Agouron (NASDAQ:AGPH) falls on Roche (ZSE:ROCZ.G) exit
Reuters, Tuesday, December 02, 1997 at 12:35
LOS ANGELES, Dec 2 (Reuters) - Shares of Agouron Pharmaceuticals Inc fell sharply Tuesday after the company said it would end development of one of its cancer drugs and drop all cancer drug collaboration with Hoffmann La-Roche.
Analysts said the drop reflected not just the termination of the one cancer drug project, but the extra costs the company would have to take on as a result as losing Hoffmann La-Roche as a partner.
They also voiced concern Agouron's popular AIDS drug, Viracept, would be hit hard by competition in 1998.
Agouron shares were down 7-1/8 to 32-3/8.
Agouron said it would discontinue development of its anti-cancer drug AG337, or Thymitaq, an agent designed to control tumor growth in head, neck and liver cancer.
The company said it will continue developing other cancer drugs, such as AG3340, which inhibits the enzymes that help tumors metastasize.
While the decision to exit the Thymitaq program was not a big surprise to those who had followed results of its clinical trials, the loss of Roche as a partner in all cancer projects stirred concern for two reasons.
Mehta and Isaly analyst Michael Sheffery said it cast some doubt on the promise of these drugs even though it was still early in the development process. And, he said, it would force Agouron to pay research and development expenses on its own.
Sheffery estimated this would push Agouron's R&D expenses up 20 percent in fiscal 1998, ending in June.
An Agouron spokeswoman said the termination of the deal with Roche would not inhibit its work on other cancer drugs.
She said the loss of Roche would have a "nominal negative impact" of less than $2 million in fiscal 1998. She said it would increase fiscal 1999 spending about 10 percent.
Copyright 1997, Reuters News Service |
