Pharmaceuticals are not like going to the newest restaurant in town. Doctors and patients are tough to change.
30 years ago, Roche held most of the benzodiazepine patents (like AGPH with PIs). The first two were big winners, Librium and Valium. Though newer drugs have come to market and most of our patents have long since expired, Roche still does over $600mm in benzodiazepine sales each year.
Patients who get results from Viracept and have no problems will be on the drug for the rest of their lives. Why would they want to gamble their life on another drug or even a generic 17 years from now?
It is interesting to note that the bears tend to compare AGPH to companies with little or sales, but the bulls compare it to Merck, Galxo, Roche etc. Though I bought AGPH when they had no sales, I hardly think that the stock has run its course.
I take a more simplistic view in investing in pharmaceutical companies. Who is Hiring? Number of Reps times average salary times 12 = revenues. Drug companies hire more reps in direct response to anticipated revenues (or fire them.)
Unlike most speculative biotechs, AGPH actually hired reps for the U.S. Market. Thus, I think they anticipate about $162mm in U.S. sales. In 18 years, I've only sold 3 drugs that generated more than this in a given year. Interestingly, even Valium didn't do this well.
I think the real question is whether or not AGPH will be able to surpass Merck. The initial take is impressive. Watch the Want Ads, if AGPH starts expanding its sales force, you may want to let at it again. |
