The Wall Street Journal - Monday, 4 August 1997
Rhonda L. Rundle

The drug, Viracept, generated $43.6 million in sales in its first full quarter on the market, easily surpassing the most optimistic projections by securities analysts. Agouron also unveiled a fiscal fourth-quarter net loss and plans for a two-for-one stock split, payable on or about Aug. 29 to stock of record Aug. 15.

When Viracept was launched in March it was the fourth in a new class of medicines called protease inhibitors that in combination with older antiviral drugs have made the AIDS virus undetectable in the blood of many patients. Analysts predicted a monumental marketing battle with Merck & Co. and other makers of rival protease inhibitors.

Yesterday, Peter Johnson, president and chief executive officer of the La Jolla, Calif., company, said he was "delighted" with the sales figures. Based on current trends, Viracept sales in fiscal 1998 will very likely exceed $250 million, he said in an interview. Until recently, many analysts thought it would take years for Viracept to achieve such sales.

Viracept has already claimed about a quarter of the market for protease inhibitors, according to recent prescription information, he said. Agouron estimates that 35,000 people were using Viracept by the end of June. The patients are "clearly a mix" between those who are taking a protease inhibitor for the first time, and those who are switching from rival drugs, Mr. Johnson said.

The majority of sales are coming from the new patient population, but it also appears that some patients taking Merck's Crixivan are switching to Viracept, said Tony Butler, an analyst in New York for Lehman Brothers Inc. "The ease of use is the primary driver for Viracept," he said.

For the quarter ended June 30, Agouron posted a net loss of $10.8 million, or 76 cents a share, after the writeoff of $57.5 million of technology associated with the company's recent acquisition of Alanex Corp. Excluding unusual items, Agouron posted the first operating profit in its history. Viracept sales to date total $57 million. Total quarterly revenue, including Viracept sales, more than doubled to $60.8 million from $28.5 million.

In the year-earlier quarter, Agouron had a net loss of $1.9 million, or 17 cents a share.

Agouron shares fell $1.9375 to $95.75 in Nasdaq Stock Market trading yesterday before the results were released. The shares had jumped to $100.875 on Wednesday, reflecting preliminary reports of favorable Viracept sales.

Agouron had about 14.7 million shares outstanding at June 30.

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