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Biotech / Medical : GUMM - Eliminate the Common Cold -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (93)	1/30/1999 3:37:00 AM
From: DanZ	Read Replies (1) \| Respond to of 5582

Mad2, I disagree with your statement "Given that GUMM really doesn't bring anything to the table leads me to the conclusion that the reason for the "venture " is to pump GUMM's stock." First, GUMM does bring something to the table. Gel Tech is a joint venture that is owned by Biodelivery Technologies, Inc (40%) and GumTech International (60%). Biodelivery is a privately held biotechnology company. While I don't have specific knowledge about the company, I'd be willing to bet that it consists of a few doctors (R&D) and their spouses (Admin). The doctors developed the active ingredient, Zinullose (TM), that allegedly reduces the duration of cold symptoms from 10 to 14 days to an average of 1.5 days. Even more interesting, preliminary results suggest that when used once a day during the cold season, Zicam protects against the common cold. GumTech provides the manufacturing, packaging, marketing, and distribution of Zicam. So your statement that GUMM doesn't bring anything to the table is incorrect. Biodelivery does not have manufacturing capabilities and it is doubtful that they have sufficient capital or the desire to build a manufacturing facility. The only practical thing to do was to team with a company like GumTech that already has manufacturing, packaging, and distribution facilities in place. Keep in mind that GumTech also distributes Breath Assure, and therefore, has an established distribution channel to major nationwide grocery chains (Albertsons et. al), drug stores (Eckherd, Rite Aid, et. al.) , and discount stores (K Mart, Target, et. al). The GelTech partnership allowed Biodelivery to obtain rapid market penetration for their product and I think it will be a big winner for GumTech. I completely disagree that GUMM is pumping their stock. The initial press release was very low key and didn't even mention GUMM as being involved. You had to do some digging to figure it out. The pumping was done by some traders who bought before the news was officially released. Finally, there will always be hype when a new promising product hits the market. There's no way around this and it has caused significantly increased volatility in the shares of GUMM. Some people bought the stock based on the rumor and dumped it when the news became public. IMO, this caused the sharp drop in the stock from 15 Thursday and Friday. Once the short termers exit the stock, I think it will recover and test 15 at a minimum. If the stock gets through 15, I think it will run to at least 16 1/2. There's no doubt that the market for cold remedies is very large. According to market data, about $1.5 billion is spent on cold remedies each year. IF Zicam works as suggested, then I think it will gain rapid market share and many units will be sold. Just consider how many Albertson's, Eckherds, and Kmart stores are in the United States. Even with only a handful of units in each store, the volume of units sold could be staggering. I have also read that the Military would be very interested in Zicam if it works as advertised. GUMM only has about 7 million shares outstanding and they have averaged $3 million to $4 million in sales the past few years. Zicam has the potential to increase their sales by orders of magnitude. Given that only 7 million shares are outstanding, the company has plenty of earnings leverage. For example, if they only make $7 million profit, their EPS will be $1. With high perceived growth, the company could easily trade at 25 to 35 times earnings, putting the stock at 25 to 35 in a heartbeat. It shouldn't be hard for them to make $7 million profit on Zicam if the product works as advertised. That is a tiny number compared to the size of the market for cold remedies. They could even make $2 to $3 per share. Where would that put the stock? Sounds far fetched? Maybe, maybe not. Do you know how Genentech started? A couple of doctors developed a gene splicing technique and went public. Their net worth went from small (relatively speaking) to mult-millions in one day. I'm not suggesting that those who invest in GUMM will become millionaires. My point is that you have to look beyond the past fundamentals of GUMM because of the tremendous growth prospects for Zicam. Who cares if GUMM lost money the past several years. They have a new product that could dramatically change their financial condition in a hurry. Many companies go from nothing to something big with a single product or technique. Genentech is only one example and there are many. Those who believe that Zicam will become something big are buying GUMM stock. Those who think Zicam is hype are trying to short the stock. Only time will tell who is right. I have done my DD, and putting all hype aside, I think Zicam will be a big winner.

To: Mad2 who wrote (93)	1/30/1999 3:40:00 AM
From: Mike M	Read Replies (1) \| Respond to of 5582

Boy, that clever post really proves something...How many people worked for Yahoo early on...Give me a break. You know even less of what you speak than Bengalus. Short on, old boy...We will appreciate the buying power...

To: Mad2 who wrote (93)	1/30/1999 3:54:00 AM
From: Mike M	Respond to of 5582

By the way, since you are so clever, where do you think the manufacturing plant for ZICAM is? (I am betting you don't have a clue.) Which drug stores are already selling the product? How many more will....This all has to do with how well GUMM's product will perform, not how many sales QGLY has... If GUMM were trying to pump their stock they would have made a far greater fan-fare than the terse report made by Kehoe....I am convinced that he is rather unhappy with the speculative ride this stock has taken recently and will be happy when it is based on the merits of rising sales, which, I believe will happen soon enough. Regards, Mike