FOOL ON THE HILL: Quigley's Cold-Eeze Questioned
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The saga of Quigley Corp.'s (Nasdaq: QGLY) Cold-Eeze zinc gluconate glycine (ZGG) lozenges took another turn yesterday as a new study published in today's Journal of the American Medical Association (JAMA) found that a lower-dose version of the lozenge didn't provide any benefits to children. The news wasn't a total surprise, as CEO Guy Quigley had made comments in a May 1 conference call and at the May 8 shareholders' meeting indicating that there were some problems with the study. Nonetheless, the stock dropped $1 3/8 to $7 1/2 on the bad news yesterday. The stock was unchanged today as the company attempted some damage control, announcing an additional 500,000 share stock buyback.
The JAMA article, though, poses new problems for Quigley, which has seen Cold-Eeze continue to dominate the zinc lozenge market it created, despite rather massive ad spending by Hall's for its Zinc Defense zinc acetate lozenge. After all, the power of the Cold-Eeze brand has depended on the fact that a clinical trial conducted by the Cleveland Clinic's Dr. Michael Macknin and published in the respected Annals of Internal Medicine (July 15, 1996) showed that adults taking the standard Cold-Eeze formulation (with 13.3 mg of ionic zinc) had experienced a 42% reduction in the duration of cold symptoms.
Those results were in line with an earlier study conducted at Dartmouth College by ZGG patent-holder Dr. John Godfrey. That study used ZGG lozenges with a high level of zinc (23.7 mg). These trials allowed Quigley to make the unique claim that its patent-protected zinc formulation had been "clinically proven" to reduce the duration and severity of the common cold.
While an accompanying editorial in JAMA notes that the new study "by no means closes the door on zinc gluconate lozenges," this study will inevitably reinforce doubts about whether Cold-Eeze really works. The irony here is that the new trial was also led by the Cleveland Clinic's Macknin and funded by a grant from Quigley Corp. Macknin had been attacked for his original study because he had acquired stock in Quigley after analyzing the trial results (he still holds 20,000 shares). A later Annals editorial indicated that Macknin had disclosed this financial interest when he submitted the manuscript but that the editors determined it was not necessary to disclose this information in the published text.
Nonetheless, the episode led to much public discussion about potential bias in scientific research and considerable skepticism about the Cleveland Clinic's results. For his part, Godfrey offered his own re-analysis of these trial data. He argued that if data from 16 of the 99 patients who violated the study protocol were excluded, the results would have shown an even stronger 48% shortening of the duration of the common cold (see Alternative Therapies, November 1996).
The children's study involved 249 students grades 1-12 taking a 10 mg ZGG lozenge or placebo either 5 or 6 times a day. Three lozenges a day were administered by study personnel at the school, with the students expected to take additional doses themselves in the evening and on weekends. Though nearly half of the students in each group reported taking more doses (median of 6) than could be verified by the actual lozenge packages, the researchers deemed overall compliance (88.8% median) to be good. Moreover, students in the ZGG group who adhered better to the protocol did not show a significant reduction in the duration of their colds. Children on zinc did miss fewer days of school (59 days vs. 32), but that difference was not statistically significant.
For the elementary grade students, colds lasted a median of 9 days for the placebo group and 8 days for those on ZGG. For the older students, the median time to the resolution of all cold symptoms was 8.5 days for the placebo group and 9.5 days for those taking ZGG. These results revealed no significant benefits of this lower dose ZGG formulation. Meanwhile, as in previous studies, those on zinc experienced higher rates of adverse effects, such as bad taste reaction; nausea; discomfort of the mouth, tongue or throat; and diarrhea. They were also more likely to guess correctly that they were taking the zinc lozenge.
Although the researchers speculate that the lower dose level or compliance issues may have led to the negative results, they ultimately dismiss these concerns. A more likely explanation is that Cold-Eeze may only be effective against rhinoviruses. Some 200 viruses can cause the common cold, but rhinoviruses are the most frequent cause. Yet they are more likely to strike in the beginning or end of the cold season -- precisely when the earlier two trials showing benefits of the ZGG formula were conducted. The children's trial, however, took place throughout the cold season (from October 7, 1996 through March 13, 1997). Macknin's team notes that "rhinovirus almost certainly would not have been the predominant virus isolated throughout this entire study." The matter of how zinc might work against colds has been studied most closely by Godfrey. He has argued that zinc ions fit into the surface of rhinoviruses, blocking them from entering cells. The children's study, then, may actually support Godfrey's hypothesis of how Cold-Eeze works.
For its part, Quigley has come out swinging. CEO Guy Quigley called the study "bogus" and said that JAMA had been "equally irresponsible" in publishing the findings despite being supplied by Quigley Corp. with information detailing "the bad science" practiced by the Cleveland Clinic. The company charged that the study included children who had never had a cold; subjects who had a cold for longer than a week before entering the study; subjects who had verified secondary infections, including strep throat, or who had the flu; and 29 subjects with asthma. Also, many of the children also took other cold medicines. Quigley argues that 83 of the 249 students should have been excluded from the data.
The published results don't appear to offer clear evidence regarding some of these claims. Still, it appears that only two children (one on placebo, one on ZGG) didn't have colds on entry. (They didn't want to miss out on the fun, apparently.) Meanwhile, at least 17 of the asthma subjects were in the placebo group, which, if anything, should have worked in favor of a positive finding for ZGG.
Quigley said it plans to repeat the study at a different institution and both Macknin's group and JAMA have called for additional clinical trials. In the meantime, Quigley shares held up fairly well, though they are still off considerably from the $13 level reached in mid-May following the company's move to the Nasdaq National Market and a deal with Yahoo! (Nasdaq: YHOO) to market Cold-Eeze over the Internet.
Given that a weaker-than-expected first quarter has left it with high inventories and new filings indicate insiders may still be selling, Quigley needs to show it can accomplish as much during Cold-Eeze's third year in the big leagues as it did during its first two seasons, otherwise its stock isn't going anywhere. Skeptics wonder, for instance, what ongoing annual sales will amount to now that inventory is on the shelves. The story remains interesting, though, because despite many reasons for caution, Quigley's is a highly profitable business, and the company had around $2 a share in cash and no debt at the end of March.
Related articles:
-- The Quarrel Over Quigley (2/17/97)
-- Quigley Warms Up (2/18/98)
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