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Biotech / Medical : Zonagen (zona) - good buy? -- Ignore unavailable to you. Want to Upgrade?

To: BDR who wrote (1096)	12/18/1997 2:21:00 AM
From: Bruce Rosen	Read Replies (2) \| Respond to of 7041

Dale and all: Regarding Zonagen's patent position, the following is taken from the research report by Dan Ramsey of Harris Webb and Garrison. They were the first firm to cover Zonagen, back last spring, when the stock traded in the mid-teens. <<The company owns a patent which covers the systemic delivery of phentolamine in a rapid onset fashion to modify or modulate human sexual response. Although the patent does not refer specifically to oral administration, it could be countered that the reference to transmucousal administration includes an oral delivery method due to the fact that the medication is placed between the cheek and gum and thus enters the bloodstream through a mucous membrane. In addition, Zona is optimistic that they will soon receive formal notification of a patent allowance for the specific formulation phentolamine used in vasomax. Taken together, the patents give solid proprietary protection to Zona. Even if there is a way to be found around these patents, a potential competitor would still need to synthesize their own effective formulation, conduct their own trials, assemble and file thier own NDA, secure marketing approval and sign up a corporate partner, all before VASOMAX hits the market. The whole issue, kind of seems a moot point, when you consider that. >> I recognize that there has been a difference between the posts of most of the newcomers to this board and that of Bill Wexler. He I know to be a liar, at least in part, by the outrageous accusations of paid "shills" trying to dominate the debate on the message boards here and on Motley Fool. Where is his proof of that? I have done much due diligence over the past year or more, including reading company filings, articles, stock message boards and any other relevant material that I could find. I have listened to every conference call and have spoken to people in and out of the company, including at Schering-Plough. I have never heard Joe Podolski hype this stock once! He is always reserved and detailed in his responses and doesn't claim to have the magic bullet to cure ED. He does believe that Vasomax can help some men who suffer from mild to moderate impotence, which is about 70 - 80% of the total market. He doesn't claim that Vasomax will help everyone in that mild to moderate category. Phase III tests indicate that about 40% of men could be helped by Vasomax and the company estimates their future market share at 15 - 30%. One cannot value a development stage biotech like an established company with a present flow of earnings. This type of company is valued on the potential of its future earnings, which in this case, could be very large indeed. The various estimates are out there for all to see. Virtually everything that is being said now has been said before and if you go back and read the postings going back to the beginnings of this and the MF boards, you will see all the give and take between bulls and bears and references to virtually every outside source on this company. It might seem tedious, but perhaps then you could make an educated decision on how or whether you wish to play this stock. As for the patent, although I think Dan Ramsey's conclusions are valid, I don't think that Vasomax' intended use is to place it between the cheek and gums. When questioned about the patent on his most recent conference call, I believe Joe Podolski said that it could be argued that Vasomax is absorbed transmucousally once inside the GI tract. If this were the entire patent position, it might have concerned me. He also went into some detail about the status of the second patent, which covers their unique, proprietary formulation of phentolamine. Joe said that their patent attorneys were among the most respected in the country and that their counsel was confident they would be granted this second patent. As stated above, the two patents would give them strong patent protection. I find it comforting to know that Schering looked closely at the patent issue and feels it gives sufficient protection to Vasomax. I consider ludicrous, the argument that Schering is just throwing money at biotechs, without sufficient due diligence, in the hope that one will pan out . It would take Schering far less than $10 million to properly investigate the patent and all other relevant information about Zonagen. They have stated publically that they have done their due diligence and there is no reason to doubt that. They are looking forward to Vasomax being a significant new drug for them. I know that there is some risk to being long Zonagen, but the Phase III results and the S-P deal has IMHO, significantly reduced that risk. So has the vicious pullback of recent weeks. I believe there is far more risk in being short this stock. I am sure this discussion will continue and I hope things stay civil. I don't have the same amount of time to devote to this as some of you seem to have, but I will be here to read and respond when I can. Best of luck in your other positions!

To: BDR who wrote (1096)	12/18/1997 3:52:00 PM
From: Cacaito	Respond to of 7041

Dale, I agreed with your patent position, no drug company will use resources until this is FDA approved, after that it is much easier to market a similar drug. The patent as I see it is worthless. Same phentolamine mesylate as the IV form, both with phentolamine hydrochloride are the old formulations. The only Zonagen advantage could be time if they get FDA approval, and some further delayed from court fights. The hypotension and drug interactions will severely limit this drug to psychogenic cases, mild ED and recreational use if effective (also in doubt). The Gwinup and Gianotti articles are poorly designed and execute for the standards that are used now by the FDA. Zonagen own results are similar to the low end of this previous works, and this is not surprising if one assume that Zonagen's trial designs are more strict (the FDA is behind their designs) then this better studies will showed (very commonly in new drug studies) the real effectiveness. A difference from 34% to 17% could be even statistically significant (with the appropriate number of patients and zona seems to have them),but the problem behind change the burden of proof. If the disease or clinical problem is severe and or life threathening, then it will pass even with many side effects, but why will the FDA approved an almost recreational drug just for fun with the added burden of hypotension and or arrythmias plus multiple drug interactions, it is not justified. The Redux case ilustrated this the company researchers presented lots of calculations to showed the decrease long term reductions in morbidity and mortality in the severely obese population in order to get approval. It went through and became a recreational drug. Will it happen here again? or in the viagra case? I doubt both and I will not go long in neither. If it is approved, vasomax will be limited to a segment of the ED population that will be already served by viagra. Still, it will be a victory for the company and could double or triple the stock price. Maybe they could sell to the 4% of blue vision patients cause by viagra Could you report the results of and your opinion on the early trial you disccused at the meeting? The travails of the stock price short term is a different story. Bruce, Von Elmster last report when the stock price was still $30 was that he "still holds zona", not buying here. Will he buy at $20? I just want him to put his money where his mouth was.