also be critical to our success. We may not be able to attract and retain these personnel and consultants on acceptable terms given the competition between numerous pharmaceutical and biotechnology companies. We do not maintain “key person” insurance on any of our employees.

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We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

In order to protect our proprietary technology and processes, we rely in part on confidentiality agreements with our corporate partners, employees, consultants, manufacturers, outside scientific collaborators and sponsored researchers and other advisors. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information.

Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Our research and development activities and planned manufacturing activities involve the use of hazardous materials, which subject us to regulation, related costs and delays and potential liabilities.

Our research and development and our planned manufacturing activities involve the controlled use of hazardous materials, chemicals and various radioactive compounds. Although we believe that our research and development safety procedures for handling and disposing of these materials comply with the standards prescribed by state and federal regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. In addition, as part of the development of our planned manufacturing activities, we will need to develop additional safety procedures for the handling and disposing of hazardous materials. If an accident occurs, we could be held liable for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial costs to comply with, and substantial fines or penalties if we violate any of these laws or regulations.

We are exposed to potential risks from legislation requiring companies to evaluate internal control over financial reporting.

The Sarbanes-Oxley Act requires that we report annually on the effectiveness of our internal control over financial reporting. Among other things, we must perform systems and processes evaluation and testing. We must also conduct an assessment of our internal control to allow management to report on, and our independent registered public accounting firm to attest to, our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. In connection with our Section 404 compliance efforts, we have incurred or expended, and expect to continue to incur or expend, substantial accounting and other expenses and significant management time and resources. We have implemented certain remediation activities resulting from our ongoing assessment of internal control over financial reporting. Our future assessment, or the future assessments by our independent registered public accounting firm, may reveal material weaknesses in our internal control. If material weaknesses are identified in the future we would be required to conclude that our internal control over financial reporting are ineffective and we could be subject to sanctions or investigations by the Securities and Exchange Commission, the NASDAQ Stock Market or other regulatory authorities, which would require additional financial and management resources and could adversely affect the market price of our common stock.

We have implemented anti-takeover provisions that could discourage or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders, and as a result our management may become entrenched and hard to replace.

Provisions in our certificate of incorporation and bylaws could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders. These provisions include:

·allowing our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;

·allowing our board of directors to issue, without stockholder approval, up to 5.5 million shares of preferred stock with terms set by the board of directors;

·limiting the ability of holders of our outstanding common stock to call a special meeting of our stockholders; and

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·preventing stockholders from taking actions by written consent and requiring all stockholder actions to be taken at a meeting of our stockholders.

Each of these provisions, as well as selected provisions of Delaware law, could discourage potential takeover attempts, could adversely affect the trading price of our securities and could cause our management to become entrenched and hard to replace. In addition to provisions in our charter documents and under Delaware law, an acquisition of our company could be made more difficult by our employee benefits plans and our employee change in control severance plan, under which, in connection with a change in control and termination of employment, stock options held by our employees may become vested and our officers may receive severance benefits. We also have implemented a stockholder rights plan, also called a poison pill, which could make it uneconomical for a third party to acquire us on a hostile basis.

Our executive officers, directors and major stockholders control approximately 68% of our common stock.

As of March 31, 2009, executive officers, directors and holders of 5% or more of our outstanding common stock, in the aggregate, owned or controlled approximately 68% of our outstanding common stock. As a result, these stockholders are able to influence all matters requiring approval by our stockholders, including the election of directors and the approval of corporate transactions. This concentration of ownership may also delay, deter or prevent a change in control of our company and may make some transactions more difficult or impossible to complete without the support of these stockholders.

We could be negatively affected as a result of a proxy fight and other actions of activist shareholders.

If a proxy contest results from one or both notices received from the Icahn Group or Eastbourne announcing their intent to each nominate five individuals for election to our Board of Directors at the 2009 annual meeting and, in the case of the Icahn Group, to submit a proposal for shareholder approval requesting that we reincorporate in the state of North Dakota, our business could be adversely affected because:

·responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees;

·if a majority of our Board of Directors ceases to be composed of the existing directors or other individuals approved by a majority of the existing directors, we may be required to repay $575 million under our 2007 Notes, $125 million under our Term Loan and any amounts that may be outstanding under our $15 million revolving credit facility, and if a cross-default is triggered, $200 million under our 2004 Notes;

·perceived uncertainties as to our future direction may impact our existing and potential collaborations or strategic relationships and in-licensing opportunities and may make it more difficult to attract and retain qualified personnel; and

·if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plan.

