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

To: scaram(o)uche who wrote (4937)	7/22/1998 1:49:00 AM
From: Peter Singleton	Read Replies (1) \| Respond to of 6136

I may repeat myself from Yahoo, and I'm not going from my notes, but here's my take from the con call: 1 - Viracept is an unqualified home run. Period. Kent Snyder gave what he called conservative guidance for FY 99. $430-440M in US sales, $100M in revenue from Roche, based on $270-300M in Roche sales. A $700-740M product in its second full year of sales. And these are conservative numbers. Viracept US sales have been growing 12% per quarter (with some noise in the growth rate per quarter) throughout FY 98, with no signs of slowing down. Snyder's numbers assumed a substantial slowdown in the growth rate. Partly because there are unknowns in the marketplace, which he detailed. Partly because he's a smart salesman, and he's sandbagging his public forecast. I can guarantee you he's managing his team to much more aggressive numbers. Remember, folks, the short case is based on Viracept sales declining next year ... e.g., a combination of resistance, lipid and fat disorders, competition from new PIs, protease sparing NNRTI regimens replacing PI combination therapies as first line ... the litany goes on and on. And of course they are all reasonable questions to ask. Snyder and especially Barry Quart ran through all these issues, not defensively, but as prudent business folks would. AGPH has good answers on these, with an emerging body of data to support their conclusions. On cross resistance, there's more and more data to support a conclusion that people who fail on Viracept have a good chance of responding to other PI therapies ... of course there's a right way to do this (quickly change over at first sign of failure, change more than the PI). This is real strong support for Viracept first. There's also preliminary, very interesting data indicating Viracept may be viable as salvage therapy for failed PI regimens. Once again, great news. Lipid and fat distribution disorders ... based on their review of the data, they think there's a good chance Viracept has an advantage here vs the other PIs, and it doesn't appear to be a major problem based on patients in their clinical trials. For example, on study 511, there were fewer cases of abdominal enlargement on Viracept than on placebo. Sustiva and protease sparing? Don't think NNRTI-based therapies will supplant PI-based combination therapies as first line, however they think PI + NNRTI combo therapies will be. Viracept is the logical first line PI to be used with Sustiva, since only Viracept and Crixivan can be effectively co-administered due to drug interactions with the other PIs (Saquinavir and Amprenavir have a negative PK interaction, and doses have to be increased). There are 10 studies of Viracept and Sustiva used together either underway or in development. Finally, conclusive data on BID as safe and effective. Net net, Viracept is a very big, smashing hit, and will be more so in a year's time. And remember, it's a testimony to AGPH's ability and artisanship in handcrafting a molecule with attractive drug properties. The other guys also had the molecular structure of the target (at least MRK and VRTX did), and a lead compound to start with that showed binding potency. They all started from the same place that AGPH did. Viracept is just a better molecule. 2 - very positive on inlicensed products 3 - Q&A didn't seem to go that well, imo. Tony Butler of Lehman and Edmund Debler of Mehta were skeptical ... I wrote "brusque" in my notes by Tony's questions, and Debler seemed a bit hostile. These are both influential guys - better to have them on your side. The other folks seemed to have a hard time following the oncology division concept ... admittedly it was the first time people had heard about it, and the details (some of which remain to be worked out) will be forthcoming in a few weeks when the prospectus comes out. Probably best for suspend judgement here. With all the confusion about what the income statement(s) look like next year, there were questions fired at especially Steve Cowell looking for clarification and guidance on various folks financial models ... it may have been just me, but it made me a little nervous. There was lots of chance for error and confusion. I hope those people caught Cowell offline to clarify where needed. net net on the call, there's still some confusion about what next year looks like ... and I don't expect the 10M short shares to be covered any time soon. However, I think the short holders are playing a game of chicken with the fundamentals on AGPH, which appear to be very strong ... they might be able to pound a few more bucks out of their positions in the near term (maybe not) ... but long term they're on the wrong side of the fundamentals here, and it could be costly to stay short too long. jmo, of course. Peter