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

To: Oliver & Co who wrote (3306)	12/12/1997 11:42:00 PM
From: JOHN W.	Read Replies (1) \| Respond to of 6136

PW Highlights: Analyst report dated December 9, 1997 from PaineWebber BACKGROUND: Agouron sponsored an analyst meeting on its premises to provide more details on its lead cancer products, AG3340 (MMP inhibitor) and AG2034 (GART inhibitor) and an update on the market for protease inhibitors and Viracept. Key highlights are as follows: 1. AG3340, (matrix metalloproteinase or MMP inhibitor) - Good safety profile with potential for potent anti-tumor effects in combination with chemotherapy. 2. Phase I in advance cancer patients ongoing; 23 evaluable patients demonstrating no significant toxicities; Anecdotal evidence of stable disease and tumor shrinkage in 3 patients. 3. Phase II dose ranging strudies to be initiated in Q2 98 4. Phase II/III clinical studies expected to target two different indications: 5. Hormone refractory prostate cancer (with mitixantrone, prednisone) 6. Non-small cell lung cancer (with paclitaxel/carboplatin) 7. NDA filing targeted for FY 2000 (6/99-6/00) AG2034, GART INHIBITOR, DEMONSTRATES POTENTIAL AS A UNIQUE ANTI-TUMOR AGENT --Preclinical in vivo data demonstrated growth delay in a variety of tumor types. --AG2034 is selectively toxic to p53 negative tumor lines -- p53 negative tumors represents a significant patient population as approximately 50% of tumors are p53 (-), approximately 70% of color cancers are p53(-) where p53(-) patients are 3 times more likely to die than p53(+) patients; --Phase I dose escalation and safety study currently underway ROBUST MARKET DEMAND FOR VIRACEPT CONTINUES - ACHIEVED #1 DOLLAR SALES POSITION AMONG THE PROTEASE INHIBITORS IN OCTOBER --Market data collected by Agouron confirms continued strong demand for Viracept: --IMS data indicates October monthly sales of $23.8 million exceeding all other protease inhibitors and on track to achieve over $300 million in annual sales represents a current dollar market share of 35%. --Physicians surveyed by Agouron expressed intention to increase their use of Viracept above and beyond their use of other protease inhibitors --Double combination protease inhibitor therapy becoming a significant portion of the market -- Viracept is estimated to be used in 17% of double protease inhibitor combination therapy. --Significant growth opportunities remain with new combinations of therapy and deeper penetration of the physician market expected to be key drivers. REITERATING BUY (1) RATING We believe the market overreacted to the Roche and Thymitaq news released last week and reiterate our buy rating on the stock. We continue to expect events related to Viracept will continue to drive the stock price in the near term. Our conviction regarding the significant market prospects for Viracept remains intact. Market intelligence data presented by the company supports our premise as Viracept has achieved teh #1 position in dollar sales among the protease inhibitors within the first eight months of its market launch. We expect a series of new clinical data, including more on the Viracept BID regimen, combinations of Viracept with other protease inhibitors (including Crixivan, Fortovase (saquinavir-SGC), Glaxo's 141W94 (Vertex's PI inhibitor), and Norvir), Viracept in combination with DMP 266 and other data to be released at teh 5th Annual Retrovirus conference in February that will support market demand for Viracept. With key trends including support from thought leaders to utilize earlier and aggressive treatment with triple combination therapy (with a protease inhibitor) reinforcing strong growth, we continue to expect the market for protease inhibitors to expand rapidly with Viracept capturing a significant portion of the market growth over time. Our 12-month price target of $65-70 based on discounting fiscal 2000 EPS estimate of $3.46 at a 20-25% rate using a 25-30 multiple represents potential significant appreciation to current stock levels. UPCOMING MILESTONES Earnings release for fiscal Q2 98: Second week of January Additional clinical data on Viracept (5th Annual Retrovirus meeting); Q1 1998 European approval for Viracept (Roche - European marketing partner); Q1 1998 Selection of lead compound (rhinovirus 3C protease inhibitor) for clinical dev.: Q1 1998 Initiation of Phase II clinical studies for MMP inhibitor: H1 1998 Announcement of corporate collaborations: H1 1998