Looking into Chris Mayer’s “The 100-to-1 Project: How a Company Solving the Opioid Crisis Could Show You a Fortune”

Will this new drug, approved just last year and launched a couple months ago, bring 10,000% returns for long-term investors?

Today we check in again on Chris Mayer, he’s sending out ads for his Chris Mayer’s FOCUS newsletter ($2,500) over at Bonner & Partners, and his ideas are often interesting.

His big focus in recent years has been trying to back-test qualitatively to identify the things that made huge investment successes possible — and specifically to look for what ingredients went into making a long-term “100 bagger” investment.

Here’s a bit of the ad:

“After spending six months and over $138,000 on research… Chris discovered all the companies that paid out 100-to-1 or more in the 52 years between 1964 and 2014.

“By studying these companies, he was able to reverse-engineer a blueprint of what made them tick.

“Now, he’s taking it one step further – and in this exclusive presentation, Chris is going to tell us about his ongoing hunt for 100-baggers… and the company he has just discovered that he believes has the potential to pay you 10,000% – or more.”

So there’s your “giant long-term potential” tease… what else do we learn about this?

“… according to Chris’ research, these kind of 100-bagger opportunities appear on average seven times per year….

“… folks don’t believe these kinds of returns are possible for everyday investors without putting their money in something risky or highly speculative… like penny stocks or Bitcoin.

“But you don’t have put your hard-earned money in something risky or highly speculative to see returns of 10,000% or more… It’s possible to see those types of gains by investing in real companies… that solve BIG problems.”

That’s one of his criteria — “small company that solves a big problem” … we’ll get into that a little more in a minute, but first let’s get into the clues about the specific idea he’s recommending:

“I first was clued in to this company at a closed-door investing meeting in New York City. At the event I talked with a billion-dollar hedge fund manager, whose name I’m not able to reveal. What we discussed led me to look into the company.

“Naturally, that got my attention. This person has a really phenomenal track record. But what really piqued my curiosity was the fact that this particular stock was hiding in a historical 100-bagger hotbed.”

And what’s that “hotbed?” Pharmaceuticals… he runs through a bunch of comparisons to other companies, all name-brand big Pharma stocks that had massive runs driven primarily by one blockbuster drug. Like Pfizer (PFE), for example…

“You can literally see the spike from the news of Lipitor’s discovery in August 1995 to its release… and subsequent success as a treatment.

“And it’s important to note: The Lipitor effect was felt for over a decade… from 1996 to 2012, Lipitor became the world’s best-selling medication… ‘providing up to a quarter of Pfizer Inc.’s revenue for years,’ according to Crain’s New York Business.”

And Abbott Labs…

“HUMIRA became the second-bestselling medication in history, with total lifetime sales of roughly $109.2 billion.

“And Abbott Labs’ investors were rewarded with a 1,965-to-1 return.”

And he runs through several other examples of huge 1,000%+ gains from other big pharmaceutical companies, including Amgen and Biogen.

“I believe my new pick has an even wider moat that can protect company profits for years to come… helping it to become the next 100-bagger…..

“The company I found takes a similar approach… developing specialty treatments for patients with high, unmet medical needs… and that’s one reason I believe it could be a game changer.”

So what is it? It’s a company that he thinks will make a difference in the opioid epidemic…

“… by investing in this company, my readers can literally make a small contribution to saving millions of lives… as well as potentially ride the next 100-bagger….

“At least 66,324 people died of opioid-related drug overdoses during the 12-month period ending in May 2017 based on data released by the National Center for Health Statistics.

“For context, that’s more than the 58,000 soldiers who died in the entire Vietnam War… more than the 34,461 people killed in car accidents in 2016… and more than the 43,000 people who died from HIV/AIDS during the epidemic’s peak in 1995….

“… the surge in overdoses has brought down the life expectancy in the United States for the past two years.”

OK, so what else do we learn about this stock?

