It has been a while since I have posted on this thread, but feel now is a compelling time to buy Agouron shares. Last week Agouron traded in excess of 15 million shares and this was the highest weekly volume in the company's history. This is climactic action, and I personally believe a very important bottom is in place. Note that today's low is 2 points higher than the low it made last week.
Getting into the fundamentals:
The news in Thymitaq was disappointing but not terribly negative. This was very going to be a big drug; most estimates called for sales in 2000 of approximately $25 million. At an analyst conference which the company held on Monday, they went into great detail about their 2 cancer drugs, AG 3340 (mmp inhibitor) and AG 2034 (Garth inhibitor). Both drugs will be put on a fast track development with phase 2/pivotal trial for AG 3340 beginning in the first quarter of 1998 in combination with chemotherapeutic agents in non-small cell lung cancer and hormone refractory prostate cancer. These trials could turn into pivotal trials. Other disease potentials include glioma, breast, and colon cancer. It is possible, if all goes well, an NDA filing could come in fiscal 2000.
Their second compound,, AG2034, is earlier than 3340, but it is a garft inhibitor that has shown selective cytotoxic to P53 negative cells, which make up 50% of all tumors and 70% of colon cancers. Viracept which is of course what more than justifies the current price of Agouron, is gaining steadily. October data for the first time indicates that Viracept is the #1 drug in dollar share of hiv market. As important, surveys done by Agouron at the ICAAC conference, physicians indicated that they plan to increase the use of Viracept by 90% over the next year compared to 35% for Crixivan and 30% for Invirase. Also, approximately 80% of new Viracept patients are protease inhibitor naive vs. 37% in May. This means newer patients will have much better durability of response.
B.I.D. data looks great and should reach statistical equivalence to T.I.D. some time in 1998. Data will be presented in Chicago.
Second quarter earnings will be coming second week in January, and I do not believe anyone will be disappointed. Now to put the value of Agouron into some kind of framework, today ICN Pharmaceuticls bought 4 drugs from Roche for $89 million in cash. The four drugs they purchased have total US sales of approximately $25 million. Agouron's US sales of Viracept should exceed $340 to $350 million in fiscal 1998, and well north of $400 million in fiscal 1999. Four times $350 million in sales come to $1.4 billion, and 4 times $450 million becomes to $1.8. This would be a rough way of valuing what Viracept alone is worth, and remember Viracept is a terrific drug as opposed to the four that were purchased by ICN.
Folks, we will all look back at this time, and wished that we had purchased more shares.
Good luck to all!. |
