Dylan Jovine is a little bit of a ‘blast from the past’ for me, I very briefly covered a teaser pitch he did for his Tycoon Report when I was in just my first couple weeks of trying different article formats for this weird new “Stock Gumshoe” website I was starting twelve years ago… that Tycoon Report service wasn’t around for very long after that, I think he sold to Agora and he apparently went off the grid a few years later for health reasons, but now he’s back with a new service called Behind the Markets ($79/yr).
And, of course, he’s recruiting new subscribers with a teaser ad campaign… this “Living Software” one we’re looking at today has been running for a while now, and the questions from readers are piling up, so I thought it was time to take a quick look.
Here’s the intro that got readers interested:
“One Drop of Breakthrough… Living Software Sells for $83,000
• The Wall Street Journal Reports: “It’s Transforming Medicine.”
• 60 Minutes Reports: “It’s revolutionizing the search for new drugs.”
• And one small company funded by Bill Gates and Google owns the patent on it
“And our research proves that anyone who gets in before Thursday, September 27 could earn profits of 46,751% (or more).”
Oh, wait a minute, that was the original version of the ad… they updated it a bit, so the one we’ve been seeing recently has this to replace that last sentence:
“And thanks to a major event about to take place on November 26, you have the chance to earn profits of 46,751% (or more) by getting in today!”
There was also a version that focused on October 26th, and they seem to have been testing some different lead-ins because this language was an alternate version of the intro that I saw:
“Tiny Massachusetts Company Awarded $2 Billion Patent for Groundbreaking “Living Software”
“Cambridge firm’s ‘new approach’ proves it possible to extract Cancer cells from sick patients”
So all of that’s probably enough to let you know that yes, Jovine is pitching a CRISPR stock — he’s touting the “gene editing” technology as a way to “cut and paste” to erase and fix bad genes, and that’s certainly a common spiel we’ve heard from lots of different newsletters over the past couple years as the CRISPR companies have gone public and raised money.
Which one, though? Let’s see what other clues he drops… first, he trumpets the potential of CRISPR to rapidly eradicate disease:
“Like a ‘Manhattan Project’ for Medicine….
“But nobody expects it to take 30 years to happen in this case.
“Because of the unique, high-stakes power of this treatment governments are pushing business to accomplish this within 5 years.
“In that way it’s become like a Medical Manhattan Project.
“And because of that we think one of two things happens – it either moves like an Amgen or it’s taken over by a larger competitor….”
And then he gets into the specifics a bit…
“I’m not recommending any of the big companies.
“For the folks who follow my research, I prefer recommending biotechs on the very forefront of this massive change. The biotechs that the large companies are partnering with.
“That’s where all the innovation is. And that comes in the form of smaller companies with the world’s leading scientists.
“My research has led me to a firm that was formed five years ago…
“And this small company has the patent on the most popular way of doing this.
“And they have the two other key ingredients: a strategic partner and they’ve already survived a patent challenge.
“In the last few months, they’ve announced positive results from a partnership with Allergan Pharmaceuticals and Celgene, one of the largest biotech companies in the world.”
And then just a little more hype from Jovine:
“There’s One Small Company At The Center of It All…
“And a remarkable – yet overlooked – company is at the forefront. This company is literally at the center of this revolution.
“Right now only the savviest scientists and investors know about. But that’s starting to change.
“If you were to make only one investment in the next decade, this is it. It doesn’t get clearer than this.
“Of that I have no doubt.
“… CRISPR has the opportunity to radically change how we treat diseases.
“And the best way to capitalize on this once-in-a-lifetime opportunity is to invest in the small company that made this treatment possible.”
So what is this stock that Jovine likens to getting in early on Wal-Mart or Amazon, with extraordinary returns on the horizon? Thinkolator says he must be hinting at Editas Medicine (EDIT), which has been generally referred to as the “winner” in the patent fights over CRISPR/Cas9 gene editing technology over the past year (that’s not a definitive statement, the folks at Intellia (NTLA) and CRISPR Therapeutics (CRSP) would argue the point — but EDIT seems to have a stronger footing in terms of the “foundational” patents for CRSPR work in eukaryotic cells, at last for now… I’m sure the courts will see dithering on this point for years).
And the first CRISPR-enabled clinical trials are just about to make news, with both Editas and CRISPR Therapeutics likely to have their initial clinical trials enrolling by the end of this year. EDIT’s clinical trial is an eye disease treatment partnered with Allergan, and they’ve already delayed it by a year or so but have been talking about filing their investigational new drug (IND) application with the FDA by October. You may notice that October has passed, and I haven’t seen any update on whether or not they’ve filed — but they do report their earnings on Wednesday, so undoubtedly they’ll say something about progress at that point.
