The article below was originally published on November 27, 2017, when Jeff Brown’s ads promoting the “God Key” started to show up in our inboxes. It has not been updated or revised, but the new versions of the ad from Brown are very similar to the ones we covered in November, including the description of the three “secret” companies that we discuss below… the biggest change is his push for February 27 as a critical date because that’s when he expects Chinese researchers to release data from their early study of CRISPR gene editing in cancer patients.
I can’t confirm the February 27 date, but would caution that it’s probably included more for encouraging rapid newsletter signups than as an important catalyst in the development of this technology. China releases data when it feels like it, on its own terms, and the early data is likely to be subject to lots of interpretation (and in the original ad from Brown, he expected those results “this year” and urged you to sign up before they came out, so the dates are certainly not set in stone). Last I saw, the first human trials of CRISPR gene editing in the US, at Penn, should start soon.
And now, the more detailed look at this teaser pitch — what follows is from late November and has not been updated:
Here’s what has folks hot and bothered after reading Jeff Brown’s latest pitch for Exponential Tech investor about the “God Key” …
“If this breakthrough develops as I believe it will…
“This could become a trillion-dollar industry rather quickly…
“And the stocks I’m recommending have the potential to shoot up 50-100 times over the long haul.
“The ‘God Key’ will give us the power to eliminate hundreds of diseases once thought incurable…
“Some of these applications will take a few years to play out.
“Others a bit longer.
“And some, as you’ll see, are happening right now.”
It’s that “right now” bit that always gets people hepped up… and it’s also the bit that is usually most egregiously over-emphasized (or sometimes even just made up) by newsletter promoters. They know that you won’t spend $2,500 on a newsletter to find out about an investment idea that “might” have 50X returns in 15 years, you want huge gains NOW.
Here’s how he describes the “god key:”
“They don’t just catalog the viruses…
“They create the ‘perfect soldier’ to seek out and destroy them.
“In short, whereas most genes create ordinary proteins…
“These ‘viral fingerprints’ create RNA… and special proteins instead…
“In lay terms, it’s like they form a ‘genetic warrior’ that can identify foreign invaders… remove their DNA… and render them harmless.”
And I’ll save you from the full spiel (you can check out the full ad here for that if you like), but we’ll sample a bit more from the pitch as we go along so you can get a taste for it… and start to pick out those hints about the actual investments he likes. Here’s more:
“It’s easy to see that the ‘God Key’ will change the entire medical industry… but it’s actually far more than just a medical tool…
“You see, I’ve yet to mention what the ‘God Key’ can add to the agricultural space…
“But its applications there may be even more developed than its role in biotech.
“For instance, scientists are using the ‘God Key’ to remove deadly diseases that affect crops and livestock.
“They’re making certain crops resistant to weather changes and droughts…
“And they’re finding ways to load fruits and vegetables with even more nutrients…
“The global food industry, by the way, is an $8 trillion a year market. If the ‘God Key’ can penetrate just 5% of it, we’re talking an additional $400 billion a year!”
The big “coming soon” rationale here seems to be that we’ll be seeing news soon from the first Chinese trials of this “God Key” in lung cancer…
“On October 28 of last year, Chinese scientists in Chengdu used the “God Key” on lung cancer cells…
“And introduced those cells back into lung cancer patients.
“The whole world is watching this trial.
“It now looks like preliminary results will be available early 2018.
“If the Chinese government deems it ‘safe’ – it’ll be a major victory for the ‘God Key.’
“More money will pour into academic centers and startups worldwide…
“And the stocks I’ve been tracking will likely pop.
“If the Chinese government deems it safe AND also reports the cancer has gone into remission…
“Then I suspect we’ll see 60 Minutes stories…
“Front-page, New York Times articles…
“And these stocks I’m tracking will go through the roof.”
That was well-covered last year, and certainly the race to develop and test CRISPR-Cas9 therapies to edit human genes is one that is getting a lot of attention and funding.
I am not an expert at the continuing surge in gene-editing human trials, where China does indeed have at least a speed advantage right now in terms of getting trials underway, including on human embryos, but there’s a pretty good summary here from earlier in the year.
So yes, this is another CRISPR-Cas9 pitch, with the “God Key” being that ability to edit genes using this technology — we’ve seen plenty of those ads over the past year. What else does Brown tell us?
“Now, these promises of unlimited energy and the eradication of disease won’t come true overnight.
“But refinement and development of the ‘God Key’ continues to progress at a blistering pace.
“Originally, scientists said it would take another 10-20 years before this technology would be ready for field trials.
“That was just a few years ago.
“Field trials are already taking place…
“And we should see the results of HUMAN TRIALS this year.”
And we hear about other big investors who are already on board, which makes it seem ever more appealing…
“… billionaire Bill Gates has taken a personal interest in the ‘God Key.’
“He believes he can use it to cure malaria worldwide. Through the Gates foundation, he has invested $75 million in this technology.
“And through a fund run by his old science adviser, Gates has invested an additional $120 million in a small company that I’m recommending to my subscribers.”
And, of course, he says the things that all newsletter pundits have to say about “it might fail”… which it might, indeed… but also that the stock price won’t be the same as it is today if you wait until after we know whether it has failed or not. In his words…
“For truly life-changing gains, you can’t wait for 100% verifiable proof of concept. You can’t wait for the results of the trials, if you want to see the biggest returns.”
So… what are the actual stocks being teased as plays on this “God Key?” I bet that quite a few of you can guess, but let’s check out Brown’s clues and make sure he’s not throwing a curveball at us…
“‘God Key’ Stock #1
“This little gem has been on my radar since 2012.
