by Travis Johnson, Stock Gumshoe | March 12, 2019 5:23 pm
Another day, another promise of imminent riches from a biotech clinical trial! This time it’s from Ray Blanco[1], who has made many such promises in his ads, and the pitch is all about a “bio switch” that has the potential to “end diabetes[2], plus heart & kidney disease (with a twice-a-day pill).”
What more could you want, right? Blanco says the market is valued at $1.98 trillion, but that this is a tiny little $3 stock — and he’s predicting FDA[3] approval on March 15, 2019, which, in case you aren’t looking at a calendar, is this Friday.
So, naturally, once he’s got you fretting about a huge gain to come in just a couple days… this is the perfect time to say gosh, sorry, can’t tell you the details unless you subscribe to Breakthrough Technology Alert[4] for $1,995. And, whaddya know, that $1,995 is non-refundable even if it turns out that I just made up the March 15 date, or the stock turns out to be lousy.
That seems a raw deal, and a foolish bet, so we’ll just figure out the stock on our own… then you can think it over, decide whether you like the risk, and use your $1,995 for something more satisfying. Or, heck, maybe once you hear about the stock you’ll be convinced of Ray Blanco’s brilliance and will want to send him your money… that’s fine with me, it’s your money, but don’t type in your credit card number just to get a stock tip. This way, you’ll know the stock in advance and have a chance to love or hate it before you pay for it, which isn’t always the way things work in this field (Remember the last time you bought a car? I bet you kept checking ads afterward to make sure you got the best price, right? Same with the last house you bought? Everyone wants to congratulate themselves for making wise choices, the human brain looks for validation for big decisions it has already made — so once you subscribe to a newsletter, most people are hard-wired to want to agree with the author… and if you paid $2,000 for a stock idea, you’re probably going to be hugely biased to BUY THAT STOCK RIGHT AWAY, with your critical thinking put on the back burner. What kind of dummy would spend $2k for stock tip and then not buy the stock? Sheesh!)
So anyway, what’s this magical stock? Clues from the ad for you:
“The New York Times raves: “These [‘bio-switches’] are crucial… They can silence some genes and activate others.”
“And the doctor who discovered DNA thinks this science breakthrough is even BIGGER…
“In the race to find a cure, this Rocky Mountain biotech just blasted 7 years ahead of potential competitors — in a market valued at $1.98 Trillion….
“A massive investor in this company recently tripled down…
“Plowing $87 million more in anticipation of the predicted FDA approval…”
OK, so we can skip a few steps and say that yes, this teaser pitch is about epigenetics… which for those of us who don’t really remember much from our science days is defined thusly by NIH[5]:
“What is epigenetics?
“DNA modifications that do not change the DNA sequence can affect gene activity. Chemical compounds that are added to single genes can regulate their activity; these modifications are known as epigenetic changes. The epigenome comprises all of the chemical compounds that have been added to the entirety of one’s DNA (genome) as a way to regulate the activity (expression) of all the genes within the genome. The chemical compounds of the epigenome are not part of the DNA sequence, but are on or attached to DNA (“epi-“ means above in Greek). Epigenetic modifications remain as cells divide and in some cases can be inherited through the generations. Environmental influences, such as a person’s diet[6] and exposure to pollutants, can also impact the epigenome.
“Epigenetic changes can help determine whether genes are turned on or off and can influence the production of proteins in certain cells, ensuring that only necessary proteins are produced. For example, proteins that promote bone growth are not produced in muscle cells. Patterns of epigenetic modification vary among individuals, different tissues within an individual, and even different cells.”
So for our purposes, I guess epigenetic treatments for diseases don’t rely on doing gene editing (like the CRISPR[7] stocks) that actually alter your DNA, but on modifying the way a gene is expressed… or something like that.
I’m a bio-idiot, so bear with me. I’ll focus on naming the company, then let you do the science-y bit. There’s also an interesting site here called “What is Epigenetics” [8]if you want to explore more. (Oh, and that NY Times article cited is here, from 2016[9])
Other clues? Indeed, here you go:
“… the stock that could earn you a once-in-a-generation $1,032,031 windfall if you move before March 15, 2019 — when the FDA is set to approve its final clinical trial.”
