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March 16, 1998
The Selling of Impotence
Impotence is a much bigger problem than doctors used to think, and
new pills are on the way to treat it. But hype about the drugs may
be hazardous to your wealth--and may obscure health risks of the
second sexual revolution.
David Stipp and Robert Whitaker
Reporter Associate: Alicia Hills Moore
Plus:
The Rise and Fall of an Impotence Stock
Sex Quiz for Men
new chapter in the history of impotence began in 1983, when a
57-year-old British physician named Giles Brindley stepped from
behind the lectern at a Las Vegas medical conference, dropped his
pants, and showed his erect penis to hundreds of colleagues.
Brindley had just presented work on injectable drugs to treat
impotence and was displaying an erection he had induced by injecting
his own penis. The results were quite good. Says an attendee: "I was
wondering why this very smart man was giving his talk in a jogging
outfit. Then he stepped from behind the podium. It was a big penis,
and he just walked around the stage showing it off."
Brindley knew he was making medical history. But he couldn't have
foreseen that his demo would eventually trigger a stampede to create
pharmaceutical treatments for what is now called erectile
dysfunction (ED). Today new treatments are appearing in the market,
and many others are moving through clinical trials. Pfizer's Viagra,
the first pill for ED, is expected to be approved by the FDA this
spring, and already analysts are predicting it could generate annual
sales as high as $4.5 billion, which would make it the world's
top-selling drug. All this has led to a blaze of attention for
impotence treatments: In a recent cover story Newsweek trumpeted the
promise of the new drugs as "better loving through chemistry."
But there is another side to the story that is going untold. The
saga of the latest breakthroughs is also a fascinating tale of how
the medical establishment may redefine a condition in a way that
greatly increases the number of people "afflicted"; how Wall Street
may adopt hyped statistics to weave a gold-rush tale of
multibillion-dollar markets; how pharmaceuticals companies may
recruit influential doctors as consultants until there are few
independent experts left; how physicians' safety concerns about new
therapies may remain whispers that the public--and investors--are
unlikely to hear. It's also a tale of how a Texas startup called
Zonagen rode the hype to a remarkable valuation, wooing investors
with press releases that omitted disappointing clinical results and
misled stockholders about its patent protection. Its story provides
a rare look at how the best face is put on new medical
treatments--and how the investment community may be taken in.
Injections Replace Snake Oil
The impotence-curing business has always been one of medicine's
shadiest niches. Hundreds of bizarre remedies, from boar gall to
tiger-penis soup, have won believers through the ages--desperate
males are easily fooled by placebo effects, which can temporarily
ameliorate mild impotence. A century ago men even mail-ordered
electrified jockstraps in hopes of jump-starting their inoperative
parts. Drug companies with sober public images to maintain tended to
view impotence remedies, like aphrodisiacs, as taboo.
Brindley's interest in this medical backwater began almost by
chance. In 1982 his curiosity was piqued by a colleague's contention
that certain drugs that lowered blood pressure could also cause
impotence. Brindley, who suspected they might have just the opposite
effect, went home and tested his hypothesis by injecting his penis
with some of the drugs. The results were striking. Detailing his
findings with clinical precision in several classic research papers,
he noted that a drug called papaverine could induce "an unrelenting
erection lasting for hours."
The drugs that Brindley studied were mainly older blood-pressure
medicines. When injected, they relax smooth muscles wrapped around
penile arteries, causing them to dilate. That increases blood flow
to the penis, the first stage of an erection. As the organ's inner
chambers fill, veins that normally drain them are squeezed against a
sheath of surrounding tissues, allowing the penis to become fully
engorged--picture a bathtub filling with the faucet on and the drain
plugged. Muscles constricting the chambers also relax, aiding
engorgement. If any part of the sequence is disrupted--say, by
clogged arteries or damage to nerves--impotence can ensue. Brindley
showed that wrenching the faucet wide open with drugs could make the
whole faulty plumbing system work.
Few U.S. doctors knew of his research, however, until his
unforgettable demo at the medical conference. It was intended to
preempt skeptics, and it worked brilliantly: Within months
urologists across America were prescribing injection therapy. Says
Dr. Alvaro Morales, an authority on impotence at Queen's University
in Kingston, Ontario: "We have to be very grateful to Brindley."