“I first heard about this stock at a closed-door investing meeting in NYC. A billion-dollar hedge fund manager, whose name I can’t reveal, inspired me to find it. I knew about her and her company from an associate.

“There were a handful of interesting companies mentioned at this invite-only event, but this one jumped out at me… because it promised a cure for the opioid epidemic… and this was something I instantly recognized had 100-bagger potential.”

And then some real specifics for the Thinkolator to chew on…

“Their treatment was approved by the FDA in late 2017. And they just started selling this treatment in March of 2018….

“… they have a track-record of success developing treatments. In fact, according to our research one of their earlier drugs generated over $12 billion in sales and $6 billion in operating profit.”

“And they believe this opioid treatment drug will be much bigger.”

OK, so that’s probably enough for the Thinkolator… but let’s get a couple more little tidbits from the ad in first:

“Mike Derkacz, a 25-year pharmaceutical veteran, and current CEO and president of Braeburn said, ‘This new technology has the potential to greatly influence the way patients are treated today… [it can] free patients from the daily decision and reminder of the disease.’

“Bottom line: I believe this drug could become the predominant player in the opioid treatment world and turn into a multibillion-dollar medication in just a few years.

“In fact, the co-director of opioid research at Brandeis University said ‘It’s potentially a game changer… This could become the first-line [medication] for opioid addiction.'”

That all sounds impressive, right? Certainly we need more ways to combat this wave of addiction. So what’s the stock?

We do get a few other clues…. The company has a $4 billion market cap, the CEO is a 25-year veteran of the pharma industry who has developed multi-billion-dollar treatments before, their treatment uses a “new and improved” delivery method that creates a “moat” for the business, with patents, and they’ve built products before so they know how to ramp up a sales force and get doctors and patients to buy it.

Which means it’s time to pull the Thinkolator out of the garage and shovel those clues into the hopper. Haven’t had to really click it into gear recently, but this one requires a little chugging and churning… still, the ol’ beast still has some power left in her, so our answer does come dribbling out the other side — this must be Indivior (INDV in London, INVVY for the US ADR, each ADR is five shares).

The name might not sound familiar to those who haven’t explored the opiate addiction space, but it used to be part of a much larger company — Indivior was spun out of Reckitt Benckiser as an “addiction control” company, built around their suboxone opioid addiction product, back in 2014.

Mayer talks about this as one of his “coffee can” investment, a “buy and hold” strategy that he’s talked about for several years…

“So the idea in a nutshell is to find the best stocks you can and let them sit long enough to grow. Don’t put anything in your coffee can you don’t think is a good 10-year bet….

“Before I ever put a stock in my coffee can portfolio, I ask these four questions…

Is this a small company that solves a big problem?
Is it run by owner-operators or CEOs with skin in the game?
Does the business have competitive moats?
Does the business have unquestionable growth potential?”

So he presumably believes that this stock ticks those four boxes. I’ve not looked at Indivior in any detail before, but it has been a powerful player in the opioid addiction treatment market for a while, with strong sales of Suboxone and then, when the patent expired for that drug, for its sublingual film that’s used to deliver Suboxone (Suboxone is just the brand name for their combination of buprenophrine and naloxone).

And the ground continues to shift beneath that core product. There has been some bad patent news, most recently with the indication that a competitor’s sublingual film Suboxone doesn’t infringe on Invidior’s patents. That seems likely to depress market share, particularly given the wide variety of somewhat similar generic addiction maintenance drugs at competitive prices, but I don’t know what the actual impact will be since the whole sector is presumably going to keep growing as we work our way through (and hopefully out of) this epidemic… perhaps with some regulatory pressure if the cost of drugs impacts large-scale responses to the epidemic.

But the new drug that they’re excited about… or, really, the new drug delivery system, is a monthly injectable that’s intended to get rid of the maintenance problem — it’s challenging to have to take a drug every day, and some people would do better with a once-a-month regimen, even if it requires a visit to a clinic for an injection. That’s the subcutaneous injection Sublocade, which is an extended-release buprenophine and was indeed approved late last year by the FDA. You can see the description of their products, including Sublocade, here.

