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Biotech / Medical : Zonagen (zona) - good buy?
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To: Paul M. who wrote (862)11/22/1997 9:47:00 AM
From: BigKNY3  Read Replies (1) of 7041
 
Asensio's press release and report were not your normal "strong buy" or "strong sell" recommendation. He accused Zonagen of fraud and still is. He based this conclusion "as a result of Zonagen's highly selective disclosures.. and failure to disclose material". In this report, Asensio failed to disclosed his own short position in a hedge fund and failed to disclose a major Zonagen agreement with a major pharmaceutical company that might invalidate and hurt his position. Given the accusations in his press release and the timing of this release, the failure to disclose this information is inaccusable and hopefully illegal. Asensio is still in a state of denial and refuses to acknowledge his mistakes.

One additional point, it is clear that Asensio doesn't understand the pharmaceutical industry and how it operates. He bases much of his conclusion that "Zonagen nor any of its investigators ever published complete medical papers for peer review". Asensio doesn't know that these papers are written only after Phase III clinical studies are completed. Then, the peer review process of medical journals takes an additional 3-18 months. New pharmaceuticals are approved on the basis of data analysis reviewed by the FDA not published articles. These articles are normally available soon after product approval... not before.

Although I do not own Zonagen (in fact I own Pfizer), I am shocked by what Asensio has done and hope that the proper authorities take action. As investors, we should not take the attitude that Asensio's actions are part of normal everyday business. If you are going to attack a company on the basis of "selected disclosures" and fraud, you better have the evidence, proper understanding of the industry and provide full disclosure of the possible motivations behind your actions.

BigKNY3
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