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Currently, I'm flat on AGPH. The hype is from the company itself. Hype is also from sell-side analysts who only report positive news, but are nowhere to be found regarding negative news, as I highlighted with the previous post regarding AGPH's solid-tumor drug. Although contributors to this thread and a few sell side analysts state that FDA letters repremanding drug companies are inconsequential, I disagree. IMO, AIDS is a disease a lot more serious than hay fever. I believe that it is absoutely immoral and repugnant for any company to overstate the "parameters" of its AIDS drug. If you speak to the right people within AGPH, they too, will share in this belief. I found it interesting that about a week after the Paine Webber conference call with Dr. Conant of San Francisco, the brokerage firm Cowen had a conference call with a physician of equal stature covering HIV. None of the contributors of this AGPH "love fest" commented on the contents of that call. Why not? I listened to both calls. On the second call, the physician mentioned he still used Crix as his first choice, and he unprompted mentioned AGPH as frustrating since they were especially reluctant to compare the effectiveness of Viracept to other protease inhibitors head to head. He did say that if side effects or dosing regimen of Crix were thought to be a problem, then alternatives would be used, including Viracept. I also find it amusing that the assay used in AGPH's claim that therapy with Viracept reduces the level of virus to undetectable levels is with an assay that is amazingly coarse in its sensitivity - I hope that AGPH is conducting studies with assays that Merck uses that are much more sensitive. Beyond Vertex, there are currently over 120 drugs in various stages of clinical development for HIV in the US alone. Just as Crix took huge market share for a time, Viracept does have its place in the history of fighting HIV. A big unknown is how long that place will last. With Vertex's drug due to arrive in 1998, peak sales for Viracept could actually be late 1998-early 1999, since with the FDA eager to approve new drugs for HIV, many more will be quickly coming to market. Then, you have the valuation issue. How much should the market pay for a company with 1 drug on the market which will peak in sales about a year from now? If AGPH is profitable in 1998, that profitablilty could be short lived, even as triple-combination therapy grows - as more of the undiagnosed get into treatment, etc., since the newly diagnosed will likely get the Vertex drug or something else, just like people like Dr. Conant are so eager to prescribe Viracept today. What kind of P/E multiple will the market pay for a company so reliant on a single product, one that will be replaced in entirety after only maybe, 4-5 years on the market, with years 2-5 characterized by declining sales? What is positive for people with AIDS is actually negative for AGPH (and Merck, etc.) We are fortunate that the pace of discovery of the AIDS process is fast. Science is gaining ground. But, the pipeline is getting so incredibly crowded. And, in 4 years, it is quite possible that protease inhibitors may actually have zero role in therapy - that is how robust the research is today. All I have done here is put a flashlight on some issues that you all IMO have not even chose to examine. Although I clearly disagree with AGPH on the ethical front - having seen people I've worked with die from AIDS, I cannot be fooled by hype - I am overjoyed that Viracept is on the market. But having a half decent drug and a good investment are different animals. I am sure that some of you reading this have friends working at Agouron, and no doubt people who work at AGPH are reading this. To the management of Agouron, I ask you to accept the limitations of Viracept and be pleased at its strengths. We are dealing with too serious of an issue to peddle drugs and hype stocks like Tide detergent on a television commercial. The world (& the FDA) will be watching. PS - And,...please don't steal data from universities. (I do have a sense of humor.) |