Not sure what “approve its final clinical trial” means — the FDA does have to approve trial design, but what companies are really looking for in the end is for the FDA to approve the drug itself for commercial use. So that’s a little squishy… but that’s OK, because the dates in these ads are often made up anyway, mostly to give an artificial deadline to hurry you up as you dig for your credit card.
More from the ad:
“For millennia, this biological switch was hidden above the surface of your DNA.
“But since 2001, one company has been developing it behind the scenes…
Are you getting our free Daily Update
"reveal" emails? If not,
just click here...“They’ve figured out how to take advantage of this natural anomaly to fix three of the world’s deadliest diseases…
“And they created a breakthrough treatment for heart & kidney disease, plus diabetes.”
Other clues? He says it’s “trading at just $3.06 per share” …
And “Seeking Alpha[10] calls the stock ‘A Billion-Dollar Blockbuster in the Making.'”
Which is pretty silly for anyone who spends time perusing Seeking Alpha, since you can easily find extreme opinions on both sides of any stock there… with very little editorial control (not that Stock Gumshoe is any better, but, well, I wrote some for Seeking Alpha in its early days, years ago, and hopefully no one ever quotes me to validate their opinion about a stock’s future).
And he’s got a quote from the company’s 9/12/2018 earnings call…
“When we were finished with Phase 2, no other pharma or biotech had even started Phase 1.”
And the “seven years” quote is sourced to a hedge fund…
“The renowned NY-based Makalu Fund estimates they hold ‘a lead of seven years over potential competitive drugs.'”
More from the pitch:
“… they have a stunning sixteen patents protecting the lifesaving creation.
“Plus, I’ve found only 1 Wall Street analyst covering it.
“It all set to come to a head on March 15, 2019…
“That’s when they’re slated for a key FDA approval round that could trigger the catalyst to catapult every $1,000 invested into $158,770 over time… in its longer mission to end suffering.”
So who is this? We’ve got plenty more clues we could bore you with here, but that’s enough to get our answer — Thinkolator sez this is Resverlogix (RVX.TO, RVXCF OTC in the US), which is trading right around C$3 (in US$, the 52-week high was right around $3.06, back in September).
The drug in question is apabetalone, which works through an epigenetic mechanism called BET inhibition (bromodomain and extra-terminal), and the FDA did approve its plan and endpoints for the first big Phase 3 trial of the drug in Acute Coronary Syndrome (ACS). That trial was originally noted in their investor presentations last fall[11] to have a “read out” of top line data in the first quarter, which I guess could make the March 15 date somewhat relevant, though in subsequent presentations they have been a lot squishier about that (in the latest investor presentation, they note that the trial will probably be complete in the first half of 2019 and that the top line data will be announced after the outcomes (SAE MACE events) are adjudicated, two or three months after the trial is completed. These are high risk patients, and it’s a Phase 3 trial so there are a lot of very sick people being treated… so my understanding is that this basically just means it will take some time to get the official judgement (from who, I don’t know) on which Serious Adverse Events or Major Adverse Cardiac Events might have been caused by the drug and which weren’t. The drug has apparently been judged safe in 1,900 patients so far over the years, but I assume this is their biggest trial yet.
That sounds more to me like we’ll have results from the clinical trial in the Fall, not on Friday this week… though who knows, maybe they will say something about how the trial is going at a conference — and they do have a poster session about this trial at a conference on March 16, though poster sessions don’t usually announce huge news (Resverlogix did announce yesterday that they’re participating in a bunch of conferences in the coming weeks[12], so you can peruse that list for other possible events if you like).
And yes, Resverlogix did get an $87 million infusion from one of their big investors, their Chinese partner Shenzhen Hepalink… but I’d call “recent” a bit of an exaggeration, that private placement deal was announced back in December of 2017.[13] That got them through a few quarters, along with a $30 million loan last summer and another $30 million in shares issued late in the year (including a November private placement of $13 million that’s not in the filings yet), but a biotech running late-stage trials is a cash-burning machine and they’ll presumably need to raise money again soon (I’d guess they will probably have to do so in the next couple months, well before we have top-line results from their Phase 3 trial, but one never knows — maybe they’ll be able to do more borrowing or hit up one of their partners for more cash).
