What’s Patrick Cox’s New Obesity-Fighting Teaser Drug Stock?

Sleuthifying out the answer to the "How to Build Lasting Wealth from a True Weight Loss Breakthrough" report teased by Breakthrough Technology Alert

By Travis Johnson, Stock Gumshoe, April 2, 2012

Patrick Cox is not a shy guy. I don’t think I’ve ever read one of his biotech teaser ads that didn’t leave me convinced (at least for a moment) that the world was about to be changed because of the newest potion or pill that his favorite little companies were developing.

And this latest one is no different — for the first time in a while, he’s sidestepped the Star Scientific (CIGX) anatabloc story (though that’s still one of his teaser picks, later on in the same ad), and moved on to something that’s arguably even a bigger market than inflammation: obesity.

Or, in his words:

“Act before April 9th, and you could live longer, healthier and much richer.

“That’s because you could benefit directly from the biggest Baby Boomer story of them all…

“10,000 Baby Boomer Americans now reach retirement age each day. Over 45% are overweight or obese, according the CDC.

“Each year, that’s 1,620,000 more Americans. The numbers will only go up from here as more and more Baby Boomers reach retirement age.

“What I’ll show you today could someday help folks lose weight, get back the healthy hearts of their youth, and potentially live many years longer. This is a revolution.”

And it’s certainly true: we’re fat. And it makes us sick. And if there’s someone who can make us less fat without forcing us to give up McDonald’s and sitting at our desks for 60 hours a week and watching 120 hours of television a month, well, it will find a ready and willing market. Heck, the gummint might even sneak it into our drinking water.

So what is it that Cox has discovered that helps with obesity? And how will it make us rich? Let’s sample a bit more from the ad to get a few clues for the Thinkolator …

“… every idea in weight loss history – in one way or another – targeted the brain. What I’ll reveal to you today targets a major type of fat cell directly. And destroys them. So this is new.

“If you read The Wall Street Journal, you were among the first to hear about this work. It had the first scoop on this science years ago.

“As the work rushes forward, Reuters has called this advance ‘potentially groundbreaking.’ Fox News said subjects saw ‘their waistlines shrink in just weeks.’ Time Magazine reported obese test subjects lost ‘11% of their bodyweight in just a month.’”

OK, so it’s a new way of going after fat — sounds interesting. He goes into a few more pages of detail to make clear to us that this compound doesn’t mess with the brain or try to suppress appetite like so many other failed drugs before it, like Fen Phen, but it goes after the fat cells themselves.

And apparently, this compound is actually undergoing clinical trials now — here’s the impetus to BUY RIGHT THIS VERY SECOND …

“In the first week of January 2012, the FDA gave approval for the company behind this brand new weight loss research to begin Phase I clinical trials.

“Phase I, as you know, is for safety tests in human patients. Phase II is efficacy, proving if a new drug actually works in humans.

“Dendreon and their prostate cancer drug Provenge is a great example of the possible fortunes this company could deliver. As test data piled up, the share price shot from around $3.50 to nearly $60 in a little over a year.

“In the case of this weight loss breakthrough, the results of the pre-clinical tests on mice and monkeys are so encouraging that I expect a share price breakthrough of epic proportions if this new drug does well in Phase I. This news could come rolling in soon…”

And the last real clue is that this breakthrough came out of a University in Texas — here’s a spiel about the actual science:

“This leads me to revolutionary work going on right now at a major university hospital in Texas.

“I can’t mention the name, but you’d certainly recognize the school.

“This current work has come up with a treatment that doesn’t target the brain, but it still makes animal subjects lose weight.

“How does it work? It goes right after fat cells themselves. No more messing with the brain.

“The easy way to explain it is that this treatment cuts off the blood cells that supply oxygen to one type of fat cells. If you cut off the blood cells, fat can’t get into the fat cells, and the fat cells die.”

And apparently this treatment has been tested on both mice and rhesus monkeys, with great results (we even get a photo of two cute little mice, one humongously fat and one normal, to emphasize the point).

“In 30 days, these monkeys achieved a new, healthy weight. I’m talking about overweight and obese subjects losing huge amounts of total body mass… in a month. Imagine the implications of this news ….

“The monkey got thinner. Total fat reduction in this particular study came in between 30% and 40%. That’s astounding.

“If this work translates to humans, it’s a true weight loss revolution.

“That’s exactly why I expect the epic share price breakthrough I mentioned a moment ago.”

