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

To: Steve H. who wrote (3320)	4/6/1998 8:46:00 AM
From: Dauntless	Read Replies (3) \| Respond to of 7041

Steve H, interesting points Welcome to the thread - always nice to get a new perspective. I believe that your take on SGP's investment is right on the mark. I heard a speaker about six months ago that showed how big pharma has gradually been adopting (at least partially) a strategy that allows smaller start-ups to undertake the risk of early drug development. Lots of compounds are sitting on the shelves or stuck in research at big firms. They license these to little guys for development and them "buy" them back later after much of the risk has been removed. I don't look at SGP's investment as being "limited" to $10M. There's another $47M committed against milestones - and I believe that at least some of those milestones are readily attainable - for instance, the NDA filing, the FDA's acceptance of same, FDA approval, etc. SGP knew before they signed up that they would be making these payments - tieing them to specific milestones is a way to keep folks focused & spread out the cash outlay. I believe SGP has also put their "reputation" on the line in announcing this deal and subsequent press releases reaffirming their confidence & commitment. I agree, however, that in the big picture, this is a relatively small piece of SGP's R&D pie. It is huge for Zonagen - from a financial & a business development standpoint. I don't think that Pfizer is worrying about Vasomax at this time. I believe Brad's take on the demand for Viagra. It will be interesting to see if PFE adequately anticipated this demand and can deliver all that's needed - I bet they did - and that's proof that the big pharma firms know their business - same argument gives me confidence over SGP's deal with Zona. I'd like to hear from Brad as to whether the SGP rep introduced Vasomax into their conversation or they were simply having a discussion of available therapies & it "came up". In my experience, sales people are not encouraged to bring up competitive products - especially when they not going to be available for at least a year. SGP's reps will not be "selling" Vasomax as much as they will be gathering intelligence about Viagra's acceptance, utilization & problems. Glad to have another long on the thread - or even a reasonable short.