Another month, another big pitch about a biotech stock with a great “P-Value Indicator” from Ernie Tremblay, all in an ad for his Biotech Insider Alert.
Should we pay attention?
Well, we can hardly avoid noticing it — we’re being battered about the head and neck with the constant email fusillade from Tremblay’s publisher and colleagues at Money Map Press, and the questions are rolling in from readers… so even though the “secret” has already been solved here on the site by several readers, we’ll take a quick look.
And yes, I wouldn’t blame you for being a touch skeptical about the powerful predictive punch of the “P-Value” indicator that Tremblay says he uses to pick high probability biotech investments. The last ad he circulated with this same boastful “P-Value” headline was his “Fast Double by August 31” promise for a tinnitus stock, and that one was a big ol’ flop (because of weak clinical trial results)… and before that, probably the most aggressively marketed “urgent double” ad he ran was over the winter, for surgical robot company Transenterix (TRXC), and that was also a flop (because of a bad FDA response).
So does that mean he’s “due” to have a winner? Or that the “P-Value” is worthless? Something inbetween? We’ll take a look, confirm the solution, and let you think for yourself on this one.
Here’s a brief look at the ad we’re seeing this week:
“The company I’m about to tell you about today not only passed it with flying colors… but passed it with one of the strongest P-Values you’ll ever see.
“Plus it’s just one of the many opportunities I’ve uncovered in the market right now that I’ll detail later.
“And when my P-Value Indicator blinks green, it usually means one thing and one thing only.
“The science behind a new drug works. It’s sterling proof that the drug does what it was meant to do with flying colors.”
Ahem. OK, that’s EXACTLY the same text he used in his ad that was teasing Auris a few weeks ago. Just FYI.
Then we get into the stuff that has been updated, the spiel about this particular “better and safer aspirin” stock:
“There are no unusual safety issues with the drug.
“This drug is unique, in that its active ingredients have already been approved by the FDA and have been proven to work in study after study AND with patients using it today in the marketplace.
“But where this opportunity goes “off the charts” for you as an investor is the sheer enormity of the market and the fact that EVERYONE within the drug’s defined user group is a potential user….
“Over 24 million men and women are candidates for this drug.”
And more about this idea:
“The American Heart Association says that over 24 million Americans should be taking aspirin to prevent the recurrence of heart attack or stroke.
“That’s about 1 in 10 adults in the U.S. alone….
“But there’s one very major problem:
“Regular, longer-term aspirin use can lead to serious gastric bleeding and ulcers…
“Sores in the stomach lining that can cause pain, bloating, nausea, and vomiting.
“In fact, it’s such a serious problem that many people who are vulnerable to stomach issues can’t follow their doctor’s advice to be on an aspirin regimen…
“Which means the risk for another heart attack or stroke shoots way higher for millions of people.
“In fact, the company’s own research has shown that when a patient stops using aspirin following incidents of gastro-intestinal bleeding – the risk of another cardiac event, or even death, rockets almost seven-fold!”
And I think you know where he’s going with this… that’s right, it all comes down to “one little company.” More from the ad:
“… one little company has developed a long-awaited solution.
“It combines the blood-thinning benefit of aspirin – with a powerful “proton pump inhibitor” drug that’s proven to help prevent the severe stomach problems regular aspirin can cause.
“How can I say it’s ‘proven’ when the drug has yet to be approved by the FDA?
“This company is already successfully using a ‘pump inhibitor’ as a co-ingredient in another FDA-approved drug to treat pain and stiffness from inflammatory joint conditions.
“Only now, the company has combined this proven therapy with a blood-thinning therapy – one designed for cardiovascular, or ‘heart attack’ prevention… and another for cerebrovascular disease, which can prevent strokes.”
OK… and we’re told that he believes there “will be an imminent FDA approval” after they “dot some i’s” for the manufacturing facility.