So … that ought to be enough to toss into the ol’ Thinkolator, no? We’ve got a University in Texas, a new treatment that breaks down fat cells in monkeys and mice, a huge impact in just a month of treatment, that means the stock we’re looking for is …

Ablaris Therapeutics … which is a private partly-owned subsidiary of … Arrowhead Research (ARWR)

Arrowhead Research is more known for RNAi research, and they have several different pipeline compounds that are pre-clinical, along with a couple cancer drugs that are in phase I or II … you can get a pretty good lowdown on their programs and their strategy from the latest annual meeting presentation here.

The stock is up about 10% today, due entirely, I’m sure, to Cox’s recommendation to his subscribers over the weekend (or he may have recommended the stock to them earlier, these might just be new folks brought in with his tease of a special report on the company). It’s still a tiny company, with a market cap of about $75 million as I type, and it’s an early stage biotech company so they have no revenue to speak of yet (any revenue in the near term will be from partnership deals, most likely). They are being carried for Phase 1 of this Adipotide trial, which will be conducted at and paid for by the University of Texas MD Anderson Cancer center, which is where the discovering researchers have their lab — which is good, because their current burn rate is over a million dollars a month and, at that rate, they have only a few more months of cash on the books.

Which makes it a good time for the stock to go up a bit, since they’re probably going to need to sell some equity to raise capital in the months ahead (I haven’t looked to see if they have capital raising plans or have raised cash recently, or even looked very closely at their books — that’s just an assessment based on the fact that they spend over a million bucks a month and have only about six million in cash as of their last filing).

The drug, Adipotide, sounds interesting indeed — if you can wipe out fat cells that easily and quickly, with the side effects being limited to some renal impact that they think they can counteract, that’s pretty impressive. And doing it in monkeys is much more impressive than doing it in mice (especially because the monkeys were “naturally” obese, they just were lazy and overate, they weren’t pumped up or primed to obesity … and it was only the obese ones who lost weight and fat, it didn’t have an impact on the lean monkeys). So though I’m not a scientist, that’s pretty impressive, and it has caught the attention of the press.

You can see the article that got a lot of attention in the Wall Street Journal here, and the notice about the approval to begin the Phase 1 trial is here. The company did a 1:10 split in part on the strength of that WSJ article and the initial surge of interest it got for them, so it has a nice reasonable-sounding price of about seven dollars instead of being a penny stock, but don’t get complacent and assume that the price can’t move wildly on any kind of attention or news (including attention from yours truly) — on the day before the WSJ story the stock closed at about $5 (or fifty cents, since this was before the share consolidation), and on the day of the article it opened at $7 and spiked as high as about $12, but within a week it was back down around five dollars. So if you decide to research this one yourself and do a little speculating, be prepared for news to cause big swings.

I haven’t seen official word (haven’t looked that closely, to be honest) about when the results of this first trial might start to come out, but it’s possible that it could be pretty soon — Phase 1 groups are often small since they try to test initial safety without exposing a lot of people or spending a lot of money, and the monkeys were tested over just four weeks, so it could be that we’ll hear some kind of preliminary results soon.

That’s about all I can tell you after my few minutes churning the Thinkolator and a little bit of reading of their website and filings — I’m sure there’s a lot more that you’d want to know before buying the stock, but I’m certain that this is the potential obesity-fighter that Cox is teasing. If you look into it and like what you see (or not), please let us know with a comment below.


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29 Comments on "What’s Patrick Cox’s New Obesity-Fighting Teaser Drug Stock?"

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Myron Martin
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0
April 2, 2012 4:11 pm
Seems to me that people who have a weight problem should simply take a good hard look at what they are eating, (and drinking) and make some adjustments. Substituting ONE healthy food or drink for some not so desirable item. Easiest way is to make ONE change at a time until it becomes an established habit. DRUGS are unnatural and unhealthy, a crutch for bad living habits, never a solution, and they all have side effects, even if they do not manifest themselves for years. Drugs are dangerous, in fact some of the disclosed side effects, (as severe as DEATH)… Read more »
JSchmoe
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JSchmoe
April 2, 2012 4:26 pm

Thanks for the Health Lecture, Myron. Now we are all privy to the stunning and groundbreaking information that obesity is the result of bad habits. Wow. So…can we get back to INVESTING information now maybe?

austin
Guest
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austin
April 2, 2012 4:35 pm

It takes forever to get from phase 1 to market.
The best way to play a stock of this type is wait for the hoopla to die down, the price can drop by 80% from the highs.
Then buy and wait for the next milestone news to pop the stock a few 100% and just sell and walk away until it drifts back down.
Expect dilution along the way when the pps goes up it’s a common event.

razubel
Member
0
July 29, 2013 9:21 pm

Excellent appreciation Austin.
Just take a look at the chart from this exact date to one year in the future (past actually) 76% down. Now it’s been teased again and it’s going up like an air balloon.

