by Travis Johnson, Stock Gumshoe | November 14, 2019 1:01 am
This article was originally published on November 5, 2018, we’re getting lots of questions so we’re popping it to the top of the page for you but it has not been updated or revised — the ad being covered appears to be almost identical to the ad that was running in the fall of 2018.
Dylan Jovine[1] 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[2] 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[3] 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[4] ($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[5] 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[6] cells from sick patients”
So all of that’s probably enough to let you know that yes, Jovine is pitching a CRISPR[7] 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.
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just click here...“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)[8] 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[9] but have been talking about filing their investigational new drug (IND) application with the FDA[10] 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[11].
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)[12] and Editas (EDIT)[13]. 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)[14] 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.
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Are you sure it isn’t DNA (Ginko Bioworks)?
Jovine is pushing EDIT again. I just received his pitch today 1/14/23. Act now and you’ll get his full report for just $39 an incredible “markdown” from his regular $199 price for the first 1000 subscribers. blah blah blah. It took me all of 5 minutes on the internet to confirm that he was pitching EDIT. Then I found that Travis was already on the scent. Interesting but I have stopped betting on instant fame and fortune stocks. Sometimes you just have to learn the hard way.
Travis, do you think that a gene editing ETF would be a better wager than the current several different stocks on the scene, I’m thinking CRSP, NTLAT, and EDIT. There are several very different ETFs offering coverage, any idea on which offers the best coverage?
None of the gene-editing ETFs are really “just CRISPR” ETFs — but they are likely to provide a much more balanced exposure to the “genetic editing is going to transform the world” idea, most of them own a bunch of stocks that includes both the CRISPR tech companies and the few biotechs who are fairly advanced in getting gene therapies approved, plus a few steadier toolmakers (like Thermo Fisher or Danaher) and a few big pharma companies who are exposed to the same basic theme. It might be that owning just the three or four real CRSPR stocks and holding them for a decade works out to be the best ride for the genomics revolution, but that certainly has not been the case yet, they’re all spending so much money and remain far from having any commercial business to justify that spending, so I’d probably be more tempted by the ETFs. The one that’s most exposed to the CRISPR names is probably Cathie Wood’s Ark Genomic Revolution (AKRG), which will probably be more aggressive in active management and also costs more, and has been the worst performer over the past 18 months or so… the ones that have fallen less in the recent collapse are PBE and WDNA, which own more of the steady tool-provider companies. At first glance, I like the WDNA ETF, partly because it also has a relatively low expense ratio.
I bought EDIT as it was starting its climb in 2020 for $33 a month before it went to $99. I waited a few days but still made a killing. I’m looking at DNA, Ginko Bioworks, because of all the Billionaires who have invested in it. Blessings.
Billionaires can afford to risk their money on unproved technologies, unlike some of us.