OK - at least you're off the statistics - let's see if I can get some other facts across. Responding to your post:
IMHO, your example of two new headache remedies is not analogous to Vasomax and, say, Vivus's product. One is oral and the other is, um, let's just say more unpleasant for the patient. Also, the Vivus product does not "work wonders" - actual success rates in the field (measured by re-orders) have been lower than any of the efficiacy rates reported in their trials. Also, Vasomax has reported the least side effects of any of these drugs. I love analogies - lets try this one - two antibiotics - one oral with almost no side effects, one more effective, requiring injection - & the condition is chronic - will need treatment forever - which one would you try first??
Second - company valuation, using your numbers (which are very modest), but adding one more fact. The royalty payemnt is not only revenue, it is nearly 100% profit. Now, take out $10 million to run the company - hell, take $20 million - that leaves $29 million in net income - shall we conservatively assume an earnings multiplier of 30 for a small, successful (how many ever even get a product to market) drug company - that's more like a $900 million valuation. Now what if the drug is used 4x/month instead of 3?? What if Zona captures 15% or 20% of the market instead of 10%. What if Vasomaxine works?? Also, if you think that Pfizer is going to compete on a price I'd say you've got no industry experience at all.
Third, the negotiations for a marketing partner were broken off by Zonagen when they felt that their low cash position was being used against them. They sure fixed that problem & are now back in negotiations. And, by the way, how can you say "given the rumored 20% back end royalty that Zonagen is purportedly negotiating" and then try to imply that there is no interest in a deal.
I read where you just recently sold your Vivus stock?? Being a clever fellow, you undoubtedly made some profit - so why not just short Zonagen and back up your convictions? |
