Today we’re digging into a teaser ad that mentions several little companies, most of which appear to be in biotech … and which is so terribly urgent that they have to “this presentation from the Internet at 5pm Thursday, March 31st.” So, golly gee, we’ve only got one more day! Quick!
The promise will sound familiar to most of you who’ve been taking off your shoes to be screened for Gumshoe Airlines over the past few years — it’s from Patrick Cox for his Breakthrough Technology Report, which aims to identify technologies that are, well, breakthroughs, and to pick the stocks that make these discoveries or advancements well before the market catches on.
The risk, of course, is that most of these stocks — biotechs or tech startups, in the main — are junk, and will never get to the point of actually selling a product or making a profit. So we’re left to trust in Cox to find the best of them, and to keep an eagle eye. On the positive side, though, portfolios of these kinds of stocks can be more than 90% failures and still do well if they pick just one or two of the stocks that are really legitimate breakthroughs — the next Google, or Amgen, or whatever lofty goal you’d like to choose … this is one of the few sectors, along with mining, where the value of a company can really change by a thousand percent in a year.
Which is, of course, why our lusty lizard brains respond to the promise — get rich while changing the world, and without doing any work? Man, that sounds pretty good.
Cox’s teaser this time around is built around the promise that this is the “biggest story since the Gutenberg printing press” … innovation that truly changed the world. We’ve seen Gutenberg in teasers before, most recently when “Mainz Income” was pitched as a way to benefit from the kind of royalties that were made possible by the printing press (that one was a bit of a stretch, comparing natural gas royalties to Barack Obama and Bill Clinton’s book royalties … but still). And yes, Mainz is where Gutenberg was born, and where you’ll find the Gutenberg Museum if you’re so inclined.
But Cox isn’t talking about anything directly related to the printing press — instead, he’s teasing technologies that he thinks will give the world their “printing press moment.” Here’s the basic premise:
“The work of these companies could impact human lives to a greater degree than the printing press did at the dawn of the Renaissance.
“Now, some of these companies have a long way to go. That’s true. Others have work that’s closer to market. Some may view these tiny firms as risky.
“But if just one company pans out, fast movers could see huge gains. Possibly over 8,000% for just one company, if the success of businesses in similar fields is any indicator.
“Now imagine the gains if all SEVEN of these companies pan out.
“If I had to estimate long term gain potential from these seven companies – I’d put it at 60,000% total gains. Shocking, yes.
“After all – if you’d gotten in on Merck alone in 1970, you could have made up to 17,350% in the 30 years Merck was peaking.
“And as you’ll see, the work these seven tiny companies are pursuing is so important and necessary – any one of them could be as big or bigger than Merck.
“Again, 60,000% total gains from these seven companies is my estimate if they all pan out. Even better, some of the companies behind the breakthrough work I’ll reveal to you today trade for less than a dollar a share.”
So … without further ado (I’m kidding — we’re going to do a lot more ado’ing), let’s see if we can identify the stocks behind these expected “printing press moments,” shall we? The clues are a bit thin in spots, but I can probably tickle the Thinkolator into giving up a couple, and providing some possible ideas for the rest.
So … clues?
“Now here’s why the first company in The Next Printing Press: Revolutionary Gains from 7 Tiny Breakthrough Companies has me so excited…
“This tiny company wants to reverse aging.
“I’m talking about organs in your body – made young again….
“That’s what the technology this company is exploring has the potential to do. Cell by cell. All throughout the cardiovascular system…
“That’s right. This company is attempting to essentially reverse aging.”
That, in broad terms, could apply to a lot of companies … but then we get some specifics on this first stock:
“This company just reached agreements to buy two companies. This is HUGE.
“One company has a way to make certain disease-fighting cells attach themselves to diseases in the body – and take cell therapy to a new level.
“’Targeting’ disease cells like this is a new frontier of research that shows incredible promise – both for scientists, and fast-acting stock watchers like you.
“The other company just purchased has a way to build synthetic “extra-cellular matrix” or ECM . Maybe you’ve seen it on television recently. 60 Minutes just did a story about it.
“ECM is the ‘framework’ we could someday use to rebuild new limbs for soldiers and accident victims. We could also use it to rebuild hearts, lungs and livers.”
And we also hear a little bit about management:
“I’ve interviewed the CEO of this company very recently. He’s also been featured on Bloomberg news.
“I believe he’s the most visionary scientist in America today. His research pedigree is rivaled only by his business acumen.
“In time, he could take his place among the great geniuses in history.”
Well, having followed Patrick Cox for a while on this topic I’d have to guess that his “most visionary scientist” award goes to Michael West, for whom Cox has been leading the fan club for a while, and the two acquisitions line up perfectly to tell us that this is probably, again, BioTime (BTX), which he has teased many times over the years (to the delight of those who profited from the big rise in the stock — it’s up several hundred percent since I sniffed it out for you in late 2008, though it has been at times a pretty bumpy ride).
West has been a key player in research and in business development of stem cell therapies for years — he also founded Geron, in the days before BioTime, and has worked with many other small companies. He’s trying to build up BioTime as a stem cell bank and a source of next generation therapies, and they have made anti-aging advances. Perhaps most importantly in matching our clues, they have acquired two businesses in recent months — Cell Targeting, which does, as you guessed it, the cell targeting stuff, which they describe as “painting” cells with peptides; and Glycosan Systems, which they say “has been a leader in developing, manufacturing, and marketing proprietary biocompatible hydrogels that mimic the human extracellular matrix (ECM).”
