Here is an interesting post from AOL boards:
Rtboch, I don't know who is selling AGPH short, but I must admit to being fascinated by their behavior. It's like watching an episode of "extreme sports" or "living on the edge" on TV, with someone skiing off the summit of Mt. Everest.
Viracept sales are exceeding the expectations of all analysts following Agouron. Some of them have recently raised their estimates, but with regard to FY98 and FY99 they are still too low. Recently published proposed guidelines for treating HIV/AIDS endorse early treatment, which will greatly expand the market for protease inhibitors. (Early treatment, if widely adopted, should at least triple the PI market, since only about 20% of U.S.
HIV-positive people are now being treated.) Viracept is one of the three PIs recommended, and its characteristics make it the obvious first choice in most cases. Incidentally, Roche's Invirase is not one of those recommended, no doubt because of its low bioavailability, a problem which is largely overcome if it is taken with Viracept in a 2 PI combination, which clinical studies now underway may show is a very attractive option.
The number of patients now taking Viracept (I estimate 38,000) is probably greater than those taking any PI other than Crixivan, and the gap between these two is closing.
With regard to new PIs under development, the furthest along is probably Glaxo/Vertex's 141W94/VX-478. If clinical trials are successful, an NDA submission is expected in December 1998, which means FDA approval probably not before March 1999. It is too early to tell if this PI will be not as good as, equal to, or better than Viracept.
In summary, events of the last few months have increased confidence in the values selected in the probabilistic analysis I posted on March 12, which estimated the most probable sales of Viracept in FY99 to be $1.6 billion. Note that only Amgen among the biotechnology companies has comparable (actually somewhat greater) sales, and its market capitalization is thirteen times that of Agouron's.
There is, moreover, a high probability that Agouron is much more than a one-drug company. It is a leader in characterizing target molecules and in identifying and developing candidate drugs with desired attributes. Its TS, GART, and MMP inhibitors to fight cancer are now in clinical tests, and it is likely that a candidate drug to inhibit rhinovirus will be identified within the year. A rhinovirus inhibitor could be another blockbuster in
terms of revenues.
Clearly the short sellers must not believe any of this, or, if they are pure technicians, they don't care. They have increased the short position in AGPH to 3.9 million shares as of mid-June. This is 27% of the outstanding shares.
Incidentally, a few weeks ago I did ask a reliable source at Agouron whether a significant number of short sales might have been made by Agouron insiders to lock in profits. The response was in the negative. In fact, it was: "You must be kidding!"
Time will tell whether the shorts have the extreme skill to negotiate these treacherous slopes at high speed, or, and I think this is more likely, they are like deer transfixed by the glare of oncoming headlights.
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