Silverman (ROBERTSON STEPHENS) (1/14/98):
"KEY POINTS:
1. Another Strong Quarter For Viracept Sales, Trends. Rainsing Sales Estimates Again.
a) Agouron reported its fiscal 2Q"98 earnings of $0.15 versus our expectation of $0.18 but hitting right on consensus. Total Viracept sales came in at $91.8 million, beating our recent $90 million estimate, which was at the high end of the range. Direct sales in the U.S. were $84.5 million as compared to our $84 million; sales to Roche were $7.3 million versus our $6 million. Management indicated that approximately 70,000 to 75,000 patients are now on Viracept.
b) As a result of Viracept's strong showing in the F2Q, we are increasing our sales expectations for the rest of FY 1998 and FY1999. For F3Q, our Viracept U.S. sales estimate goes from $90 million to $94 million. For F4Q, our U.S. sales projection goes from $95 million to $98 million, bringing our new F1998 Viracept sales estimate to $352 million (from our previous number of $344 million). For F1999E, we are inching up our Viracept sales figure to $418 million form $413 million. We continue to be comfortable with our estimate for Viracept saels to Roche of $44 million and $61 million in F1998 and F1999, respectively.
2. Higher Spending Made Bottom Line Difference.
Gross margin improved by 300 basis points, to 63% in the quarter, essentially in line with our expectations. But, Agourong's R&D and SG&A spending was a bit higher than our estimates for the quarter. R&D was $30 million compared with our projection of $28 million, due primarily to increased spending for the development of its two lead anti-cancer compounds (AG3340 and AG2034). Recall that rights to these two compounds were reacquired form Roche in December. SG&A expenditure in the quarter was $14 million compared with our $13 million estimate." |
