Canaccord’s Salveen Richter has maintained a SELL rating with a price target down at $12.00 per share.  This is important because Amylin closed at $25.73 and the 52-week trading range is $8.03 to $26.87.  The report is based in part on the notion that Bydureon sales are off to a slow start that was disclosed in the company’s earnings report yesterday.  The report was called a weak earnings report with Bydureon revenue of only $6.9 million versus $10.4 million expected.

The report may be very much of a standout because some of the companies which have been named as likely and/or potential bidders are Bristol-Myers Squibb Company (NYSE: BMY), Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), Sanofi (NYSE: SNY), and Takeda.  We have also wondered perhaps whether or not Pfizer Inc. (NYSE: PFE) or Novo Nordisk A/S (NYSE: NVO) could be among the possible buyers, but these two seem to be dismissed elsewhere as likely buyers.

The report does caution about a floor from the buyout speculation: “That said, continued speculation on the company’s takeout potential will likely set a floor on Amylin shares at current levels, barring a potential E.U. partnership.”   Other notes as follows: Bydureon captured 5.9% of the GLP–1 market… Bydureon is being impacted by competition, healthcare reform and reimbursement/access… AMLN Q1/12 total revenue of $153.7 million was under consensus of $162.1 million… it is lowering FY12 Bydureon revenue estimate to $133.9 million from $209.5 million… firm is increasing its non-GAAP SG&A expense to $395.5 million from $356.3 million… firm is lowering FY12 GAAP EPS estimate to -$1.68 EPS from -$1.09 EPS.

Canaccord Genuity’s valuation puts its 12-month price target at $12.00 and it is based upon 20-times the firm’s fully taxed and fully diluted GAAP earnings estimate for 2016 of $1.55 EPS that is then discounted back to 2012 at a rate of 28%.

What is interesting is that the Thomson Reuters consensus target is only $18.10, so there is quite a takeover premium built into the stock.  Amylin may get acquired or it may not.  This is a bold call considering that the company even recently announced that Carl Icahn voluntarily dismissed his suit against the company.  It would seem that Carl Icahn believes that a premium buyout is headed Amylin’s way.

JON C. OGG

The lawsuit was seeking an extension of the deadline to nominate directors at the 2012 annual meeting of shareholders.  The news may include Icahn Enterprises, L.P. (NASDAQ: IEP) as well.

Icahn said, “The decision to discontinue our lawsuit seeking to extend the director nomination deadline was the result of discussions I had with Daniel Bradbury, Amylin’s chief executive officer, that we agreed would not be publicly disclosed.”

What is interesting is that this is in the middle of a bidding process.  This drives up the price of poker or it at least takes away one more hurdle that a would-be buyer might have had.  It is unlikely that any buyer would have not bid just because Carl Icahn was involved.  After all, everyone knows that Carl Icahn cares about three real goals here: getting a good price, getting a good price, and ultimately on getting a good price.

The note also said, “Mr. Icahn reiterated that he continues to strongly believe that the company should be sold at this time.”  Duh!

Amylin shares are up 3.5% at $26.45 and today is a new 52-week high against a prior range of $8.03 to $26.25.

JON C. OGG

The unofficial closing bells put the DJIA fell more than 102 points to 12,926.86 (-0.79%), the NASDAQ fell 30 points (-1%) to 2,970.45, and the S&P 500 fell -0.84% or more than 11 points to 1,366.94.

There were several analyst upgrades and downgrades today, including General Electric Co. (NYSE: GE) reiterated ‘outperform’ with a $22 target price at Credit Suisse; F5 Networks Inc. (NASDAQ: FFIV) started as ‘overweight’ at Morgan Stanley; Groupon Inc. (NASDAQ: GRPN) raised to ‘overweight’ at Evercore; Progressive Corp. (NYSE: PGR) cut to ‘neutral’ at Citigroup; and Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) reiterated as ‘buy’ and target price raised to $146 at BofA/ML.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: Check Point Software Technologies Ltd. (NASDAQ: CHKP) is down -5.1% at $60.77; ConocoPhillips (NYSE: COP) is down -0.6% at $72.44; D.R. Horton Inc. (NYSE: DHI) is down -2.1% at $15.06 (our coverage here); Eaton Corp. (NYSE: ETN) is down -0.15% at $47.37; Hasbro Inc. (NYSE: HAS) is down -5% at $34.11; Potlach Corp. (NYSE: PCH) is down -1.7% at $30.53; and Xerox Corp. (NYSE: XRX) is up 0.32% at $7.90.

