Agouron Pharmaceuticals Inc. grossed $75 million from the sale of2.5 million shares but sold the stock for 25 percent less than it wastrading at when the company registered for the offering.
"The decision to go ahead with this transaction was neither pleasantnor an easy one to make," said Donna Nichols, Agouron's seniordirector, corporate communications. "We were disappointed andsomewhat offended by the price structure of the deal, but nonethelessit accomplished our goals."
The goal for the La Jolla, Calif., company is to have manufacturingand marketing infrastructure in place when its HIV protease inhibitor,Viracept, is approved. That's expected next year.
The stock (NASDAQ:AGPH) was trading at about $39.50 on June21, 1996, when the company registered for the offering. The newshares were sold at $30. Agouron was trading between $30 and $31Friday, down more than $1 per share.
"Despite pressure from the volatile NASDAQ market and the usualpressure from a stock offering we just had to do it," Nichols said.Pulling the offering or reducing the shares would have put thecompany at unacceptable risk of slowing the launch of Viracept, shesaid.
At the end of June 1996 Agouron had about $90 million in cash."That simply is not enough money to make the contractualcommitment for metric ton quantities of Viracept," Nichols said."That means pulling the trigger on commitments now rather thanthen."
Demand for Agouron's stock has been strong the past two yearsbecause of the potential for the protease inhibitor, which may havesuperior qualities to those already on the market, and the smallnumber of shares outstanding (now 13.2 million). A cancer programat Agouron also is strong, with the company completing a $75million deal with Hoffmann-La Roche Inc., of Nutley, N.J., justbefore registering for this offering.
Nichols said enthusiasm hasn't waned. "We had exceptional interestthroughout the road show," which she described as three weeks ofcontinual back-to-back, one-on-one meetings.
"We had to put up with the market conditions," Nichols said. "Wegot the deal done, which is something a lot of other companieshaven't been able to say."
Agouron has all rights to Viracept in North America. Nichols said thecompany expects to be ready for filing of a new drug application inthe first quarter of 1997. A filing on Thymitaq, the lead cancercompound, could be made late in 1997 or 1998. (For related storiessee BioWorld Today, June 21 and June 24, 1996, p. 1.) n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.