One urologist in the audience the day Brindley dropped his pants was
Adrian Zorgniotti. A New York University professor, Zorgniotti saw
that Brindley was paving the way to new commercial as well as
medical horizons. The professor started research of his own,
tinkering with cocktails of blood-pressure-lowering drugs. His idea
was that the chemicals might work synergistically, allowing men to
inject smaller doses that would minimize side effects such as
priapism--an erection that lasts more than four hours, potentially
causing tissue damage. In 1985 he reported good results from a mix
of papaverine and phentolamine.
As a result of such research, urologists began treating impotence
patients with a mix of three drugs: papaverine, phentolamine, and
prostaglandin E1. The cocktail approach is still widely used. "By
tailoring the dosages and mix of drugs in an injection, a man can
even fine-tune the duration and rigidity of his erections," says
Seth Koeppel, CEO of Men's Health Centers, a chain of ED clinics
based in Boca Raton, Fla. Porn-film actors were reportedly among the
first to master such fine-tuning.
However, Zorgniotti and other specialists knew that this therapy
would have limited appeal as long as the drugs had to be delivered
through scary needles. (The fine-gauge needles reportedly cause
little pain.) Administering ED drugs by another route would open up
much greater commercial possibilities.
The obvious solution would be a pill. Take one at bedtime and
voilą!--a man could boast an erection of Brindley-esque vigor. But
researchers believed that if they tried to deliver the old
blood-pressure medicines in a pill, the compounds would be broken
down too quickly by the stomach and liver to act on penile arteries.
Refusing to give up, Zorgniotti pondered lollipops laced with
erection-boosting drugs for absorption into the bloodstream via oral
tissues. That sounds silly, but the basic idea wasn't. Eventually,
in 1993, he applied for a patent that covered melt-in-your-mouth
phentolamine.
By the early 1990s, the use of injection therapy began to attract
drug-industry interest. Lilly, Syntex, Pfizer, and Upjohn all
quietly investigated impotence remedies. Pfizer's Viagra seemed
especially promising. But Wall Street didn't notice the area's
promise, and many big drugmakers remained uneasy about the seedy
history of sex medications and skeptical about the size of the
potential market. Says Harin Padma-Nathan, a Santa Monica, Calif.,
urologist who consults with industry players about impotence drugs:
"The companies had to be convinced this was a serious area of
medicine."
An Impotence Epidemic
News that would catapult impotence into prominence was on the way,
thanks to a team that included the Paul Revere of impotence, a
Boston University urologist named Irwin Goldstein. Gregarious and
highly quotable, Goldstein is known for his prolific research and
brash assertions. (He recently stirred a ruckus by claiming that
bicycle riding can cause the disorder.) In 1987, Goldstein and his
colleagues began the first definitive study on the prevalence of
impotence. Their statistical conclusions were as startling as
Brindley's lectern stunt.
In their research, which was part of a federally funded survey
called the Massachusetts Male Aging Study, Goldstein and his
colleagues examined impotence through a new lens. The classic
definition for impotence had always been, crudely put, the inability
to get it up. But rather than merely asking men whether they were
unable to have erections, the Bostonians posed questions like "How
satisfied are you with your sex life?" In effect, they redefined
erectile dysfunction as a matter of degree, properly assessed with
subjective questions (see Sex Quiz for Men). They created a "mild
ED" category to include men who may be able to get erections but do
not feel they can maintain them long enough for "satisfactory sexual
performance."
"That statement has a lot in it," says Dr. David Ferguson, an
independent expert on erectile dysfunction from Grayslake, Ill., who
consults with companies developing ED drugs. "It puts the problem in
the eye of the beholder. Who decides what is satisfactory? The
patient and the patient's partner. [Impotence] used to be looked at
as an all-or-none phenomenon."
Drawing on the Massachusetts study, the National Institutes of
Health estimated that an astounding 30 million American men suffer
from ED, triple the number previously regarded as impotent. After
detailing their numbers in a landmark 1994 report in the Journal of
Urology, Goldstein's team ran up the flag: "Impotence should be
considered as a major health concern," they concluded.
To hear the experts tell it, ED was now an epidemic. A majority of
men over 40 were now seen as suffering from erectile
dysfunction--yet fewer than 5% were seeking treatment. The
Massachusetts research paved the way for newspaper articles in which
men were urged by urologists to get beyond their embarrassment and
see their ... urologists.
