Eastbourne Capital Management DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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of the Securities Exchange Act of 1934

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AMYLIN PHARMACEUTICALS, INC.

(Name of Registrant as Specified in its Charter)

Eastbourne Capital Management, L.L.C.

Black Bear Fund I, L.P.

Black Bear Fund II, L.L.C.

Black Bear Offshore Master Fund, L.P.

Richard J. Barry

M. Kathleen Behrens

Charles M. Fleischman

Jay Sherwood

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Eastbourne Capital Management, L.L.C.

Amylin Pharmaceuticals: The Case for Change

May 2009

2

Disclaimer

This presentation is for general information purposes only.  It is not intended to, and does not, address the specific investment objectives, financial

situation,

suitability

or

the

particular

needs

of

any

person

who

may

receive

this

presentation,

and

should

not

be

taken

as

advice

on

the

merits

of

any

investment decision.  The views expressed herein represent the opinions of Eastbourne Capital Management, L.L.C., Black Bear Fund I, L.P., Black

Bear Fund II, L.L.C., Black Bear Offshore Master Fund, L.P., Richard J. Barry, M. Kathleen Behrens, Charles M. Fleischman and Jay Sherwood

(collectively,

the

“Participants”),

and,

unless

otherwise

stated,

are

based

on

publicly

available

information

with

respect

to

Amylin

Pharmaceuticals,

Inc.

(the “Company”) or other entities identified herein.

Certain

matters

addressed

in

this

presentation

are

forward-looking

statements

that

involve

certain

risks

and

uncertainties.

You

should

be

aware

that

actual results could differ materially from those contained in the forward-looking statements.  The Participants assume no obligation to update any

information, including forward-looking information, contained herein.

The Participants reserve the right to change any of their intentions or opinions expressed herein at any time as they deem appropriate. 

The

Participants

have

not

sought

or

obtained

consent

from

any

third

party

to

use

any

statements

or

information

indicated

in

this

presentation

as

having

been obtained or derived from statements made or published by third parties.  Any such statements or information should not be viewed as indicating

the

support

of

such

third

party

for

the

views

expressed

herein.

No

warranty

is

made

that

data

or

information,

whether

derived

or

obtained

from

filings

made with the SEC or from any third party, are accurate.

The Participants shall not be responsible or have any liability for any misinformation contained in any SEC filing of the Company or of any third party or

in any other third party report.  There is no assurance or guarantee with respect to the prices at which any securities of the Company will trade, and

such securities may not trade at prices that may be implied in this presentation. 

This

presentation

does

not

recommend

the

purchase

or

sale

of

any

security.

Under

no

circumstances

is

this

presentation

to

be

used

or

considered

as

an offer to sell or a solicitation of an offer to buy any security.  The Participants currently own an aggregate of approximately 12.2% of the outstanding

common stock of the Company.  It is possible that there will be developments in the future that cause one or more of the Participants from time to time

to sell all or a portion of their shares or buy additional shares (in each case, in open market or privately negotiated transactions or otherwise).

All stockholders of the Company are advised to read the definitive proxy statement, the white proxy card and other documents related to the solicitation

of proxies by the Participants from the stockholders of the Company for use at the 2009 annual meeting of stockholders of the Company because they

contain important information.  The definitive proxy statement and form of proxy will be mailed to stockholders of the issuer and will, along with other

relevant

documents,

be

available

at

no

charge

on

the

SEC’s

web

site

at

http://www.sec.gov

or

by

contacting

MacKenzie

Partners,

Inc.

by

telephone

collect

at

(212)

929-5500,

toll-free

at

(800)

322-2885

or

by

e-mail

at

amylinproxy@mackenziepartners.com.

In

addition,

the

Particpants

will

provide

copies of the definitive proxy statement without charge upon request.  Information relating to the Participants is contained in the definitive Schedule 14A

filed by the Participants with the SEC on May 4, 2009.

