ubj: Financing an increase in Viracept production and sales is not a problem
Date: 29 Apr 1997 10:53:28 EDT
From: LMoss
My March 12 post on estimating the sales of Viracept was reposted (with my permission) on the SI Agouron board. A reader of that board commented that he did not think that Agouron could finance a build-up in Viracept of the magnitude I suggested, and that this would limit Viracept sales to half or less of the amount I thought likely.
I'm glad to have this comment, because it encourages the kind of substantive discussion of important issues that I wanted my March 12 post to stimulate.
My March 12 analysis implies that the average patient count in FY99 will be 312,000. What are the financial consequences of this?
First, the widely-reported difficulties in producing Crixivan do not apply to Viracept. Viracept is of a quite different molecular design and does not have chiral centers. Second, note that Agouron's annual report last year reported that by the end of 1QFY97, more than five months before FDA approval, 50 million pills of Viracept had been produced. This is enough to treat 60,000 patients for three months. It is reasonable to assume that
production has been building since that time. My rough estimate, based in part on reported values of inventory at the end of 2Q and 3Q, along with 3Q sales, is that current production is sufficient to supply the needs of 100,000 to 140,000 patients.
An increase in production from this level to 312,000 over a period of about 20 months should not require new financing. Agouron currently has a healthy cash position, and Viracept revenues are beginning to flow in.
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