Lehman Bros update:
Headline: Agouron Pharm.: Reports FY1Q Results Ahead of Expectations; Maintain Buy
Author: CA Butler,PhD/R.Rouse (212)526-4410
Company: AGPH
Industry: BIOTEC
Ticker : AGPH Rank(Prev): 1-Buy Rank(Curr): 1-Buy
Price : $53 1/4 52wk Range: $57-21 Price Target:$73
Today's Date : 10/08/97
Fiscal Year : JUN
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EPS 1997 1998 1999 2000
QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr.
1st: -0.57A 0.07E 0.11A - -E - -E - -
2nd: -0.47A 0.11E 0.13E - -E - -E - -
3rd: -0.19A 0.28E 0.34E - -E - -E - -
4th: 0.09A 0.13E 0.18E - -E - -E - -
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Year:$ -1.13A $ 0.59E $ 0.75E $ 1.40E $ 1.80E $ - $ 2.48
Street Est.: $ 0.47E $ 0.50E $ 1.49E $ 1.53E $ - - $ - -
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Price (As of 10/7): $53 1/4 Revenue (1998): $412 Mil.
Return On Equity (97): N/M Proj. 5yr EPS Grth: N/M
Shares Outstanding: 33.2 Mil. Dividend Yield: N/A
Mkt Capitalization: $1.8 Bil. P/E 1998; 1999 : 71.0 X; 29.6 X
Current Book Value: $6.15/sh Convertible: None
Debt-to-Capital: N/M Disclosure(s): C
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* Agouron reported FY1Q98 results of $0.11 versus ($0.57). This was solidly
ahead of the $0.05 Street consensus as well as our recently improved $0.07
estimate.
* Total patients receiving Viracept are in excess of 60,000 currently, with
roughly 2,000 to 3,000 new patients per week being added.
* Data will be presented later this month at an AIDS meeting in Hamburg
illustrating Viracept's effectiveness as a twice per day agent. A larger study
should be available at similar meetings in Chicago.
* We therefore believe demand will continue, and are again increasing our
estimates for this year and next. Estimated sales of Viracept this year
should approach $345 million and $460 million in FY 1999.
* As the momentum in Viracept continues, so should Agouron's stock.
Accordingly, we reaffirm our 1-Buy rating at this time.
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FINANCIAL SUMMARY -Agouron
Pharmaceuticals reported impressive fiscal first quarter results of
$0.11 per share versus a $0.57 loss a year ago. This compares quite favorably
to our recently improved $0.07 estimate which was the highest on the Street
(and a $0.05 consensus number). Revenues for the quarter were led by $79.5
million in Viracept sales - 18% ahead of our newly forecasted $67.4 million.
Contract R&D of $12.3 million was slightly below the $15.0 million in our
model, however total revenues of $91.9 million exceeded our model by 11%. A
57% gross margin compares to our 60% forecast. On the operating spending
front, R&D actually declined by 9% to $26.9 million and was shy of our
projected levels by over $800,000. SG&A of $12.5 million also came in below
estimates of $13.1 million. Operating income of $4.9 million (a 5.4% margin)
compared to a loss last year and our forecasted $2.5 million (a 3.0% margin).
Nominal interest income and a 40% tax rate (exactly as we had expected)
provided for net income of $3.6 million, or a 64% improvement over our $2.2
million estimate. At the end of the quarter, Agouron had cash and equivalents
of nearly $99 million, or $2.98 per fully diluted share.
We are again increasing our estimates to reflect strong Viracept demand which
we believe will continue, especially as data on its use twice per day (bid')
becomes available (note comments below). Our revenue estimates move to $345 |