3

We Believe The Amylin Board Needs Change Now

Shareholders Have Lost Over $5 Billion In Shareholder Value

Under The Watch Of The Current Board And Management Team

•

We believe the current Board and management have failed shareholders

–

They have failed to maximize the commercial value of the exenatide program

–

They have failed to adequately anticipate and address product concerns

–

They

have

exercised

ineffective

expense

controls

contributing

to

increasing

operating

losses

since

2005

–

They

have

disclosed

a

“5

Point

Plan”

that

appears

to

us

to

be

a

“wish

list”

of

goals

that

offers

no

roadmap

to

achievement

–

They

have

expressed

an

optimism

about

commercial

capabilities

we

believe

is

unjustified

by

historical

results

•

We believe the incumbent Board should be held accountable for management’s lack of success

–

We believe the Board as currently composed cannot provide the objective judgment that Amylin needs at this

critical juncture

–

We

believe

the

compensation

decisions

of

the

Board

have

led

to

a

record

of

“pay

without

performance”

•

We believe the Company has an exciting potential with a window of opportunity that should not be

entrusted to the incumbent Directors

–

We believe the upcoming product launch of Exenatide Once-Weekly is Amylin’s best chance for commercial

success

–

Two new Board members selected by incumbents will not, in our view, adequately address our concerns about the

Board’s composition and abilities

–

We believe our nominees possess the skills, experience, objectivity and judgment to bring significant value to the

Board and to ensure that the Board considers proper steps to maximize the commercial value of Amylin’s assets

Amylin Is At A Critical Juncture And We Believe Shareholders Should Not

Entrust The Future Of The Company To The Current Board

4

The Incumbent Board Has Presided Over A Period Characterized

By A Massive Loss Of Shareholder Value

•

Amylin’s shares have fallen over 75% since their peak of $51.43 in 2007, and now trade at

$11.25 –

below the 1992 IPO share price of $14.00

•

The AMEX Biotech Index, on the other hand, has declined less than 20%

•

Since August 9, 2007, only 2 of the other 19 companies in the AMEX Biotech Index have

performed worse than Amylin

Performance Since Amylin High On August 9, 2007

AMLN Share Price Vs. AMEX Biotech Index

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

AMLN Equity

AMEX Biotech Index

Over $5 Billion In Shareholder Value Has Evaporated

AMLN Share Price Vs. AMEX Biotech Index

3-Year Performance

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

AMLN Equity

AMEX Biotech Index

Source:

Bloomberg

–

as

of

April

24,

2009

5

Byetta’s Enormous Potential Was Initially Reflected In

Wall Street’s Revenue Estimates

•

We believe the Company’s failure to execute its

commercial program, control costs and prepare

for and address product concerns can be seen

in

declining Wall Street revenue targets

•

In addition, Amylin missed its own 2007 and

2008 initial revenue estimates and “elected”

not

to provide revenue guidance for 2009

Bloomberg Mean Estimates of Amylin Revenues

2007 Historical

Mean Estimate

2008 Historical

Mean Estimate

2009 Historical

Mean Estimate

2010 Historical

Mean Estimate

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

2007 Historical Mean Estimate

2008 Historical Mean Estimate

2009 Historical Mean Estimate

2010 Historical Mean Estimate

Wall Street 2010 Revenue Estimates For Amylin Have Declined By 50%

Source: Bloomberg estimates

6

Byetta Prescriptions Have Stalled While Competitors’ Increase

New Prescriptions (NRx)

BYETTA

LANTUS

JANUVIA

ACTOS

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

BYETTA

LANTUS

JANUVIA

ACTOS

Byetta Prescriptions Have Sunk To Below 2006 Levels

Source: IMS Health Inc. –

Through March 2009

Total Prescriptions (TRx)

BYETTA

LANTUS

JANUVIA

ACTOS

-

150,000

300,000

450,000

600,000

750,000

900,000

1,050,000

1,200,000

1,350,000

1,500,000

BYETTA

LANTUS

JANUVIA

ACTOS

•

Byetta prescriptions growth slowed significantly at the end of 2006 with new (NRx) Byetta prescriptions only up 2% in

Q406 versus Q306, a full year before the first FDA pancreatitis alert in October 2007

•

Six out of the last nine quarters showed a sequential drop in new (NRx) Byetta prescriptions

•

Older and newer branded diabetes drugs (Actos, Lantus and Januvia) outgrow Byetta

7

Is An “Evolution”

In The Market Really The Problem?

Mr. Bradbury’s Statements Lead Us To Question Management’s Ability To

Accurately Measure The Market And Properly Size The Sales Force

“That is a great question, Kevin. So the question was could I comment on sensitivity to sales force size on the marketing and sales of Byetta.

That

is

a

great

question

we

are

actually

looking

at

that

at

this

time.

