Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Captain Jack who wrote (5278)	9/9/1998 4:15:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 6136

Top Stories: Rumors Push Agouron Higher By Jesse Eisinger Senior Writer 9/9/98 2:33 PM ET Shares of Agouron (AGPH:Nasdaq) were rising sharply this afternoon on takeover rumors. The name investors are hearing is DuPont (DD:NYSE), which is trying to build a presence in biotechnology. An Agouron spokeswoman said the company didn't comment on rumors. A DuPont spokeswoman said the same thing and added that DuPont has said it wouldn't make a "large, dilutive acquisition" in expanding its life-sciences business. Investors in recent weeks have also latched onto Roche, the Swiss drug company, as a possible acquirer. Biotech analysts have dismissed that possibility because late last year Roche walked away from a cancer drug partnership with Agouron. Agouron shares were up 2 1/16 at midafternoon to 28 on heavy volume. Agouron stock has been weak since last year around this time, down almost 50% from its high of 55 1/2. This year it's down about 5%, which looks pretty good compared with the 23% drop in the Amex Biotech Index. But takeover rumors are always tricky. The last refuge of worried bulls is to float rumors about a takeover. There have been relatively few takeovers in the history of biotech, as bigger companies have preferred to cherry-pick good products. In this case, however, some analysts say it's not outlandish to think that AGPH would be taken out. Charles Engelberg of Americal Securities said he lifted his sell rating on Agouron in early August after he decided a takeover wasn't implausible. Agouron sells Viracept, the leading protease inhibitor for the treatment of AIDS. The drug brought in worldwide sales of $409 million for fiscal 1998 ended in June, including $358 million in the U.S. The company forecasts U.S. sales of $430 million to $440 million in fiscal 1999. But some investors are concerned that the drug's sales are not growing, and many short-sellers think sales of the product will in fact shrink as competing AIDS treatments and side effects eat into use of protease inhibitors. An Agouron deal might make a good fit for DuPont. The Wilmington, Del., chemicals giant filed for approval in June for approval of Sustiva, another AIDS drug in the nonnucleoside reverse transciptor family, raising the possibility it might want to build an AIDS franchise. DuPont gained rights to Sustiva this summer when it closed its purchase of Merck's (MRK:NYSE) stake in their pharmaceutical-development joint venture. Agouron, which has licensed several other AIDS drugs, has ongoing cancer research, but investors have not been overly impressed with the quality of the company's science. Agouron's Viracept and other earlier stage drugs will be featured at a large antiviral conference, the Interscience Conference on Anti-Microbial Agents and Chemotherapy, to be held in San Diego at the end of the month, which could be goosing the stock as well. Agouron also has a heavy short position and it's possible that some short-sellers are covering Wednesday. Agouron's options were acting like traders were expecting a sharp move upwards. Options traders typically focus on at- and out-of-the-money calls to play takeovers, and those were the busiest today. The September 25 calls, for instance, traded 100 contracts and rose 2 ($200) to 3 1/2 ($350) per contract in early action today. Most of the options action took place in the October series, possibly reflecting the belief that a deal, while expected in some quarters, isn't imminent. The October 25 calls traded 138 contracts and the October 30 calls' volume reached 168, outstripping current open interest. The price jumps on the contracts were also dramatic, as the October 130 rose 1 ($100) to 1 11/16 ($168.75), showing mounting interest in the biotech's shares at 30.

To: Captain Jack who wrote (5278)	9/9/1998 6:52:00 PM
From: Intel Trader	Respond to of 6136

re upside, for you longs, I hope so John. The recent events of our slightly wounded bull market don't have me hoping for much more than that AGPH may pull back to its recent low area where I may become interested again. The run over the last couple of days to 29 was rather phenomenal. Careful on the s/l on overnight holds. They work fine during the day, if a stock isn't halted, but I'm sure you know that ; ) I may be wrong here, but as I see it, we will have continuing weakness in the markets until the presidential leadership issue is resolved. Such weakness can pull Agouron down below the recent lows where it could remain. However it eventually concludes, it needs to be relatively quick (ie clear Clinton of all wrong doing [highly unlikely] or resignation), otherwise things could turn very ugly over the next few months (impeachment). Best regards, it