Substantial future sales of our common stock by us or our existing stockholders or the conversion of our convertible senior notes to common stock could cause the trading price of our common stock to fall.

Sales by existing stockholders of a large number of shares of our common stock in the public market or the perception that additional sales could occur could cause the trading price of our common stock to drop. Likewise, the issuance of shares of common stock upon conversion of our convertible notes or redemption of our convertible notes upon a designated event, or upon additional convertible debt or equity financings or other share issuances by us, including shares issued in connection with potential future strategic alliances, could adversely affect the trading price of our common stock. Our convertible notes are currently convertible into a total of up to 15.2 million shares. In addition, the existence of these notes may encourage short selling of our common stock by market participants.

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Significant volatility in the market price for our common stock could expose us to litigation risk.

The market prices for securities of biopharmaceutical and biotechnology companies, including our common stock, have historically been highly volatile, and the market from time to time has experienced significant price and volume fluctuations that are unrelated to the quarterly operating performance of these biopharmaceutical and biotechnology companies. Since January 1, 2007, the high and low sales price of our common stock varied significantly, as shown in the following table:

	High		Low
Year ending December 31, 2009
Second Quarter (through April 28, 2009)	$	12.30	$	8.56
First Quarter	$	14.13	$	7.89
Year ended December 31, 2008
Fourth Quarter	$	20.47	$	5.50
Third Quarter	$	35.00	$	18.55
Second Quarter	$	33.22	$	25.30
First Quarter	$	37.38	$	23.75
Year ended December 31, 2007
Fourth Quarter	$	51.10	$	35.83
Third Quarter	$	53.25	$	40.86
Second Quarter	$	46.93	$	36.91
First Quarter	$	42.45	$	35.55

Given the uncertainty of our future funding, whether BYETTA and SYMLIN will meet our expectations, and the regulatory approval of our other drug candidates, we may continue to experience volatility in our stock price for the foreseeable future. In addition, the following factors may significantly affect the market price of our common stock:

·our financial results and/or fluctuations in our financial results;

·safety issues with BYETTA, SYMLIN or our product candidates;

·clinical study results;

·determinations by regulatory authorities with respect to our drug candidates;

·our ability to complete our Ohio manufacturing facility and the commercial manufacturing process for exenatide once weekly;

·developments in our relationships with current or future collaborative partners;

·our ability to successfully execute our commercialization strategies;

·developments in our relationships with third-party manufacturers of our products and other parties who provide services to us;

·technological innovations or new commercial therapeutic products by us or our competitors;

·developments in patent or other proprietary rights; and

·governmental policy or regulation, including with respect to pricing and reimbursement.

Broad market and industry factors also may materially adversely affect the market price of our common stock, regardless of our actual operating performance. Periods of volatility in the market price of our common stock expose us to securities class-action litigation, and we may be the target of such litigation as a result of market price volatility in the future.

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ITEM 6.  Exhibits

The following exhibits are included as part of this report:

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation (filed as an exhibit to Registrant’s registration statement on Form S-1 (File No. 333-44195) or amendments thereto and incorporated herein by reference)
3.2	Fourth Amended and Restated Bylaws (filed as an exhibit to Registrant’s Current Report on Form 8-K filed on December 8, 2008 and incorporated herein by reference)
3.3	Certificate of Amendment of Amended and Restated Certificate of Incorporation (filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 and incorporated herein by reference)
3.4	Certificate of Amended and Restated Certificate of Incorporation (filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and incorporated herein by reference)
4.1	Specimen Common Stock Certificate (filed as an exhibit to Registrant’s registration statement on Form S-1 (File No. 333-44195) or amendments thereto and incorporated herein by reference)
4.2	Rights Agreement, dated as of June 17, 2002, between the Registrant and American Stock Transfer & Trust Company (filed as an exhibit to Registrant’s Current Report on Form 8-K filed on June 18, 2002 and incorporated herein by reference)
4.3	First Amendment to Rights Agreement dated December 13, 2002, between the Registrant and American Stock Transfer & Trust Company (filed as an exhibit to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and incorporated herein by reference)
4.4	Form of Rights Certificate (filed as an exhibit to Registrant’s Current Report on Form 8-K filed on June 18, 2002 and incorporated herein by reference)
4.5	Certificate of Designation of Series A Junior Participating Preferred Stock (filed as an exhibit to Registrant’s Current Report on Form 8-K filed on June 18, 2002 and incorporated herein by reference)
10.1	2003 Non-Employee Directors’ Stock Option Plan (the “Directors’ Plan”), as amended†
10.2	Directors’ Plan Option Agreement, as amended†
10.3	Letter Agreement, dated April 9, 2009, between Registrant and Eli Lilly and Company
31.1	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certifications Pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

