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Biotech / Medical : Zonagen (zona) - good buy?
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To: Dauntless who wrote (3158)3/28/1998 11:33:00 PM
From: Peter Goss  Read Replies (1) of 7041
 
<<Zonagen received $10 up front from SGP as part of the deal for distribution rights to Vasomax.>>

I know it's a typo, but that's about how much SGP wishes they had paid.

So anyway, how much do you think investors are expecting? Right now ZONA is capped at 15x that one time payment. It seems as if Latin American revenues will dribble in - let's be generous and say 2 million doses at $3 for $6 million. So now we are at 25x those revenues, and we can't count the SGP money since it is a one time thing (when you think about it those funds aren't really revenues in accounting terms). Seems pretty expensive to me, but what do I know.

Oh, by the way how does no EXPEDITED NDA figure into the question? Everyone seems to be avoiding this issue. Seems like the regular process of approval will be years away, so as good investors we should discount all of those huge potential revenues a bit more heavily.

Interest income? yeah right that's why I buy a speculative biotech company because I really am dissatisfied with my money market fund. Those aren't revenues either.

So I am left with a one time payment, interest income on diminishing pile of IPO proceeds, and a slim trickle of pesos. I hope investors begin to see the light. I want to cash in my puts.

Peter
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