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

To: McNabb Brothers who wrote (5692)	9/24/1998 4:18:00 PM
From: Craig Markell	Read Replies (1) \| Respond to of 7041

FDA Accepts Zonagen's Impotence Drug Vasomax For Review Dow Jones Online News, Thursday, September 24, 1998 at 16:03 By Melanie Trottman, Staff Reporter NEW YORK -(Dow Jones)- A potential new contender in the market to treat male erectile dsyfunction has passed another milestone. Zonagen Inc. (ZONA) said Thursday that the Food and Drug Administration agreed to review the company's new drug application for Vasomax, a pill to treat the condition that would compete with Pfizer Inc.'s blockbuster drug Viagra. The FDA's filing acceptance generated a $5 million milestone payment for Zonagen from Schering-Plough Corp. (SGP). Vasomax was licensed to Schering-Plough in November under conditions that the Madison, N.J., maker of health-care products would pay Zonagen $10 million up front and make subsequent milestone payments as specific regulatory goals were achieved. If Zonagen meets all the goals, the up-front and milestone payments will total $57.5 million; that doesn't include royalties. A Zonagen spokeswoman declined to comment directly on the stock increase but said, "I presume people assume it's a positive event for us." The company presented results from its late-stage, or Phase III, trials of Vasomax at the American Urology Association meeting in early June. As reported in The Wall Street Journal, results showed that 37% to 45% of about 300 patients taking Vasomax achieved better erections than without the drug. Pfizer Inc.'s (PFE) Viagra helps about 70% of impotent men. Industry analysts who follow the company said safety data from the Vasomax trials were good, but indicated Viagra is seen as more potent. They don't expect Vasomax, if approved, to reach the blockbuster status that Viagra has attained. "It's slightly less effective and it comes second" to market, said Mehta Partners analyst Sergio Traversa, adding that he is neutral on the company. Analysts estimate Vasomax would seize a market share equal to about 25% of Viagra's. Part of that is seen coming from an expansion of the impotence market, while another portion is expected to come from patients who have had no success using Viagra. They would likely be the first to try Vasomax, analysts said. Other companies working to get products for erectile dsyfunction to market include MacroChem Corp. (MCHM), which recently said interim-stage clinical trials supported the effectiveness and safety of its Topiglan gel. Also, TAP Holdings Inc., a joint venture of Abbott Laboratories (ABT) and Takeda Chemical Industries Ltd. of Japan, is developing apomorphine, which acts directly on the brain to create erections. Researchers have cautioned that none of the drugs has been directly compared with Viagra in scientific studies, so definitive conclusions can't be drawn. -Melanie Trottman; 201-938-5287 Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: McNabb Brothers who wrote (5692)	9/24/1998 5:54:00 PM
From: Linda Kaplan	Read Replies (1) \| Respond to of 7041

By the end of the day, ZONA was up only 3/4 on this news. I'm not knocking the $5 million milestone payment but milestone payments aren't what will make ZONA worth this stock price. I believe the stock price will erode from now till FDA's decision, as I outlined before. The estimate of 25% of Viagra sales in the news item Craig posted, is pure wishful thinking. With such a lower success rate and being tried only on people who failed with Viagra, it would be amazing if Vasomax obtained 2% of Viagra's sales. What tests were done on people who fail with Viagra to see how many of them are helped by Vasomax? Viagra is supposed to help a wider population than Vasomax, in helping mild to moderate cases of ED. Vasomax, if it helps anyone (dubious that it does), only mild cases. So those that fail with Viagra are in my opinion likely to be the moderate to severe cases, leaving almost nothing of Vasomax' mild population unhelped by Viagra. So, Vasomax may help almost no one who wasn't helped by Viagra (assuming it works at all, which is questionable). That 25% figure is pure hype but that will be shown only if the drug is approved, I guess, so we won't have the proof of the accuracy of what I'm saying for two years, if ever. Linda