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Biotech / Medical : Agouron Pharmaceuticals (AGPH) -- Ignore unavailable to you. Want to Upgrade?

To: margie who wrote (3107)	12/3/1997 3:41:00 PM
From: David S.	Respond to of 6136

"We are shocked by the magnitude of the devaluation of AGPH shares in response to our decision to discontinue development of a cancer drug from which most analysts were expecting a contribution to our profitability of about 15 cents per share in the fiscal year 2000." Morgan Stanley (a small investment boutique) reduced their 2000 estimate from $3.05 to $2.14. Can Agouron officials do the math? Can you?

To: margie who wrote (3107)	12/3/1997 4:48:00 PM
From: Joe E.	Read Replies (1) \| Respond to of 6136

<<Agouron Comments On Recent Decline In Stock Price>> Well, what can they say after all? Still, it did bring the price back $1.50 or so. I think that it is possible that the AGPH management was feeling like they did not need no stinking Roche money now that the Viracept profits are starting to pour in. I read a news article where Johnson was quoted as saying that Roche wanted to pick and choose which [cancer] drugs they would support. Seems reasonable to me, but I guess that the AGPH brass thought Agouron didn't need support that wasn't willing to share in all of the risks. Probably, the cancellation of Thymitaq was discussed by Roche and Agouron and this is when the break happened. Agouron management had been sending signals that thymitaq might be dropped (not that I caught them, tho), so it seems possible that Roche took this as a moment to reconsider the whole cancer program with Agouron. Since the next output is several years off, geting out now would avoid most of the expense associated with determining if the next candidates are viable. This allows a fairly clean break, without seriously hard feelings between the management teams. Roche can still claim a victory from supporting Agouron, since Viracept will make them a lot of money. Agouron apparently loves their next cancer drug candidates and is probably very happy not to have to share profits on them. Everybody is happy, except the market interprets it as the very wise Roche pulling out due to presumably weak drug candidates. Indeed, if Roche thought these drug candidates were the silver bullets for cancer they would not pull out. So the basic questions to be aswered are just how good is Agouron's pipeline, and just how good is Agouron's approach to finding and developing drugs. Pretty good, I think. Any other opinions? Agouron IMO is now a very strong buy.