This pattern is emerging as a hallmark of the marketing of new
treatments. Medical crusaders draw attention to a disease by
broadening its definition to include the most mildly affected
patients. That boosts demand for new medicines--even for people who,
in an earlier era, wouldn't have been considered sick. Much as
Prozac has helped turn even ordinary bouts of the blues into a brain
disorder treatable with drugs, the new ED drugs promise to
medicalize age-related sexual decline, blurring the line between
disease and discontent. Says University of Pennsylvania urologist
Gregory Broderick: "We may feel comfortable with our sex lives now,
but what if there were a tablet that we knew would make it a little
better?"
The expanded definition of ED has also led to wild estimates of the
future incidence of the condition. Last fall the American Foundation
for Urologic Disease launched a national "impotence awareness"
campaign funded by Vivus, the maker of a recently approved impotence
treatment called Muse. The campaign began with a press release
citing a staggering statistic: Due to the aging of the population,
it stated, some 47 million U.S. men are expected to suffer from ED
by 2000. That might seem a bit strange: There are only about 52
million American men over 40 today. Confronted with the math, a
spokeswoman for the foundation, an offshoot of the American
Urological Association, says the high estimate may have been a
mistake.
The statistics have gone on to provide foundation for analysts'
bullish market reports. Just crunch a few numbers yourself: Say an
erection-boosting pill would be taken two times a week by a typical
man with ED, roughly 100 doses a year. Say it's priced at $10 a
dose--a reasonable buy for one of the best things in life. Assume
just one in five men with ED uses it. Ca-ching! Annual U.S. sales of
more than $4 billion. Here is how analyst David Saks of Gruntal &
Co., quoted by Reuters, sized up the potential for Pfizer's Viagra
pill for ED: "I hereby make the outrageous claim that Viagra will
become the world's biggest drug success story, bigger than anything
that has ever been seen." Added Viren Mehta of Mehta & Isaly on
Viagra's potential: "Any number is possible." Among the ideas that
excited some analysts was the possibility that millions of men and
women with no medical need for the new drugs would take them to
enhance sex, vastly amplifying sales. (Women also have erectile
tissues.)
And so, by last fall, the story came together. The market for an ED
pill is huge, perhaps the biggest ever, and miracle pills are at
hand. By October, Pfizer's stock had risen more than 75% in 1997,
partially in anticipation of Viagra's entry into the market.
Zonagen, a tiny biotech company with an ED pill called Vasomax that
was producing mixed results in clinical tests, saw its valuation
climb to more than $500 million. Vivus' stock soared to almost $42 a
share, giving it a market value of $1.5 billion. MacroChem, a small
company in Lexington, Mass., which is developing an anti-ED gel to
rub on the penis, saw its stock top $14 a share, almost triple its
price a month earlier.
Urologists Who Help Sell
ED experts, after years of trying to pique public interest, found
themselves hotly sought after last year. One doctor who has popped
up everywhere is Goldstein. In June, he was quoted in Playboy
proclaiming, "We're in the midst of an exciting revolution, a new
area of sexual medicine called sexual pharmacology." In August,
ABC's Good Morning America featured him in a segment on Viagra.
"It's a dream," he told viewers. "The practitioners in this field
... didn't think [an ED pill] was possible." In September the
Pittsburgh Post-Gazette quoted him on his belief that there will
indeed be considerable recreational use of Viagra. "I can see
college kids putting it in their partners' drinks," he said.
What few TV viewers or newspaper readers may have realized is that
Goldstein is a paid consultant to many companies developing ED
drugs. He consults with Pfizer, Zonagen, MacroChem, Harvard
Scientific, and Senetek, among others. "I'm very interested in
impotence. If there's a company working in the area," he says, "I
try to be a consultant to it."
It would be unfair to characterize Goldstein or other ED experts
hired by the industry as shills. Helping patients is usually a top
priority among consulting doctors, and those most favored by the
industry tend toward missionary zeal to improve treatments.
Goldstein, in particular, deserves credit for waking up doctors to
the fact that impotence causes untold suffering, wrecks marriages,
and blights millions of lives.
But once doctors become paid consultants, marching counter to the
corporate drumbeat may prove difficult. In many cases, they sign
nondisclosure agreements that block them from divulging data that
might conflict, say, with a company's carefully crafted statements
about new drugs.
