<I guess I was waiting for the peanut gallery to post the press release the instant it was released, like they always do or at least a jump in stock price to indicate something positive had happened.>
No, this is just your misperception that all Gum Tech investors hype the stock. There were only two aliases on SI that hyped GUMM. I'm not going to mention any names, but they aren't in the stock any more to the best of my knowledge. I don't condone hype and quite frankly am glad that they no longer post about the stock.
<Could it be that nobody cares because they know that GUMM will still continue to LOSE money?>
No, it's probably because profits from the nicotine joint venture are a minimum of nine months away and the company isn't hyping their stock. I believe that the nicotine joint venture will contribute significantly to Gum Tech's future growth and that the stock will discount it as we get closer to the beginning of production.
<10 million dollars is chump change in today's drug market.>
$10 million is only start up capital. The joint venture with Gum Tech is important enough to Swedish Match that their CEO mentioned it by name as a driver for future growth at Swedish Match's annual Shareholders meeting. I'm confident that Swedish Match will do what it takes to make the joint venture profitable, and if that means putting up more money, I believe that they will do it.
<It wouldn't even cover the cost of a half ass advertising campaign like the one they launched for Zicam, let alone manufacturing costs.>
Speaking of manufacturing costs, the joint venture will reimburse Gum Tech for their cost of production plus a small fee. The joint venture will also reimburse Gum Tech some R&D expenses that Gum Tech expended to develop nicotine gum.
<They have no chance against the bigger and more established competition. They have NOTHING novel.>
Granted SWMAY isn't as large as the market leader, SBH, but the nicotine cessation market is large and SWMAY is a successful, and not all that small company with a $1.5 billion market cap. You haven't seen their product offerings. How do you know they aren't novel?
<They copied Quigley and got sued.>
This is a completely ignorant statement. First, Gum Tech didn't develop Zicam. It was developed by a small biotechnology company that came to Gum Tech for help with marketing and distribution. The "copied" part of your statement is an accusation that hasn't been proven in a court of law. Plaintiffs don't always win, and people are innocent until proven guilty in the US.
<I'll be surprised if they don't run into the same sort of legal trouble with nic gum.>
Another ignorant statement. Smith-Kline Beecham's patent expired last year so they can't sue for patent infringement. Smith-Kline sued Watson for copyright infringement because the instructions that came with Watson's generic nicotine gum were a copy of Smith-Kline's. The case was frivolous because the FDA requires generic drugs to have the same instructions. It isn't surprising that Watson prevailed in that case.
<Zicam Allergy is a lame copy cat product that is intended to mimic other remedies already out there.>
The ingredients in Zicam Allergy are proven effective against allergy symptoms. While I believe that the gel matrix makes Gel Tech's product unique and perhaps even more effective, the real issue is one of marketing and distribution. Gel Tech has already won the battle of distribution against the other companies that make allergy products with the same ingredients and I believe that they will win the marketing battle shortly as they form a partnership with a larger company.
<They'll have to undergo intense FDA inspections before the FDA will allow them to produce even one stick of that stuff.>
Yes, Gum Tech will have to have an approved ANDA before they can sell nicotine gum in the US. However, they can sell nicotine gum outside the US without FDA approval. I believe that the joint venture will sell nicotine gum in Europe and Asia while they wait for the ANDA to be approved by the FDA. In addition, the joint venture will most likely sell products other than just nicotine gum. |