Other standouts from today include the following stocks:

Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) is up 14.2% at $26.17 after posting a new 52-week high this morning of $26.25. The company has hired advisers for a possible sale of the company. More coverage here and here.

LSI Corp. (NYSE: LSI) is up 1% at $8.01. The semiconductor maker got a boost from a story in Barron’s magazine over the weekend. More coverage here.

Stay tuned for Tuesday. The Federal Reserve Open Market Committee begins its two-day meeting. We have noted the following events on the schedule (all times Eastern):

• 9:00 a.m. – S&P Case-Shiller housing price index
• 10:00 a.m. – New home sales
• 10:00 a.m. – Conference board consumer confidence
• 10:00 a.m. – FHFA house price index
• 10:00 a.m. – Richmond Fed manufacturing index
• 11:30 a.m. – 4-week bill auction
• 1:00 p.m. – 2-year note auction

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Ardea Biosciences, Inc. (NASDAQ: RDEA) is now worth about $1.2 billion and the stock’s prior 52-week high had been $29.06. Now shares are up at $31.58 and AstraZeneca buys a gout and cancer pipeline here.  The problem is that no one is expecting big earnings nor even big sales any time soon.  Thomson Reuters has estimates of -$3.64 EPS on only $13.4 million in revenue in 2012 and -$1.89 EPS on almost $56 million in 2013.  Ardea has just over 100 employees and its pipeline includes two gout treatments and two cancer treatments (one for pancreatic cancer and one for primary liver cancer.

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) now has a $3.8 billion market capitalization rate.  With a fresh new diabetes drug approval and with prior speculation of a super-premium buyout, this one already has a lot of premium built in.  Shares went from about $11 to more than $17 early in 2012 and then from about $16 to over $24 over the last month before settling down around $23 of late.  Now there is talk that it has several interested bidders.  Amylin’s ongoing pipeline is concentrated around diabetes and obesity but its main products are BYDUREON and BYETTA.  Amylin is also expected to lose money in 2012 and in 2013, but its sales were $650 million in 2011 and are expected to rise to $688.4 million in 2012 and $852.9 million in 2013.

Bristol-Myers Squibb Company (NYSE: BMY) reportedly made a bid for Amylin already, and newer reports have Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), and Takeda all lined up as would-be potential acquirers.

It is very difficult to get an apples to apples comparison here when you consider that one company is in the development and clinical stage and the other is already in the product commercialization stage.  Ardea is of course a much larger unknown that Amylin.  Its price and market capitalization also reflect this.

JON C. OGG

One potential buyer is Sanofi (NYSE: SNY), the Paris-based drug company that is developing a similar treatment for diabetes. Amylin ended a long relationship with Eli Lilly & Co. (NYSE: LLY) last November, but still owes Lilly payments of $1.2 billion over the next several years. AstraZeneca plc (NYSE: AZN) is another drug maker believed to be on the look-out for an acquisition as is Merck & Co. Inc. (NYSE: MRK).

Amylin’s diabetes drugs Byetta and Bydureon are both approved for use in the US. Byetta is a twice-weekly injection for Type 2 diabetes, while Bydureon, which was approved only in January, is a once-a-week injection for the disease. Diabetes affects some 300 million people worldwide and 26 million in the US alone. Drugs to combat the disease could be enormous sellers.

The market is very happy with the news from Amylin. Shares are up more than 10% in the pre-market this morning, at $25.15 in a 52-week range of $8.03.25.84.

