By Randall Osborne
To bring its oncology program out of the long profit shadow cast by the anti-HIV drug Viracept and end the earnings drain, Agouron Pharmaceuticals Inc. has filed with the Securities and Exchange Commission (SEC) for a stock series to track the performance of the company's new cancer division.
Agouron's oncology potential "is truly not recognized right now," said Donna Nichols, spokeswoman for the La Jolla, Calif.-based company.
"This is not a separate company, so it's primarily in profit and loss [statements] that you will see the divisions," Nichols said. "We've been looking at financing vehicles for quite some time."
In fiscal 1998, which ended June 30, Agouron reported a net income of $13.15 million, or $0.40 per share, on revenues of $466.5 million, thanks to Viracept (nelfinavir mesylate), which is the second bestselling of four protease inhibitors. (See BioWorld Today, July 27, 1998, p. 1.)
The company's lead cancer product is AG3340, a matrix metalloprotease (MMP) inhibitor in Phase III trials for lung and prostate cancer. MMPs are believed to play a key role in the spread of tumor cells to secondary sites as well as in the blood vessel growth that helps tumor cells thrive.
Another MMP inhibitor, AG3433, is scheduled to begin clinical trials next year.
Also in the preclinical stages are inhibitors of the enzyme glycinamide ribonucleotide formyl transferase (GARFT) as a treatment for cancer. By blocking the action of GARFT, the compounds inhibit purine synthesis and subsequent construction of tumor DNA molecules.
One GARFT inhibitor, AG2034, has completed dose-escalation studies. Another, AG2037, is expected to begin trials next year.
"There are about eight programs in the oncology division," Nichols said.
Subject to SEC and shareholder approval, the new division could be established by the end of the year, she added.
"Right now, our shareholder meeting is scheduled for the end of October, but that date depends on how quickly we get comments back from the SEC," Nichols said. "We don't foresee any problems."
The company intends to ask shareholders to increase the number of authorized shares to 150 million, designating 75 million as Agouron stock and 25 million as oncology division stock, according to the SEC registration. Shareholders also will be asked to authorize the issuance of two or more additional series from the remaining, undesignated stock.
Agouron's goal is for the cancer division to stand on its own, although at first it will be helped by the main company's resources.
"The idea would be that the first few products would be co-marketed with the pharmaceutical division," Nichols said.
Agouron's stock (NASDAQ:AGPH) closed Thursday at $23.875, up $0.25. *