Previously

work

that

we

did

demonstrated

that

there

would

be

a

benefit

to

increasing the field force. Last year we increased our field force by 65 people and we matched Lilly's field forces…

…Since that time I think it's fair to say that there has been an evolution in the diabetes

marketplace.

One

of

the

things

that

we

are

[seeing]

is

that

major

brands

are

pretty

flat.

You

see Lantus is pretty flat. You see Januvia is pretty flat and responsiveness to sales force size

doesn't seem to be as great as it used to be. And that is, I think, pretty indicative of what is

going on in chronic disease markets in general…

…So

certainly

one

of

the

things

that

we

are

looking

at

is

whether

or

not

there

should

be

a

change

in

our

philosophy

there,

but

we

haven't

made any decisions at this time.”

Dan Bradbury, President & CEO

Amylin @ Cowen & Company Healthcare Conference

March 17, 2009 (Emphasis Supplied)

8

We Question The Assumptions Management Appears

To Be Operating Under

•

Mr. Bradbury has expressed his judgment

(which we assume is shared by his

management team) that there has been an

evolution over the last nine months in the

diabetes marketplace

–

“Major brands are pretty flat”

–

“Lantus is pretty flat”

–

“Januvia is pretty flat”

•

Mr. Bradbury’s statement about sales force

size comes less than nine months after

increasing the Company’s sales force by ~15%

–

“responsiveness to sales force size”

declining

•

We believe Mr. Bradbury was wrong on the

facts

–

Lantus and Januvia continue to grow

–

Byetta’s decline continues

Note: TRx Per Day defined as TRx divided by number of days in the relevant

month.

Growth

rates

are

defined

as

March

2009

vs.

June

2008

data

which

is

the

time period referenced by Mr. Bradbury

Total Prescriptions (TRx) Per Day

BYETTA

LANTUS

JANUVIA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

BYETTA

LANTUS

JANUVIA

+8.7%

+25.2%

-15.1%

Competition Grows While Byetta Declines

Source: TRx Data from IMS Health Inc.; Mr. Bradbury comments from Cowen & Company Healthcare Conference, March 17, 2009

9

Amylin Board And Management Have Not Succeeded

In Addressing The Lack Of Revenue Growth While Losses Increase

•

Operating losses increase as revenue stagnates

•

Management missed its initial revenue guidance

for the past two years

•

Management “elected”

not to provide revenue

guidance for 2009

Net Product Sales & Collaborative Revenue

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Net

Product

Sales

Collaborative Revenue

Source: Capital IQ, Company Filings, Q4 2008 Amylin Pharmaceuticals, Inc. Earnings Conference Call

Note:

Collaborative

revenue

contain

reimbursement

of

development

costs

based

on

Company’s

contractual

agreements

Annual Operating Loss 2005-2008

($297)*

($243)

($237)

($209)

($350)

($300)

($250)

($200)

($150)

($100)

($50)

$0

2005

2006

2007

2008

Operating Loss

Restructuring

*2008 operating loss include $54.9M restructuring charge. Excluding this charge, 2008

operating loss was $242.2M

10

•

Total Scripts (TRx) declined 13% (Q408 vs. Q407) and

are now below 2006 levels

•

Total Scripts (TRx) decline steepens to 16% (Q109 vs.

Q108) following management’s announced “Strategic

Restructuring

and

Workforce

Reduction”

on

November

10, 2008

•

Amylin’s SG&A return is the worst among its peer*

group

*Peers are as specified by the Company in its 2008 and 2009

DEF14A. REGN excluded as product revenues are immaterial.

MYGN include molecular diagnostic revenues only.

Amylin

SG&A and Scripts TRx

Performance

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

600,000

620,000

640,000

660,000

680,000

700,000

720,000

740,000

760,000

Selling, General and Administrative Expense

Byetta

Scripts (TRx)

Amylin’s SG&A Spend

Has Lowest Returns Among Its Peer Group

Source:

Amylin

and

peer

company

filings,

Amylin

Pharmaceuticals

Announces

Strategic

Restructuring

and

Workforce

Reduction

–

November

10,

2008

Note: Amylin’s revenues are adjusted to make SG&A figures comparable and account for Eli Lilly receiving effectively ~50% of U.S. Byetta revenues (technically 50% of

gross margins) as part of their partnership agreement.

