Warner-Lambert Closes $2.1 Billion Merger With Agouron
Warner-Lambert Co. (Morris Plains, NJ) has completed its $2.1 billion merger with Agouron Pharmaceuticals Inc. (La Jolla, CA). The deal brings Warner-Lambert the nation's best-selling HIV protease inhibitor, Viracept (nelfinavir mesylate). It also enhances its research capabilities, bolsters its pipeline of late-stage compounds, and expands its presence in antivirals and oncology.
For Agouron, the merger offers a global infrastructure to launch new drugs now under development and expand its innovative approach to rational drug design.
Agouron has built its business through protein structure-based drug design. The technique identifies protein targets for specific therapeutic needs and the chemicals most likely to react with them. It then produces large amounts of protein targets by genetic engineering techniques, and uses high-speed combinatorial chemistry techniques to screen them with likely reactants. Agouron maintains that the approach is more efficient than conventional, untargeted screening and sifting.
Agouron's successes lend weight to its belief. Sales of its Viracept protease inhibitor reached $146 million for the third quarter ending March 31, 1999—up 23% from one year earlier. Equally important, Agouron has a pipeline full of promising drugs in late-stage development. Among the most prominent:
Prinomastat (AG3340). This matrix metalloprotease (MMP) inhibitor for cancer is currently undergoing large-scale pivotal clinical trials that could lead to an NDA submission by the end of 2000. Agouron is also studying Prinomastat for age-related macular degeneration, the leading cause of blindness in the elderly.
AG7088. A compound designed to inhibit the common cold, it is active against all 48 strains of rhinovirus 3C that have been tested. Now in Phase II, AG7088 could enter large-scale Phase III clinical trials in later in 1999 with an NDA by the end of 2001.
AG1549. Agouron is currently completing Phase II dose-ranging studies of this non-nucleoside reverse transcriptase inhibitor for HIV/AIDS, and is prepararing for larger pivotal trials. Should they prove successful, NDA submission could come as early as the end of 2000.
Remune. Agouron is codeveloping this HIV/AIDS therapeutic agent, which was discovered by Immune Response Corp. (IRC; Carlsbad, CA). A first-in-class therapy, it uses the body's reaction to an inactive, modified HIV virus to build natural immune response. Remune supplements existing HIV drugs. Agouron and IRC recently announced that they were cancelling two Phase III trials because they found no difference in outcomes between Remune users and nonusers in terms of progression to AIDs or deaths. They did find, in a study of 250 patients, that Remune takers have lower HIV virus levels and higher lymphocyte counts. IRC and Agouron plan to begin new Phase III studies within 18 months, using viral load and lymphocyte levels as endpoints.
Others. Other prominent drugs under development by Agouron include AG1776 HIV protease inhibitor; AG2034 GART enzyme inhibitor for cancer; hepatitis C protease inhibitor; PARP (poly [ADP-ribose] polymerase), cdk4, and VEGF receptor inhibitors for cancer; and HIV integrase for HIV infection.
In addition to state-of-the-art research techniques, Agouron's library of more than 400,000 compounds doubles the total number now available to Warner-Lambert.
The fact that Agouron has both a category-leading drug (with sales approaching $600 million and gross margins of 73%) and a full research pipeline allows Warner-Lambert to have its cake and eat it too. Agouron provides an immediate contribution to income while holding out the promise of even faster growth in the future.
Growth is important at Warner-Lambert. This year, the company will nearly triple worldwide pharmaceutical sales to more than $7 billion, from $2.5 billion in 1996. Pharmaceuticals now dwarf the company's $2.7 billion (1998 sales) consumer health care and $1.9 billion confectionery businesses.
"The closing of this acquisition represents a new era for Warner-Lambert and is further evidence of our commitment to maintain our position among the fastest growing companies in the pharmaceutical industry," says Warner-Lambert chairman/president/CEO Lodewijk J.R. de Vink. "This acquisition is consistent with our long-term strategy to supplement our internally generated growth with creative alliances."
Warner-Lambert's growth pharmaceutical is powered by several high-volume drugs. Its leading product is Lipitor (atorvastatin calcium), the most prescribed cholesterol-lowering agent in the US. Worldwide sales more than doubled to $2.2 billion in 1998. Trial results published last November show that it may delay the need for coronary angioplasty and other cardiac procedures in some patients. Other major drugs include ReZulin (troglitazone) for oral treatment of type 2 diabetes ($748 million); Neurontin (gabapentin) anticonvulsant ($514 million); and Accupril (quinapril) antihypertensive ($454 million).
For more information: Warner-Lambert Co., 201 Tabor Rd., Morris Plains, NJ 08750-2693. Tel: 973-540-2000. Fax: 973-540-3761.
By Alan S. Brown