In the impotence arena, independent, unbiased reviews of new
therapies are especially hard to find. Says Dr. Jeremy Heaton of
Queen's University: "It isn't possible to go to anybody in this
field right now for a neutral opinion." (For the record, Heaton is
an adviser to TAP, a joint venture between Abbott Laboratories and
Takeda Chemical Industries of Japan, which is developing an oral ED
drug called apomorphine.) Another urologist, who declines to be
named, is even blunter: "In my opinion, all these pills are being
hyped unmercifully."
In some instances physician-consultants even invest in the companies
they serve. Ferguson, the expert from Illinois, helped develop
Zonagen's strategy for testing Vasomax and is a consultant to other
companies as well. But when media reports cite him on the promise of
the new ED therapies, they don't typically mention that he owns
stock in Zonagen and other ED companies. Questioned by FORTUNE about
these investments, Ferguson is quite forthcoming, listing them
company by company; he adds that the problem, if there is one, is
that reporters never ask: "If there has not been disclosure, it's
because the issue has not been raised."
Physicians who moonlight as consultants are part of the modern
medical landscape. But the medical community is beginning to
acknowledge that there's a price. A disturbing study in January in
The New England Journal of Medicine revealed that 96% of medical
experts who published studies or other articles supporting the use
of certain controversial blood-pressure drugs had financial ties
with companies that make them, while 37% of those who wrote articles
critical of the drugs had such ties.
Are certain risks getting little attention in the excitement about
new ED drugs? The great unspoken fear surrounding many ED
medications is the danger of heart attacks during sex. Many cases of
incipient heart disease have been discovered by doctors doing
workups on men whose sex lives had crashed; recent research suggests
that ED is a leading indicator of heart disease. (It seems that
small arteries supplying the penis get narrowed by fatty deposits,
hindering erections, before larger cardiac vessels are plugged up
enough to cause trouble.) The new ED therapies could both mask this
critical warning sign and also tempt aging men to put heavy,
unaccustomed demands on their hearts while trying to relive lusty
scenes of youth. The worst nightmare for developers of sex pills and
other impotence therapies, says Heaton, is that the craze for ED
pills will lead to a rash of "coital coronaries."
Investors, of course, might like to hear of such risks before
betting on an impotence-drug fad. As the recent debacle involving
diet drugs showed, when hordes of people are prescribed potent
medicines like candy, little-known side effects can appear. The
heart-valve defects apparently caused by slimming pills like
dexfenfluramine prompted the withdrawal of the drugs from the
market, bringing a booming $300-million-a-year business to a halt.
Yet coital coronaries have gotten scant mention in media reports on
the new ED drugs.
One Startup's Story
No company exemplifies the risks of the impotence game better than
Zonagen. Its pill, Vasomax, is regularly named among the
front-runners in the ED race, and Schering-Plough, a
$6.7-billion-a-year drug company, recently agreed to help develop
and market the drug. Zonagen's stock has been an investor roller
coaster, more than quadrupling in value last year after a string of
upbeat company announcements and media reports, before being
hammered by shortsellers.
Formed in 1987 with backing from prominent venture capitalists and
Ross Perot, the company, in The Woodlands, Texas, had an
unpropitious start. A contraceptive for pets it tried to develop
didn't pan out, and a plan to devise a similar product for humans
was iffy at best. In 1992, Joseph Podolski, an engineer who had
managed operations at Monsanto, was named CEO. The following year
Zonagen completed a $7.4 million initial public offering and then
went shopping for a product that could turn things around.
In early 1994, it zeroed in on one: For about $300,000 it bought
Adrian Zorgniotti's patent for orally absorbed phentolamine as a
treatment for ED. Acquiring the patent from the elderly physician,
who died three months later, seemed a stunning coup. In a 1993 study
Zorgniotti had reported that a third of 69 impotent men who let
phentolamine tablets dissolve in their mouths had strong erections,
vs. 13% who took a placebo--compelling for a proof-of-principle
experiment. Zonagen also retained a prominent Mayo Clinic impotence
expert, Dr. Ronald Lewis, as a consultant. Overnight it seemed
poised to lead in the race to develop an oral drug for ED.