Amylin

and Peer Group Revenue Per SG&A Dollar Spent

$0

$1

$2

$3

$4

$5

$6

$7

$8

11

Last Year’s Amendment To The Eli Lilly

Co-Promotion Agreement Has Not Delivered Positive Change

•

Scripts and productivity* have declined since

amending the co-promotion agreement (Q208)

with Eli Lilly and increasing Amylin sales

representatives by ~15%

*Productivity is defined as year-over-year change in net product

revenues

per

field

force

employee

‡

at

end

of

period

‡

Quarterly field force employee estimated headcount based on a

straight-line calculation using year end 2007 and 2008 field force

headcount figures. Q1 2009 field force employee headcount was

estimated to be flat with Q4 2008.

Field Force Productivity

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Q108

Q208

Q308

Q408

Q109

2005

2006

2007

2008

Sales Force Headcount

400

550

600

650

Headcount Up + Revenue Down = Negative

Productivity

Source: Company filings, former employees

12

We Believe Management’s Sales Strategy Is Not Working

And The Board Has Not Addressed This Failure

Byetta’s year-over-year total

scripts are weakening while

competitors’

scripts continue

to grow

Byetta, Lantus, Januvia (TRx) YoY Growth

-6%

-1%

-10%

-17%

6%

8%

5%

7%

6%

101%

70%

46%

41%

-17%

-13%

-14%

-19%

3%

2%

10%

16%

13%

14%

12%

93%

55%

53%

36%

42%

74%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

BYETTA

LANTUS

JANUVIA

We Believe Mr. Bradbury, The Management Team And The Board

Do Not Adequately Understand The Problems Facing Amylin

Source: IMS Health Inc.

13

Amylin’s Share Price Plummets In The Wake of Management’s Statements To

Provide “Context And Clarity”

About The FDA’s Pancreatitis Alert

We Believe A Failure To Communicate Negatively Impacted The Share Price

And Likely Impacted Patient And Physician Acceptance Of Byetta

0.0%

25.0%

50.0%

75.0%

100.0%

125.0%

150.0%

AMLN Equity

AMEX Biotech Index

August 26, 2008

Conference call to

provide “clarity”

about

pancreatitis alert

Stock falls nearly 25%

to $20.48 on August 27th

August 25, 2008

Amylin schedules

conference call with

investors about the

FDA’s pancreatitis

alert

Closing Stock Price

$27.77

August 18, 2008

FDA issues

pancreatitis alert

related to Byetta

•

Instead of providing promised clarity, we believe Amylin management’s handling of the pancreatitis alert

only created greater confusion and concern

14

We Believe Amylin’s “5 Point Plan”  Lacks A Roadmap

(1) Byetta –

Return the product to growth

–

What specific steps will management take to achieve this given scripts have been flat for the last 2.5

years despite multiple initiatives?

(2) Exenatide

Once-Weekly

–

Position

for

launch

–

What specific steps will management take to achieve this?  How confident can we be in

management’s ability given the history of Byetta’s launch?

(3) Symlin –

Continue growth

–

What growth is management planning to continue? Symlin total prescriptions (TRx) have been down

sequentially three quarters in a row and Q1 2009 was down 11% year over year. Symlin product

revenues were down 2.7% Q4 2008 to Q1 2009

(4) Obesity

–

Finalize

development

and

funding

strategy

–

Is

partnering

the

obesity

pipeline

a

desirable

business

model

or

a

consequence

of

disappointing

marketing

efforts

with

Byetta?

Has

management

considered

whether

a

strategy

of

partnership

will

provide short-term gain at the expense of long-term value?

(5) Operating Results

–

Achieve positive cash flow by end of 2010

–

Will management pursue this near-term strategy by partnering the obesity pipeline and cutting R&D

at the expense of long-term shareholder value?  We believe the real issue is management’s inability

to grow revenues within an appropriate cost structure

We Believe The Board Should Ask Management These Questions To Exercise

Effective Oversight

Source: Amylin’s Five Point to Create Value in 2009, Company Filing on March 17, 2009, IMS Health

15

Ted Greene, Co-Founder Ex-Board Member Of Amylin

Speaks His Mind

•

On April 7, 2009 Ted Greene, Co-Founder of Amylin and Board member, resigned from

the Board after 22 years of service and explained his decision to resign in a publicly

available letter to the Board, in which he states

–

“…the obvious and appropriate choice to not stand for election would be our

Chairman [Mr. Cook]…”

–

“…will not vote [his] shares to reelect [Mr. Cook]”

–

His departure “reduced Director ownership of AMLN stock by over 50%”

•

We believe Mr. Greene’s frank judgments provide a refreshing but also very disturbing

insight into the functioning of the incumbent board

•

Mr.

