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Biotech / Medical : GUMM - Eliminate the Common Cold -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (3155)	11/8/2000 6:28:45 PM
From: StockDung	Respond to of 5582

Quigley Co. (Nasdaq: QGLY) Phone: 215-345-0919 Website: quigleyco.com Price (3/26/98): $11 1/4 HOW DID IT FIND TROUBLE? Gesundheit! This was supposed to be Quigley's time to shine. The maker of Cold-Eeze lozenges had grown sales from just below $5 million in 1996 to just over $70 million last year. Owning a clinically proven cold remedy should have been a bonanza over this prolonged winter, with the likes of the Centers for Disease Control and Dateline NBC proclaiming this one of the worst cold and flu seasons on record. Colds were hot. Cold-Eeze was hot. But Quigley ran cold. Pharmaceutical giant Warner-Lambert (NYSE: WLA) introducing a Cold-Eeze clone, and the high margin livelihood of Quigley was called into question. Last year's growth was due primarily to filling the retail distribution channel to the point where production not only met demand -- Cold-Eeze was now available at just about every drugstore chain -- but the future growth of Quigley was called into question as well. So Wall Street sneezed, shareholders sniffled, and Quigley called in sick. BUSINESS DESCRIPTION Pennsylvania-based Quigley's sole product is Cold-Eeze, a zinc gluconate glycine lozenge that has been shown in clinical studies to shave as much as three days from a typical weeklong cold. FINANCIAL FACTS Income Statement 12-month sales: $70.2 million 12-month income: $21.0 million 12-month EPS: $1.43 Profit Margin: 29.9% Market Cap: $165.4 million Balance Sheet* Cash: $7.7 million Current Assets: $28.8 million Current Liabilities: $6.3 million Long-term Debt: $0.8 million (*As of Sept. 30, 1997) Ratios Price-to-earnings: 7.9 Price-to-sales: 2.4 HOW COULD YOU HAVE SEEN IT COMING? Followers of Breathe Right nasal strip maker CNS (Nasdaq: CNXS) may have seen this coming. The crashes have been similar. Just as consumers clamored for the sticky cardboard strips to relieve breathing disorders after seeing Jerry Rice running down the sideline with a Breathe Right strip on his nose, Cold-Eeze's popularity had a meteoric rise as well. Between scientists from the Cleveland Clinic holding up a bag of Cold-Eeze when they announced the zinc formula effectiveness at combating the common cold to an ABC 20/20 segment calling Cold-Eeze "the only one that works," retail chains soon began stocking the trendy fix that had been primarily QVC Network sales fodder in the past. A year ago the $12.3 million order backlog was 2.5 times greater than Quigley's trailing annual sales. It may have left prospectors euphoric, but as the company ramped up production, with Cold-Eeze finding its way onto the shelves of 90% of domestic drugstore chains, it should have given investors a reason to consider what would happen once the market had been fully penetrated -- and what would happen when better funded pharmaceutical firms found Quigley's 30% net margins too enticing not to enter the fray. WHERE TO FROM HERE? Quigley is too dynamic to deem as rudderless, but sometimes one has to wonder if the company itself knows where it is sailing. In January the company announced that fiscal results would equal the analysts' consensus estimate, only to eventually top it by a dime a share a month later. Then the company alerted investors that the current quarter would be weak due to a mild cold season -- while every other source, including no doubt your congested spouse, has been saying otherwise. Then again, nothing is ordinary at Quigley. The company has been associated with questionable stock touts and accountants in the past, but has cleaned up its image on the way to legitimacy. Yet despite the improbable success of Cold-Eeze, Guy Quigley's company continues to be a humble operation, run out of a converted church in Doylestown, Pennsylvania, with a meager payroll of just 14 employees. Besides the low corporate overhead, Quigley is selling a single product that is cheap to produce, but at a hefty premium that cold suffering patrons are willing to pay. That is why the margins have been so strong. But now Cold-Eeze is battling Halls Zinc Defense, which usually retail for $5.99 a bag, with dueling promotional discounts. Cold-Eeze must remain sharp because while it had an 8-to-1 lead over Zinc Defense back in October, that has been trimmed to a mere 4-to-1 advantage recently. Quigley's patent prohibits an exact knock-off, and the Halls product is simply a zinc acetate, but the similarities have blurred consumers to the point that if either one decided to cut prices permanently, the other would probably have to follow suit and the margins would obviously contract for both parties. That is why one of the fastest growing companies of last year is selling for just 8 times trailing earnings today. Despite the move to international distribution, with globetrotting deals in place for a Merck (NYSE: MRK) subsidiary to distribute Cold-Eeze in Canada and a foray into China inked just last week, domestic concerns weigh heavy. But now Quigley is trying to market its zinc lozenge as an allergy reliever. If successful, it should eeze the company's burden of being not only a one-product company, but also a seasonal one at that. While one can speculate that even with no earnings growth this year the company's valuation makes it vulnerable to buyout offers from the drug powerhouses, possibly even Warner-Lambert itself, that is certainly no reason to buy into Quigley. Yet finding a niche leader with a single-digit P/E multiple is at least an interesting situation to monitor closely. If the company can capitalize on its brand to expand its product line as well as its reach, the cold that investors may be catching could be cold, hard cash. -Rick Aristotle Munarriz (tmfedible@aol.com) --------- Check out the Daily Double for the stories behind stocks that have doubled over the past year.

To: Hank who wrote (3155)	11/8/2000 7:15:32 PM
From: DanZ	Read Replies (1) \| Respond to of 5582

Me a scumbag? I think it's obvious who the scumbags are here, and I'm not on the list. Zicam is not a nasal spray. It is a nasal GEL with a very specific viscosity. Zinc nasal sprays are sold today as nasal moisturizers, and Zicam is much thicker than those products. The manufacturers of those products don't make any claims about reducing the duration of the common cold because they CAN'T MAKE THAT CLAIM. The products don't work for that purpose. You can't assume that just because previous attempts to make a zinc nasal product didn't work, that no zinc nasal product will ever work. Using your stupid logic, nothing new would ever be invented that someone failed to invent before. Can you think of any products that failed a few times before someone got it right and made it work? Duh! And for the last time, NOBODY pays me any money for posting my opinions about this company. If you don't know what NOBODY means, look it up in the dictionary. IMO, you are committing libel and slandering my name with lies. If you do it one more time, I will consult an attorney to see what options I have. Your only defense is to prove that you are right, and I assure you that you are wrong. How are your estimates for dental gum and nicotine gum coming? Yeah I know. You aren't smart enough to make any estimates. Have you called any buyers in the retail channel yet? Do you know anyone who can give you IRI marketing data for the cough and cold category? Information is king and you obviously don't have it. Ignore the data at your peril.