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

To: Bo Didley who wrote (564)	5/16/1999 12:18:00 PM
From: DanZ	Read Replies (3) \| Respond to of 5582

Bo, My post on Yahoo may answer some of your questions. messages.yahoo.com My personal target for the stock is 28 to 32 this year. I think this is highly probable if GumTech wins a nicotine supply contract and investors discount sales of $35 to $40 million in Zicam next year. Your estimate of $1.80 profit per unit of Zicam doesn't include advertising expense. My financial model is based on advertising expense of $1 million per month and gross margin of $3.00 per unit (from Gel Tech's perspective). Based on this, GumTech's break even point for Zicam is $28.6 million in annual revenue. Zicam would contribute $0.23 per share of profit on sales of $35 million, $0.41 per share on sales of $40 million, $0.77 per share on sales of $50 million, $1.67 per share on sales of $75 million, and $2.57 per share on sales of $100 million according to my projections. I don't have a detailed projection for nicotine gum but I do know that the margins for that product are much higher than GumTech's current products. GunnAllen estimates that GumTech would earn 47 cents from their gum business if they win a nicotine contract. Dental gum is very early in it's life cycle and I'm expecting it to grow about 20% per year for the next two years. My guess is that dental gum (Breath Asure and Ranir) contributed about $800,000 to GumTech's $2.1 million revenue in Q1 99. This is just an educated guess because GumTech won't release sales per customer. The projections that I have provided in this post justify why I think the stock could trade to $100 next year if they sell $100 million in Zicam in the year 2000 and win a nicotine gum contract. If both of those come to fruition, I think GumTech would earn about $3.05 per share in 2000. Applying a PE of 30, which would be reasonable given their growth rate, the stock could trade at 100. I hope this information helps. Dan