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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (1950)	7/12/1999 12:10:00 AM
From: out_of_the_loop	Read Replies (1) \| Respond to of 10293

Hank, the way I interpret your post you assume Zicam is a gum. It is not. It is a nasal gel spray. Of course we have heard of nicorette. The patent expired on it this year so generic nicotine gum can now be sold in the USA; that is our point and that is why GUMM wants to make it.

To: Hank who wrote (1950)	7/12/1999 11:41:00 AM
From: DanZ	Read Replies (1) \| Respond to of 10293

<What benefits if any does Zicam offer over other zinc based cold treatments such as Cold-Eeze(also found in Walmart, K-mart etc.)?> Cold-Eeze reduces the duration of common cold symptoms by 42%. According to Quigley, "Under an FDA-approved Investigational New Drug Application filed by Dartmouth College, a randomized double-blind placebo-controlled study conducted at Dartmouth College Health Service, Hanover, NH, concluded that treatment with zinc gluconate lozenge formulation, initiated within 48 hours of symptom onset, resulted in a 42% reduction in total duration of the common cold." The average duration of the common cold is 12 days so a 42% reduction means cold symptoms subsided in about 5 days with Cold Eeze. The first randomized double-blind placebo-controlled study conducted by Drs. Hensley and Davidson concluded that treatment with Zicam resulted in an 87.5% reduction in total duration of the common cold. The average duration of the common cold with Zicam is 1.5 days. One benefit that Zicam has over Cold-Eeze is that it works faster. Another benefit is that Zicam doesn't have a bad taste. Many who have used Cold-Eeze report that it tastes bad. Another benefit is that Zicam delivers the active ingredient to the site of infection in the nasal cavity whereas Cold-Eeze must travel through the blood stream to the site of infection. Because of this, Cold-Eeze has a much higher concentration of zinc than Zicam. To summarize, the benefits of Zicam over Cold-Eeze are that it works faster, has no taste, isn't ingested, and has a lower concentration of zinc. <This zinc business is nothing new and has been around for about 5 year now.> I'm not sure what your point is here. Semiconductors have been around since Texas Instruments developed the transistor in ~1959 and many companies have been developing new and better applications using that technology since. <It's efficacy is questionable at best.> If you so desire, you can question the results of the randomized double-blind placebo-controlled study. You can also question the study if and when it is published in a medical journal. There will always be skeptics, no matter what data or proof one provides. <..neither zinc nor nicotine are proprietary substances. Anybody could run out and maker their own brand of gum using these ingredients. What happens if Wrigley decides to make their own brand of these gums? Haven't you ever heard of Nicorette?> Out of all due respect, sir, this statement exemplifies your ignorance with regard to GumTech's business. You are correct that zinc and nicotine are not proprietary but your implied conclusion is wrong. While zinc is not proprietary, Zicam is, and the company has filed for patent protection. Nicotine isn't proprietary but your characterization that anybody can make nicotine gum is wrong. Nicotine is a drug according to the FDA and not "anybody" can produce products using it. First, drug GMPs must be followed when making products containing nicotine and the facility where products are made must pass an FDA audit and inspection. Furthermore, any company wishing to make nicotine containing products, including gum, must submit and be approved for an FDA New Drug Application (NDA) or Abbreviated NDA (ANDA). The type of filing depends on whether the company will manufacture a generic version of a product covered by a previously approved NDA, or a completely new product formulation. Finally, it isn't easy to mask the bad taste of nicotine in a pleasant tasting gum. This alone makes it unlikely that "anybody" would produce a nicotine containing gum. The CEO of GumTech, Gary Kehoe, has many years of experience creating pleasant tasting chewing gum that contains foul tasting ingredients. Wrigley is not in the business of making drugs and it would be no small feat for them to add the necessary infrastructure to produce drugs. First, Wrigley does not follow drug GMPs, or any GMPs for that matter, and has no reason to be audited by the FDA. Second, the assembly line for nicotine gum would have to be completely separate from Wrigley's other assembly lines or contamination would be a problem. Can you imagine if Wrigley made Doublemint gum in the same vat as nicotine gum? I seriously doubt if Wrigley is interested in the chewing gum drug business. Schering-Plough made Aspirgum for 20 years and Wrigley showed no interest in that market during that entire period. The only companies that have shown an interest in using chewing gum as a delivery system for drugs are drug companies such as SmithKline Beecham and Watson Pharmaceuticals, and GumTech. GumTech already follows drug GMPs and produces several products that are considered drugs by the FDA. These include Aspirgum and Breath Asure Dental Gum. GumTech also makes Acutrim diet gum for Heritage Consumer Prouducts, but I don't know if the FDA considers it a drug. Let's take a look at what the nicotine market could do to GumTech. According to Smith Kline Beecham's 1998 annual report, they sold $279 million of Nicorette in 1998 and held 90% market share. Their sales grew 68% to $183 million in the first quarter of 1999 alone. Assuming no further growth and sustained sales of $183 million per quarter, Smith Kline could sell $732 million of Nicorette in 1999. Their patent expired a couple of months ago and this market is now open to anybody that wants to play. Let's assume that GumTech enters this market and garners only 10% market share. That would translate into sales of $73 million. Given that GumTech's break even point is approximately $2.75 million in sales per quarter (excluding Zicam), sales of $73 million would result in a huge margin boost and I estimate that they would earn between $3.00 and $4.00 per share, depending on how much they spend developing new products. What multiple would the market pay for a company that increased it's sales from $5 million to $80 million in a year or two? Is 25 to 30 a conservative number? That puts GUMM in the 75 to 100 range, and this doesn't even account for what Zicam could do to the bottom line. You guys short away...I just hope for your sake you use a stop loss order.