A number of points which have not been considered about Agouron.
First, Roche is now both heavily and directly involved with the success of AGPH. Go back and look at the charts of other companies during their first five years of collaboration with Roche. Glaxo had a 10 fold stock price increase and is now one of the largest pharmaceutical companies. Genentech had a 8 fold increase in five years and would still be increasing if Roche wasn't controlling the price (they now own better than 70%). Look to see AGPH at 400 in five years with more to come. Even Merck has a tough time dealing with Roche's marketing and financial expertise. After the Syntex acquisition, they still had 32 billion in cash and short term securities.
Secondly, the only reason Viracept didn't set a record for fastest approval time was probably because of the holidays. The FDA would look like ____ if they didn't do everything possible to bring the only AIDS drug with a pediatric claim and pediatric dosage form to market as soon as possible.
Third, every drug company which expands its sales force sees at least short term gains in their stock price. Unlike most upstart biotechs, AGPH has created a force which is readily to go as soon as they get approval. I heard they stole a lot of top people from other AIDS drug producers.
Fourth, of what I've read, AGPH has a number of advantages over other PIs. Safety, the pediatric population, synergistic activity with other PIs, etc. I think they get 30-40% of the market by the end of the year.
Finally, management has handled the shareholders well. They have not created a lot of debt, nor have they given in to the big companies. Even a modest launch of viracept will wipe out all of their losses in the first year.
It seems to me, that waiting for a 10% or 8 point decline on a stock which could rise 300 points in five years is not considering the big picture. |