Paul Ausick

Time Warner Cable (NYSE: TWC) may end its deal with Current TV because of low ratings. (Reuters)

The Securities and Exchange Commission is examining stock exchanges for failing to disclose changes in their rules. (Reuters)

Worries about the eurozone increase because of a troubled debt auction by Spain. (Reuters)

New York State examines insurers for forcing products on homeowners. (WSJ)

As Russia joins the World Trade Organization, U.S. businesses have done little to exploit its markets. (WSJ)

Google’s (NASDAQ: GOOG) YouTube and Viacom (NASDAQ: VIA) set a movie rental deal. (WSJ)

The European Central Bank expresses concerns about inflation in the region. (WSJ)

Dynegy Holdings (NYSE: DYN) is close to a deal with bondholders that would take the value of equity to zero. (WSJ)

Carl Icahn attacks the board of drug maker Amylin (NASDAQ: AMLN) for rejecting a takeover offer from Bristol-Myers (NYSE: BMY). (WSJ)

The market for pooled junk bonds rises quickly. (WSJ)

JP Morgan’s (NYSE: JPM) CEO Jamie Dimon made $23 million last year, which is tops among bank chief executives. (WSJ)

A study by the IMS Institute for Healthcare Informatics shows that Americans have cut use of doctors and prescription medications. (NYT)

An increase in U.S. crude stocks pushes oil prices down. (FT)

Morgan Stanley (NYSE: MS) meets with Moody’s in an attempt to stop a ratings cut. (FT)

Yahoo! (NASDAQ: YHOO) cuts 2,000 jobs as part of a restructuring. (Bloomberg)

Douglas A. McIntyre

The unofficial closing bells put the DJIA down nearly 72 points to 13,126.06 (-0.54%), the NASDAQ fell more than 15 points (-0.49%) to 3,104.96, and the S&P 500 fell -0.49% or nearly 7 points to 1,405.54.

There were several analyst upgrades and downgrades today, including DirecTV Inc. (NASDAQ: DTV) raised to ‘buy’ at Citigroup and reiterated as ‘buy’ at Canaccord Genuity; Kinder Morgan Inc. (NYSE: KMI) started as ‘equal weight’ at Morgan Stanley; Verizon Communications Inc. (NYSE: VZ) cut to ‘sector perform’ at RBC; Weight Watchers International Inc. (NYSE: WTW) started as ‘outperform’ at Credit Suisse; and Nvidia Corp. (NASDAQ: NVDA) raised to ‘market perform’ at JMP Securities.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Christopher & Banks Corp. (NYSE: CBK) is down -13% at $2.05 after posting a new 52-week low of $1.85 earlier today; Synnex Corp. (NYSE: SNX) is down -13% at $37.94 (more coverage here); Family Dollar Stores Inc. (NYSE: FDO) is up 0.6% at $58.58 (more coverage here); and Jos. A. Banks Clothiers Inc. (NASDAQ: JOSB) is down -8.7% at $49.77 (more coverage here). After markets close today the Mosaic Co. (NYSE: MOS), Red Hat Inc. (NYSE: RHT), and Sanchez Energy Corp. (NYSE: SN) will report earnings. Before the markets open in the morning, we’ll get earnings from Best Buy Co. Inc. (NYSE: BBY) and Shaw Group Inc. (NYSE: SHAW).

Other standouts from today include the following stocks:

Commercial Metals Corp. (NYSE: CMC) is up 0.49%. The steel and metal fabricator posted better-than-expected earnings this morning. More coverage here.

Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) is up more than 53%. The drug maker rejected a takeover bid. More coverage here.

Vermillion Inc. (NASDAQ: VRML) is up 19%. The drug maker received a patent approval today. More coverage here.

Stay tuned for Wednesday. Fed Chairman Ben Bernanke, Atlanta Fed President Dennis Lockhart, Philadelphia Fed President Charles Plosser, and Richmond Fed President Jeffrey Lacker are giving speeches. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New unemployment benefits claims
• 8:30 a.m. – Corporate profits
• 10:30 a.m. – EIA natural gas storage report
• 11:00 a.m. – Kansas City Fed manufacturing index

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Investors often speculate that drug partners (or competitors) will merge.  After all, if a big drug company can add on full revenues rather than partial revenues and can milk out cost efficiencies of the combined outfit, it only makes sense if the price is right.  That also could bring Eli Lilly and Company (NYSE: LLY) into the mix if you look through recent press releases.  Amylin has been the subject of takeover rumors on and off over the last 8 years or so.  Frankly, any large drug company could be a potential acquirer of this company if the price is right.

