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

To: Bob Trocchi who wrote (6238)	2/25/1999 10:11:00 AM
From: Linda Kaplan	Read Replies (1) \| Respond to of 7041

Great article. The longs in this thread insisted that Mexico was going to be TERRIFIC for Vasomax, that it was a wonderful place to test the market. Notice that all they do is call shorts names now, trying to taunt them, rather than addressing the fact that they were dead wrong about Mexico, that the sales that they claimed were excellent, have been negligible to nonexistant. So now Mexico is not a wonderful place to test the market any more. Now Mexico is irrelevant. Before, the boorish loud-talking longs said they'd be happy to get a small percentage of the huge ED market, but now the market is no longer so huge. That small percentage of the ED market it is going to be very small sales. Maybe no better than were had in Mexico. Of course, one of the more mindless longs thinks that Italy is going to be a key country for Vasomax. Anyone want to take bets on that? Of interest to the long suffering VVUS owners, MUSE has received marketing licenses in Germany, Denmark, The Netherlands, Ireland, Luxembourg and Finland. Now MUSE happens to work, and Vasomax does not. MUSE's drawback is its delivery system. Vasomax's drawback is that it doesn't work. My expectation is that MUSE will have better sales than Vasomax and that MUSE's sales will continue to be poor. Linda

To: Bob Trocchi who wrote (6238)	2/25/1999 11:13:00 AM
From: Bob Trocchi	Read Replies (1) \| Respond to of 7041

ZONA: I am trying to portray a best case scenario for ZONA. I read recently that Viagra sales have dropped off to an annual world-wide run rate of slightly less than $500M. I believe that Shearing Plough will give ZONA royalties of I believe 20% of sales. I will assume that the FDA approves Vasomax which in itself is a big assumption. Assume that over the next three years, ZONA gets market share of 20%, 30% and 40%. I actually would expect market share to go down as additional products come to market and Viagra fights the competition but I am painting a best case scenario. Using the above, the sales of Vasomax would approximate $100M, 1$150M and $200M with royalties of $20M, $30M, and $40M. Lets further assume that 20% of these royalties drop to ZONA's bottom line yielding profits of $4M, $6M and $8M. With 11 million shares outstanding, that will translate to an EPS of $0.36, $0.55 and $0.73 and a PE ratio of 75, 49 and 37. Now I know from experience that whenever one piles assumptions on top of assumptions on top of assumptions, there is little chance of one coming out with the correct conclusion. Nonetheless, one must make decisions based on their interpretation of whatever existing data exists and make assumptions on all the rest. My conclusion is that even if Vasomax is approved, a lot of high expectations have already been built into the price. Maybe not the best short in the world but IMO, not the best long in the world either. I would appreciate thoughtful comments on my analysis as I am only too interested in gaining as much insight as possible. Bob T…. Still Short