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

To: JOHN W. who wrote (3310)	12/13/1997 1:30:00 PM
From: JOHN W.	Read Replies (1) \| Respond to of 6136

Bear Sterns Summary of this weeks meeting: Summary Agouron hosted an analyst meeting yesterday, provididng updates for its three key compounds-Viracept, AG3340 and AG2034. In our opinion, the outlook for Viracept appears quite robust, while regarding AG3340 and AG2034 we are somewhat cautious. Below, we go over each of these in turn: Viracept Based on IMS and other data, we estimate that Viracept has about 28% share of the US protease inhibitor market, and that this share is still growing slowly. This translates into a $290 million run rate (as of October) in the US alone. What is more exciting, however, are Viracepts prospects for the future. Depending on the survey, doctors indicate that 8-13% of patients under care are on dual protease inhibitor therapy, but that 12-23% are expected to be on be on dual protease inhibitor therapy twelve months out. Currently, this translates 80% of the time to Invirase/Norvir used as a salvage regimen in those failing antiviral treatment. However, with additional data, we believe that Viracept will participate to a greater extent in this expansion of the market. We also note that today, Viracept is the clear drug of choice for patients and physicians initiating traetment with a PI for the first time. 90% of physicians surveyed (admittedly by Agouron) indicated they plan to expand use of Viracept in 1998, while between 30% and 40% indicated similiar sentiments for Crixivan, Invirase and Norvir. While we are not enthusiastic about either Crixivan or Viracept twice daily regimens, we note that interim data from the Viracept study intended to support a sNDA should be available in Febuary. AG3340 This compound is Agouron's selective matrix metalloprotease inhibitor (MMPI), set to begin combination studies with Taxol in non-small cell lung cancer and Carboplatin in hormone refractory prostrate cancer patients in 1998. MMP activity is important for primary tumor growth, metastasis (cancer spread) and angiogenesis, although certain members of this family of enzymes play specific roles. For example, gelatinase A is important in angiogenesis, but collagenase (a related MMP) is important in the day-to-day maintenance of joint integrity. Therefore, MMPIs that hit both of these enzymes can yield both anticancer effects and joint stiffness as a side effect. AG3340 is selective for the enzymes implicated in tumor growth and could therefore have a therapeutic window in which to provide anticancer effects without joint stiffness, etc. Thus far, in clinical trials lasting several weeks, the 5mg twice daily dose of AG3340 has yielded such a profile. Despite this, we remain cautious regarding AG3340. There is an obvious therapeutic window to the drug (10mg twice daily began to yield some adverse events) and we do not yet know the magnitude or duration of anti-tumor response at the best tolerated doses or in a variety of tumor/patient types. AG2034 Tumors rely on what is known as the "do novo" purine pathway for growth. This biochemical process involves several enzymes, including GART, of which AG2034 is an inhibitor. For this reason, AG2034 is more toxic to cancer cells than normal cells. What is also very interesting about AG2034 is that it selectively kills cells which lack a protein known as P53. About 70% of colon cancer cells lack P53 and about 50% of all tumor types lack P53, although all normal cells are P53 positive. It has been shown that patients with cancer cells lacking P53 are much more likely to die than are those with P53 positive cells (e.g. 3 fold more likely in colorectal cancer). Therefore, there is much reason to believe AG2034 could be a very effective anticancer agent. At present, Agouron is wrapping up a Phase I dose-escalation study in which AG2034 is given as a one hour infusion every three weeks. In this study, fatigue and blood cell toxicity appear to be the limiting side effects, although it is not yet known what the safety/efficacy trade off will be for longer-term studies. While we are intrigued by AG2034's mechanism of action, we believe any proof of commercial promise must come from efficacy studies which Agouron is now planning, especially in light of AG2034's potential to generate side effects.

To: JOHN W. who wrote (3310)	12/13/1997 2:09:00 PM
From: JOHN W.	Respond to of 6136