Bloomberg has reported that Amylin rejected a $3.5 billion offer.  Bristol-Myers has a market value of nearly $57 billion.  Amylin shares are now up 48% at $22.62 and many investors believe that BYETTA can become a blockbuster drug as a new treatment for diabetes.  To prove the point, Thomson Reuters has consensus revenue targets of $688.12 million for 2012 and $845.3 million for 2013.

As a reminder, Amylin lists Alkermes plc (NASDAQ: ALKS) as a strategic partner and noted on its partnership page “Amylin worked with Alkermes to develop the first once-weekly treatment for type 2 diabetes using Alkermes’ proprietary technology for long-acting medications.”

It also noted that Takeda Pharmaceutical Company Limited is a partner: “In October 2009, Amylin and Takeda entered into a worldwide exclusive license, development and commercialization agreement to co-develop and commercialize pharmaceutical products for the treatment of obesity and related indications.”

Biocon, Limited is the other partner listed: “In September 2009, Amylin and Biocon entered into an exclusive agreement to jointly develop, commercialize and manufacture a novel peptide therapeutic for the potential treatment of diabetes.”

We are treating this as a rumor only at this point, but we suspect that the company will either confirm the report or issue a statement that they are not going to comment on market rumors.  Either way, Amylin is one of the emerging biotech and biopharma players which seems like a shoe-in to be acquired soon or down the road.  The real question is what price, and ultimately when.

JON C. OGG

As a reminder, Amylin agreed to pay $250 million to Lilly as well as milestones of up to $1.2 billion for the molecule that makes up Byetta.  Amylin also confirmed that it will be responsible for the commercialization of Byetta outside of the United States.  Amylin is still working with Lilly during the transition period through 2013.

Amylin shares have not responded so far this morning and the indications have not been matched with any real share volume.  At $15.51, the 52-week range is $8.03 to $18.45.

Amylin currently has a market capitalization rate of $2.27 billion as of now and the company is expected to lose money in 2012 and 2013 even though revenues are expected to be about $681 million and $837 million for 2012 and 2013, respectively.

JON C. OGG

Altria Group Inc. (NYSE: MO) Started as Hold at Jefferies.
Amazon.com Inc. (NASDAQ: AMZN) Cut to Equal-weight at Morgan Stanley.
AMERCO, Inc. (NASDAQ: UHAL) named as Bull of the Day at Zacks.
Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) Started as Outperform with $22 target at Credit Suisse.
Arch Coal, Inc. (NYSE: ACI) named as Bear of the Day at Zacks.
Canon, Inc. (NYSE: CAJ) Cut to Neutral at Credit Suisse.
Comcast Corporation (NASDAQ: CMCSA) Reiterated Buy and raised target to $37 at BofA/ML.
Deere & Co. (NYSE: DE) Cut to Market Perform Wells Fargo.
Digital Realty Trust, Inc. (NYSE: DLR) started as Overweight with $76 target at Morgan Stanley.
EnerSys Inc. (NYSE: ENS) named as Value Stock of the Day at Zacks.
Equinix, Inc. (NASDAQ: EQIX) Reiterated Buy with $155 target at BofA/ML.
Incyte Corporation (NASDAQ: INCY) Cut to Equal-weight at Morgan Stanley.
Lorillard, Inc. (NYSE: LO) Started as Buy at Jefferies.
MEMC Electronic Materials, Inc. (NYSE: WFR) Raised to Hold at Jefferies.
Newell Rubbermaid, Inc. (NYSE: NWL) Reiterated Buy and raised target to $24 at BofA/ML.
NVIDIA Corporation (NASDAQ: NVDA) Cut to Neutral at BofA/ML.
Philip Morris International Inc. (NYSE: PM) Started as Hold at Jefferies.
Renren Inc. (NYSE: RENN) Reinstated as Neutral at Credit Suisse.

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