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

To: Mad2 who wrote (1991)	7/12/1999 1:50:00 PM
From: DanZ	Read Replies (2) \| Respond to of 10293

Mad2, Thanks for your comments and please allow me to clarify a few points. You are entirely correct that GumTech shifted away from developing their own brand names with the change in management last year. My belief is that the company will partner with another company for international distribution of nicotine gum soon, and in the meantime, apply for an ANDA so they can manufacture nicotine gum for sale in the US. According to management, they are pursuing an ANDA for a generic version of Nicorette, and I believe that it will be approved within the next 9 months. Once GumTech's ANDA is approved, I believe that they will announce a distribution agreement with a partner such as Heritage, Watson, or Novopharm. The amount of revenue that GumTech would derive from such an agreement is unknown, and I was merely providing an example of what could happen if GumTech's revenue increases to $80 million. Given that Smith Kline has seen the market grow 68% year to year, and sold $183 million of Nicorette in Q1 99, I don't think it's beyond the realm of possibilities that GumTech could book revenues of $80 million in 2000 from nicotine gum. I will revise my estimate as time goes forward, but I think this is a fair estimate at this time. The bottom line is that I don't think GUMM is a good short based on future fundamentals because even if my estimates are too high, the company's revenue is heading significantly higher. So maybe the stock only trades to 40 or 50. That still makes the stock a long term buy, not a long term short. I don't even consider the stock a good short for a quick trade at this time because the technical indicators are all bullish and the chart is in a breakout mode. If it clears 13, I think it will trade to 14 1/2 or 15 relatively quickly. Finally, I think it is completely irresponsible for anybody to call GumTech a scam simply because they disapprove of homeopathic remedies. Some homeopathic remedies are deserving of that characterization, but in the case of Zicam, homeopathy is a labeling issue. If you were a decision maker at a company and developed a product that would be a big source of revenue and profits for shareholders, would you want to spend millions of dollars and months on phase three trials, call it a drug, force consumers to buy it through a prescription only after going to a doctor, OR, if you were legally permitted to do so, would you label it as homeopathic, save shareholders millions of dollars in unnecessary expenses, and get the product to retailers quickly? This is the decision that GumTech management faced with regard to Zicam and it makes no sense whatsoever from a business perspective to go the full blow drug route. The company went beyond what they had to do for homeopathic remedies by conducting a clinical study and submitting it to the scrutiny of the New England Journal of Medicine. They have even gone another one step further are conducting three additional clinical studies as we speak. Best to all. Dan