However, when the company tested Zorgniotti's idea, says Podolski,
patients complained that phentolamine held in the mouth was
extremely bitter. Rather than walking away--Zonagen had little else
going for it by this time--the company took a fateful gamble: It
abandoned the melt-in-the-mouth approach to pursue a swallowed
phentolamine pill, which it named Vasomax.
As the company switched strategies, it also switched advisers.
Lewis, like Zorgniotti after his early experiments, doubted that
swallowed phentolamine would work--stomach acid and liver enzymes
would neutralize it. Without using risky large doses of the potent
blood-pressure drug, says Lewis, now at the Medical College of
Georgia, "I couldn't see how Vasomax would lead to high enough blood
levels" to boost erections. Soon he was off the team. "They read my
skepticism and figured I wouldn't be out there pushing," conjectures
Lewis. Zonagen disagrees, saying it replaced Lewis with experts
associated with a contractor it hired to do clinical trials. They
included Goldstein and Ferguson.
Like any biotech or drug startup, Zonagen faced a daunting financial
challenge in developing Vasomax. It would need to raise significant
capital to compete with industry giants that regularly spend more
than $100 million developing a single product. Part of the challenge
involved science; part involved keeping investors excited. At the
latter, Zonagen proved particularly adept.
Soon after it started developing Vasomax, Zonagen began issuing
upbeat releases about its clinical tests. After racing through a
first phase of safety tests, the company announced in May 1995 that
it had begun a "phase II" efficacy trial in Germany. Phase II
results often make or break a drug: If they show little or no
efficacy, a startup like Zonagen typically can't proceed--investors
won't be willing to place the hefty bets needed to finance larger
phase III trials, which typically cost tens of millions of dollars
and which the FDA requires to firmly establish that a drug is safe
and effective.
The German study involved 177 impotent men. Each was asked to try to
achieve vaginal penetration on three separate occasions after
receiving Vasomax or a placebo--those succeeding at least once were
deemed to have responded positively. In March 1996, Zonagen
announced Vasomax had worked well: "Positive" results in the German
study would soon be followed by a phase III trial, said the press
release. Focusing on a subset of the German data, it noted that one
group of patients had shown a striking "50% improvement in efficacy
over placebo with no side effects."
But like a profit-and-loss statement missing the bottom line, the
rosy release made no mention of the study's overall result--which
Zonagen did not disclose until eight months later, in a Securities
and Exchange Commission filing. The news wasn't good: The German
trial had failed to show statistically significant efficacy.
Podolski defends Zonagen's press release as an accurate disclosure
of promising early data.
Zonagen plunged ahead. In 1996, it rushed Vasomax into phase III
trials, one in Mexico and two in the U.S. To investors the move into
phase III trials was a good sign; Zonagen's drug was moving toward
approval. In June the company had more good news: It announced in a
press release that the U.S. Patent Office had approved its patent
"covering the use of Vasomax as a treatment for erectile
dysfunction."
That announcement might have surprised the late Dr. Zorgniotti. The
patent that had been approved was his, which covered
melt-in-the-mouth phentolamine pills but not the swallowed kind that
Zonagen was now testing. (In fact, statements in the patent cast
doubt on whether a swallowed pill would be effective.)
For a patent to protect Vasomax, the company had filed a separate
application, which the release said was pending. Zonagen
subsequently disclosed that the patent office rejected the second
application, a decision the company is trying to get reversed. In a
recent interview, Podolski concedes, "You can say today no patent
specifically covers Vasomax"; he claims the company's issued patent
"broadly covers" the drug. He adds that the second application
initially failed because its claims were too broad but that he
expects it to be issued soon.
Zonagen's spin-doctoring in its 1996 announcements may have been a
matter of survival. Its auditors soon warned that it would need
additional capital to continue developing Vasomax and to stay in
business. Aided by the upbeat press releases, Zonagen steered away
from the brink. Its stock price doubled, reaching $12 a share in
mid-1996, and Zonagen raised $16.9 million in a private placement of
preferred shares to fund its phase III trials. Investors didn't
appear to notice its dubious patent position or the mediocre phase
II results.
By the end of 1996, Zonagen had begun telling investors that it was
racing to submit a new drug application to the FDA by midyear
1997--a timetable likely to leapfrog Pfizer's submission for Viagra.
The early submission would, at least in theory, enable Zonagen to
become the first company to market with an oral pill for ED, a
critical advantage for grabbing long-term market share.
