By Randall Osborne

Entering profitability powered by Viracept, its anti-HIV drug, Agouron Pharmaceuticals Inc. said it will create an oncology division apart from its burgeoning antivirals business.

For fiscal 1998, ending June 30, Agouron reported a net income of $13.15 million, or $0.40 per share, on revenues of $466.5 million, thanks to sales of the company's anti-HIV drug, Viracept (nelfinavir mesylate), which is the second best-selling of four protease inhibitors on the market.

"I don't think, by any means, [the new oncology division] will lessen attention to either development area," said Joy Schmitt, spokeswoman for La Jolla, Calif.-based Agouron. "It will focus them. It's maximizing the success, really, of a drug like Viracept and keeping it almost separate."

The new division will be tracked by separate stock and must be approved by shareholders.

Agouron's lead cancer product is AG 3340, 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. Other MMP programs are in earlier stages. (See BioWorld Today, May 6, 1998, p. 1.)

The company intends to stay strong in antivirals — and keep that success clear to the market, Schmitt said. "We end up doing so [many] acquisitions separately, and getting a lot of research and development money, that it doesn't reflect the success of Viracept," she added.

In recent weeks, Agouron has agreed to pay more than $140 million in three licensing deals for AIDS drugs, two of them from Japanese firms. One, valued at up to $40 million, is with Shionogi & Co. Ltd., of Osaka, Japan, to develop a second-generation non-nucleoside reverse transcriptase inhibitor. The other agreement, worth up to $26 million, is with Japan Energy Corp., of Tokyo, for a protease inhibitor. (See BioWorld Today, June 30, 1998, p. 1, and July 1, 1998, p. 2.)

The largest of the collaborations is with The Immune Response Corp., of Carlsbad, Calif. Worth as much as $77 million over two years, the deal calls for the two companies to jointly develop and commercialize Remune, a therapeutic vaccine for HIV. (See BioWorld Today, June 12, 1998, p. 1.)

Viracept gets the credit for pushing Agouron into the elite league of money-making biotechnology firms. "From a market share perspective, it's number two," Schmitt said. "From a sales perspective, it's number one."

Agouron will spend $170 million to $175 million on research and development next year — a 48 percent increase over 1998 levels.

"A lot of it will go into Remune, and about 25 percent of the R&D funds for 1999 will go into the [oncology] divisional area," Schmitt said.

Agouron's stock (NASDAQ:AGPH) closed Friday at $27, up $0.375. *