And given the steady decline in revenues over the years as Suboxone has endured competition, it seems likely that much of the hope for the future is built on this Sublocade produce, which is just in the early ramp up of being sold to doctors and clinics and patients — and it will likely be a fairly gradual ramp-up in sales, I would imagine, because it’s a somewhat dangerous drug to administer and the clinics or pharmacies who dispense it have to be certified in their special program (if you inject into the vein instead of subcutaneously, it’s bad news).

So I don’t really know what the risk/reward scenario looks like for Indivior. They seem to me a two-trick pony at this point, with probably-declining or flat Suboxone sales and hopefully-rising Sublocade — they do have other addiction-control drugs in their pipeline, for cocaine and alcohol, but those are very early on (preclinical or phase 1), and they also are expecting a response from the FDA on its expected approval for RBP-7000, their Schizophrenia drug, but they don’t talk much about that one and I don’t know what the revenue contribution is likely to be if approved.

They do have very high gross margins, since a huge part of the cost of the business is maintaining the sales force and managing and distributing the drug, producing it is not expensive at all — which means that any improvement in sales that doesn’t require a dramatic increase in selling expenses would jump right to the bottom line, but that doesn’t seem likely to happen immediately. I assume that the cost of building a market for this new injectable will be considerable, and that the returns would come a bit later on if they are able to again take a controlling market share in addiction treatment.

And, of course, there’s plenty of risk to that market share — they are fist with this injectable extended-release drug, but they probably won’t be last… Braeburn, which is not publicly traded, also specializes in different delivery systems for buprenorphine and has a 6-month implant that was approved by the FDA back in 2016, and they’re also in the process of re-filing their new drug application for similar subcutaneuous buprenorphine injections that can be given either weekly or monthly (they got a Complete Response Letter from the FDA last time, requesting more information, but re-filed last week and expect to know more by the end of June). I don’t know if there’s a fundamental difference between the products from Braeburn and Indivior, or whether one or the other has a stronger sales force that should give them the edge if they end up having competing products in the market, but they sound similar to me — both use a subcutaneous injection that essentially forms a gel under the skin and slowly dispenses the drug into the bloodstream. Braeburn is private but its partner, Camurus, is public (CAMX in Stockholm), and therefore Camurus explains the situation to investors more clearly than Braeburn does — they say they’re still targeting marketing approval for the US, Europe and Australia in 2018, and they explain their FluidCrystal technology here.

The gels are different and proprietary (Atrigel for Indivior, FluidCrystal for Braeburn/Camurus) — Braeburn’s uses a smaller needle and they say that it doesn’t require refrigeration, so perhaps that will matter, but I don’t really know if the differences are enough to be significant to patients or providers… the basic intent and the basic solution to the problem, combatting abuse and daily inconvenience by depositing a slow-release “depot” of the drug under the skin is essentially the same from an outside perspective. And, of course, Braeburn’s drug is not actually approved and might not ever be.

Indivior currently has pretty low growth forecasts from UK analysts, with guesses that that they will boost revenues by only about 6% this year and another 4% in the following year, presumably because of pressure on Suboxone sales, though they do see earnings growing a little more than that, with earnings growing about 10% this year and another 5-10% next year. So that’s going in the right direction, and they could certainly beat those estimates if Sublocade is a big hit in the second half of this year, or if their sublingual Suboxone manages to maintain some market share without big price cuts, but it’s not a picture of overwhelming growth.

But then again, it’s not priced as if it’s got overwhelming growth, the stock trades at a forward PE of about 17, which is about average for the market (but substantially higher than some of the less-popular mega-cap pharmaceutical companies — Pfizer, for example, has a forward PE of about 12 and similar growth forecasts to Indivior).

