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To: Susan Saline who wrote (20785)	9/23/1999 10:19:00 AM
From: DanZ	Read Replies (2) \| Respond to of 53068

GUMM. I realize that some of you have been trading GUMM rather than holding it like me. In retrospect, this has been a better strategy for the past six months. I strongly believe that the future will prove that an investment is the better strategy. I'm not saying this to knock anyone, but more to lead into a discussion of things that are in the pipeline and why I have chosen to invest in this company rather than trade its stock. The company announced at the shareholder's meeting that they intend to sign a joint venture to manufacture and distribute nicotine gum. They didn't provide many details then, but I have been able to get more details of what we might be able to expect. While this information hasn't been validated by a company press release, I put my good reputation on the line that it will come to fruition much as I laid out here. GumTech is not just going to be a contract manufacturer of nicotine gum. I believe that they will sign a joint venture with a large multinational Scandinavian company, and the joint venture will go after the nicotine cessation market (valued at approx. $300 million and growing), and a market aimed at using nicotine gum as a substitute for tobacco. The tobacco industry is valued at $46 billion, and I think there is a market for a smokeless, tobacco free, delivery system for nicotine. Can the joint venture capture even 1% of the market? If so, their sales will be a staggering $460 million. Something of this magnitude could send GUMM to levels that people would laugh at if I made a projection. My initial research indicates that many people smoke because they like the effect of nicotine. On the other hand, the tar in tobacco causes cancer and smoke causes diseases of the lungs such as emphysema. Many people smoke because they are addicted to the hand-mouth movements of smoking. Given enough time, I don't think this will keep people from using a safer delivery system for nicotine. Furthermore, society is moving towards a smoke-free environment, and I think this trend plays beautifully into a smoke-free delivery system for nicotine. Even if people prefer smoking to chewing gum, they may use gum in places where smoking is banned. There are some known health hazards to using nicotine, but they aren't as severe as smoking. For example, nicotine is known to increase blood pressure, and this can lead to heart disease over a long period of time. The other big news on the horizon is related to Zicam. I believe that the company's first clinical study will appear in a reputable medical journal in October. This should result in PR for Zicam and PR for the stock. The advertising campaign that GumTech previously announced will start in late October to coincide with the beginning of the cold season. They have excellent distribution for Zicam, as it will be available in about 40,000 drug, grocery, and mass discount stores by the end of October. They have the distribution; they have the advertising lined up; the cold season is almost here; and I have personally used Zicam and found it to work as concluded in the first clinical study. Once the PR cranks up, I think Zicam will be a big seller, and ultimately this will move the stock price or support its gains. Finally, the company is conducting two double blind placebo controlled clinical studies through two independent Universities. One is to test the effect of Zicam on preventing the common cold and the other is to test the effect of Zicam on reducing the duration and severity of the common cold. There are two reasons why the company is conducting these clinical studies when they already have a study being reviewed for publication. One, the FTC requires two studies before a company can make claims that anything is clinically proven to do anything. Second, the first study was modeled after Quigley's Cleveland clinic study for Cold-Eeze, and the second study is modeled after the Tremecamra study in which subjects were inoculated with a specific known strain of rhinovirus. While the results of the first study are very compelling (p < 0.001), the second study should completely dispel any criticism of the results since the controls are much tighter. From a chart perspective, GUMM has support between 11 and 11 1/4. I would look for a bounce from there, and a spike on the news of the nicotine gum joint venture and publication of the first study. I believe that all of this will happen in October, but the stock may rally in anticipation of the news. If the second round of clinical studies come back positive, the stock should spike further. The second round will be completed by the end of October. Short sellers are playing with the stock. This is just a way of life with a small cap like GUMM who is in the process of proving themselves. They will take jabs at the company. I think they will be proven wrong in time. It is my understanding that several mutual funds are looking at GUMM for an investment but they are waiting for assurance that the nicotine gum joint venture and second round clinical studies come back positive. They would rather buy higher with less risk, than buy lower with more risk. I can certainly understand this perspective, but for those who understand the risks, are more aggressive, and believe in the company's future, I would buy ahead of the news. Best of luck to everyone, Dan