Greene’s

letter

is

reprinted

in

full

in

the

Appendix

and

we

believe

all

Amylin

shareholders should read it

We Believe This Action By A Co-Founder And Significant Shareholder Speaks

Volumes About Amylin’s Current Leadership

Note –

full text of letter in the Appendix

16

Amylin’s Board And Management Had “No Clue”

About

The

“Proxy

Puts”

Embedded

In

Their

Debt

Agreements

“It was only through the internal distribution at Amylin of [a] February 2, 2009 Morgan Stanley analyst

report that Amylin’s senior executives and directors learned of the existence of a Proxy Put embedded

in the Indenture for the Company’s convertible notes issued in June 2007 for a face amount of $575

million (the “2007 Indenture”).  The Company’s Chief Executive Officer and Chief Financial Officer both

confirmed

under

oath

that

prior

to

February

2,

2009,

they

had

no

clue

about

the

Proxy

Put.”

We Find Amylin’s Board And Management’s Ignorance With Respect To The

Existence Of The “Proxy Puts”

Troubling

Source: San Antonio Fire & Police Pension Fund v. Amylin Pharmaceuticals, Court of Chancery In The State of Delaware, C.A. No. 4446-VCL; Plaintiff’s Opening Pre-Trial

Brief 4-30-09; Emphasis Supplied

17

In Response To Shareholder Activism, We Think The

Incumbent Board’s Latest Action Is Too Little Too Late

•

Amylin proposes new Directors following Eastbourne and Icahn notices of nominations

–

Paul N. Clark and Paulo F. Costa were added as new nominees on Amylin’s slate and we have no

objection to their nomination

•

We wonder whether the Board would have brought in these two nominees if Eastbourne

and Icahn had not spoken up

•

In our view, however, this is not enough. We believe the time has come for a substantial

number of incumbent Directors including the long-reigning Chairman of the Board to be

replaced by Directors selected and nominated by shareholders rather than by Mr. Cook

and the current Board

We Believe Amylin Should Embrace The Formation Of A Single Shareholder

Slate And Encourage Free Choice In The Election Of Amylin’s Directors

18

Amylin’s Exenatide Program (Byetta) Is A Promising Therapy With

Significant Potential In The GLP-1 Drug Class

Worldwide Diabetes Drug Sales By Drug Class ($Bn)

-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

Insulins

GLP-1 Analogs

DPP-IV Inhibitors

Glitazones

Sulfonylureas

Thyroid Drugs

Other Oral Agents

GLP-1

Analogs

CY2008A

CY2013E

Overall diabetes therapeutic market is expected to grow at a

compound annual growth rate of 12% from 2008 to 2013, with

the

largest

growth

coming

from

the

GLP-1

analog

segment

Source: SG Cowen & Co. Therapeutic Outlook, March 2009

Amylin’s

Window

Of

Opportunity

May

Be

Closing

Because

Numerous

Companies Are Now Developing GLP-1 Class Drugs

19

“[Exenatide Once-Weekly has] arguably the best responses that have ever been seen

with a glucose lowering therapy in the history of mankind…

[the weight loss and A1c control]

combination is the kind of stuff that makes clinical investigator’s hair on the back of their necks

stand up…

…it’s pretty impressive…”

John Buse

Former ADA President, Medicine & Science

Professor, UNC School of Medicine

Amylin 2007 ADA Investor Reception

June 24, 2007

Exenatide Once-Weekly Has A Head Start

It Needs A Successful Launch

We Believe Shareholders Cannot Risk A Failure To Successfully

Commercialize Exenatide Once-Weekly

Exenatide Once-Weekly

NDA Filing, 1H 2009 est.

Exenatide Once-Weekly

Approval and launch, 1H 2010 est.

