Amylin Pharmaceuticals Inc. sold $175 million worth of debt, pricing a private placement of 2.5 percent senior convertible notes.

Due in 2011, they initially will be convertible at the holder's option into Amylin common stock at $34.35 per share, subject to adjustment in certain circumstances. The conversion price represents a 45 percent premium to Wednesday's $23.69 closing bid price on the stock. On Thursday, the shares (NASDAQ:AMLN) dropped 24 cents to close at $23.45.

San Diego-based Amylin also granted the initial buyers an option to purchase up to an additional $25 million in principal amount of the notes. The placement is expected to close April 6.

The company plans to use the proceeds to continue research and development, fund operating expenses, establish manufacturing sources and inventory, pursue regulatory approvals and expand its commercialization capabilities.

Leading its development programs is the diabetes drug Symlin (pramlintide acetate), which has been the subject of FDA review and twice received approvable letters from the agency following regulatory submissions. Most recently, the FDA indicated that it wants more data before it approves the drug, which is designed to treat people with Type I and Type II diabetes. (See BioWorld Today, Dec. 19, 2003.)

Last summer, Amylin submitted data from a dose-titration study in about 300 patients and four small pharmacology studies. But that submission resulted in the December approvable letter. (See BioWorld Today, June 18, 2003.)

Further in its past, Symlin was rejected by an FDA advisory committee more than two years ago, though the agency later issued an approvable letter asking for another clinical trial. (See BioWorld Today, July 27, 2001, and Oct. 15, 2001.)

Another late-stage product, exenatide (synthetic exendin-4), is being developed in partnership with Eli Lilly and Co., of Indianapolis. The first-in-class candidate for Type II diabetes is a 39-amino-acid peptide designed to exhibit several glucose-lowering actions. The partners expect to submit a new drug application for the drug in the middle of this year on the basis of three pivotal Phase III trials.

Other compounds in its portfolio include AC137 and AC162352 for obesity.

Amylin had reserves of about $270 million in cash, cash equivalents and short-term investments at Dec. 31, when it reported a $17.3 million net loss in the fourth quarter.