“Backroom Drug Deal Delivers Your Next Double”

By Travis Johnson, Stock Gumshoe, April 2, 2010

Friday again already — hard to believe!  I’m traveling this week, but I couldn’t escape the plethora of ads for Louis Navellier’s Emerging Growth, and since he’s teasing a sector I think show some real promise, generic drugs, I thought I’d have a look today.

He uses his standard “with or without you” language — though the professor in me cringes when I read “your next double … with or without you.”

Still, he tells us that this $17 stock is going to $34 “in the blink of an eye.” And dammit, I’m a sucker for a promised double in the stock price … even if I know that the only real “promise” behind the pick is that Navellier will give you your subscription money back if you don’t get your double and ask for a refund.

And this one was a little thin on the clues, so that challenge always gets me going, too. Here’s what he tells us about the company:

“The company is about to become one of the biggest beneficiaries of health reform—thanks to the MAMMOTH backroom drug deal that gifts as much $35 billions to generic drug companies over the next 10 years!

“How can this be?

“1. Because generic companies not only get to keep their lucrative pay-for-delay settlements from brand drug-makers that’s worth an extra $35 billion to profits in the next 10 years…

“2. …but they also get to profit from increased health coverage that will throw billions of dollars in new prescriptions their way.

“As a result of this HUGE double win, my No.1 company’s sales and earnings will continue to shoot through the roof, not only from future settlements to keep generics off the market but also from lucrative contracts with brand-name behemoths like Novartis, Wyeth, Schering-Plough and Leiner Health Products.”

Not bad, but not much in the way of clues — those companies are all huge and work with tons of suppliers, though I’d argue that Leiner might not be a “brand-name behemoth” (they also make generic drugs, along with vitamins and supplements, and are privately held, which is why that might be the name that doesn’t sound as familiar).

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