He goes on to talk more about “P-Value,” and about how this somehow gives him a better analysis of the clinical trial results for the companies he’s looking at, and at the performance of the drug versus placebo — which sounds like the very most basic thing most biotech investors would do, look at the actual trial results data (or at least the press releases about that data). Drugs that don’t “beat placebo” or don’t at least match “standard of care” don’t generally get approved for sale, but that’s obviously not the only thing that the FDA looks at.
“P-Value” is a pretty standard statistical expression, Tremblay didn’t invent and doesn’t control the basic “P-Value” formula that he shows in the ad, though there are lots of different ways to measure it and different inputs you can use in the formula — P Value really is just a way of measuring whether a result is “statistically significant” based on the parameters you use for inputs. The way he uses the term, it’s mostly a measure that attempts to judge whether good results are really from the drug, and whether it’s likely that good results in earlier stage trials will be replicated in a broader trial.
And, of course, Tremblay says the catalyst is imminent:
“… the results are due out any day now.
“And given my P-Value Indicator has already flashed bright GREEN, I believe this is going to pop by minimum triple digits.
“And with over 24 million potential users just in the U.S. alone – and doctors eager to prescribe a safe drug they know won’t cause debilitating gastric issues…
“In my view, it’s practically a slam dunk…
“That’s why I’m certain the stock price of this little company has the very real potential to double your money very quickly – in the next few weeks.”
So what’s the stock? As you may well have already figured out, it must be Aralez (ARLZ), which was formed from a merger that closed earlier this year between Pozen (formerly POZN) and Tribute Pharmaceuticals (formerly TRX in Toronto). The drug that Tremblay is talking about has the brand name Yosprala, and it’s essentially an aspirin coated with omeprazole. The basic idea is that doctors will be more likely to prescribe this combination pill because patients will stick with the regimen, since it’s easier to take one pill a day than two… but Aralez doesn’t “own” either aspirin or omeprazole, both are generics, so it’s also a way to take two cheap drugs and shove them into one pill that you can charge a bit more for. Nothing drug companies haven’t been doing for a long time, but it does bring some extra scrutiny these days (depending, to a large degree, on whether your pricing is absurd).
And yes, the PDUFA date for Yosprala is September 14, so that’s the deadline by which they expect to get a response (marketing approval, they hope) for the drug. They’ve got a sales force all ready to go that will start pushing the drug as soon as possible, and they do think there’s a large addressable market — their presentations (including the Q2 results presentation here) indicate that a substantial percentage of the several hundred doctors they polled would prescribe the combination pill instead of either monotherapy with aspirin or an alternative blood thinning pill called clopidogrel. I don’t know if they asked whether doctors would prescribe Yosprala over a two-pill regimen of aspirin and omeprazole, but presumably the incentivized sales force will help to beat the bushes to find those doctors who will prescribe for convenience or some degree of improved efficacy (assuming there is some improvement for the combination pill over the two-pill regimen beyond convenience or better patient adherence to the regimen, I haven’t looked at their results).
And, really, I don’t know much about this one at all — so I’ll leave it to you to do your thinking. Dr. KSS, who writes about biotech for the Irregulars, has not been interested in ARLZ and recently commented that he would be careful about assuming that FDA approval is a “slam dunk”, and he was unimpressed with POZN before that — the stock has come up in discussions a few times in those biotech threads and elsewhere, and we also recently had a reader who has been following the stock start up a discussion thread about it here.
So what will next week bring? Heck if I know, but this is the stock Tremblay is touting. And he also touted Pozen when it had a previous PDUFA for what I assume was this same drug about two years ago (the shares were around $9 then and are at about $5.50 now, apparently the stock has been punished a bit over the past couple years by the FDA’s responses to their manufacturing challenges).
Oh, and they just bought US and Canadian rights to another drug today, Zontivity (from Merck). They are generating some cash from their existing drugs and royalties, and they have a reasonable balance sheet with roughly $75 million in cash matched by a similar amount of long term debt before that $25 million deal with Merck today… so they probably aren’t in imminent crisis or in need of immediate funding unless the rollout of Yosprola is expensive or the FDA sends them back to do more work. Beyond that, you’re on your own — let us know what you think with a comment below.