If you’re curious to see a bullish take, that hedge fund mentioned published its analysis a few months ago — you can download Makalu’s report, “Resverlogix — The Making of a mini-Humira?” here[14]. I don’t know anything about Makalu or their track record, though the author does also note that this Phase 3 trial will be critical to proving their concept, with an argument for huge potential gains if there is a large and verifiable reduction in cardiac risk, and that they will need to raise more money. Makalu seems to think that a takeover is likely if the trial is successful, but that the risk is higher before trial results are in so any acquirer would prefer to wait for that ‘derisking’ event. Which makes some sense, though I had never heard of Resverlogix or Makalu before today so my judgement isn’t terribly useful here, either.
So I’ll leave you there, dear reader — think Resverlogix has the next big breakthrough in cardiovascular disease[15] with their apabetalone? Want to bet on what the clinical trial results will be later this year? Understand the science better than I and feel like explaining for us? Just use the happy little comment box below to share your thoughts… thanks for reading!
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I think the ticker is RVXCF
Indeed, another typo to fix — thanks!
This is what I have found about their latest Phase 3 trial: “The BETonMACE trial is currently expected to be completed within the first half of calendar 2019, with third party adjudication of all MACE events anticipated to be available within two to three months past trial completion. The topline results of the study will be made available shortly thereafter.” I don’t know of any FDA announcement likely in the next few days.
Resverlogix Announces Participation at Prominent Industry and Investor Conferences
March 16th, 2019
– Poster Session: Apabetalone, an Epigenetic BET Inhibitor in a Phase 3 Trial, Inhibits Vascular Inflammation and Cellular Adhesion Leading to Beneficial Outcomes in CVD Patients
March 18th, 2019
– Poster Session: BET Protein Inhibition and Cognition: A Pre-Specified Substudy of the BETonMACE Phase 3 Trial Evaluating Apabetalone in Patients With Diabetes and Acute Coronary Syndrome
31st Annual ROTH Conference, Orange County, CA, USA, March 17 – 19, 2019
Ahead of the conference, a pre-recorded webcast will be accessible on the afternoon of March 11, 2019. Access the webcast by visiting our events page HERE.
BIO-Europe Spring 2019, Vienna, Austria, March 25 – 27, 2019
AD/PD 2019, Lisbon, Portugal
March 27th, 2019
– Poster Session: The Epigenetic Inhibitor Apabetalone Downregulates Brain Endothelial and Microglial Cell Activation That Contributes to Neurodegenerative Disease
March 30th, 2019
– Presentation Title: Apabetalone (An Epigenetic BET-Inhibitor Small Molecule): A Sub-Study Evaluating Effects on Cognition In Diabetes Patients With Cardiovascular Disease
Applicable posters and presentation material will be available on the Company’s website HERE and HERE, respectively, at the appropriate time.
That matches with what I found… though six months ago they were indeed anticipating “top line results” in the first quarter. Maybe they have some MACE results that they don’t want to highlight, or maybe it’s just taking longer than they anticipated to get full enrollment and start to observe results (which wouldn’t be so unusual).
Resverlogix has no ongoing clinical trial on the ClinicalTrials.gov site. Not sure what they are addressing. There are some interim results as late as 2016, and two that will be recruiting, one for renal. Doc, thanks for the past help, you saved me some money. Should have paid more attention to your ADXS review, you were spot on, it is a huge loser. down in the quarter range last time I looked. Had always wished you would have reviewed IPIX (formerly CTIX). GLTY
Carl, if you’d bothered to do a simple google search you would have found this: https://clinicaltrials.gov/ct2/show/NCT02586155 That’s for the Phase III BETonMACE trial, if you are able to do simple searching you’ll see that there are also planned trials for CKD and Fabry’s on clinicaltrials.gov as well…
Here’s a current Zacks report that will provide more clarity: http://s1.q4cdn.com/460208960/files/News/2017/Dec-20-2017_T.RVX_Vandermosten.pdf
I read a pitch about a similar trial that was going to catapult the stock to the stratosphere. XOMA was the name. I came to Stock Gumshoe to see what it was. I bought the stock, the test failed, and the stock tanked. I still own the stock, but at least I didn’t have to sign up for the overpriced newsletter thanks to Travis. I keep thinking XOMA may get something approved that will run the stock back up to breakeven. I know – I’m not holding my breath.
EXTREME caution is due when evaluating biotech stocks, especially including those that describe altering DNA/RNA and/or its expression, to benefit patients with specific medical needs. Note the above comments, per currently available, effective dietary, etc. interventions. Case in point: Check out J. Gelsinger, a teenager whose parents agreed to have their son participate in the first, ever, genetic study, in order to try to save their child from cancer. He died. when he succumbed to what is termed unpredictable “cascade effects” = in this case, and in many more to follow, harmful sequelae, that claimed his life. Also note that there are, to date, more than ten thousand (10,000) medicinal plants from around the world, many of which have been used, successfully, for thousands of years. Hippocrates, the Greek physician, often referred to as the “Father of Modern Medicine”, said, about 2,500 years ago, to paraphrase, “Let food be your medicine, and let medicine be your food.” Other examples: there were ZERO obese children, and ZERO cases of autism/ASD in our elementary school, in our nation’s capital, over 50 years ago… Our school had over 500 students in attendance.
This is what makes for the classic “resistance levels”: enough individuals bought at a certain price level, then the price went down. Now they all want the price to go back up to their break even point so they can get out.
If the price does go back up to that level, all that supply comes onto the market and the price will not go higher until it is all picked up by new buyers. Some potential buyers will hold off when they see that the price rise has stalled.
Classic “resistance levels” in action.
Thanks for all the research! I’m going to buy a few shares, just for giggles. If anything awesome transpires, I’ll let y’all know.
This coming from the Cl&*n who promised us “Wireless phone charging”…over and over again….this guy is a hack!
Ray recommended this stock back in October and it has dropped 25% since then. Might be set for a rebound?
The future stock price movement depends on the results of the clinical trial, I expect. If surprisingly bad, it could fall dramatically… it’s still a $500 million stock, and if there are safety concerns with their one drug or other major issues, there isn’t any other value in the company to prop it up. If results are good, sure, I expect the stock will “rebound” and probably go much higher… though as I read it the results are not likely to be released for at least several months.
Many pharm outfits – Novartis, for one – are researching epigenetics, which is indeed a promising field. There will certainly be many drugs based on that mechanism. Does Resverlogix have an inside track? Just possibly.
For all who are sceptical about this company, do have a close look at page 16 of https://www.resverlogix.com/upload/event/40/dc1fa4a5dafe/2019-rvx-corp-pres-mar-11.pdf This shows that apabetalone had achieved a significant beneficial effect on the composite of death, myocardial infarction, stroke, heart failure etc and in the diabetes sub-group. If this continues to the end of this trial (not far off now) this could well be a major new drug in CVS disease!!
I looked at your link. I am a physician that does clinical trials. The red flag is that it is published in a really low impact factor journal. So obscure that I can’t access through my university library online system that subscribes to almost every mainstream journal. What does this mean? Usually researcher try and publish in the best journal possible. This article was probably rejected a number of times from mainstream journals due to some concerns with the study design.
Overall, I find the story pretty compelling but I am just a little bothered by the above.
Posted this on Stockhouse and CEO.ca exactly a year ago:
I have been in and out of this stock for the last 10 years. Since 2017 I do not own any shares for the following reasons:
http://www.stonegateinc.com/reports/RVX_MARCH_2018_Final.pdf
Stonegate extracts AND MY COMMENTS from the ABOVE REPORT:
Since August 2000, Don McCaffrey and Dr. Norman Wong have been working together …… with an accumulated deficit of USD $366M as of 1/31/18.
As of 1/31/18, the Company reported approximately USD $0.5 million in cash on hand with a reported average monthly cash burn rate of approximately USD $4.7M for the quarter. AND ON APRIL 15 they ask for 30 mill AND HAVE NO CLUE ON THE TERMS…
Company will still need to raise additional funds within the near term to support its pipeline. In the short-term, Zenith has agreed to prepay certain operating cost reimbursements to Resverlogix in the amount of $0.3 million. WOW: GOT 300,000 covered: need ANOTHER 29.7 million
the Company’s stock is currently undervalued and could trade in the range of CAD$5.17 – $10.73 per share, with a midpoint of $7.20 AND TODAY WE ARE AT $1.35 – 1.40 ……
AND THE FINAL STATEMENT from SCP (the author of this report) : SCP has a non-exclusive Advisory Services agreement to provide research coverage, retail and institutional awareness, and overall Investor Relations support for which it is compensated $7,500 per month. Stonegate Capital Markets “SCM” (Member FINRA) is an affiliate of SCP and may seek to receive future compensation for investment banking or other business relationships with the covered companies mentioned in this report.