2009

First competing 1x daily GLP-1

with projected approval Q2/Q309

(would compete against Byetta)

Second competing 1x daily and first

competing 1x weekly GLP-1 with

projected approval in 2011-2012

Second and third competing 1x

weekly GLP-1 with projected

approval in 2012-2014

Exenatide Once-Weekly’s Head-Start

Source: Company reports

20

We Expect Exenatide Once-Weekly To Demonstrate Superiority

To Most Products On The Market

•

Superior

reduction in HbA1c

•

Superior

weight-loss benefits

Amylin’s Exenatide Once-Weekly Trials Demonstrate Considerable Promise

Compared With Competing Products

Source: Company Filings

DURATION

Comparison

Result

DURATION-1

LAR reduction in HbA1c -1.9%, BYETTA reduction-1.5%;

Demonstrate superiority

LAR fasting plasma glucose reduction -42 mg/dL, BYETTA -25 mg/dL

77% of patients on LAR achieved A1C of 7% or less vs. 61% for BYETTA patients

Baseline HbA1c >= 9%, 29% of patients on LAR had HbA1c 6.5% or less, vs. 13% for BYETTA patients

Average weight loss on LAR -8 lbs

@52 weeks: LAR patients HbA1c -2.0%, fasting plasma glucose -47 mg/DL

@52 weeks: BYETTA patients that switched to LAR: HbA1c -2.0%, fasting plasma glucose -43 mg/dL

@52 weeks: BYETTA patients that switched to LAR: 75% HbA1c levels <=7%, 53% <=6.5%

@52 weeks: Average weight loss on LAR -9.5lbs

DURATION-2

LAR HbA1c -1.7% reduction from baseline, vs. -1.0% for sitagliptin, and -1.4% for piogliatzone

Demonstrate superiority

LAR weight-loss of -6.2 lbs at 26 weeks vs. -1.9lbs for sitagliptin, weight gain of +7.4lbs for pioglitazone

DURATION-3

Demonstrate superiority

DURATION-4

Demonstrate superiority

DURATION-5

Demonstrate superiority

Estimated Completion in Q309

Estimated Completion in 2010

Initiated Q109. Completion TBD

Exenatide Once-Weekly

(LAR) vs. BYETTA

LAR vs. Actos

(pioglitazone), Januvia

(sitagliptin)

LAR vs. Metformin,

Januvia (sitagliptin),

Actos (pioglitazone)

LAR vs. BYETTA

LAR vs. Insuline Glargine

21

Eastbourne’s Nominees Would

Add Complementary Skills To The Board

Eastbourne’s Nominees as a group:

•

Relevant industry experience

•

Track records in implementing successful commercial strategies in the industry

•

Operational efficiencies expertise at similar companies

•

A track record of building and financing new product offerings

•

Independent

•

Objective and unburdened by any need to justify past decisions

•

Aligned with shareholders’

interests through significant stock ownership

•

Committed to assessing and pursuing the best operating platform and all strategic

opportunities to benefit shareholders

22

Eastbourne’s Nominees Deliver

A Combination Of Expertise And Experience

Kathleen Behrens

–

Experienced

venture

capitalist

and

founder

of

multiple

life-science

companies

–

Protein

Design

Labs, COR Therapeutics

–

Former Managing Director at Robertson Stephens and RS Investments

–

Former

Director

of

Abgenix

(sold

to

Amgen

in

2006)

–

Member of President’s Council of Advisors on Science and Technology (2001-2009)

Charles Fleischman

–

Former Co-Founder, President, CFO, COO and Director of Digene Corporation

–

Led Digene through its R&D and commercialization phases, culminating in a sale at an all-time

high stock price

–

Currently

a

Director

of

Dako

A/S

Jay Sherwood

–

Managing Director, Eastbourne Capital Management

–

Former Managing Director of Robertson Stephens Investment Management (RSIM)

We Believe Eastbourne's Nominees Have The Skills And Experience

Necessary To Guide Amylin Through This Critical Time

23

Eastbourne's Nominees Are Committed To

Maximizing The Commercial Potential Of Amylin’s Products

•

Eastbourne’s nominees, if elected, will encourage the Board to objectively re-assess

Amylin’s current strategy:

–

Current sales and marketing strategy to grow Byetta prescriptions

–

Current strategy to position Exenatide Once-Weekly for launch

–

Relationship with Eli Lilly & Co.

