From: ACTUP San Francisco

Date: 14 Jul 1996

The following financial report appeared on the front page of The Financial Post the day after ACT UP San Francisco's "Bloodbath in Vancouver." It shows a dramatic drop in the stock prices of BioChem, manufacturer of 3TC, due to "investor confusion over powerful new AIDS treatments revealed at Vancouver conference."

ACT UP SF's targeting of Margaret Fischl, Paul Volberding and Glaxo Wellcome at a major conference symposium on the use of toxic chemotherapies like AZT, 3TC and the protease drugs increased the uncertainty among conference attendees about the effectiveness of these immune suppressive agents. AIDS activists are demanding that AZT be pulled from the market and vowed to escalate their direct action tactics to achieve this goal.

The following article dramatically outlines the inner-workings and motives of the AIDS establishment. The goal here is not to explore all possibilities of ending this global epidemic but, rather, to create and market "blockbuster" drugs that increase the profit margins of pharmco investors. Combinations of expensive, immune suppressive antivirals are being pushed on healthy HIV-positive asymptomatics, not because the drugs extend life (they don't), but because the sooner and longer people dose themselves, the more money firms like BioChem make. It's nothing but a profit-making scam masquerading as science that, ultimately, KILLS people with AIDS.

Be warned pharmco CEOs...people with AIDS have figured out your scam and are ready for revolution. Watch your backs and pockets, we are through taking your shit!

AIDS Coalition To Unleash Power * ACT UP San Francisco * 1388 Haight Street, #218 * San Francisco, CA 94117 * (415) 522-2907 * FAX: (415) 834-0243 * Email:

BioChem hit over AIDS drug outlook

The Financial Post, July 11, 1996
Share price drops 14% amid investor confusion over powerful new AIDS treatments revealed at Vancouver conference.
By Jennifer Lanthier (Biotechnology Reporter)

Heightened competition in the AIDS drug market is forcing investors to take a sober second look at the potential for so-called blockbuster drugs.

Shares in BioChem Pharma Inc. plunged 14% yesterday amid investor confusion over information on powerful new treatments coming from the international AIDS conference in Vancouver.

Other companies such as Agouron Pharmaceuticals Inc. and Gilead Sciences Inc., also saw their share prices fall. But investors, seizing on a few lines in a U.S. analyst's report on the conference, turned BioChem into the most dramatic illustration of the effects of information overload and ill-informed players trying to capitalize on a hot market.

BioChem's fall heightened the widening gap between investors' aggressive earning expectations and the reality of a marketplace that no longer offers one or two treatments, but a whole raft of potent and expensive drugs.

Investors in Montreal-based BioChem (BCH/TSE), which developed the AIDS drug 3TC and licensed it to Glaxo Wellcome PLC, saw its share price tumble $5.95 to close at $40.05.

More than two million shares changed hands in New York, where the stock (BCHXF/NASDAQ) closed down US$4 ¾ at US$ 29 ¼.

In March, the stock hit a 52-week high of $69 in Toronto and US$50 ½ on Nasdaq.

Most of the publicity at the week-long conference in Vancouver has centered on protease inhibitors, a potent new class of drugs.

But it appeared yesterday that investors are reacting to reports that Glaxo had shown data suggesting its drug, known as 1592, is outperforming BioChem's 3TC.

Both therapies belong to a class of treatments called reverse transcriptase inhibitors. They attack the virus at an earlier stage than the new protease inhibitors, and most industry experts expect AIDS treatments will continue to use both classes of drugs in what is called combination therapy.

Glaxo's 1592 is still in the early stages of clinical testing. But it isn't the first time rumors about the drug have hurt BioChem. A column about 1592 in Barron's last month sent the company's stock reeling.

Investor reaction forced California-based analyst Ed Hurwitz of underwriter Robertson Stephens & Co. to release two reports yesterday on the Glaxo data. His morning report said combination data on 1592 and AZT were "modestly better than the AZT and 3TC combination."

He tempered his comments by saying 1592 would likely be used with 3TC, as well as the new protease inhibitors-but the damage had been done. By late afternoon, Hurwitz issued a second report, saying ne considers BioChem a "buy" with 1592 having no impact on 3TC sales 1998.

"We believe the Street has grossly misinterpreted the daata and its implications for BioChem," Hurwitz wrote.

BioChem founder and chief executive Francisco Bellini said it is too early to compare 3TC and 1592, which is two to three years away from commercialization. He attributed the drop in BioChem's share price to profit-taking.

Bellini said the latest data on drug sales shows 3TC is now the top-selling prescription drug in the United States, outselling AZT by 10%. The conference should bring only good news for BioChem investors, he added.

"Tomorrow there will be several presentations about combination therapy," Bellini said. "And guess who's always there-3TC."

Analyst Cameron Groome of First Marathon Securities Ltd. said BioChem's drop shows so-called "momentum players" who jumped on the stock earlier this year, "thinking it was going to the moon," are now fleeing.

The market for 3TC is becoming more clearly defined and those investors are realizing "there are no magic bullets" in AIDS and are getting out, he said.

Another analyst said the heightened competition will not hurt the shares prices of big, diverse pharmaceuticals such as Merck & Co. But, he said, it may pose problems for smaller companies that have staked millions of dollars in developing AIDS drugs.

And investors may start to question bullish U.S. analysts who have forecast US$1-billion sales for AIDS drugs, despite the fact that a big chunk of the patient population lives in developing nations, unable to afford the $10,000 price tag for a one-year course of treatments.

The silver lining lies in data showing AIDS treatments should be started as soon as possible, instead of waiting for symptoms to appear.

As well, combination therapy offers the possibility AIDS may become a long-term, chronic disease. That means patients will start the drugs sooner, and stay on them longer. *