† Indicates management or compensatory plan or arrangement required to be identified pursuant to Item 15(c).

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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 11, 2009	By:	/S/ MARK G. FOLETTA
	Mark G. Foletta, Senior Vice President, Finance and Chief Financial Officer (on behalf of the registrant and as the registrant’s principal financial and accounting officer)

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EX-10.1

Exhibit 10.1

AMYLIN PHARMACEUTICALS, INC.

2003 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN

ADOPTED APRIL 2, 2003

APPROVED BY STOCKHOLDERS MAY 14, 2003

EFFECTIVE DATE: APRIL 2, 2003
LAST AMENDED: MARCH 16, 2009

1.PURPOSES AND RELATIONSHIP WITH THE COMPANY’S 2001 EQUITY INCENTIVE PLAN.

(a)Eligible Option Recipients.  The persons eligible for Initial Grants and Annual Grants are the Non-Employee Directors of the Company.

(b)Available Options.  The purpose of the Plan is to provide a means by which Non-Employee Directors may be given an opportunity to benefit from increases in the value of the Common Stock through the granting of Nonstatutory Stock Options.

(c)General Purpose.  The Company, by means of the Plan, seeks to retain the services of its Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

(d)Relationship with the Company’s 2001 Equity Incentive Plan.  All Options granted pursuant to the Plan shall be deemed to have been issued under and pursuant to the terms of the Incentive Plan and subject to all the terms and conditions of the Incentive Plan except to the extent otherwise provided for in the Plan.  In the event that any of the terms or conditions of the Incentive Plan are inconsistent with or in conflict with any of the terms or conditions of the Plan or the Options, the terms and conditions of the Plan or the Options shall control.

2.DEFINITIONS.

(a)“Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(b)“Annual Grant” means an Option granted annually to all Non-Employee Directors who meet the criteria specified in subsection 6(b) of the Plan.

(c)“Annual Meeting” means the annual meeting of the stockholders of the Company.

(d)“Board” means the Board of Directors of the Company.

(e)“Change in Control” means the occurrence of any of the following: (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a subsidiary, an affiliate, or a Company employee benefit plan, including any trustee

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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 Company representing 50% or more of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction; (ii) there is consummated a sale or other disposition of all or substantially all of the assets of the Company (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 Company in substantially the same proportions as their ownership of the Company immediately prior to such sale); (iii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such transaction, the stockholders 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.

(f)“Code” means the Internal Revenue Code of 1986, as amended.

(g)“Common Stock” means the common stock of the Company.

(h)“Company” means Amylin Pharmaceuticals, Inc., a Delaware corporation.

(i)“Consultant” means any person, including an advisor, whether an individual or an entity, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate and who is compensated for such services.  However, the term “Consultant” shall not include Directors who are not compensated by the Company for their services as Directors, and the payment of a director’s fee by the Company for services as a Director shall not cause a Director to be considered a “Consultant” for purposes of the Plan.

(j)“Continuous Service” means that the Optionholder’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated.  An Optionholder’s Continuous Service shall not be deemed to have terminated by reason of a change in the capacity in which such Optionholder renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which such Optionholder renders such service, provided that there is otherwise no interruption or termination of such Optionholder’s Continuous Service.  For example, a change in status from a Non-Employee Director of the Company to a Consultant of an Affiliate or an Employee of the Company will not constitute an interruption of Continuous Service.  The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

(k)“Director” means a member of the Board of Directors of the Company.