BioTime has come quite a long way, though they’re still nowhere near becoming a profitable company and generating royalties from the therapies derived from their stem cell lines and technologies — they do position themselves also as a supplier to researchers in the stem cell business, and they do have some revenue on those products, but this is really a way to buy into a stem cell pioneer and hope that stem cell advancements move forward to cure disease, etc., and build a profitable business for BioTime. They are certainly more stable than the stocks in the sector who are dependent on just one or two products in the FDA pipeline, but that doesn’t mean they’ll be a blue chip dividend stock in the years to come. I certainly don’t know the technology nearly as well as Patrick Cox, but I’m pretty sure that this must be his pick once again — if you’ve got some BioTime wisdom to share, please shout it out with a comment below.
In the meantime, let’s see if we can identify some others from his list of seven … clues for number two, please!
“The second company I reveal in The Next Printing Press: Revolutionary Gains from 7 Tiny Breakthrough Companies just completed Phase I trials of a liver cancer drug.
“It passed with flying colors.
“So it’s that much closer to hitting the market.
“This new drug uses a substance that’s been in use for diagnostic medicine for over 30 years.
Just recently, scientists figured out how it could fight cancer.
“This drug swoops in and attacks the cancer itself. Without harming other cells.”
Excellent! Stem cells get lots of attention, growing new limbs is really cool, and Alzheimer’s may be the biggest unmet market in pharmacology, but fighting cancer is where the real money is — that’s what built the giants like Genentech. And, of course, cancer is bad and we want to squash it … but we’re talking the money side here.
Some more clues?
“Plus, this firm has treatments in the works for melanoma, breast cancer, and psoriasis.
“In fact, this company just released results of clinical tests in which 80 people with advanced skin cancer were given their new treatment.
“Here’s what the doctor in charge of the trial had to say about the results – ‘[Drug] is well-tolerated, eliciting a robust response in a majority of patients.'”
And the shares are less than a dollar, we’re told. So who is this?
Toss that info into the Thinkolator, and we learn that this one must be …
Provectus Pharmaceuticals (PVCT, trades over the counter — slightly over a buck now, too)
Provectus is one of the many “one drug” companies — but their drug is a formulation of Rose Bengal, which is indeed something that has been used in laboratories and in diagnostic medicine for decades, mostly as a stain to help identify tumors in the eye (or something along those lines). They have two formulations, actually — one for oncology, PV-10, and one for dermatology, PH-10, which is being used to target psoriasis and which it sounds like they’d like to outlicense to someone else.
PV-10 has been through trials for several cancers, they did just finish treatment for phase 1 trials in liver cancer (which was a half dozen patients — they just finished treating the last one), and they did a phase 1 trial in breast cancer a few years ago, but the main focus is on the lead product: PV-10 for metastatic melanoma (skin cancer).
That’s the compound that has been tested in 80 patients in phase II, and they are in (extended, some say) discussions with the FDA about how to set up a possible phase III trial. The update on their clinical pipeline and progress is here, and the latest release about that possible phase III trial is here. They also have a more general investor presentation here if you’re interested.
The stock has climbed nicely today, so yesterday it was under a dollar and today it’s slightly over, at $1.06 as I type this (perhaps that’s due to Patrick Cox, though it wouldn’t take much to move a stock this small — it’s under $100 million in market cap, so even the fact that we’re discussing it amongst ourselves here could easily cause a bump in the price). That’s about the midway point for their share price over the last couple years, the stock has been down to 70 cents and up to about $1.70 at various points.
And no, as with most early stage biotechs, I can’t think of any way to reasonably value the company — if they have a great drug for melanoma or make a good deal to partner their psoriasis drug eventually they’re probably way undervalued, even though they’d have to spend millions to get to production (or partner with someone), but if their lead drug fails to excite in the next phase then it may never get approved … it’s good news that they say the treatment was well tolerated and elicited a “robust response” as they company says, and there’s probably some advantage to using a compound that has been known about and studied on some level for decades, but I certainly don’t know enough about the science to tell you whether they’ll get approval for this as a cancer drug eventually. More reasons to be diversified if you’re a biotech investor, and to understand the science better than I do.
Provectus states in their latest 10-K that they expect to have enough cash to finance their operations until 2013 — which by my reading means they’d like to partner PV-10 for Phase III trials, they do seem to have enough cash (looks like between $10-15 million, counting the $5+ million they raised so far this year) to keep going at the same burn rate probably until December 31, 2012 as they say, but I can’t see how that could include a big, expensive phase III trial. They also had to do some restating of their books for last year due to treatment of warrants, which I don’t see as particularly worrisome — it doesn’t impact their business directly, and this is clearly a make or break company that will rise or fall on the science and on possible deals with deep-pocketed pharma companies, investor interest in the stock is not going to swing based on how they book a few million warrants.
So there are two of the seven — time runs short at Gumshoe Manor, in part because there are sick little Gumshoes running around the place, so I’ll have to catch up and see if I can identify the rest of the stocks for you tomorrow. If you’ve got thoughts on BioTime, Provectus or anything else biotech-y, feel free to shout ’em out with a comment below.