(FORTUNE Magazine) – A 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 voila!--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 box). 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.

REPORTER ASSOCIATE Alicia Hills Moore