Mike S
Guest
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Mike S
April 2, 2012 4:46 pm

Wow Myron what stunning information. Wonder why it hasn’t been discovered by all the people battling the problem. Okay back to investment talk.

Dusty44
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Dusty44
April 2, 2012 5:00 pm
Slim people are slim, always have been. Most humans easily grow fat cells. Most humans cannot recover the nutriment/energy stored in fat cells. In any case, primary fat cells are like water balloons; they fill up and there is no adequate emptying valve, unlike creatures that hibernate: these cells are also ‘forever.’ When they are less than full, they generate chemical signals of strong hunger. There is no way to stop them. The Healthy Food & Fitness Industry hates these facts. A drug that can destroy actual fat cells and not also do things that would kill the person would… Read more »
paul leve
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paul leve
February 16, 2015 1:28 pm

Like magic. No effort required. Does it sound like to good to be true?

wojogumshoe
Irregular
2
April 2, 2012 6:53 pm
The average American eats about one third of a pound of sugar per day. (Not simply the white stuff, but all of the commercial forms included, like corn syrup.) Research appears to indicate a direct impact on health, even to the point of now tracking sucrose receptors on cancer cells to help them grow faster. (yummy) Research on the brain indicates that it is more addictive than previously thought. Controlled studies even show a major increase in bad cholesterol on a diet which includes a measured small amount of sugar (less than 1 Coke) within 2 weeks. We need an… Read more »
Joe Kelly
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Joe Kelly
April 2, 2012 7:59 pm

I thought ox was in jail or had some kind of order against him.

burnerjack
Member
0
April 2, 2012 8:04 pm

All interesting comments. Myron alludes to a possible truth that may affect this product sales and that is while many just don’t exercise enough to generate a muscle mass capable of consuming excess caloric intake, many others eat for psychological reasons. Bottom line is at least there is a possibility that those who overeat would be able to continue to indulge if this product were legitimate. As for me, “if it sounds too good to be true…”

Venture Shadow
Guest
0
Venture Shadow
April 2, 2012 10:51 pm

Phase 1 is cheap. The other phases are the costly ones. Question: How is this $75 million Market Cap company going to get the $Billion or so it takes to accomplish the clinical trials and satisfy the FDA for approval? Could it be Dilution? Looks like the dilution will have to be at least 10:1 if not 20:1. And that’s if the drug WORKS. See what happened to Discovery Labs. Their drug worked and it was approved, but not before dilution destroyed all value for long-holding shareholders, and I mean all.

Tony
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Tony
April 2, 2012 10:52 pm

Hi Gumshoe,

I’m new and trying to learn more about investing. Could you explain direct me to a website link that would explain how to calculate this? Also if you have any recommendations on good investment books or publications to read would be great. Thanks.

Tony
Guest
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Tony
April 2, 2012 10:55 pm

I meant to ask how to calculate the burn rate on a company given the publicly available info on a company.

marywilbur
Member
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marywilbur
April 8, 2012 4:24 pm

I highly recommend that you read “The Indomitable Investor, Why a Few Succeed in the Stock Market When Everyone Else Fails” by Steven M. Sears. You can buy it on Amazon. It is a very recently published book. Good luck.

Dave
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Dave
April 2, 2012 11:15 pm
What’s questionable here is the fate of the fat. If fat cells are killed, the fat that they contain has to go somewhere–it can’t just disappear, nor can it be burned in such large quantities without heating up a body (I know of no mechanism to allow for released fat to be burned, anyway–this is extremely unnatural, physiologically, seems to me). If it ends up in the liver, a fatty liver is not a heatlhy thing. Could the liver dump it in the stool via bile? Seems very far-fetched. Also , dumping fat from dead fat cells into the bloodstream… Read more »
Dusty44
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Dusty44
April 3, 2012 1:16 am
For Venture Shadow: Yes. Patrick Cox has lots of this sort of thing. Fun for those who like to gamble with long odds. I have too much respect for my money to even consider this. For Dave: Thank you for the tech info within you comment. Interesting. I would also like to read a generalized answer (real medical detail is beyond my actual ken). Otherwise, I just thought that a single pill maybe once or twice a day would have very little active agent and the body and circulatory system could manage the relatively small consequential mass, just like all… Read more »
Dave
Guest
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Dave
April 3, 2012 6:51 am

