Just saw this, thought all might find interesting. DC
Volpe Brown Whelan & Company
Zonagen, Inc. October 12,
1998
ZONA -- $15 5/8
Meeting
David M Steinberg 415-274-4428
david.steinberg@vbwco.com
Rhett Brown 415-274-4496
rhett.brown@vbwco.com
EPS 1997A 1998E 1999E Investment Opinion BUY(2)
Q1 $(0.62) $(0.53)A $0.00 Price Target $45
Q2 $(0.65) $(0.06)A $0.00 52-Wk Price Range $45 3/4-$12 1/4
Q3 $(0.57) $(0.05) $0.00 Shares Out. (million) 11.3
Q4 $0.15 $0.10 $0.00 Market Cap. (million) $176.7
Year(Dec) $(1.46) $(0.53) $1.91 3-Year EPS Growth Rate NM
First Call $-0.68 $0.67
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ZONA: Impotence Conference Highlights Vasomax Potential
Last Friday we attended the third annual international symposium on "The
Pharmacologic Management of Male Sexual Dysfunction" in the greater Los
Angeles area. This conference was attended primarily by urologists as well
as many participants from the pharmaceutical industry.
The faculty of the symposium included all of the world's leading experts
in erectile dysfunction. The conference was chaired by Dr. Harin
Padma-Nathan (USC) and Dr. Ridwan Shabsigh (Columbia University). Other
notable presenters included Dr. Raymond Rosen (Robert Wood Johnson Medical
School), Dr. Irwin Goldstein (Boston University), Dr. Jeremy Heaton
(Queen's University, Canada), Dr. Tom Lue (UCSF), and Dr. William Steers
(University of Virginia), among others.
The symposium included presentations on a number of currently
commercialized products for the treatment of male erectile dysfunction
(MED) such as Pfizer's Viagra (R) and Schwarz's alfadex injectable
alprostadil. A large portion of the presentations, however, focused on
other treatment modalities that are currently in development, including
Zonagen's Vasomax (TM), TAP's apomorphine (joint venture between Takeda
and Abbott Labs), and Macrochem's Topligan.
The clear message from the conference was that the arrival of Viagra
(sildenafil) has both dramatically transformed the way physicians treat
erectile dysfunction and the general public's knowledge of the disease and
treatment options. According to data presented, there have now been 14
clinical trials completed on Viagra, with strong results. In addition,
well over 5 million U.S. men have now used Viagra, according to
researchers.
At the same time, despite the success that Viagra has had in its first six
months on the market, both treatments in development and other
currently-used pharmacotherapies should also make an impact on the MED
market.
While there is no question that Viagra has proven to be an effective
therapy for the countless men seeking treatment, it is not quite the
"perfect" drug due to a couple of factors. In his presentation on
sildenafil, Dr. Steers, while emphasizing that Viagra is "safe and
effective if used properly," addressed these two issues.
First, patients have complained about the time required for onset of
action, which is about an hour after ingesting the drug (closely mirroring
the time to achieve peak plasma concentrations). Secondly, Viagra cannot
be prescribed to individuals taking nitrate medications (typically, those
with angina). Despite these two drawbacks, the lack of alternative
noninvasive treatments continues to drive demand for Viagra, as evidenced
by the fact that patients in Dr. Steers' practice have even lied about
their use of nitrates just to get a prescription for Viagra, according to
the physician.
Dr. Steers also articulated that the highly publicized deaths in patients
taking Viagra very likely were not associated with the drug itself but
instead were probably due to the resulting sexual activity. He noted that
later this year, at the American Heart Association meeting, data will be
released showing that the risk of heart attack increases by 2.5x in
response to sexual activity for patients in the higher risk categories.
Future guidelines on this issue will clearly affect all of the oral
therapies.
Conversations we had with several urologists at the conference also
confirmed these aforementioned issues and indicate that perhaps the most
significant drawback to Viagra was the delay in the onset of action. One
doctor indicated that many men dislike the wait and acknowledged that a
faster-acting drug, such as the new version of phentolamine, would offer a
benefit to patients.
In an extensive presentation, Dr. Goldstein of Boston University discussed
oral phentolamine's (Vasomax) mechanism of action, pharmacokinetics, and
clinical efficacy data. In discussing the pharmacokinetic profile of
Zonagen's product, Dr. Goldstein emphasized that the Vasomax formulation
is very different from other versions of phentolamine that have been
tested or described in the scientific literature (e.g., injectable forms).
Interestingly, he indicated that Vasomax's unique formulation allows the
drug to achieve peak plasma concentrations at 30 minutes after ingestion
and may have a "peak activity that occurs at 10 to 15 minutes following
ingestion." In our view, this latter finding could offer a nice marketing
angle for Schering-Plough, which has worldwide rights to Vasomax.
In terms of new clinical data, Dr. Goldstein presented preliminary data
from the Vasomax open-label study. Specifically, at the end of the first
month of the open-label period, 47% of patients on the 40mg dose of
Vasomax reported that the drug had improved their erections. Of the
remaining 53%, 68% of those patients reported improvement in their
erections after increasing their dose to 80mg during a second month of
treatment. 90% of patients on the 40mg dose reported improvement at the
end of the second month. This new information demonstrates that patients
using Vasomax continue to see improvement in their erections over time.
The clear take home message from Dr. Goldstein's presentation was that
Vasomax is effective in enhancing erectile function in the male population
with mild-to-moderate erectile dysfunction. He emphasized that Vasomax
represents a viable treatment option that is safe and would be used in
patients who do not respond to Viagra or who are taking nitrates.
Interestingly, given phentolamine's different mechanism of action, he
stated that there is "a very rational basis to combine Viagra with an
alpha blocker like phentolamine (to achieve improved patient outcomes)."
Dr. Goldstein also alluded to a study he is currently conducting looking
at patients' responses to combination therapy with these two drugs, which
he hopes to present at the American Urological Association (AUA) meeting
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