Continuing with reasons for contest picks:
(5) Stericycle (SRCL). A consolidator in the medical waste disposal business, with an impressive business plan. SRCL has a proprietary technology for decontaminating medical waste, with which the company can build a plant for $3-4 million to handle as much waste as a $17-20 million incinerator, and can obtain local planning permission more easily because there are no smokestack emissions. It is gradually expanding its territories, buying up the web of local companies in the business, who are prompted to sell by increasing and expensive regulation, so that selling out to SRCL is a tempting alternative to making substantial investment in regulatory compliance. Company appears very well-managed; may possibly be the Home Depot of the medical waste industry. SRCL thread on SI has gone nowhere.
(6) Vivus (VVUS), the maker of MUSE (transurethral alprostradil, FDA-approved in late 1996), the number two treatment (after PFE's Viagra) for erectile dysfunction. At under $3.00 share, VVUS, which will make tons of money with 10% of the ED market, is priced as though it is about to go bankrupt, but it isn't. Viagra helps maybe 60% of ED cases, and is unsuitable for a substantial percentage of such cases: most notably, men taking nitroglycerin or other nitrate-based medications for cardiovascular disease (CVD). VVUS's product is thus the only thing available for these men that isn't a needle. (VVUS also has an improved version of MUSE in phase III trials (launch probably 2000) and a seemingly promising gene therapy for ED in phase I.)
The expectation in 1998 was that Viagra would greatly increase the number of those seeking treatment for ED, and that VVUS would make a nice living off those who couldn't or shouldn't use Viagra. This hasn't happened yet, in part because with the great hype over Viagra the focus of ED treatment shifted from the urologist to the PCP, and VVUS's small urological sales force couldn't do the job. VVUS has partnered with Astra and J&J for overseas sales, and is trying to negotiate a domestic marketing agreement. It will probably get a nice pop (1) if and when that (likely, IMO) agreement is inked, and/or (2) the board replaced management.
The VVUS thread on SI Subject 17176 is exhaustingly active, recently with a decent ratio of good info to noise: look for posts by Zebra365, Eddard (both physicians), Frostman, Mkilloran, DaiS and the ubiquitous VLAD, and for articulate skepticism Andreas Samson and BigKNY3. |