(l)“Employee” means any person employed by the Company or an Affiliate.  A person shall not be deemed an Employee by reason of such person’s service as a Director and/or payments of director’s fees to such person.

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(m)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n)“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

(i)If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.

(ii)Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(iii)In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board and in a manner that complies with Section 409A and 422 of the Code.

(o)“Incentive Plan” means the Company’s 2001 Equity Incentive Plan or any successor equity incentive plan thereto.

(p)“Initial Grant” means an Option granted to a Non-Employee Director who meets the criteria specified in subsection 6(a) of the Plan.

(q)“Non-Employee Director” means a Director who is not an Employee.

(r)“Nonstatutory Stock Option” means an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(s)“Option” means a Nonstatutory Stock Option granted pursuant to the Plan.

(t)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(u)“Plan” means this Amylin Pharmaceuticals, Inc. 2003 Non-Employee Directors’ Stock Option Plan.

(v)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

3.ADMINISTRATION.

(a)Administration by Board.  The Board shall administer the Plan.

(b)Powers of Board.  The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

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(i)To determine the provisions of each Option to the extent permitted in the Plan.

(ii)To construe and interpret the Plan and Options granted under it, and to establish, amend and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(iii)To amend the Plan as provided in Section 10.

(iv)Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

(c)Effect of Board’s Decision.  All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

4.OPTIONS ISSUED UNDER INCENTIVE PLAN.

All Options granted pursuant to the Plan shall be deemed to have been issued under the Incentive Plan, and the shares of Common Stock issuable upon exercise of such Options shall be issuable out of the shares reserved for issuance under the Incentive Plan pursuant to Section 4 of the Incentive Plan.

5.ELIGIBILITY.

The Options as set forth in Section 6 automatically shall be granted under the Plan to all Non-Employee Directors in accordance with the provisions of Section 6.

6.NON-DISCRETIONARY GRANTS.

(a)Initial Grants.  Each person who is elected or appointed by the Board or stockholders of the Company for the first time to be a Non-Employee Director subsequent to April 2, 2003 and who has not served as a Director at any time during the two-year period immediately preceding the date of such election or appointment, automatically shall, upon the date of his or her initial election or appointment to be a Non-Employee Director, be granted an Initial Grant to purchase thirty thousand (30,000) shares of Common Stock on the terms and conditions set forth herein, which Initial Grant shall be effective as of the date of such election or appointment.

(b)Annual Grants.  Immediately following each Annual Meeting held after April 2, 2003, each Non-Employee Director automatically shall be granted, effective as of the date of such Annual Meeting (and in addition to any Initial Grant granted pursuant to Section 6(a)) an Annual Grant to purchase twenty thousand (20,000) shares of Common Stock on the terms and conditions set forth herein.

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7.OPTION PROVISIONS.

Each Option granted shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions, and may include other provisions to the extent those provisions are permitted or required by the Incentive Plan and are not inconsistent with or in conflict with the terms and conditions of the Plan:

(a)Term.  No Option shall be exercisable after the expiration of seven (7) years from the date it was granted.

(b)Exercise Price.  The exercise price of each Option shall be one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(c)Vesting Schedule.  The Option shall vest and become exercisable as follows:

(i)Initial Grants:  (A) if the applicable Optionholder’s Continuous Service continues through the date that is one (1) year from the date of grant thereof (the “Anniversary Date”), such Option shall become exercisable as of the Anniversary Date with respect to one-fourth (1/4th) of the total number of shares of Common Stock subject to such Option; and (B) over the thirty-six month period following the Anniversary Date, for so long as the applicable Optionholder’s Continuous Service continues, such Option shall become exercisable with respect to an additional one forty-eighth (1/48) of the total number of shares of Common Stock subject to such Option on each monthly anniversary of the Anniversary Date until such Option has become fully exercisable.

(ii)Annual Grants:  such Option shall become exercisable in equal monthly increments over a period of one (1) year from the date of grant of such Option for so long as the applicable Optionholder’s Continuous Service continues.

8.MISCELLANEOUS.