Pending that, the latest pitch from the company itself is available as part of their investor presentation from last month.
And yes, it is all very exciting — even with the risks of gene editing, and the possibility that this new technology might not be safe or effective, despite the massive R&D efforts that have been committed to it over just the past five years, around the world… but the finances are a much tougher thing to get a handle on. This is R&D, with the very first projects just now starting to trickle into the clinic, and with massive risks and great uncertainty over whether CRISPR/Cas9 will even end up being the technology that works.
Just to illustrate the “earliness” of the science here, and the unsettled nature of gene editing medicine, two of the patent holders for those first highly disputed discoveries, Jennifer Doudna and Feng Zhang, are part of these early foundational companies — Zhang’s patents from the Broad Institute and Harvard are licensed to Editas, Doudna’s from the University of California to Intellia — but both of them and Doudna’s sometime scientific collaborator Emmanuelle Charpentier (University of Vienna) have also gone on to continue their research and found other companies. Just this year, Zhang has been affiliated next-stage editing startup called Beam Therapeutics, and Doudna with a genetic testing startup called Mammoth Biosciences… and, of course, given their pedigrees, those firms are getting lots of venture capital interest. This is all very fluid.
I’ve written about these stocks several times in the 30 months or so that they’ve been publicly traded, and I always come to the same conclusion: This might be stupendously important, but it could also fizzle out with safety concerns or be a huge money pit for years while slow progress is made in the lab or clinic. I certainly have no idea which of the three current leaders in CRISPR R&D will end up in the lead, or with the best collaborations, or with the first treatment, assuming a CRISPR-based drug or treatment does eventually get approved. Here’s what I wrote the last time I covered the sector, my opinion hasn’t changed:
“The CRISPR-Cas9 early stage R&D world is dominated, at least in the public markets, by the three companies who have licensed the foundational patents from the three major researchers in this space — CRISPR (CRSP), Intellia Therapeutics (NTLA) and Editas (EDIT). If I were going to invest in the hope that this gene editing technology will end up curing major diseases and launching massive revenue-generating treatments, I’d just invest a bit in all three and ignore them for five years while we let the early stage clinical trials shake out. It’s still awfully early to know which patent will end up being more lucrative, or which corporate strategy or pipeline will hit ‘paydirt’ first, at least for a non-expert like me. I’ve never invested in any of them and that’s unlikely to change soon.”
If you like gene editing but are looking for stocks that are a little easier to analyze, or that actually generate revenue, then most of the big pharma stocks are at least dabbling in the sector… and you might find Celgene (CELG) specifically interesting — they’re one of the major investors in CRISPR Therapeutics, though they sold off a lot of their stake over the past year or so, and they’re also partnered with Editas (EDIT) thanks to the Juno acquisition this year, (and they’ve also invested in some smaller gene editing startups like Repare Therapeutics). Celgene may well be a super high-risk stock as well, of course, it’s much, much larger ($50 billion) and has plenty of its own issues that have frightened investors, not least the heavy dependence on their blockbuster drug Revlimid, which will go off-patent in 2022, but it is (arguably) reasonably valued and profitable. I don’t own Celgene either, to be clear, but it makes me more comfortable than the pre-clinical patent investments like EDIT, CRSP and NTLA.
And no, I’m not aware of any meaning to the November 26 date… other than the notion that there will likely be an IND application awfully soon for EDIT’s first clinical trial, though their earnings report on Wednesday would be the next logical date to expect some news on that and their other programs.
I’m sure plenty of the good folks out there in Gumshoedom have opinions on one or the other of these leading CRIPSR IP stocks… if you’re one of ’em, feel free to let us know: Why should we buy Editas over CRISPR or Intellia? What’s the end game? Is there a rational path to monetizing this technology that’s more specific than “someday?” A better gene editing technology out there that will make us all forget about CRISPR? Let us know with a comment below. For me, I’ll keep watching from the sidelines and trying to make sense of it all.
P.S. We’re always trying to build up our reviews and ratings sections, to help investors like you make decisions about newsletters and trading services… if you’ve tried out Dylan Jovine’s new Behind the Markets service, please click here to let us know what you thought. Thanks!
Disclosure: I own shares of Amazon, mentioned briefly above. I don’t own any of the other stocks covered, and will not trade in any covered stock for at least three days, per Stock Gumshoe’s trading rules.