–

Decision to partner/fund development of the obesity pipeline

–

Research and development priority and investment allocation

–

Expense control and headcount allocation

–

Strategic alternatives and opportunities that will be in the best interest of shareholders

Eastbourne's Nominees Are Committed To Working Alongside Other Board

Members And To Providing More Effective Management Oversight

24

We Believe Amylin’s Board And Management Have

Failed To Deliver On Their Own Business Model

“The

reward

for

doing

it

well

is

the

privilege

to

do

it

again.”

Joe Cook, Chairman and Then-CEO, Amylin’s 2000 Annual Report (Emphasis Supplied)

We Believe Amylin’s Current Board Has

Not Earned The “Privilege To Do It Again”

25

A Vote For Eastbourne’s Nominees Is Also A

Vote To Replace Five Incumbent Directors

Eastbourne will, in connection with the proxies it receives, seek authorization to

vote for all Amylin’s nominees other than

the following five members of

Management’s slate:

Joe Cook Chairman (Since 1998), Director (Since 1994), Former CEO (1998 -2003)

Jim Wilson Director (Since 2002), Chair of Corcept Therapeutics Where Mr. Cook is a Director

Joseph Sullivan Director (Since 2003), Chair of RAND Health Board of Advisors

James Gavin Director (Since 2005), Clinical Professor of Medicine

Steve Altman Director (Since 2006), President of QUALCOMM Inc.

These are the five incumbent Directors who, in our view, should be replaced by

Directors selected and nominated by shareholders.  We do not support their

reelection

Appendix

27

Eastbourne Capital Management, L.L.C.

•

Eastbourne is a research-intensive, long-term investor

–

Manages a concentrated portfolio with a few large investments

•

Owner-oriented approach to investing

–

Partner/employee capital comprise ~13% of firm’s funds

–

Often one of the largest shareholders in each of our portfolio

companies

•

We maintain positive relationships with companies in our

portfolio

–

In our 14 year history, we have never before nominated a slate

of Directors to oppose the Board or management of any of our

portfolio companies

•

Long-term

investor

in

Amylin

–

has

held

a

significant

position since 2005

28

Ted Greene’s Letter To

Amylin’s Board of Directors

April

7, 2009

To my fellow Board members:

I hereby resign from our Board of Directors, ending my 22 years of service to Amylin Pharmaceuticals.

A

majority

of

you

decided

we

could

not

win

our

proxy

fight

if

we

did

not

replace

two

ex-CEO

Board

members,

including

me.

Even

if

I

agreed,

the

obvious

and

appropriate

choice

to

not

stand

for

election

would

be

our

Chairman,

who

has

presided

over

the

loss

of

shareholder

value

that

sparked

the

proxy

fight.

I favor Board changes that are in the best interests of Amylin. As founding CEO, I built the technology platform that produced BYETTA, SYMLIN, and

our obesity pipeline. In 1996 I decided we needed a leader with pharmaceutical operating experience, qualifications I did not have. So, I stepped down

as CEO, and later as Chairman.

For the past decade as an independent director I’ve focused my Board role on helping management continue our scientific and entrepreneurial vision.

I’m proud to have filed my most recent patent application on behalf of Amylin less than two years ago. I think I could have continued to help Amylin with

these challenges.

Over the years I have invested heavily in Amylin, first to launch the company and then to keep us afloat. As a result, my departure from the Board has

reduced Director ownership of AMLN stock by over 50%. Such a large reduction in Board shareholdings cannot be reassuring to investors who are

concerned about Board alignment with their financial interests.

I’m disappointed in the outcome of the nominating process. You were not receptive to my ideas about new Board skills, and I did not participate in the

vetting and recruiting process, so I am unsure about the new nominees. I will not vote my shares to reelect our current Chairman.

Going forward I intend to be a proactive outside shareholder with an important equity position. I will expect the new Board to preside over commercial

results commensurate with our leading science, which can help millions of patients with diabetes and obesity.

Respectfully,

Howard E. (Ted) Greene,

Jr., Co-Founder of Amylin

Source: 8K filed on April 9, 2009, Ted Greene, Co-Founder of Amylin

29

Amylin’s Poor Compensation Practices Compared With Performance

Pay for poor performance

Mr. Bradbury continues to reap the benefits as CEO

•

March 2007 Compensation Decision

–

$575,000 salary

–

Option grant of 450K shares = $7,819,875

FY2006 Operating Loss = $237MM

FY2006 Share Price Performance = -9.6%

•

March 2008 Compensation Decision

–

Salary increased to $675,000

–

Option grant of 275K shares = $2,812,315

FY2007 Operating Loss = $243MM

FY2007 Share Price Performance = +2.6%

•

March 2009 Compensation Decision

–

Salary maintained at $675,000

–

Option grant of 200K shares

–

Additional performance option grant of 200k shares

–

Total options granted 400k shares

FY2008 Operating Loss = $297MM (includes $54.9MM

restructuring charge)

FY2008 Share Price Performance = -70.7%

Glass, Lewis & Co.