Analyst report dated December 9, 1997 from BancAmerica ROBERTSON STEPHENS CANCER PROGRAM, VIRACEPT STRENGTH HIGHLIGHTED AT ANALYST MEETING Cancer program, recently re-acquired from Roche, notably AG3340, better than expected. AG3340 early clinical data are very encouraging; Phase II to start in Q1:98; NDA scheduled for F2000. *By all measurements, in our view, Viracept continues to gain in HIV-protease inhibitor market. KEY POINTS: 1. Re-acquired cancer program looks promising. At a last-minute analyst meeting scheduled at Agouron (during the ASH conference in San Diego), management presented details of the two cancer compounds, AG3340 (an MMP inhibitor) and AG2034 ( a GART inhibitor), that were re-acquired last week from Roche. While the termination of Thymitaq was disappointing, expectations were low. However, the compounds under development, especially AG3340, have excellent early-stage data and could lead to an NDA filing in F2000, which is approximately the same time frame as Thymitaq. Furthermore, Agouron now owns worldwide rights to these compounds, preserving long-term value. In addition, the company has already received interest from potential new corporate partners, although it is unlikely to form a new collaboration until the end of 1998. Manufacturing is one area that Agouron will have to assume in the cancer project. However, Roche will provide ample supply for Phase II trials, allowing AGPH time to establish production/commercial capacity. The information contained herein is not a complete analysis of every material fact respecting any company, industry or security. Although opinions and estimates expressed herein reflect the current judgment of the Firm, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis; when they are, teh date of the change in estimate will be noted. In addition, opinions and estimates are subject to change without notice. This Report contains forward-looking statements, whcih involve risks and uncertainties. The Company's actual results may differ significantly from the results described in the forward-looking statements. Factors that might cause such a a difference include , but are not limited to, those discussed in "Investment Risks." BancAmerica Robertson Stephens from time to time performs corporate finance services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies. This information is not used in the preparation of the opinions and estimates herein. Facts and other information discussed have been obtained from sources considered reliable but are not guaranteed. BancAmerica Robertson Stephens, its managing directors, its affiliates, and/or its employees may have an interest in teh securities of teh issue(s) described and may make purchases or sales while this report is in circulation. BA Robertson Stephens International Limited is regulated by the Securities and Futures Authority in teh United Kingdom. 2. AG3340 has excellent oral absorption, Phase II/Pivotal trial to begin in Q1:98. In what could be a unique twice-a-day (or even once-a-day) pill, AG3340 has been tested in several preclinical cancer models and five doses (5, 10, 25, 50 and 100 milligrams per day) in patients with various solid tumors. As a selective MMP inhibitor, AG3340 appears more potent as a tumorstatic (i.e., stops tumors from growing) agent than British Biotech s (BBIoy $17 1/2) Marimastat. Exposures equivalent to those effective in preclinical models are easily achieved in humans in very low concentrations/doses. In addition, exposure levels being explored cover the spectrum of cnacers. In addition to the doses mentioned above, the company is adding cohorts of drug at teh 1 and 2 milligram levels, further supporting the drug s potency. Phase II randomized, controlled and blinded studies in combination with other chemotherapy agents wil begin in Q1:98, in non small cell lung cancer and hormone refractory prostate cancer, that could turn into pivotal trials. Other disease potential include glioma, breast and colon cancer. 3. Second Compound, AG2034, Still Early But Interesting. AG2034 is a GART inhibitor that is selectively cytotoxic to p53 negative cells, which make up 50% of all tumors and 70% of colon cancers. Phase I dose escalation trials are under way, now seven times the initial dose, with a one hour infusion fiven every three weeks. 4. Viracept Topping the Domestic HIV-Protease Inhibitor Market. Some details included in yesterdays presentation are: a) After a possible slowdown, PI market is growing rapidly, form 181,000 total prescriptions in July, to 182,100 in August, to 184,000 in September to 196,800 in October. November data are due next week, but anecdotal signs are for further growth from October. b) Viracept now has the dominant dollar share of the HIV PI market, and should continue to widen its lead over number two, Merck's (MRK $104-3/4) Crixivan. c) In surveys done by AGPH (at ICAAC, IDSA), physicians plan to increase use of Viracept by 90% over the next year, compared with about 35% for Crixivan, 30% for Invirase and 25% or so for Norvir. d) Approximately 80% of new Viracept patients are naive to PIs, versus 37% in May. This means that newer patients should have better durability of response (i.e., less resistance) than initial Viracept users. e) BID data look great and should reach statistical equivalence to TID sometime in 1998, when an ANDA is expected to be filed. f) First-quarter European approval is expected to drive additional sales growth. g) The company is taking several tactival initiatives to widen sales growth/shares. h) Agouron is in the early stages of developing new anti-HIV drugs ( e.g., integrase blockers) INVESTMENT IMPACT: Positive. Continue to believe last week's stock decline was excessive; looks very cheap, in our view. Cancer program is more than initially expected after Roche walked from program. Agouron continues to make solid inroads and market share gains in the HIV-protease inhibitor market. ACTION NOW: Agouron is rated BUY. COMING EVENTS: Expected upcoming events for Agouron include (1) filing of IND for AG3340; (2) Phase I data form AG2034 (GART inhibitor) expected in 2H:97; (3) continuation of Phase IV program for Viracept, including results form ongoing double protease inhibitor trials expected late 1997 and early 1998; (4) additional corporate collaborations; (5) other geographic approvals for Viracept.