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

To: JOHN W. who wrote (3615)	1/14/1998 9:43:00 PM
From: JOHN W.	Read Replies (1) \| Respond to of 6136

Subject: Earnings Date: Wed, Jan 14, 1998 11:23 EST From: RRanney Message-id: <19980114162400.LAA29507@ladder01.news.aol.com> To me, the bottom line number posted by AGPH of .15 per share in earnings is not the siginficant thing to look at in evaluating the company's performance. To me, the biggest thing is that AGPH is now a biotech company that is making enough money to pay for ALL it's research and development costs out of earnings, and still have something left over. This is huge. Very few other biotechs are in this enviable position. Most biotechs are cash burners - they are simply spending the cash they raised in thier public stock offerings in R&D, with little or no product revenue. To help stem the tide, they enter into deals with big pharms - trading off their future profits on drugs they might some day get approval for, in exchange for one time payments, which they use to fund their research, but which are never sufficient to prevent the ongoing cash burning. AGPH no longer has to play this game that other biotechs play. They have a steady, and ever increasing revenue stream from Viracept sales. This is not likely to dry up any time soon, from all I can figure out. So, the .15/share in earnings that was reported is obviously somewhat up to the discretion of AGPH. They can spend more, or less, on R & D, and so "manage" their reported earnings as they see fit. For the long term shareholder, I think you want AGPH to put a very large amount of it's pre-tax profits back into R&D. The other option is to spend less on R&D, and report larger actual earnings, and then pay taxes on these earnings. At this stage in the company's life, I would much rather see them put their large and ever increasing revenues into R&D, rather than report higher earnings and pay higher taxes to the Government. RR