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

To: taxikid who wrote (1301)	12/24/1997 11:55:00 AM
From: Myron David Kor	Read Replies (1) \| Respond to of 7041

It is always interesting to how someone else goes about placing a value on a stock after FDA approval Thank you very much for your opinion.

To: taxikid who wrote (1301)	12/24/1997 12:26:00 PM
From: Dauntless	Read Replies (1) \| Respond to of 7041

Thanks for your post - my comments, as I understand the industry - if you care. Starting with an FDA approved product - you already agreed to that. There is no retesting to be done. All costs of marketing, distribution, selling, give aways are paid by Schering. You suggested 25% of men is the base population I think that number is too high. Two estimates that have been suggested are 50% of men over 50 or 20-30 million in US. Use the smallest number = 20 million. You suggested 30% use Vasomax - too high - use 5% to be conservative. (20 million)x(5% share)x(4uses/month)x($7.00/use)x(12 months) = $336 million Assume 10% royalty (conservative) to Zonagen = $33 mm - $6 million burn rate (w/o development) = $27 million profit/12 mm shares = $2.25 eps Now what multiple to want to apply? Even if you only use x20 it's $45/share & x20 is really conservative for pharma industry. Obviously lots of assumptions & places to fail between here & there - but look at what HAS been accomplished & understand what the Schering partnership says about the above scenario - they are not interested in much less. I've taken lots worse risks. I know you probably don't completely agree with all this, but thanks for listening politely.