Executive Summary

Despite growing sales of {Viracept}, Agouron's stock is in the doldrums. It needs a follow-on product, but doesn't have any great near-term prospects of its own and can't spend the research funds necessary to develop earlier ones without hurting earnings. Agouron is therefore turning to licensing later-stage drugs and simultaneously remaking its share structure with tracking stocks. Its idea is to sequester R&D spending into a separately traded cancer company and thereby spare the income statement of Agouron-Viracept.