Well, let's address your two points.
Goldfinger: Doncha think that this joke has gone on a little too long?
Zimmermann: Zicam has only been on the market one year, and it takes longer than one year to build a brand name. If you are short GUMM, the joke will be on you. Here are some things that could cause your short position to go awry. 1.) Clinical results that demonstrate Zicam prevents the common cold. 2.) An announcement that Gel Tech has formed a joint venture with a major pharmaceutical company. 3.) International sales of Zicam. 4.) Positive quarterly comparisons between Q4 99 and Q4 00, and Q1 00 to Q1 01. 5.) A supply contract or joint venture with a large consumer products company for dental gum. 6.) Shipment of nicotine gum and/or the announcement of new products from the joint venture with Swedish Match.
Goldfinger: They haven't had any commercial success with Zicam.
Zimmermann: Sales of Zicam increased from $0 in 1998 to $9,589,803 in 1999. Year to year comparisons are available between Q1 99 and Q1 00 when sales increased from $368,092 to $3,100,503 and Q2 99 to Q2 00 when sales increased from $98,589 to $1,813,559. For the six month period (January to June), sales of Zicam increased from $466,681 in 1999 to $4,914,062 in 2000. Marketing data indicates that Zicam Cold Remedy increased its share of the market every month last winter and was the number two selling OTC cold and allergy nasal product. This category includes products such as Afrin, Nasalchrom, and private labels that compete with the aforementioned. Many of the same 50,000 retailers that stock Zicam Cold Remedy showed confidence in the brand by ordering Zicam Allergy Relief when it became available from Gel Tech. While two quarterly comparisons and one full year of sales aren't enough to establish a trend, I disagree that they haven't had any commercial success. Now that Dr. Hirt's independent clinical study showing a ~75% reduction in cold symptoms has been published in ENT Journal, sales of Zicam are destined to increase further as physicians and pharmacists recommend the product. An aggressive advertising campaign is underway, with radio spots by Howard Stern, and television spots during The Today Show and Jay Leno, to name a few.
Good luck! |