The Board shall have the power to accelerate the time at which an Option may first be exercised or the time during which an Option or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Option stating the time at which it may first be exercised or the time during which it will vest.

9.ADJUSTMENTS UPON CHANGES IN STOCK.

(a)Capitalization Adjustments.  If any change is made in the Common Stock subject to the Incentive Plan, or subject to any Option, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es)

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of securities subject to Options granted under the Plan and the number of securities to be issued upon the exercise of Options granted pursuant to subsection 6(a) and 6(b), and the outstanding Options will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Options.  The Board shall make such adjustments, and its determination shall be final, binding and conclusive.  (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)

(b)Dissolution or Liquidation.  In the event of a dissolution or liquidation of the Company, then all outstanding Options shall terminate immediately prior to such event.

(c)Asset Sale, Merger, Consolidation or Reverse Merger.  In the event of (i) a sale, lease or other disposition of all or substantially all of the assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (individually, a “Corporate Transaction”), then any surviving corporation or acquiring corporation shall assume any Options outstanding under the Plan or shall substitute similar options (including options to acquire the same consideration paid to the stockholders in the Corporate Transaction for those outstanding under the Plan).  In the event any surviving corporation or acquiring corporation refuses to assume such Options or to substitute similar options for those outstanding under the Plan, then with respect to Options held by Optionholders whose Continuous Service has not terminated, the vesting of such Options (and, if applicable, the time during which such Options may be exercised) shall be accelerated in full, and the Options shall terminate if not exercised (if applicable) at or prior to the Corporate Transaction.  With respect to any other Options outstanding under the Plan, such Options shall terminate if not exercised (if applicable) prior to the Corporate Transaction.

(d)Change in Control.  Notwithstanding any other provisions of the Plan to the contrary, if a Change in Control occurs and the Optionholder’s Continuous Service has not terminated prior to the effective date of such Change in Control, then the vesting and exercisability of the shares of Common Stock subject to the Optionholder’s Options shall be accelerated in full as of the effective date of the Change in Control.  Following such Change in Control (other than a Change in Control resulting from a plan of complete dissolution or liquidation of the Company) and notwithstanding any other provision of the Plan to the contrary and provided that the Optionholder’s Continuous Service has not terminated prior to the effective date of the Change in Control, then the Optionholder’s Options shall expire on the earliest of (i) 12 months following the effective date of such Change in Control or (ii) the expiration of the term of the Option.

(e)Parachute Payments.  If any payment or benefit the Optionholder would receive pursuant to a Change in Control from the Company or otherwise would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, or any comparable successor provisions, and (ii) but for this subsection, be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise Tax”), then such payment or benefit shall be either (x) provided to the Optionholder in full or (y) provided to the

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Optionholder as to such lesser extent which would result in no portion of the payment or benefit being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes (all computed at the highest applicable marginal rate), results in the receipt by the Optionholder, on an after-tax basis, of the greatest amount of payment or benefits, notwithstanding that all or some portion of such payment or benefits may be taxable under the Excise Tax.  Unless the Company and the Optionholder otherwise agree in writing, any determination required under this subsection shall be made in writing in good faith by the accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a different nationally recognized accounting firm to make the determinations required hereunder (the accounting firm so engaged pursuant to the two immediately preceding sentences, the “Accountants”).  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the payments or benefits equal the amount determined pursuant to clauses (x) and (y) above, reduction shall occur in the following order unless the Optionholder elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the effective date of the event that triggers the payments or benefits): reduction of cash payments; cancellation of accelerated vesting of Options; reduction of employee benefits.  In the event that acceleration of vesting of Options is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Optionholder’s Options unless the Optionholder elects in writing a different order for cancellation.  For purposes of making the calculations required by this subsection, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority.  The Company and the Optionholder shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this subsection.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this subsection.

If, notwithstanding any reduction described in this subsection, the Internal Revenue Service (the “IRS”) determines that the Optionholder is liable for the Excise Tax as a result of the receipt of a payment or benefits as described above, then the Optionholder shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that the Optionholder challenges the final IRS determination, a final judicial determination, a portion of the payment or benefits equal to the “Repayment Amount.”  The Repayment Amount with respect to the payment or benefits shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Optionholder’s net after-tax proceeds with respect to any payment or benefits (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such payment or benefits) shall be maximized.  The Repayment Amount with respect to the payment or benefits shall be zero if a Repayment Amount of more than zero would not result in the Optionholder’s net after-tax proceeds with respect to the payment or benefits being maximized.  If the Excise Tax is not eliminated pursuant to this paragraph, the Optionholder shall pay the Excise Tax.

