Henry, I know you follow AGPH also. I highly rec that you review these revenues and LGND future potential compared to an explosive revenue growth situation like AGPH, a stock that has fallen over 28% in a few weeks due to this ASIAN crisis which absolutely has no consequence on the sales. You should take advantage of this weakness, and buy AGPH even if you have to bail out of LGND at this time. Here an analyst note released today by AB:
BT Alex. Brown Incorporated
November 12, 1997
AGOURON PHARMACEUTICALS, INC. (AGPH): STRONG BUY
Reiterate "Strong Buy" Rating Based On Strong October Prescription Trends, Attractive Price
HIGHLIGHTS
--We reiterate our "strong buy" investment rating on Agouron stock based on strong October prescription trends for Viracept (the Company's HIV protease inhibitor), combined with the stock's attractive price.
--Data released last night by IMS America indicate that: (1) the HIV protease inhibitor market continues to grow steadily; and (2) Viracept continues to gain market share from the other three HIV protease inhibitors on the market.
--Specifically, total Viracept prescriptions captured by IMS America for the month of October were 41,085, up 9.5% sequentially. For this entire class of drugs, which includes Viracept, Merck's Crixivan, Roche's Invirase and Abbott's Norvir, total prescriptions for the month of October were 143,402, up 6.0% sequentially. Importantly, Viracept continued to gain market share within this class of drugs; Viracept's market share increased from 27.7% in September to 28.7% in October, while Crixivan's market share remained flat at 41.1%.
--While weekly prescription data have been available throughout the month of October, these monthly data, which are more relaible, show a somewhat stronger trend for Viracept.
--These prescription trends, in our view, place Agouron squarely on track to meet our projections for both the current quarter and the current fiscal year.
--At 41 1/4 (down 27% from its recent high on October 28, compared to an 8% decline in the S&P 500 over the same time frame), Agouron stock represents an attractive value, in our view. Our 12-month price target is $64, which assumes that, in a year, the stock trades at 38x our CY 1999 EPS estimate of $1.68.
INVESTMENT THESIS AND VALUATION
Agouron is a leading biopharmaceutical company that possesses: (1) a recently FDA-approved lead product for the treatment of HIV that has $500 million sales potential; (2) a rich pipeline of additional products that includes three anticancer products already in clinical development (including one in Phase III); and (3) a powerful drug discovery platform that combines unparalleled expertise in protein structure-based drug design with a leading technology base in computation-directed combinatorial chemistry.
Our price target of $64 assumes that, in 12 months, the stock trades at 38x our CY 1999 EPS estimate of $1.68. We believe that this is a reasonable multiple in light of our projected EPS growth rate (beginning in 1999) of 32%.
Additional Information Available Upon Request
BT Alex. Brown Incorporated maintains a net primary market in the common stock of Agouron Pharmaceuticals, Inc.
Within the past three years, BT Alex. Brown Incorporated or a predecessor has managed or comanaged a public offering of Agouron Pharmaceuticals, Inc.
Agouron Pharmaceuticals, Inc. stock is optionable.
An author of this comment has a long position in the common shares of Agouron Pharmaceuticals, Inc. |