“…executive compensation received a D grade…

in our proprietary

pay-for-performance model…”

“Nominee WILSON served as Chairman of the Compensation

Committee…

Company paid more compensation to its top executives but

performed worse than its peers... [similar to FY2006]...”

“Mr. Wilson... has not effectively served shareholders in this

regard.”

Glass, Lewis & Co., An Independent Corporate Governance Proxy Advisor,

Has Given Amylin Compensation Practices Poor Marks

Source: Company filings, Glass, Lewis & Co. proxy paper on Amylin 2008 Annual Meeting, Emphasis supplied

30

Amylin’s Board Moves The Goalposts With Performance Options

The

Board

Rewards

Management

for

Missed

“Internal”

Goal

–

In November 2007, Mr. Bradbury, along with the Company’s CFO and the head of Human

Resources, met with us and told us that it was Amylin’s goal to file the NDA for Exenatide Once-

Weekly by the end of 2008, which should have resulted in approval by the end of 2009

–

Bradbury

and

his

team

missed

this

goal

and

the

NDA

has

yet

to

be

filed…

…Yet the Board granted Mr. Bradbury 200K performance options which vest if Exenatide Once-

Weekly

is

approved

by

end

of

2010

–

a

full

year

later

than

the

approval

that

would

have

resulted

from

filing

under

its

previous

“internal”

goal

–

In

addition,

Mr.

Bradbury

still

retains

all

of

the

options

granted

in

2007

and

2008

–

years

in

which

the Company’s performance was poor

What Will The Board Do If The

Timetable For Exenatide Once-Weekly Is Missed Again?

Source:  Conversation between Eastbourne and Management at Dinner Meeting on November 27, 2007, Company Filings

31

•

‘Cash Bonus Plan’

Goals for FY2008 (summarized from 2009 DEF14A)

–

According to the Company

•

Amylin

executives

“…notified

the

[Compensation

Committee]

that

they

have

voluntarily

elected

to

waive

receipt of any bonuses…”

•

Amylin’s Board “…

accepted management’s recommendation not to increase management salaries above

2008 levels…”

Did

Management

Really

“Voluntarily”

Waive

A

Bonus?

NDA for Exenatide Once-Weekly was not filed by the

end of 2008

50%

R&D / Pipeline

Advancement

Byetta prescriptions declined throughout 2008 and

overall revenue came in under management’s

guidance

50%

Product Revenue

Actual FY2008  Performance

Portion of Bonus (%)

Corporate Goal

We Do Not Believe Management Deserved

A Bonus Or Salary Increase For Their Performance

Source: Company filings, 8-K filed 12/08/08, 2009 DEF14A, 8-K filed 03/06/09

32

We Believe The Board Should Have Limited

Mr. Bradbury’s Outside Commitments And Responsibilities

While serving as CEO of Amylin, Mr. Bradbury has served concurrently

on the governing bodies of at least seven outside organizations

•

The Board of Directors of

–

Illumina,

Inc.

–

Chair

of

Audit

Committee

–

Novacea,

Inc.

–

Chair

of

Compensation

Committee

•

Term expired upon sale of Novacea, Feb. 2009

–

PhRMA

–

Board Member

–

BIOCOM

–

Board

Member,

Chair

Elect

–

The San Diego Regional Economic Development Corporation

•

Board of Trustees

–

The Keck Graduate Institute

•

Advisory Council

–

UCSD

Rady

School

of

Management

•

Board of Advisors

–

RAND

Health

–

Joseph

Sullivan

(an

Amylin

Board

member

and

chair

of

the

Amylin

finance

committee)

serves

as

Chairman on the RAND Health Board of Advisors

The

Board

Permitted

These

Time

Consuming

Outside

Interests

While

The

CEO Presided Over The Loss Of Over $5 Billion In Shareholder Value

Source: Company filings