So to make a call on this one, you probably have to decide where you fall on the forward guessing game: Will sublinqual Suboxone keep high market share without too much price erosion, and will the injectable Sublocade be successful and create revenue growth for them again? If so, they’ll probably do well, given the sad fact that they have a large and growing global market… if not, whether because of competition or regulatory pressure or whatever else, the shares are likely to wither without revenue growth. It’s not a stock I’d put in my “coffee can,” given the relative lack of other products and the high regulatory risk, but that’s just me.

And, of course, what matters is what you think — it is, after all, your money. So what’s your guess? Great things ahead for Sublocade and Indivior as they fight this ugly epidemic? No? Maybe? If you’ve got any insight or thoughts on this market or any of the stocks, feel free to share with a comment below. Thanks for reading!

P.S. As always, we’re looking for investor opinions about the newsletters you subscribe to — have you ever tried Chris Mayer’s FOCUS service? Please click here to share your experience with your fellow investors.


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26 Comments on "Looking into Chris Mayer’s “The 100-to-1 Project: How a Company Solving the Opioid Crisis Could Show You a Fortune”"

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vivian
Guest
0

we owned this in its glory days and sold out. the trouble with these wonderful finds by expensive newsletters is that they are often stale as with INVVY.

Vince
Guest
0
To me, the company is irrelevant. The “problem” the company is trying to solve is the problem with this investment idea. Developing one drug to solve the problems caused by another drug is just a bad idea. Besides, the emerging cannabis industry offers a solution to the problem opioids were supposed to correct in the first place – pain management. Cannabis, a naturally grown unaltered plant, has addressed that issue for tens of thousands of years – without the potential for addiction. Opioid use will eventually decline as the prescriptions for opioids by doctors decline. A coffee can investment, HA!… Read more »
Bryan
Guest
0

InMed is in the Canadian Medical Cannabis grouping, but it makes the pain killer without the components that produce a high.

Harvey
Guest
0

Vince, you are very wrong about the addiction on cannabis. My son is addicted. He is almost 25 and it has pretty much stopped his live at 16 when he started to smoke it.

cagboulder
Member
7

you can get CCB oils and other products for pain without THC

Steve
Guest
0

hey Harvey – please don’t blame the marijuana on your sons demise. as stated it is not addicting and Im sure of it as I do enjoy a bowl or three everyday since I was 13, now im 47 I bust my ass everyday at work and take care of my family and Im still not addicted. Please don’t blame the plant on your sons absolute laziness. that stems from upbringing not marijuana.

nhr123
Irregular
0
Steve, several years ago there was a study published in Science or Nature, trying to explain why some people become addicted and some not.. What the study showed is the there are people can take a heavy dose of opioids, much higher than what is considered “addiction level” and walk way without any problems. On the other hand, there are some who become addicted by very low doses that are considered way below addition- inducing levels. In other words: Just because you were able to walk away doesn’t mean “everyone can as you do.” Also, addiction can cripple someone mentally… Read more »
roger reynolds
Guest
0

Am a subscriber to Focus—why–to have someone help research potential 100 to 1 companies. But, Chris does not believe in market timing and this recommendation is at a top of a weekly bollinger band. Every momentum indication is way overbought. He could well be correct fundamentally and yet be stopped out during a market correction. —-About 9 months ago he recommended INWK . He just said sell and at a loss. WHY—company is having to restate numbers. But, unless the changed numbers are big and bad the company is now in a timing buy area.

SageNot
Guest
0

Mayer c/b brilliant, but he’s really late with this stock, look at the chart!
https://finance.yahoo.com/quote/INVVY?p=INVVY

yukonjack
Guest
0

Who knows?…maybe this a 100 bagger, but I wouldn’t bet a dime on it. Once again, the drug magicians fail to get to the root cause of the problem and just end up throwing another drug at it. I wonder what the drug will be to treat the side effects of Sublocade? Few medical problems are solved using more drugs. Without disease and sick people, Big Pharma goes bust. That will never happen. That is why most drugs are designed not to work, but only to keep your expectations high.

