Here is the SD Union Tribune article.
LOCAL STOCKS
Immune Response, Agouron Pharmaceuticals pact has potential
By Don Bauder
June 28, 1998
Earlier this month, two biotechs, Immune Response and Agouron Pharmaceuticals, announced a collaboration to commercialize the former's Remune as an AIDS treatment.
"We believe that this deal serves as a major validation for the Remune technology by a leading player (Agouron) focused on the HIV market," says Caroline L. Copithorne of Prudential Securities.
"In addition, it provides a needed source of funds to Immune Response for the completion of Remune development."
Immune Response's losses should be pared, Copithorne says. She expects the 1998 loss to drop to 25 cents from her earlier expectation of $1.33. For 1999, she expects the loss will be 28 cents, down from the earlier forecast of 79 cents. She expects a profit in the year 2001: $1.43 a share, up from her earlier estimate of $1.24.
Copithorne has a buy on the stock, but warns that it carries high risk.
Merrill Lynch points out that Remune "has to date not been able to demonstrate convincing clinical efficacy," either because the clinical trials have not been conducted properly, or the drug doesn't work.
"This profile of the drug may change," says Merrill Lynch, saying the drug has blockbuster potential.
The collaboration will dilute Agouron's earnings per share by 20 cents this year and 30 cents next year, says Merrill Lynch, although it believes the transaction is a good one. It has its second-best (accumulate) rating on Agouron stock.
However, James McCamant, editor of the Medical Technology Stock Letter in Berkeley, says Agouron stock is "woefully undervalued," in part because of a Merrill Lynch prediction that the annual growth of the HIV market will slow.
That estimate is in error, McCamant says. Agouron, which has been trading in the low $30s, is a buy under $40, he says.
Copyright 1998 Union-Tribune Publishing Co.
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