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Notwithstanding any other provision of this subsection, if (i) there is a reduction in a payment or benefits as described in this subsection, (ii) the IRS later determines that the Optionholder is liable for the Excise Tax, the payment of which would result in the maximization of the Optionholder’s net after-tax proceeds (calculated as if the Optionholder’s payment or benefits had not previously been reduced), and (iii) the Optionholder pays the Excise Tax, then the Company shall pay to the Optionholder those benefits which were reduced pursuant to this subsection contemporaneously or as soon as administratively possible after the Optionholder pays the Excise Tax so that the Optionholder’s net after-tax proceeds with respect to the payment or benefits is maximized.

If the Optionholder either (i) brings any action to enforce rights pursuant to this subsection, or (ii) defends any legal challenge to its rights hereunder, the Optionholder shall be entitled to recover attorneys’ fees and costs incurred in connection with such action, regardless of the outcome of such action; provided, however, that, in the event such action is commenced by the Optionholder, the court finds the claim was brought in good faith.

10.AMENDMENT OF THE PLAN AND OPTIONS.

(a)Amendment of Plan.  The Board at any time, and from time to time, may amend the Plan.  However, except as provided in Section 9 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

(b)Stockholder Approval.  The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval.

(c)No Impairment of Rights.  Rights under any Option granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing.

(d)Amendment of Options.  The Board at any time, and from time to time, may amend the terms of any one or more Options; provided, however, that the rights under any Option shall not be impaired by any such amendment unless (i) the Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing.

11.TERMINATION OR SUSPENSION OF THE PLAN.

(a)Plan Term.  The Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.  No Options may be granted under the Plan while the Plan is suspended or after it is terminated.

(b)No Impairment of Rights.  Suspension or termination of the Plan shall not impair rights and obligations under any Option granted while the Plan is in effect except with the written consent of the Optionholder.

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12.EFFECTIVE DATE OF PLAN.

The Plan shall become effective as determined by the Board, but no Option shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

13.CHOICE OF LAW.

The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan without regard to such state’s conflict of laws rules.

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EX-10.2

Exhibit 10.2

AMYLIN PHARMACEUTICALS, INC.
2003 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN

STOCK OPTION AGREEMENT
(NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement, Amylin Pharmaceuticals, Inc. (the “Company”) has granted you an option pursuant to the Company’s 2003 Non-Employee Directors’ Stock Option Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice.  Options granted under the Plan are issued under the Company’s 2001 Equity Incentive Plan or any successor equity incentive plan thereto (the “Incentive Plan”), and any shares of the Company’s Common Stock issued upon exercise of your option will be issued out of shares reserved for issuance under the Incentive Plan.  Defined terms not explicitly defined in this Stock Option Agreement but defined in the Incentive Plan shall have the same definitions as in the Incentive Plan except to the extent otherwise defined in the Plan.

The details of your option are as follows:

1.             VESTING.  Subject to the limitations contained herein, your option will vest as set forth in the Plan, provided that vesting will cease upon the termination of your Continuous Service.

2.             NUMBER OF SHARES AND EXERCISE PRICE.  The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for capitalization adjustments, as provided in the Plan.

3.             METHOD OF PAYMENT.  Payment of the exercise price is due in full upon exercise of all or any part of your option.  You may elect to make payment of the exercise price in cash or by check or in any other manner permitted by your Grant Notice, which may include one or more of the following:

(a)           In the Company’s sole discretion at the time your option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.

(b)           Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the Company’s reported earnings (generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise.  “Delivery”

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for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company.  Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

(c)           Pursuant to the following deferred payment alternative:

(i)            Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued interest, shall be due (i) on the date designated by the Company in its sole and absolute discretion but not to exceed four (4) years from date of exercise, or (ii) at the Company’s election, upon termination of your Continuous Service.

