Biotech Notebook: Impotence-Drug Stock Zonagen Suffers from Ups and Downs

Maybe there's something in the water, but Mexicans don't appear to need Zonagen's (ZONA Quote) impotence drug.

Shares of Zonagen, the little company that developed a controversial erection pill called Vasomax, are about as volatile as Fred C. Dobbs in Treasure of the Sierra Madre. While the company and its supporters admit Vasomax isn't as potent as Pfizer's (PFE Quote) Viagra, they contend that it will find a nice niche and could be worth hundreds of millions of dollars. The shorts contend the drug's trial data are questionable and that it's little better than sugar pills.

Recently, Zonagen's stock has perked up on news that partner Schering-Plough (SGP Quote) will manufacture Vasomax, not a big surprise since the big drug company will sell the pill, if it's approved. Zonagen, of the Woodlands, Texas, will get a 20% to 22% royalty on U.S. Vasomax sales. The stock has run up 50% so far this year. ...