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

To: Linda Kaplan who wrote (5167)	8/10/1998 3:00:00 PM
From: Peter V	Respond to of 7041

some news, ZONA is a hot stock today cnnfn.com cbs.marketwatch.com

To: Linda Kaplan who wrote (5167)	8/10/1998 3:09:00 PM
From: S. maltophilia	Read Replies (2) \| Respond to of 7041

Don't know my reading skills can help. I seem to have missed the news release on this item<g>: In December 1993, the Company entered into an agreement with Schering AG (a pharmaceutical company based in Germany that is not affiliated with Schering- Plough), pursuant to which the Company and Schering AG agreed to jointly research, develop and test zona pellucida-based human contraceptive vaccines. Under the agreement, the Company was required to bear all costs of the development of all such products until the Company had developed a "lead compound" that met certain specified standards for use in clinical trials. The agreement required Schering AG to make payments to the Company upon certain research and development milestones, none of which had been achieved, and to bear all costs of the development of the vaccine after formulation of a lead compound. Schering AG was required to purchase $2.5 million of Common Stock on or before June 9, 1998 to retain its rights under the agreement beyond such date. Schering AG did not purchase the shares of the Company's Common Stock required to maintain its rights under the agreement; accordingly, the agreement terminated on June 9, 1998. As a result of this termination, Schering AG and the Company have no further obligations under the agreement, and all product rights under the agreement have reverted to the Company.

To: Linda Kaplan who wrote (5167)	8/10/1998 8:05:00 PM
From: Alan Newman	Read Replies (1) \| Respond to of 7041

Some highlights from my reading of the 10Q: freeedgar.com - Without the $5million payment from SGP, the loss would have been ($5,664,029) or (.50) per share. It was an "accelerated payment" since it was due when the NDA was filed. The NDA was filed on 7/14, but the payment was made on 6/30- just in time to include for this quarter! - Royalties for Z-MAX in Mexico totalled $167,170. It will be interesting to see if this increases next quarter. - FTI revenue ("female reproductive healthcare products and services") totalled $700K+ - Interest income was $730K- not bad! - They did buy back stock, but none since April 1: As of December 31, 1997 the Company had purchased a total of 61,500 shares at an aggregate purchase price of $1,286,728, representing an average price of $20.922 per share. During the quarter ended March 31, 1998 the Company purchased an additional 226,800 shares at an aggregate purchase price of $4,022,332, representing an average price of $17.735 per share. The Company did not purchase any stock during the period from April 1, 1998 through August 7, 1998. Through August 7, 1998, the Company had purchased an aggregate of 288,300 shares of Common Stock under the stock buyback program at an aggregate purchase price of $5,309,060, representing an average purchase price of $18.415 per share. - Inventories increased to ~500K from ~200K- they're stockpiling phenatolomine(!) and some other medical supplies. - They also had made a $600K+ deposit with their phenatolomine manufacturer. They guaranteed to buy all of the manufacturer's output for 5 years, with options to cancel by either party every year. My interpretation is that they needed to make the large deposit to get someone to make the stuff. - The Schering AG deal: ZONA didn't meet the development milestones so Schering terminated the deal: "The agreement required Schering AG to make payments to the Company upon certain research and development milestones, none of which had been achieved, and to bear all costs of the development of the vaccine after formulation of a lead compound. Schering AG was required to purchase $2.5 million of Common Stock on or before June 9, 1998 to retain its rights under the agreement beyond such date. Schering AG did not purchase the shares of the Company's Common Stock required to maintain its rights under the agreement; accordingly, the agreement terminated on June 9, 1998. As a result of this termination, Schering AG and the Company have no further obligations under the agreement, and all product rights under the agreement have reverted to the Company." - "The Company believes that its existing capital resources will be sufficient to fund its operations through at least the end of 1999." Alan