JayBee1
Guest
0

Good one, Yukon Cornelius!

denno1947
Irregular
1

Not to many people remember that “methadone” was invented by the nazis prior to WWII as a substitute for heroin. They needed a replacement for the opiates that they knew would be difficult to import during wartime. In the 60’s the U.S. started treating heroin addicts with methadone in an attempt to “cure” them. It just made things worse, having another addictive, destructive, drug on the streets. The “treatment centers” made billions pushing this junk, though.

StockMidas
Irregular
172

Thx Travis – Great insight into one of the more attractive punts lately. Has shown strong upward momentum, trading above 50MA & 200MA for more than 6 months with 15% ossilation between peaks and troughs. With market cap of $4.83 Bill, Forward P/E of 15.42 and PEG Ratio of 0.66 there is significant room for growth.

Probably advisable to see what the outcome of the subpoena from California Department of Insurance is before jumping into it:
https://finance.yahoo.com/news/indivior-receives-subpoena-california-department-124500497.html

Frank Jones
Guest
0

Thanks again Travis!!! I appreciate the knowledge.

Folks may want to consider Emblem Pharma in Canada EMMBF in OTC. Doing similar things with THC and the founder was the President of Purdue and brought to market Oxycotin. Patents out the wazoo and huge management ownership.

This is a much better story

cagboulder
Member
7

I haven’t made any $ yet on EMMBF., have you??? (lost only a little so far though)

fabian
Guest
0

I subscribed to his previous 100 bagger letter. It was $ 100/year and worth about that. Then he closed it and went with Bonner and pop $ 2,500/year. I suppose it’s the same. Watching paint dry.

David
Guest
0

I’m disappointed in Chris. I used to subscribe to his Capital & Crisis letter. It was renamed the 100x Club and then folded. His 100-1 ideas seem sound, but INVVY doesn’t seem to match. It seems like a crap shoot riding on them getting approval and market adoption.

Louis
Guest
0

Look at emmbf.. this weed stock has got it figured out

Add a Topic
7
oregon don
Guest
0

then why is EMMBF down 50% from its 1 1/2 year high?

cagboulder
Member
7

ditto. I got in last Nov, and it has not made me a profit

backoffice
Irregular
232

Unfortunately the problem will be with us for awhile. Purdue flooded the market and downplayed the addictive qualities of the drug, so Doctors wrote for it easily, and patients knew to ask for it. It gives the same high as heroin and because heroin is much cheaper it eventually takes over and since there are few successful treatment plans out there the addict either makes it out or dies.

dolphinlady
Member
2

Thank you again, Travis! You always bring me back to reality after hearing a pitch like this one. It would be great if this stock increases over time, but we’ll see. Your writings help me to keep things stock in perspective. Many thanks!

Gr8Full!
Irregular
11249

$VTGN $AXSM Best plays in field, $ONOV fits the coffee aspect. imho.
#DYODD #NIAIA
#Best2All

Virgil Smith
Guest
0
Has anyone looked at BICX. They claim to have a novel way of providing medication for an extended time period 1 1/2 month or longer and the medication has been approved for many years. The have developed an improved version and are awaiting FDA approval. The delivery device is awaiting approval as well. They appear to be confident enough to start buying components and develop a factory to manufacture the implantable unit. There are numerous testimonials as to how this solution kills the craving that accompanies alcohol and opiate addiction. They have two pilot projects, 1) Philadelphia,Pa. and another in… Read more »
dbc320
Member
0
Hello, I’m new to stock gum shoe.com but it appears to be a valuable tool to filter through the expensive news letters, scams or otherwise. I recently bought AMPH Amphastar pharmaceuticals. It was touted as the new drug company to combat the growing opioid epidemic. I forget who recommended it. It has dropped continuously since I bought it. Down about 11% in the last 6 months or less. It seems to be leveling off. Maybe a pump and dump scam. I should research who touted it to avoid their recs in future. Likewise, research who recommended NVDA to me and… Read more »
jon
Guest
0

what is the new drug … do we know

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