Great post Margie!!!!!!! Found this on the NET. Author unknown.
By: research_guy
Is AGPH going up or down? Here's my perspective, based on my knowledge of the company .... Viracept is on it's way to a > $500 million/year drug. Why it is true that *profits* are split 50:50 with Japan Tobacco, it is also true that a good percentage
of Agouron's expenses as a company are related to the manufacture, marketing, and distribution of Viracept, and therefore is paid for prior to the calculation of profits. It is also true that as sales increase, the margin will increase, since increased sales are being achieved largely without significant increases in sales and marketing (it is a very focused market).
Competition?
Sure, Glaxo may get approval of the Vertex PI in a year or so (remember that Vertex does NOT control the clinical and commercial development of this drug, Glaxo does and does so with the slowness of the typical big pharma), but this does not necessarily impact
Viracept sales. ALL new drugs face competition sooner or later, mostly sooner these days. I can't think of a major new drug introduced recently that has not faced competition within two or so years of approval.
What about Agouron's pipeline?
First of all, Thymitaq was not a piece of garbage, as has been suggested on other boards. It has reasonable efficacy, and undoubtedly could be an approvable drug for hepatocarcinoma, which is a very difficult cancer to treat. The decision to discontinue was based on a analysis of the size of the trial required for registration, and the very limited market once approved. It would actually make sense for a
Japanese company to pick it up, since hepatocarcinoma is more common is Asia, and it could be a nicely profitable drug there. Instead
of investing in Thymitaq, Agouron chose to invest their resources in their MMP inhibitor AG3340. *IF* MMP inhibitors live up to
the widespread expectations of the research community, AG3340 could easily be a blockbuster. Unlike current chemotherapies which
are inherently cytotoxic (and therefore cause serious side effects such as bone marrow toxicity), AG3340 would be employed as a
adjunct therapy after a standard primary therapy of surgery, chemotherapy, or radiation therapy. It is well-known that these primary
therapies are routinely quite successful at getting rid of most or all of the primary tumor. The problem is that the tumor has
frequently metastasized (spread) to various other sites, where it cannot be stopped: the floodgates have opened. MMP inhibitors are
expected to dramatically slow the growth of these metastatic secondary tumors (as well as regrowth of the primary tumor), such that
life expectancy is greatly prolonged. MMP inhibitors such as AG3340 would be administered chronically, possibly for the life of
the patient. Two pills a day, and the cancer which has spread throughout the body simply stays put. Furthermore, based on the
mechanism of action, MMP inhibitors should be applicable to many different types of metastatic tumors: colon, prostrate, ovarian,
non-small cell lung cancer, melanoma, pancreatic, glioma, and so on. A huge medical need and a huge market.
So, that's my perspective ... AGPH is undervalued right now based on Viracept alone, and if you want to take a little risk and believe in the MMP research, AGPH has a long long way to go up. |