The company also said that its Mexican trial had yielded
statistically significant results: Of 148 men, 62% using Vasomax
achieved orgasm during intercourse, vs. 42% who had taken a placebo.
The company said it planned to seek marketing approval in Mexico
during the first few months of 1997 and that by summer it would be
knocking on the FDA's door.
For Zonagen, what happened next was beyond the wildest dreams of
most small companies: In April 1997, the Texas edition of the Wall
Street Journal, quoting analysts, stated that the company was "six
months to a year" ahead of Pfizer in the race to develop an oral
impotence drug. Investor's Business Daily also ran a glowing report.
Suddenly Zonagen, a no-name startup with 35 employees, was being
hailed for whipping one of the world's mightiest drug companies in
the high-stakes ED race. Zonagen's stock climbed above $20, more
than double its price three months earlier.
Keeping pace with Zonagen's rapid strides on Wall Street, its
clinical team completed the two U.S. trials with lightning speed.
The first was conducted in a little over six months and yielded more
good news: Last May the company announced that 40% of men had
responded positively to Vasomax, vs. 17% on placebo. Up went the
stock price again.
Zonagen was beginning to seem unstoppable--unless you were paying
close attention. The results in its second U.S. trials were less
than rosy (some 34% responded positively, compared with 21% on
placebo), but that didn't dent investors' fervor. In June the
company filed with the SEC to make a secondary stock offering;
investors poured in another $72.3 million. By fall they had driven
the company's market valuation to more than $400 million. An
investor who had purchased stock in November 1996 would have seen
his or her investment more than quadruple in value in less than a
year.
Investors jumping on the Zonagen bandwagon should have asked a
crucial question that ought to be asked about all new drugs: How
safe is it? Vasomax raises a burning issue that applies to all
impotence pills: How can a drug delivered via the bloodstream dilate
penile arteries without similarly affecting blood vessels throughout
the body, risking severe side effects? After all, even localized
injections of "vasodilating" drugs in the penis occasionally cause
sudden bodywide drops in blood pressure, accompanied by dizziness
and fainting. Why wouldn't an oral ED pill knock guys out?
In its press releases on its clinical trials, Zonagen said that in
the largest trial at the highest dose, 80 milligrams, side effects
were "within expectations," including just two "serious" adverse
events. At a lesser 40-milligram dose, it said the pill had caused
no serious side effects. (Podolski points out that since Vasomax is
designed to boost natural erection processes during arousal, rather
than induce an erection regardless of sexual excitement, as
injections do, blood levels of the drug do not have to be very high
for it to work.)
All that was encouraging and about as much detail as any drug
company divulges regarding safety at this early stage. But there is
more to the story. From the beginning Zonagen and its
consultants--along with the FDA--had been concerned about the drug's
safety, says Ferguson. The company was clearly mindful of side
effects in the way it conducted its U.S. clinical trials. Before
they began, its investigators administered doses of Vasomax to
patients and disqualified anyone who showed significant adverse
effects. According to Ferguson, no fewer than 44 of more than 500
volunteers were eliminated at the outset of the largest trial. The
"adverse events" they experienced included a racing heart,
dizziness, and low blood pressure.
Asked about that, Podolski acknowledges that the men were dropped
from the trial and that a racing heart was the most common side
effect. But, contends Podolski, "these weren't serious events."
Moreover, he adds, those side effects occurred only at the
80-milligram dose; Zonagen intends to market only lower-dosage
40-milligram pills.
Drug companies usually don't disclose all the details about a
medicine's safety until it has been thoroughly reviewed by the FDA.
Butsafety concerns can slow a drug's approval and lead to label
warnings that could potentially limit its use--factors that can
affect a company's prospects and its stock. In fact, when Zonagen
approached the FDA last fall with a plan to put Vasomax on the
agency's fast track, officials replied that Zonagen would need to
submit more safety data. A few weeks later the agency granted
Pfizer's similar request for expedited review of Viagra. Now it
appears Zonagen's drug won't reach the market until many months
after Pfizer's does, if ever.
Zonagen's practice of staying with upbeat news worked for most of
last fall. The company saw its stock rise strongly, as the impotence
drug play on Wall Street built to a fever pitch. Zonagen's share
price climbed as high as $45.75, making the company worth more than
$500 million.
