In the WatchList. I used to follow them very loosely as a long. With Fuzeon struggling, as you point out, and with the replacement compound program delayed and possibly dead -- adversely affecting timing of milestones -- things look fairly grim. rkrw noted the slow acceptance of an ALKS/DNA product leading to termination of its commercial development. My guess is that Roche will plug away unless it has another program for HIV, something I'd have to look into.
The recent 10-Q provides a sketch:
sec.gov
European approval, possible progress on reimbursement . . . but it costs 20K per patient per year and is injected twice daily. I can't get a good handle on the burn, but something like $1.50/share/year? Meanwhile, resistance is probably developing faster than sales, and competing drugs are coming along. GILD's combo next year . . . PGNX and INCY drugs will beat any TRMS replacement compound to market. Pfizer's, too. Interesting snip from PGNX' last 10-K:
>>In December 1997, we entered into a collaboration agreement with the Roche Group of Basel, Switzerland to discover and develop novel HIV therapeutics that target the fusion co-receptors CCR5 and CXCR4. This collaboration, among other things, provided for Roche to apply its library of small-molecule compounds to our original screening assays in order to identify inhibitors of the interaction between HIV co-receptors and HIV.
Subsequently, in March 2002, Roche exercised its right to discontinue funding of the research being conducted under this agreement. Discussions conducted with Roche during the course of 2002 resulted in a successive agreement by which we gained the exclusive rights to continue the research and development of the small-molecule CCR5 inhibitors identified during our collaborative effort and to their commercialization, subject to certain reservations of rights in favor of Roche. Under the terms of the new agreement, Roche retains an option to resume joint development and commercialization of these compounds at defined intervals in their development. We are currently optimizing compounds in order to select a clinical development candidate. If Roche does not exercise the option described above and we achieve specified milestones, we will be obligated to pay Roche approximately $9.1 million. In addition, we are required to pay Roche royalties on the sale of any licensed products. As of December 31, 2002, we have paid $0 to Roche under this agreement.<<
Given that the Progenix compounds are still in play for Roche, and that they are oral small molecules, I could see the possibility of Roche buying back in and dropping Fuzeon on good data from PGNX. Caveat: PGNX compounds address a subset of the HIV market (using ViroLogic test, if memory serves, to find best responders).
Yeah, it looks like a slow death spiral. If it pops on European approval, that might be a good entry. Or, more near term, sales increase due to channel stuffing (sales recognized on sales to wholesaler). Might look for a half position before earnings, as wholesalers might not be biting, either.
Cheers, Tuck |
