Zonagen's Trials Slammed By Broker

Brokers Asensio & Company, based in New York, USA, have heavilycriticized Zonagen's Phase III clinical trials of Vasomax (immediate-release oral formulation of phentolamine), for the treatment of male erectile dysfunction, which it says were "seriously flawed," adding that "Zonagen had no defendable proprietary position in the male impotence pill market." Asensio has given Zonagen's shares, which it considers to be "grossly overvalued," a strong sell rating.

The excessive stock price is caused by the management's failure to disclose negative information while exaggerating Vasomax' sales potential, Asensio says. Vasomax' only active ingredient is phentolamine, a 45-year-old generic drug, which has been "shown to be ineffective in the treatment of impotence," adding that even Zonagen's Phase II German trial confirmed this.

Zonagen has rejected claims that the late-stage trials for its drug were flawed in design and execution. Vasogen was properly tested and has proved effective and safe in four late-stage clinical trials involving 1,100 patients, it says. In response to Asensio's claim that "Zonagen does not own a patent for any pill to treat impotence," it says that it has a method-of-use patent on Vasomax for erectile dysfunction and has also filed a composition-of-matter patent on its pill formulation.