(ii)           Interest shall be compounded at least annually and shall be charged at the market rate of interest necessary to avoid a charge to earnings for financial accounting purposes.

(iii)         At any time that the Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall be made in cash and not by deferred payment.

(iv)          In order to elect the deferred payment alternative, you must, as a part of your written notice of exercise, give notice of the election of this payment alternative and, in order to secure the payment of the deferred exercise price to the Company hereunder, if the Company so requests, you must tender to the Company a promissory note and a security agreement covering the purchased shares of Common Stock, both in form and substance satisfactory to the Company, or such other or additional documentation as the Company may request.

4.             WHOLE SHARES.  You may exercise your option only for whole shares of Common Stock.

5.             SECURITIES LAW COMPLIANCE.  Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act.  The exercise of your option must also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

6.             TERM.  You may not exercise your option before the commencement of its term or after its term expires.  The term of your option commences on the Date of Grant and expires upon the earliest of the following:

(a)           three (3) months after the termination of your Continuous Service for any reason other than your Disability or death, provided that if during any part of such three (3)

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month period your option is not exercisable solely because of the condition set forth in the preceding paragraph relating to “Securities Law Compliance,” your option shall not expire until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;

(b)           twelve (12) months after the termination of your Continuous Service due to your Disability;

(c)           twelve (12) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates;

(d)           the Expiration Date indicated in your Grant Notice; or

(e)           the day before the seventh (7th) anniversary of the Date of Grant.

7.             EXERCISE.

(a)           You may exercise the vested portion of your option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

(b)           By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such exercise.

8.             TRANSFERABILITY.  Your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.  Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option.

9.             OPTION NOT A SERVICE CONTRACT.  Your option is not a service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the service of the Company as a Director, or of the Company to continue your service as a Director.  Nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue your relationship with the Company as a Director.

10.          WITHHOLDING OBLIGATIONS.

(a)           At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by

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means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your option.

(b)           Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.  If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option.  Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise.  Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c)           You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow.

11.          NOTICES.  Any notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

12.          GOVERNING PLAN DOCUMENT.  Your option is subject to all the provisions of the Incentive Plan except to the extent otherwise provided for in the Plan, the respective provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Incentive Plan except to the extent otherwise provided for in the Plan or any amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the provisions of your option and those of the Incentive Plan or the Plan, as applicable, the provisions of the Incentive Plan or the Plan shall control, as the case may be.

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EX-10.3

Exhibit 10.3

Amylin Pharmaceuticals, Inc.
9360 Towne Centre Drive San Diego, CA 92121 USA Tel   (858) 552 2200
Fax   (858) 552 2212
www.amylin.com

April 09, 2009

Eli Lilly and Company
Lilly Corporate Center

Indianapolis, IN 46285

Attention:  Bryce Carmine

Re: Collaboration Agreement between Eli Lilly and Company (“Lilly”) and Amylin Pharmaceuticals, Inc. (“Amylin”), dated September 19, 2002, as amended to date (the “Collaboration Agreement”)

Dear Bryce:

This letter confirms our understanding with respect to certain amendments to the Collaboration Agreement and the co-location of certain Lilly personnel at Amylin’s facilities in furtherance of Amylin’s and Lilly’s efforts under the Collaboration Agreement to operate efficiently and effectively.  Capitalized terms used but not defined herein have the meanings given to them in the collaboration Agreement.

1.             The last sentence of Section 12.3(c) of the Collaboration Agreement is hereby amended and restated to read as follows: “If such termination occurs after Product Launch, such termination shall be effective one (1) year after the date of Amylin’s receipt of written notice from Lilly.  Within 60 days of Lilly’s notice, the parties will negotiate in good faith, and Alliance Steering Committee will approve, a mutually agreeable termination transition plan.”

