by Travis Johnson, Stock Gumshoe | March 16, 2016 2:30 pm
Bonner & Partners, which is yet another spinoff of Bill Bonner’s Agora publishing empire, has beefed up its newsletter offering a bit by launching a new newsletter that’s seems like it’s in the same vein as Agora’s Breakthrough Technology Alert — an expensive letter focused on new technologies and, more specifically, on the early stage stocks working on those technologies that they think will make you rich.
That letter launched a few months ago, and this is the first teaser I’ve seen for it — the editor is Jeff Brown, who apparently worked in a few tech companies but hasn’t been an investment pundit in the past, and the newsletter is called Exponential Tech Investor. Brown has said in interviews that he was an exec for Qualcomm, Juniper Networks and NXP Semiconductor, so it sounds like most of his specific expertise is in chips and networking — and the areas where he indicated he was spending a lot of time back when the letter launched were artificial intelligence, cybersecurity, robotics, additive manufacturing, and the trends in genomics, bioinformatics and DNA sequencing. This “secret” pick, the “one cure for 6,000 diseases” pitch, is obviously somewhere in that genomics and biotech neighborhood.
And, of course, the way they love to sell their newsletters is by promising that they’ve got a handle on a hot new stock… and all you need to do is pony up your $3,000 to learn all about it! (OK, fine, it’s “on sale” for “charter members” for $1,750). Whether or not the idea is any good, there’s no sense in committing to a subscription just to get the name and ticker of a “secret” stock — that sets you up to fail (if you spend $1,750 to learn about a stock, you’re going to be so biased to want to buy it instantly that you won’t be able to think straight). Maybe the newsletter will be great and educational and maybe you’ll love it — but don’t buy it just to solve the riddle they’re dangling in front of your nose. That’s what your friendly neighborhood Stock Gumshoe is here for — to solve the riddle, name the stock, and let you think for yourself.
So let’s get started with a look at the ad, shall we? This is how it opens:
“Small Boston firm has JUST gone public with a cutting edge technology that has the potential to be:
“The ONE Cure for 6,000 Diseases
“I’m revealing the details on a ‘day one’ investment in one of the most radical advances in medicine of the last 100 years…
“Hi, I’m Jeff Brown, the science and technology analyst for Bonner & Partners investment research.
“I have two critical questions for you today:
“Do you want to live a long, healthy life?
“And do you care about getting rich?”Are you getting our free Daily Update
"reveal" emails? If not,
just click here...
Yes! Yes! Tell me more!
“Because this small company at the forefront of the most important medical breakthrough of the past 100 years has JUST had its IPO.
“So, if you want to get in as close to the ‘ground floor’ as you can, time’s of the essence here…
“This company controls the most important medical breakthrough of the past 100 years.
“This ONE breakthrough holds the potential to annihilate 6,000 diseases.”
Sounds pretty awesome, right? This is all about gene editing to cure disease. More from the ad:
“Now, just 63 years after Watson and Crick, the secret to repairing damaged DNA may be unlocked…
“So, by enabling your DNA’s genetic code to be rewritten, this new technology’s potential amounts to rewriting your body’s destiny….
“Hank Greely, a Stanford professor, recently said this:
‘This breakthrough is the Model T of genetics. The Model T wasn’t the first car, but it changed the way we drive, work, and live. This genetic breakthrough has made a difficult process cheap and reliable. It’s incredibly precise.'”
So what does this company do? More tease…
“… it repairs individual genes by cutting out bad genes and replacing them with good ones.
“That’s the mechanism behind how this targeted therapy can destroy 6,000 genetically-based diseases….
“… this gene repair technology is the culmination of all other DNA research, including the research that brought the breakthrough profits to Amgen, Biogen and Celgene.
“Now, I certainly can’t guarantee that the company I want to reveal today will return 153,000%.
“In fact, I can’t guarantee that the stock will go up at all.
“But if this small company does just 10% as well as Amgen did…or even 1%…you’re still looking at a fifteen-bagger…”
And then we get some hints about the investors who are behind this company, and about their balance sheet…
“… you can see why this breakthrough has caught the attention of billionaire investors, including the richest man on the globe — Bill Gates.
“These big name institutions also joined in that funding round:
- T. Rowe Price
- Google Ventures
- Khosla Ventures
- Omega Funds
- Alexandria Venture Investments…
“On top of that, a $2.5 billion-sized cancer drug giant has pledged an additional $47 million in support for specific applications that could end up bringing our little company up to $250 million in cash.”
So what is it? If you pay attention to biotech stocks you’ve probably already got a guess… but we do also get one more key clue:
“… this story is so young, this technology so new, that, until early February of 2016, there was literally no publicly traded way for you to invest in this space….
“There are a handful of wholly private companies involved in this technology….
“But the best one — the most well-funded and scientifically-advanced of the four — went public on Wednesday February 3rd, 2016.”
So there’s our easy answer, barely even had to shake the dust off the Thinkolator to tell you that yes, this is Editas (EDIT).
Which did indeed go public on February 3, along with another biotech, as the first company to go public in the dastardly market of early 2016. Editas has licensed CRISPR gene editing technology from one of the pioneers of that technique, though this whole area is mired in patent dispute at the moment — more than one researcher claims to be the real innovator in this space, and EDIT’s quick fall a week or two ago (after a spectacular run following the IPO) was largely connected to new patent worries.
I don’t know anything about gene editing technology, so I can’t pretend to have an opinion on how the legal disputes over patents will work themselves out — it seems to be a bit of a soap opera, and there are a lot of startups and research labs in the space. EDIT gets a lot of the attention, thanks to the fact that they’re the first to go public… and perhaps thanks to big venture backers who have continued, in some cases, to buy following the IPO and therefore keep the price up (according to Adam Feurstein in this cautionary article). Our own Dr. KSS has also been very cautious on EDIT, noting that the technology is still limited, litigated, and probably many years from any possible therapeutic use.
The bull case for EDIT (or their patent competitors, I suppose) is that if someone has a patent on this “easiest and cheapest” way to edit genes, and that technique becomes widespread and is used to develop a lot of expensive drugs or other wonders, then the royalties on that patent could be enormous over time. Editas already has one decent-sized deal, with Juno Therapeutics, to license CRISPR for the discovery or development of new drugs (that’s the $2.5 billion company that has “pledged $47 million,” per the teaser ad), and EDIT does have plenty of cash — enough, they say, to get them through three years of furthering their R&D. The big picture excitement (and some of the patent fight backstory) was covered pretty well in a cover story in Wired last August that you can see here if you want more background. It is a fascinating story, and from my perspective it’s also highly speculative — I don’t know how to guess at what their odds of success might be, but the hoped-for end game of “royalties on all gene editing” does hold out the promise of far greater riches than does “develop one drug to treat one disease.”
And that’s about all I’ve got for you on EDIT — sound like the kind of “Exponential Tech” you’d be interested in? See profits or pitfalls ahead? Let us know with a comment below.
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