But in late October the stock market took a nosedive, hammering ED
players along with many other stocks. Soon after, the ED niche was
slammed even harder from another direction: Hyperinflation of its
stocks had created an irresistible target for shortsellers, who
borrow and sell a company's shares, betting they can replace them
with cheaper stock bought after a price plunge. Zonagen, in
particular, loomed large on their radar screens.
On Nov. 17, Zonagen trumpeted its best news yet: Schering-Plough had
agreed to put its deep pockets and marketing muscle behind
Vasomax--the drug giant would pay $10 million for licensing rights
to the drug, with another $47.5 million to follow as it clears
regulatory hurdles. A day later the upbeat announcement was
overshadowed by a scathing report issued by New York shortseller
Manuel Asensio, who argued that Vasomax "has no commercial value."
Shortsellers were soon circling Zonagen like piranhas--by year-end
its stock price plunged below $20. Other stock bubbles were soon
deflating too--Vivus' share price, for instance, dipped below $10 by
year-end.
Here Comes Viagra
Of all the companies in the ED race, Pfizer seems least affected by
the doubts. Its stock, after a short dip in November, is trading at
an all-time high. Its pill, Viagra, is expected to be launched
within a few months, beginning the raciest chapter of the impotence
story--and another colossal surge of hype.
By the fragmentary accounts of doctors overseeing its clinical
trials, Viagra works and has few side effects. In one study of men
taking fairly hefty doses of the drug, 79% of patients, most with
relatively severe ED, reportedly had good responses, vs. 29% on
placebo. Viagra's main side effects seem to be headaches and
occasional indigestion.
Researchers say Viagra's novel mode of action may explain why it
appears to work better than Vasomax. The drug slows the action of a
chemical in the penis that quells erections. Activated during
arousal, the chemical normally helps end the erection after sex. By
blocking it temporarily, Viagra can boost erections with few side
effects.
Still, high doses of Viagra reportedly can cause some worrisome side
effects, including dizziness and temporary disturbance of color
vision--some men have trouble telling blue from green after taking
the drug. Moreover, some doctors criticize Pfizer and its
consultants for revealing only selected data from the clinical
trials. Pfizer declines to comment, pending FDA action on its
application to market Viagra. And even doctors who feel the drug is
being hyped expect that the FDA will approve it soon and that it
will likely become a huge seller.
That prospect has brought renewed glow to small players that stand
to capture a piece of the huge ED pie. Vivus recently launched a
national advertising campaign for Muse with an estimated budget of
more than $5 million. At press time the company's stock price had
risen some 35% from its year-end low. Even Zonagen, with
Schering-Plough behind it, has bounced back some--the stock traded
recently at $22 a share, and its product isn't out of the race. The
niche also may be bolstered this year by good news about TAP's
apomorphine: Urologists say the drug, which has gotten little
attention, has produced promising results in clinical trials that
appear solid.
Better treatments for impotence do appear to be on their way; like
all drugs, they will offer a mix of benefits and risks. More stories
will appear in the media that tell mostly of the benefits. That's a
message less of science than of marketing, but it's the one that
investors and consumers, at some risk, will probably embrace.
Co-author Robert Whitaker is editor of CenterWatch, a newsletter
that reports on the clinical trials business.
The Rise and Fall of an Impotence Stock
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Sex Quiz for Men
How science uncovered an impotence "epidemic"
From recent reports on impotence, you'd think it was spreading like
the flu. In fact, what qualifies as erectile dysfunction (ED), as
doctors call it, has changed. It used to mean being unable to
sustain an erection during intercourse. But many experts felt this
overemphasized mechanics--there's more to sexuality than plumbing,
after all. So a groundbreaking study published in 1994 expanded the
meaning, asking men nine questions about their sexual vigor. A
selection:
How satisfied are you with your sex life?
How satisfied are you with your sexual relationship with your
present partner or partners?
How satisfied do you think your partner(s) is (are) with your
sexual relationship?
Has the frequency of your sexual activity with a partner been:
as much as you desire?
less than you desire?
more than you desire?
If your answers add up to "dissatisfied," you may qualify as
suffering from ED. You would not be alone. Media reports now
regularly state that 20 million to 30 million men in the U.S., and
perhaps 140 million worldwide, have trouble achieving erections--and
only 5% get treated. To developers of ED pills, such numbers are
extremely sexy.
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