The Wall Street Journal Interactive Edition -- June 12, 1998
Agouron to Buy Certain Rights
To Immune Response AIDS Drug
By RHONDA L. RUNDLE
Staff Reporter of THE WALL STREET JOURNAL
Agouron Pharmaceuticals Inc., seeking to expand its role in AIDS
therapy, said it agreed to pay as much as $77 million to acquire certain
rights to a controversial drug Immune Response Corp. has been
developing over the last decade.
The AIDS drug, Remune, is undergoing several human tests, including a
2,500-patient study at more than 70 medical centers across the U.S.
Remune was inspired by the late Jonas Salk, who believed that a
deactivated version of the AIDS virus might work much like the polio
vaccine he developed in the 1950s.
Some researchers have had doubts that Remune could trigger a strong
enough response to have a significant benefit for AIDS patients. But the
growing popularity of drug cocktails in the treatment of HIV, the virus that
causes AIDS, has stirred new hopes for Remune. Agouron said Thursday
that its scientists are optimistic about preliminary results from a small study
of Remune administered in combination with other antiviral drugs, slated to
be presented at the World AIDS Conference in Geneva next month.
"The results were highly encouraging. It was definitely a factor in our
decision to go forward" with the collaboration, said Peter Johnson,
Agouron president and chief executive officer. Agouron, of San Diego,
discovered and markets one of the most popular AIDS drugs, Viracept,
which has set sales records for a new biotech drug since its launch in
March 1997.
Mr. Johnson said that a goal for Agouron has been "to leverage our initial
success with Viracept and expand our presence in the AIDS field." The
Immune Response accord is "certainly a move in that direction, and it
won't be the only one of its kind," he said. Agouron and Immune
Response are planning a clinical trial of a four-drug combination including
their two drugs, he added.
With the new partnership, Immune Response, based in Carlsbad, Calif.,
gains new financial resources and a partner with a strong track record in
marketing HIV therapies. The companies hope to file a request with the
Food and Drug Administration for approval of Remune.
Remune could help Agouron build "critical mass," in the AIDS market,
said Tony Butler, an analyst at Lehman Brothers Inc. There is also a
possibility that a Remune drug cocktail might encourage HIV-infected
patients to begin drug therapy sooner. That, in turn, could boost sales of
Viracept and other antiviral drugs.
Under terms of the agreement, Immune Response and Agouron will split
all profits from any Remune sales world-wide. Immune Response could
receive as much as $77 million from Agouron over two years, including
$45 million in license and milestone payments, $18 million in development
payments, and $14 million from the sale of Immune Response common
stock. Initially, Immune Response will receive a $10 million license fee and
$2 million from the sale of 118,256 shares of newly issued common stock.
That represents a tiny stake in Immune Response, which has about 23
million shares outstanding.
Agouron shares dropped $1 to $34 Thursday, and Immune Response
shares rose $1.9375, or 17%, to $13.6875, both in Nasdaq Stock
Market trading. The pact was announced after the close of New York
markets.
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