Dusty, healthy kidneys do not excrete fat. And we are not talking small amounts of fat here. At least 25-30 POUNDS of excess body fat are required to even reach the “obesity” Dx, and obese people can have 50, 100, 200 pounds or more of fat stored in their adipose tissue. The more I think about this alleged treatment, the more absurd it seems.

Michael Hullevad
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Michael Hullevad
April 3, 2012 4:57 am

I think they will be run over by Novo Nordic and their new application for obesity that is based on their allready succesfull diabetes medicine. They have this drug approved for diabetes, getting it approved for weight reduction will prove easy as it practically is the same drug just administered with a 40% higher dose. FDA will drag it along for a year or two no doubt, but Novo has a jump start getting approval.

Jack Rudy
Guest
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Jack Rudy
April 3, 2012 3:04 pm
I like ARWR. I made a $1@share in 2006 when it went from $5 to $6. I started buying again in Dec ’10 at $.92 and bought larger chunks down to $.48 in Aug ’11. ARWR did a 1 for 10 reverse split near the end of 2011. I ended up with 4,400 shares. I have since took a profit on 1,400 shares. I am going to sell another 1,000 after I finish typing this. However, I still like this stock and think it is a good speculation. I will buy back what I sold if it comes back down.… Read more »
tomt
Guest
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tomt
April 3, 2012 9:50 pm

Great story, and terrific comments. The stock will go on the long term P.Cox watch list along with Novo Nordic. Someday maybe one of PC’s picks will go to the moon- I’ll try and catch it before it leaves Earth’s atmosphere.

tomt
Guest
0
tomt
April 3, 2012 10:18 pm
Then, there is a chance this proves safe enough, and attracts serious money. There are natural extracts of plants that have clinically proven to facilitate and increase the off-loading of cholesterols from the blood stream, and maybe the body does breakdown the material. After all., it does if we were starving. Although cell death would be adding a lot of undesirable stuff to get rid of, this would seem to be dose controlled, and wow, would this be popular with our consumption society. BTW The history of sugar consumption is amazing as it also was the ruin of every country… Read more »
Roger
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Roger
April 4, 2012 6:01 am

There is a drug available that claims to trick male and female bodies into thinking that they just delivered a baby. Said body then uses it’s fat reserves to support the phantom nursing baby. All that is necessary is for the patient to mostly quit eating and his/her dietary needs are supplied from fat. Zoot! Allors! Et voila!
roger

Louise B Andrew MD
Guest
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Louise B Andrew MD
April 5, 2012 2:53 pm

You’re referencing HCG which actually mimics the state of pregnancy, not nursing. It’w not quite as simple as you posit, does require precise dietary adjustments (to about 500 cal/day) and physician monitoring, but is quite effective and quite safe. It has been around for at least 50 years, but medical boards frown on its use so many physicians are reluctant to prescribe it. However, there is little to no investment potential!

Dave
Guest
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Dave
April 4, 2012 10:11 am

Lowering cholesterol levels is trivial by comparison–you either reduce synthesis of it (via statins) or reduce absorption from the GIT (various drugs do this) or both; 1-2 grams per day of chol. not made or not absorbed does the trick. But 200 lbs of fat is 200 lbs of fat…not possible to wish it away.

george theodorakos
Guest
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george theodorakos
April 4, 2012 8:45 am

how helpful this has been…I listened to cox’s video and was so convinced that I bought the subscription…but I am cancelling it now….what a great forum…..thanks gumshoe….I have subscribed to the forum as an irregular….and although havent made any money yet….It has prevented me from sending good money after bad…..just like this one….thanks again…great discussion

marywilbur
Member
0
marywilbur
April 8, 2012 4:32 pm

I read the WSJ article about this weight loss drug. Every weight loss drug that has been brought to market after many years of testing and billions of dollars down the hole has been either rejected outright by the FDA or recalled after first allowing it to be marketed. There have actually been very few (only 2 I can think of). Don’t waste your money. This company probably hopes it has a potential drug in the works that a large rich pharmaceutical company will want to take over. All I can say is good luck.

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