Thursday, March 11, 1999

"Never answer a question, other than an offer of marriage, by yes or no." -- Susan Chitty

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New Cancer Drug for Amgen

Biotechnology firm Amgen (Nasdaq: AMGN) late yesterday announced it has signed an agreement with Cambridge, Massachusetts-based Praecis Pharmaceuticals Inc. for the rights to market the privately held company's prostate cancer drug abarelix in the U.S., Canada, Australia, Asia and several secondary markets. The deal will cost Amgen roughly $100 million in expenses this year, but because the company now expects product sales to increase "in the mid to high teens," it is "comfortable" with analysts' 1999 earnings projections of $1.80 to $1.85 a share.

Long criticized for having few drug candidates in late stages of development, Amgen said it could file for FDA approval of abarelix as early as late 1999. The drug is now in Phase III trials -- the last of three phases required to obtain marketing approval from the Food and Drug Administration (FDA) -- in patients with hormonally responsive prostate cancer. Another version of the drug is in a Phase I/II clinical trial in patients with endometriosis, a painful condition resulting from abnormal growth of the lining of the uterus. Amgen said its acquisition of marketing rights for abarelix allows the company to leverage its success with its Neupogen cancer drug and to establish "a strong presence in urology and gynecology."

With around 179,300 new cases and 37,000 deaths projected for 1999, prostate cancer is one of the most common malignant tumors in men. A large proportion of cases are diagnosed at an advanced stage, and in about 80% of men, the growth of the disease is stimulated by testosterone. Abarelix inhibits the production of testosterone in men and estrogen in women. In Phase II studies, abarelix was shown to reduce testosterone to "very low levels" in a majority of men within the first week. None of the patients treated with currently available drugs experienced a reduction of testosterone.

News to Go

Microsoft (Nasdaq: MSFT) and 3Com (Nasdaq: COMS) announced plans to develop co-branded home networking products, including traditional Ethernet and home phone line networking kits initially, followed by radio frequency (RF) and power-line carrier (PLC) kits. The companies expect to release their first jointly developed products to original equipment manufacturers (OEMs) this summer, with retail kits scheduled to debut in the fall.

Charles Schwab (NYSE: SCH), the nation's largest online brokerage, is quietly settling complaints from around 300 investors with losses that could total $1.2 million on orders they tried unsuccessfully to cancel before trading in theglobe.com (Nasdaq: TGLO) began last November, The Wall Street Journal reported. Schwab wasn't able to process about 300 of the 1,500 cancellation orders it received before opening-day trading in the stock began.

Wireless phone distributor Brightpoint Inc. (Nasdaq: CELL) warned that it won't meet analysts' expectations for first-quarter revenue and that it will have a breakeven quarter compared with analysts' mean estimate of earnings of $0.22 a share.

Tenneco Inc. (NYSE: TEN), which makes Hefty trash bags and Walker mufflers, said it will take a first-quarter charge of $1.36 to $1.41 a share on the previously announced $2.2 billion sale of a majority stake in its containerboard unit to Madison Dearborn Partners. It expects to complete the deal in the first half of the year.

Steve Jobs's computer animation studio Pixar Inc. (Nasdaq: PIXR) announced that CFO and Executive Vice President Lawrence Levy will resign at the end of March and join the company's board of directors. Levy said he was stepping down "to take personal time" after four years at Pixar.

Building and equipment management software maker Peregrine Systems (Nasdaq: PRGN) said it plans to take a $4.1 million charge and restate financial results extending to the quarter ended September 30, 1997. It added that the restatement will have no effect on the company's operating earnings nor on its general financial condition.

No baloney. Aurora Foods (NYSE: AOR), whose food products include Duncan Hines cake mixes and Van de Kamp's frozen fish, said it will acquire the Chef's Choice brand of skillet meats for $50 million. The deal is expected to add to Aurora's earnings this fiscal year, and Aurora expects to double Chef's Choice sales to about $100 million over the next two years.

Australian resources company Broken Hill Proprietary Co. (NYSE: BHP) warned that analysts should drastically reduce their earnings forecasts for the year ending in May to around A$500 million (US$319 million), the Sydney Morning Herald reported. That's as much as 25% short of analysts' current estimates.

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor