The latest pitch from Breakthrough Technology Alert, the high-priced tech “upgrade” newsletter from Agora Financial, is certainly over the top… this is how it opens:
“Witness a Miracle Made Real
“A shocking, exclusive video below reveals the most urgent market story of your lifetime.
“Your fast action today could kick off lasting generations of wealth for your family.
“Think about your future. Consider your goals. Your family cannot afford for you to miss this.”
The “Miracle Made Real” is certainly real enough, that part is about the increasing promise of treatments for spinal cord injury… the increasing potential that some spinal cord injuries and paralysis can be reversed, which might, possibly, have let actor Christopher Reeve, who is best known for portraying the Man of Steel in a few Superman movies, “fly” again.
But the “kick off lasting generations of wealth for your family” bit is probably best consigned to the compost heap — that’s just a way to get you to trigger those greed receptors in your brain, which are prone to overexcitement that leads to going “all in” at the poker table or betting too big on a wildly risky stock (or a newsletter that’s way too expensive for your portfolio). Get those juices flowing, the ad copywriter knows, and the reader will be much less worried about the details… partly because they’re already imagining that new Mercedes in the driveway or the “paid in full” invoice from their beloved chid’s Ivy League university.
That kind of promise has been used by this same newsletter many times in the past — comparing the opportunity before you to the opportunities the first investors had in the railroads or in Microsoft stock or whatever. We’ll see if this is the same kind of stock, then perhaps we’ll look back and see how the prior promises have worked out so far.
The big sell is clearly the videos of these patients who’ve benefitted from “miraculous” cures, heres a bit of the description from the ad:
“ALL of the patients who’ve received this experimental surgery in the past few months have seen the impossible come true thanks to the breakthrough I’ll reveal to you here today…”
Here are some the details from one of those patient examples, the person they call Kevin Douglass:
“In March of this year he was in a fateful car accident in California.
“One second he’s driving…the next second he can’t move his hands or legs… completely paralyzed from the neck down….
“His transformation following the surgery left everyone speechless…
“Kevin began to show signs of improvement barely a few weeks after the surgery.
“Fast forward five months and not only can he move his arms, but he’s lifting weights.
“What you’re witnessing was simply beyond anyone’s imaginations.
“To see Kevin raise one arm would have been considered a miracle.
“But to see him raise two arms over his head and lift weights several times all by himself is simply mind-blowing.”
And apparently this surgery and technology, whatever it is, is not just limited to spinal cord injuries:
“… the technology behind the treatment that’s changed these two men’s lives could soon help people with all sorts of diseases, ailments and medical conditions.”
The story is really about regenerative medicine, and newsletter publisher Aaron Gentzler (who I last heard of when he was pitching rare stamps for a different publication) builds up the person behind this investment as “the Man Whose Work Could Deliver You Wealth That Lasts for Generations” and puts him on a pedestal alongside Henry Ford and Steve Jobs as “life changing visionaries”…
What they talk about is essentially creating pluripotent stem cells by re-engineering your own cells and taking them “back in time” to when they were able to transform into any kind of cell (like the few cells of an embryo transform into all the future differentiated cells needed).
And, apparently this trial on the spinal cord injury patients was spectacular, and creates the possible catalyst of further results that could come in January…
“… the patients that volunteered to test the therapy were given a limited dose.
“This would allow doctors to analyze the data and, six months later — January 2017 — determine whether the new therapy should be allowed to continue.
“But after seeing such incredible results barely a few weeks after the therapy, doctors simply couldn’t wait to share the news with their peers.
“Naturally, scientists and doctors were even more skeptical than you and me.
“After all, these types of recoveries were unprecedented.
“This was the first time that a therapy of this type showed any improvements in patients with spinal cord injuries.
“And now the FDA has approved an increased dose and opened the doors to treat more patients — all ahead of schedule.”
And apparently this is a technology that Breakthrough Technology Alert has believed in for a long time…
“Why did this scientist agree to meet with Agora Financial?
“Why did he take me into his lab even though I wasn’t a scientist?
“And, most importantly, why did he let us show you?
“The answer is simple:
“Because we were early believers in him and his vision…
“And because he knew that we would only get this message in front of the right people.
“People like you.
“Just like we did almost a decade ago….
“… we sent an email to a group of our most loyal readers in the summer of 2008 recommending that they buy shares of this enterprise while stock traded for only 75 cents.”
So who is it? This is the stock that was first teased in 2008 by Patrick Cox when he was running Breakthrough Technology Alert, BioTime (BTX). It matches all the clues, and the “next Steve Jobs/Henry Ford” figure in the video interviews in the ad is stem cell pioneer and BioTime founder Michael West (who remains co-CEO).
The stem cell therapy is from one of BioTime’s affiliate companies, Asterias Biotherapeutics (AST), which was spun out as a separate company after BioTime acquired the stem cell businesses of Geron (GERN, another company that Michael West founded). You can see the same videos that Agora cut snippets from on Asterias’ website here if you’d like to see more. AST is valued at about $200 million, and BioTime still owns more than 50% of AST, so that $100 million share holding represents a fairly substantial portion of BioTime’s balance sheet (BioTime’s market cap is just over $400 million).
That’s BioTime’s basic strategy for drug development using their technologies — let a subsidiary do the work and raise some outside funding. OncoCyte is another controlled subsidiary that also trades separately at OCX (it looks like BioTime’s shareholding is again worth something in the $100 million neighborhood on that one), working on cancer diagnostics, and BioTime is also advancing several therapies and technologies itself that have not been spun out, including OpRegen for macular degeneration and Renevia for HIV-related lipoatrophy.
BioTime does show a profit in recent quarters, which might be a little surprising to some folks because it’s really a “pre revenue” company still, even after a decade of R&D and advancement of the stem cell cause — those profits aren’t from the business, those are recorded because of the increase in value of their subsidiaries, which the accountants tell them is technically a “non operating profit” even if they don’t sell the shares. During quarters when those subsidiaries fall in price, BioTime will have to record equally meaningless “losses” on those positions… but in reality, BioTime is still an R&D company that’s trying to advance several different stem cell-related treatments, both on their own and through subsidiaries, and their treatments are generally novel and therefore likely to remain highly scrutinized by the researchers who conduct the trials and by the FDA, so they’re likely not going to have meaningful revenue for at least several years (unless they sell one of those subsidiaries and actually book the cash, or sell something else to a different pharma developer).
Still, biotech hopefuls don’t trade on revenue — they trade on the future promise of something fantastic. BioTime may get there, too, I am not at all qualified to tell you when or if their macular degeneration product will be considered safe and effective after several more years of clinical trials or if there are likely roadblocks in its way…
… I can just note that the stock has traded on sentiment and hope (and promotion from Agora) in the past, and that Michael West is real and is a real pioneer in stem cells, but that this was all also true three, five, six and eight years ago when I wrote about teasers from Agora and other publishers about this stock, so don’t get yourself twisted in knots about whether the stock will soar in January when the latest data from the spinal cord injury trial is released… in all likelihood, the stock will go up and down many times before (if) it becomes a foundational company in the next wave of regenerative medicine and becomes a key part of those advancements five, ten or more years from now.
I don’t know the stock inside and out and don’t have anything particularly negative to say about BioTime, other than that real progress moves a lot more slowly than newsletter promos would like us think… especially when that progress is in what is still a very new clinical area like stem cell-related treatments.
So if you think of BioTime as an appealing investment, do so with a long-term view, and spend some time getting to really understand the company first… they are spending lots of money and raising money every now and then to spend more, so they will be news-driven and sentiment-driven for the foreseeable future. And no one can predict what the results of their R&D or clinical trials will be, or what the reaction of regulators might be for the few treatments that are actually being tested in humans… even the newsletter folks.
The copywriters who make huge promises in these ads about gains being right around the corner, and about life-changing results and family-changing “generations of wealth,” are writing checks that real-life stocks can rarely cash. I’ll reiterate that almost exactly those same promises have been made for many years, by Breakthrough Technology Alert as well as by a few other newsletters also pitching this stock, and I get no impression that they know the best time to get in or out of the stock, either — I suspect that these newsletter editors are sold on the long-term story and the patent portfolio and the promise of a future where BioTime’s treatments are leading the way to life extension and curing lots of mega-billion-dollar diseases, and perhaps you’ll be sold on that, too… but once the stock gets to the person who has to convince you to buy a $2,000 newsletter, “the story of 2025” doesn’t work, that pitch has to come with “you must buy today or you’ll miss out!”
To illustrate, for those who prefer pictures: This is a chart of BioTime in the years since Breakthrough Technology Alert says they first recommended it, in the Summer of 2008 at 75 cents… and I’ve added those red arrows to point at roughly where the price was when they and other newsletters (but mostly Agora and, after he left Agora, Patrick Cox for his new publisher) have metaphorically pounded the table for BioTime shares to enough of an extent that it generated an article from yours truly in Stock Gumshoe.
This is not scientific, but I looked back through many of those articles and saw similar promises about life-changing wealth and immediate catalysts that you couldn’t miss… who knows, maybe that life-changing wealth will come from BioTime in the fullness of time, but it’s not likely to come in the next few days — so you can take your sweet time doing your own research and making your own call.
So what do you think? In a hurry to get into BioTime shares in case AST reports more promising spinal cord trial results next month? Want to give it some more thought? Not interested at all? Let us know with a comment below.