GUMM - Eliminate the Common Cold Message Board

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Biotech / Medical : GUMM - Eliminate the Common Cold

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To: Mark Marcellus who wrote (3965)	11/5/2001 9:35:37 PM
From: DanZ	Read Replies (2) of 5582

Well, Mark. I wrote that message over a year ago. Things change in business quite often. At the time that I wrote that, it was obvious that Swedish Match did think the joint venture with Gum Tech was important. Otherwise they wouldn't have included it in their interim report and their CEO wouldn't have commented on the joint venture during his annual address to Swedish Match Shareholders. I have been saying for several months that I thought Swedish Match and Gum Tech would dissolve their joint venture at the end of November. There is a clause in the Shareholder's Agreement between the two companies that gives either party the right to dissolve the joint venture if a product hasn't been launched after eighteen months. The eighteen months is up this month. Swedish Match has been moving at a snails pace and if the joint venture dissolves, I think it will be a mutually agreeable split. It isn't that Swedish Match wants out like you purport. It makes sense for Gum Tech to want out so they can take their nicotine gum formulations to another distributor and make some money on those assets. Swedish Match was interested in Gum Tech's manufacturing capability, but they were more interested in their ability to formulate good tasting nicotine gum. That is obvious since Gum Tech had purchased more manufacturing equipment to make nicotine gum before the Wrigley deal closed. If Swedish Match only wanted manufacturing capacity, they could have bought some gum making machines for a lot less than giving up 49% of the joint venture's profits to Gum Tech. It's obvious that they were more interested in Gum Tech's formulations than their manufacturing capacity. In fact, Swedish Match was paying Gum Tech to conduct research and development for the joint venture. <But they're not going to be able to do that again based on claiming the cure for the common cold, they've milked that one for all it's worth.> Gum Tech has never claimed that Zicam is a cure for the common cold. In fact, I recall that they said in at least one press release that Zicam is not a cure for the common cold. The term cure makes no sense for a self limiting illness such as the common cold. Zicam reduces the duration and severity of the symptoms better than anything else on the market. Nothing more, nothing less. <a money losing one product company.> I disagree that Gum Tech is a money losing company now that they sold the money losing gum business. Gel Tech was profitable in the third quarter and has been profitable in the past. I also disagree that Gum Tech is a one product company. Gel Tech has two products and Gum Tech has nicotine products that are ready to be marketed. Wrigley is also evaluating three gum products that Gum Tech could earn royalties on. Zicam is a high margin product and they held their 72% gross profit margin last quarter. I don't have a problem with differing opinions. I have a problem with the way you and other people that have chosen to bash this company present their views. Truthseeker's post tonight inferring that Gum Tech is somehow involved with a person trading their stock is a perfect example. I seriously doubt if anyone at Gum Tech even knows who Pomper is or has ever heard of him. Why don't you pick his posts apart for a while?

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