Agouron Pharmaceuticals Inc. and its partner in proteaseinhibition are moving into pivotal trials for the HIV drugAG1343. In conjunction with Thursday's news Agouronreceived a $24 million non-equity milestone payment.The move into Phase II/III trials continues the fast-trackrise of the La Jolla, Calif., company in recent months.The stock, too, has climbed quickly, reaching $37.25 onThursday, up $1 per share. The stock was at $26.75 whenAgouron registered to sell 2 million shares on Aug. 6, andwas as low as $11 last fall.Agouron's AG1343 partner, Japan Tobacco Inc., ofTokyo, made the $24 million payment as a result of thedecision to go into pivotal studies. That was made afterlooking at data from a series of small Phase II trials.Japan Tobacco has paid $30 million to date, and will splitfurther development costs.Agouron officials could not comment because thecompany is under registration. If the 2- million-shareoffering goes off at the stock's current price, it wouldraise $74.5 million. Together with $24 million fromJapan Tobacco and $20 million reported at the end ofJune, Agouron will have well over $100 million. Thecompany currently has only 7.3 million sharesoutstanding.Kevin Tang, a biotechnology analyst in the New Yorkoffices of Alex. Brown & Sons Inc., attributed the rise inAgouron's stock price since registration of the shares toinvestors' belief that the company's Phase II results weregood enough to trigger the milestone, or Agouronwouldn't have proposed the offering. Also, he said,investors concerned about not being able to buy into thedeal purchased stock in advance of the closing.Tang had recommended the stock at $24 with a $35 pricetarget. He upped the target Thursday to the mid-$40sbased on the company's stronger cash position andreduced risk.While company officials are not disclosing Phase II/IIItrial plans, Tang said the study should start this fall in anumber of settings. "They should be able to file by early1997," he said.Tang suspects the pivotal trials of AG1343 likely willinclude studies of the agent as a monotherapy and incombination with approved and investigational drugs.Agouron's protease inhibitor is expected to compete withdrugs being developed by Hoffmann-La Roche Inc., ofNutley, N.J.; Merck & Co. Inc., of Whitehouse Station,N.J.; Abbot Laboratories, of Abbott Park, Ill.; VertexPharmaceuticals Inc., of Cambridge, Mass.; and TheUpjohn Co., of Kalamazoo, Mich. Tang said as many asthree drugs in the class eventually may be used as part ofcombination-therapy regimens designed to suppress thevirus for the longest time. Agouron's AG1343 appears atthis point as if it will be one of the three, he said.The company has completed a 20-patient trial in the U.K.and a 30-patient trial in the U.S. In the U.K. study,patients getting 257 mg of drug three times a day hadaverage maximum virus reductions of 80 percent; thosegetting 515 mg had average maximum HIV reductions of91 percent. CD4+ T cells increased by more than 140cells on average.Complete data on the U.S. trial are expected to bepresented at a conference in September. In that study,doses up to 1,500 mg, in tablet form, produced reductionsgreater than those seen in the U.K. study, according toAgouron's prospectus. Also, patients in the U.S. studywith HIV-related clinical conditions, such as diseases ofthe lymph nodes or fungal infections, experiencedimprovement in those conditions, the prospectus said.Tang said important questions in the U.S. study arewhether higher doses lead to better antiviral activity, anddoes the changed formulation _ from capsule to tablet_ change what already is a very good side-effect profile."None of us knows the specifics," he said, "but I believeboth of those have a good chance of being achieved." n
-- Jim Shrine
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