Agouron HIV Drug Sets Biotech Sales Record
Agouron Pharmaceuticals Inc. said Tuesday that sales of its HIV drug Viracept totaled $308 million during the drug’s first full year on the market, making it the most successful biotechnology drug launch ever.
The strong sales at the La Jolla-based biotech firm eclipsed the previous maiden-year record of $240 million that analysts estimate was the revenue generated by Neupogen, a drug introduced in 1991 by Thousand Oaks-based Amgen Inc. to stimulate the production of white blood cells in cancer patients.
Viracept is the most recent entry in the new field of drugs called protease inhibitors, which are showing encouraging results in the fight against the virus that causes AIDS.
The total annual market for such drugs, the only class so far proven to prolong the lives of AIDS patients, is estimated by PaineWebber at $1 billion and climbing.
Viracept, which was introduced in March 1997, has found growing acceptance among HIV-positive patients because of its ease of dosage and relatively mild side effects, although it costs more than competing drugs produced by Merck & Co., Abbott Laboratories and Hoffmann-LaRoche Inc.
The Agouron drug, taken as part of a “cocktail” of drugs, often during chemotherapy, is used regularly by about 85,000 HIV-positive patients, the company said, or about one-tenth of Americans believed to be infected with the virus.
In terms of dosages sold, Viracept has 30% of the $1-billion protease inhibitor drug market, behind Merck’s Crixivan, which has 35%, said Elise Wang, biotechnology analyst at PaineWebber in New York. “Viracept came to the market a year later than the others but nevertheless has gotten significant market share,” she said.
Since 1982, the Food and Drug Administration has approved 54 biotechnology drugs, drugs that involve changing the basic genetic structure of cells. They range from insulin substitutes and human growth hormones to anti-clotting drugs and hair stimulants.
Agouron, founded in 1984 by Chief Executive Peter Johnson and several UC-San Diego scientists, received FDA approval for Viracept last year after more than a decade of research financed by $500 million from investors. The company is the largest biotech firm in San Diego, with 890 employees, up from 530 in February 1997.
Viracept has found favor among HIV patients because it balances efficacy with tolerable side effects, said Dr. Howard Grossman, an internist in private practice in New York.
“Viracept’s major side effect is diarrhea, which most patients can deal with, whereas some of the other drugs cause kidney stones, numbness around the mouth and nausea,” Grossman said. Viracept can also be taken twice a day and during meals, whereas other drugs require three doses a day and must be taken on an empty stomach, he said.
After the close of trading Tuesday, Agouron reported third-quarter net income of $13.5 million on revenue of $134.5 million, contrasted with a loss of $5 million on revenue of $38.6 million in the year-ago quarter. Viracept sales over the quarter were $111.9 million, a 10% increase from the previous three months.
Agouron shares rose 50 cents to close at $38.13 on Nasdaq.
Despite Viracept’s success, Agouron’s stock has fallen from a 52-week high of $56.50. It was hit hard in December when Hoffmann-LaRoche, which markets Viracept in Europe, dropped out of a partnership with the firm to develop anti-cancer drugs. That same month, Agouron halted development of its Thymitaq anti-cancer drug.
Speculation that Agouron is having difficulty bringing future drugs to market could be hurting the stock on Wall Street, Wang said.