<Agouron CEO sees boom for Viracept
Talks of $1 billion in annual sales>
(I think we all know how conservative Agouron is, so they would not be making these bullish projections and statements without good reason, imo.)
By Thomas Kupper
STAFF WRITER
December 17, 1998
San Diego Tribune
Sales of Agouron Pharmaceuticals' AIDS drug Viracept could hit $1 billion in fiscal 2000 as the company introduces it in countries around the globe, the company's chief executive officer told shareholders yesterday.
CEO Peter Johnson's optimistic words at the San Diego biotech's annual meeting offered a sharp contrast to skeptical reports over the past year that new treatments could eat into Viracept's market.
But Johnson said the first of those products, the Sustiva drug from DuPont, which won approval in September, has failed thus far to steal the momentum that has made Viracept the world's top-selling AIDS drug.
Agouron forecasts that Viracept sales in the United States will grow 20 percent to at least $430 million in the company's 1999 fiscal year, through June 1999, Johnson said.
And he expects foreign sales, on which Agouron receives royalties from marketing partner Roche, to take off. Those sales could grow to $300 million in fiscal 1999, from $51 million last year.
"We think it's entirely reasonable that the $1 billion barrier could be broken in our fiscal year 2000," Johnson said.
Additionally, Johnson said Viracept sales gained a clear lead in sales over rival drug Crixivan last month for the first time. Both drugs belong to the class of protease inhibitors, a key component of AIDS cocktails.
While sales of the two drugs had been roughly even in recent months, with Viracept slightly ahead, Johnson said that in November Viracept had almost 36 percent of the market to Crixivan's 31 percent.
Also at the meeting, shareholders approved a proposal for a new "divisional stock" to represent Agouron's cancer-research division. Shareholders will receive half a share of the new stock for each Agouron share.
The idea behind the new stock is to separate the cancer work and its large cost from the Viracept revenue, because some believed that the research costs were holding back the stock's performance.
Agouron share prices languished for much of this year but have more than doubled since the beginning of September. The shares closed yesterday at $49.75, down 31-1/4 cents.
Johnson said the new divisional stock will begin trading sometime next year, depending on market conditions.
Among the milestones Johnson covered in his half-hour presentation was the recent hiring of Agouron's 1,000th employee -- by far the most of any of San Diego's dozens of biotech companies.
In the most recent quarter, Agouron's net income nearly doubled to $6.9 million as sales grew 58 percent to $144.9 million. The company spent $37 million on research and development, of which about a quarter went to the cancer division.
Perhaps the biggest factor in whether Viracept sales continue to grow is whether Roche generates significant sales overseas. The drug is approved in more than 40 countries but has not been on the market in most of them nearly as long as it has been in the United States.
Additionally, the company's future remains difficult to forecast because drug companies around the world -- including Agouron -- have dozens of new AIDS treatments in development. If any of those proved better than current drugs, it could change the marketplace dramatically.
Most immediately, a new protease inhibitor could reach the market in 1999 from Massachusetts-based Vertex Pharmaceuticals, a company that has long been an Agouron rival because the companies use a similar "structure-based" approach.
Jim McCamant, editor of the Medical Technology Stock Letter in Berkeley, said uncertainty about the Vertex product and other drugs makes it difficult to judge how likely Agouron is to succeed in selling $1 billion worth of Viracept.
"That's an optimistic view," McCamant said. "There's a bunch of questions that have to be answered between now and then."
Vertex gained notoriety among biotechs as the subject of the 1994 book "The Billion-Dollar Molecule," but Johnson joked that Viracept could prove to be the drug deserving of that title. |
