GUMM - Eliminate the Common Cold Message Board

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Biotech / Medical : GUMM - Eliminate the Common Cold

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To: Street Walker who started this subject	3/17/2001 9:10:56 PM
From: Bo Didley	of 5582

Quick Summary of WWY News (makemilns yahoo #46291) I don't have a lot of time to post and I haven't read all the messages today. Sorry if someone already posted this. 1. Based on the press release, Gum Tech is selling the P&G dental gum contract to WWY and the manufacturing capacity. 2. Gum Tech will keep their 49% share of the joint venture with Swedish Match for nicotine gum. 3. Gum Tech will keep their 60% share of Gel Tech. 4. This means that Gum Tech will receive $25 million in cash, plus it looks like they will receive about $2 million for sale of stock to WWY. Shorts can kiss their running out of cash scenario goodbye. 5. The drain on this company's cash flow has been due to the high overhead of the manufacturing plant. While this would have been offset by sales of dental gum to P&G, the bottom line is that the company's expenses are going to drop to next to nothing, so shorts can kiss their negative cash flow scenario goodbye. 6. Gum Tech will receive royalties on sales of dental gum to P&G. Since they won't have any expenses against this (or minimal), this will be pure profit. 7. If you read Gum Tech's press release from the last annual meeting, they mentioned something about the possibility of purchasing firms in the drug delivery or biotech area. Given that they are systematically making good on the goals that they set forth at the annual meeting, it would be a safe bet to assume that they will use some of the cash from this sale to purchase a business(s) that is more consistent with their long term growth plans. 8. CSFB is in the thick of this and you can be sure that this is only the tip of the iceberg to refocussing Gum Tech, which is certain to have a new name now, on a profitable path. Bottom line: The reason that shorts had for shorting this company are history. They can make up new excuses for remaining short, but their position is officially dead and the longer they hold, the more they will lose. All the expenses are gone and the profitable businesses remain. I believe that a big pharma is in the works for Gel Tech as this would be consistent with the company's goals and business plan. messages.yahoo.com

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