AND I HAVE NOT SAID ANYTHING ABOUT their options and warrants handling.
Fresh addition for March 2019: No insider trading at all in the public market since 2016.
To whomever published this article for Gumshoe, I would like to point something out. The article says:
“Seeking Alpha calls the stock ‘A Billion-Dollar Blockbuster in the Making.’”
That is not qute true. Firstly I wrote the article, I have an account on Seeking Alpha where my user ID is Joe Retail. While it is published there it is what they call an Insta-Blog post. As such on that site it is only available to those who are following me, however I am somewhat proud of what I wrote and I did share a link on sites like Twitter. Regardless that post only has a few hundred reads, here’s the link to my post:
https://seekingalpha.com/instablog/15663412-joe_retail/5205099-apabetalone-billion-dollar-blockbuster-making
Saying “Seeking Alpah calls the stock….that is like saying “Facebook calls…” based on what some joe schmo like me posts to their timeline. Seeking Alpha is merely a platform they do not proof read or edit Insta Blog submissions at all. Here’s what SA says about instablog postings:
No editorial review
Your blog for anything stock market related
Can be published on other sites
Not eligible for earnings
Syndicated to followers
Regardless I do not consider it a typical pump piece in that I wrote that after having written several other articles on Resverlogix when the stock was much lower and I don’t gloss over the risk factors, I stress them. My mantra for all investments is that ‘nobody has ever gone broke from taking profits’.
The risks are very real, and I wish whoever this Blanco guy is, I wish he’d never hyped Resverlogix in the manner he has….but it is what it is. At the time I wrote that the company was projecting that BETonMACE would hit 250 MAC events around the end of 2018. Do note that this is an events based trial, which means that it is not over untile 250 people suffer a Major Adverse Cardiac Event….and I am hopeful that the increased time its taking to complete the trial, that it bodes well for Apabetalone working in reducing the time to MACE.
I’ll be watching this thread if anyone wants to comment, and of course comments are welcome on my post at Seeking Alpha.
Hi Gordie, welcome to our space and thanks for commenting… yes, the promoters often try to add gravitas by including misleading quotes from official-sounding sources, often from blogs and other content on SeekingAlpha or Forbes or similar sites that have good name recognition.
I’ve checked your space many times and find it to be a very valuable resource….I didn’t realize that you were quoting Blanco’s article in reference to my SA blog post, sorry for the misunderstanding on my part.
I keep a watchful eye for the triumverate of News/Hype/Promotion on speculative stocks and have read many articles on stockgumshoe detailing what I consider to be very dubious promotions…..
Keep up the good work.
Update on Resverlogix – on September 30, CEO Don McCaffrey (DM) announced primary endpoint from the 4 year phase 3 trial wasn’t met. DM stated in a pre-market conference call that the company’s drug, apabetalone, “is now confirmed a safety profile worthy of a chronic use drug. I believe future released data will confirm this drug works.” DM also stated the following: “Due to academic embargo rules, we are not yet in a position to share additional important data. We will be submitting for a peer-reviewed publication and we have already received a late-breaker podium presentation at the American Heart Association in Philadelphia on November 16, 2019. That is only six weeks away and will be very enlightening for shareholders.”
Update October 31, Resverlogix had their annual shareholders meeting and DM gave a presentation on the upcoming events. I provided a link below and you will have to register to view (its well worth it!!!)
http://services.choruscall.ca/links/resverlogixagm20191031.html
Resverlogix is meeting with the FDA on November 13; full data results will be announced at the AHA on November 16th except for the cognitive impairment (alzheimers/dementia) results which will be announced at the CTAD on December 6 in San Diego; DM stated he will schedule a pre-market conference call on Monday, November 18 to “lift the kimono” on the test results.
The 3 diseases (Cariovascular, Kidney, Alzheimers/Dementia) are the 3 targets for Apabetalone and the test results will be announced in the coming weeks. If you are interested in what this company is about to announce, I highly recommend you view the presentation with audio from DM. It’s only 20 minutes long. While I believe the phase 3 test results will be a grand slam based upon DM’s presentation last week, everyone should do their own DD.