2.             As of April 1, 2009, notwithstanding any term of the Collaboration Agreement to the contrary, including but not limited to the definition of the term “FTE” or the term “Reimbursable Marketing Expenses,” each Party’s internal costs, including headcount, that are specifically attributable to the Development or Commercialization of Product (e.g. specific finance/accounting support, managed care contracting, etc.) as mutually determined and agreed by the Alliance Steering Committee shall be reimbursed in accordance with each Party’s respective standard cost accounting procedures.  The ASC will be responsible for approving the methodology, plan and rates for these previously unshared expenses.  Each Party shall insure that such internal costs are not unfairly allocated to the Development or Commercialization of Product, and that headcount is allocated based on actual time spent on the Product similar to the procedures specified in Section 1.48 of the Collaboration Agreement.  Such internal costs shall be reimbursed in accordance with each Party’s standard cost accounting procedures.  For purposes of clarification, such internal Reimbursable Marketing Expenses shall include internal marketing costs, whether incurred by Amylin or Lilly, including internal expenses of the types describes in clauses (i) through (xviii) of Section 1.100 of the Collaboration Agreement, even if incurred internally by the Parties.

3.             With regard to certain Lilly employees to be co-located at Amylin’s facilities in furtherance of the efforts between Lilly and Amylin to operate efficiently and effectively (the “Co-located Lilly Employees”), the Parties shall agree upon a set of operating and human resources principles (the “Principles”) to be agreed to by April 16, 2009 and approved by the Alliance Steering Committee.  Those Principles will address matters deemed necessary for the operation of the Alliance business and the co-location of employees including, without limitation the items set forth on Exhibit A hereto.

If this letter correctly reflects our agreement as to the foregoing matters, please sign in the space provided below and return a signed copy of this letter to me.  Unless otherwise set forth in this letter, the terms of the Collaboration Agreement remain unmodified and in full force and effect.

Regards,

/s/ Mark J. Gergen
Mark J. Gergen
Senior Vice President, Corporate Development
Acknowledges and Agreed:
Eli Lilly and Company
By:	/s/ Bryce D. Carmine
Name:	Bryce D. Carmine
Title:	Executive V.P., Global Marketing & Sales
Date Signed: April 9, 2009

Amylin Pharmaceuticals, Inc.
9360 Towne Centre Drive San Diego, CA 92121 USA Tel   (858) 552 2200
Fax   (858) 552 2212
www.amylin.com

EXHIBIT A

The Operating and Human Resources Principles shall address, without limitation, the following needs, as well as addressing other operating and human resource matters as the parties deem advisable or necessary:

· Co-located Lilly Employees located at Amylin will be required to sign a confidentiality agreement reasonably acceptable to Amylin and Lilly to cover the potential inadvertent exposure to Amylin confidential information not related to the Alliance.

· Amylin may restrict access of Co-located Lilly Employees to information and facilities not related to exenatide or not necessary to fulfill their obligations to the Alliance.

· Each party shall be responsible for severance costs for their displaced employees, if any.

· Co-located Lilly Employees shall remain Lilly employees and not be deemed to be employees of Amylin. Similarly, those Amylin employees co-located with the Co-located Lilly Employees shall remain Amylin employees and not be deemed to be employees of Lilly.

· Amylin shall not incur any liability for any act or failure to act of any Co-located Lilly Employee. Lilly shall not incur any liability for any act or failure to act of any Amylin employee. Lilly shall indemnify and defend Amylin against any claim brought by or on behalf of a Co-located Lilly Employee to the extent caused by any negligent act or omission by Lilly. Amylin shall indemnify and defend Lilly against any claim brought by or on behalf of an Amylin employee to the extent caused by any negligent act or omission of Amylin.

EX-31.1

Exhibit 31.1

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 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 report;

3.Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; and

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May  11, 2009
	By:	/S/ MARK G. FOLETTA
		Senior Vice President, Finance and Chief Financial Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Daniel M. Bradbury, certify that:

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

2.Based on my knowledge, this 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 report;

3.Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; and

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or those performing similar functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May  11, 2009
	By:	/S/ DANIEL M. BRADBURY
	President and Chief Executive Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350, as adopted), Daniel M. Bradbury, the President and Chief Executive Officer of Amylin Pharmaceuticals, Inc. (the “Company”), and Mark G. Foletta, the Senior Vice President, Finance and Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2009, to which this Certification is attached as Exhibit 32.1 (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 11, 2009

/S/ DANIEL M. BRADBURY	/S/ MARK G. FOLETTA
Daniel M. Bradbury	Mark G. Foletta
President and Chief Executive Officer	Senior Vice President, Finance and Chief Financial Officer