“I was tracking this company when the scientists in charge just had the seed of an idea in a lab – before the business entity even existed.
“Many insiders believe the first company-sponsored ‘God Key’ trial in humans will take place this year – and it will be this company.
“And it will take place on one of the ‘easy’ single-gene diseases I mentioned earlier – a rare type of blindness.”
OK, so strangely enough that doesn’t narrow it down to one stock quite yet… rare genetic diseases that result in blindness are the first target of several gene therapy companies, partly because it’s relatively easy to apply therapies locally to the retina.
So… other clues?
“They’re currently working on applying the ‘God Key’ breakthrough to genetic and infectious diseases of the liver, a wide range of cancers, cystic fibrosis, and blood diseases.
“They’re able to practically work on any gene and disease because of the intellectual rights they just secured to the underlying technology.
“According to Wired magazine, this company – and another that I’ll tell you about – have a stranglehold on ‘God Key’ patents.
“Exclusive licenses aren’t rare in biotech, the magazine writes, but the scope of these ‘do stand out.’ They cover 2 out of every 3 genes in the human genome.”
And then the pile of clues gets a bit ridiculous…
“They’ve already – just in a few short years – nailed down 44 patents.
“They’ve inked a deal with a strategic partner that could be worth nearly their entire value in the stock market today, if they hits certain milestones.
“Plus, they’ve inked two other exclusive intellectual property deals with Massachusetts General Hospital and Duke University.”
OK, so yes, this is Editas (EDIT), the first stock that comes to mind for most people when it comes to CRISPR-Cas9 gene editing. Editas has licensed the work of Feng Zhang at Harvard and others (including researchers from Mass General and Duke, as teased), and raised (and is spending) tons of money to try to make rapid progress in developing drugs built on those foundational patents.
To oversimplify, CRISPR-Cas9 is a tool and technique for editing DNA — there are other CRISPR technologies as well, but Cas9 is the most advanced one right now, and it gives unprecedented ability to make precise changes to DNA, both in removing damaged or unwanted genes and in replacing them. The goal, as with most other gene therapies, is to have a “one shot cure” for lots of genetic diseases and abnormalities — cut out the bad genes, add good ones, and the problem is gone forevermore.
It’s not often that simple, of course, and that’s part of the reason why many gene editing companies and researchers are aiming first at those relatively simple diseases that they can clearly identify as being caused by one specific little genetic tweak. Part of the appeal of eye diseases is that the treatments are local — the retina is small and contained, and they can apply their genetic editing treatment to a very targeted area with a direct injection.
And yes, EDIT does have one potentially very large partnership deal that “could be worth nearly their entire value in the stock market” — that’s their cancer collaboration with Juno Therapeutics (JUNO), and if the milestones are all reached (which would be amazing, and would take a long time) the total milestone and research support payments could be close to $750 million… and EDIT would also be eligible for “tiered royalties” if one of the research programs actually becomes a commercial product. I don’t know what the milestones are based on, but presumably the larger payments are for more meaningful progress (like clinical trial success and advancement).
EDIT currently has a market cap of a bit over a billion dollars, and they’re spending money fast but certainly have a big piggy bank to work with (almost $300 million in cash as of last quarter). They’ve also been widely seen as the “winner” in the patent wars over the foundational CRISPR-Cas9 discoveries so far, since Dr. Zhang’s patent on the use of CRISPR in human and plant cells was granted first and has been held up in court so far (the other major patents, which were submitted well before Zhang’s but were less specific, came from the work of Emmanuelle Charpentier and Jennifer Doudna and have been licensed by other companies).
And yes, Bill Gates is one of the many big investors who have put lots of cash into EDIT, which had lots of big-name venture firms behind it before going public last year, and also got $120 million from a biotech investment fund that Gates is involved with (along with Vinod Khosla, Google Ventures, and lots of big money managers).
So might we guess that Brown is, in fact, teasing the three big “pure play” stocks in CRISPR/Cas9 R&D? The other two would be Intellia Therapeutics (NTLA), also founded by Dr. Doudna but with a current license on her University of California patents, and CRISPR Therapeutics (CRSP), founded by Dr. Charpentier and licensing her patents. All three have lots of luminaries in the field on their scientific boards, all are presumably doing important and cutting-edge work, and all have lots of cash to spend and access to at least a chunk of the critical patent portfolios that everyone currently thinks will be valuable in the future.
That’s about all I can tell you about the science, by the way, which is baffling and early-stage and nowhere near being commercial — there may well be critical differences in the patented work or in the scientific potential of these three companies, but if so I will not be the person to identify that for you. But let’s see which other stocks Brown is hinting at so we can tell whether or not he’s straying from this “big three” closely-followed CRISPR stocks (the fourth big name in the space, Caribou Biosciences, is not yet public but also presumably has had lots of access to gigantic truckloads full of venture funding).
Here’s what he drops by way of hints about the other picks:
“‘God Key’ Stock #2
“This company recently received 2 patents on its proprietary technology for use in humans. In short, they’re engineering special white blood cell cancer therapies…
“They are set to begin testing in humans this year for two related diseases.
“They must be doing something right. San Raffaele University and Novartis liked this company’s work so much they signed two separate multiyear licensing agreements with them.
“This tiny ‘God Key’ company also has major backers like Fidelity and Janus Capital ready to hand over nearly $700 million in cash as long as they hit their milestones.
“To put that in perspective… That’s roughly the size of the entire company.”
This one must be Intellia (NTLA), which does have Novartis (NVS) as its big backer (they’re collaborating with them on combining CAR-T and CRISPR in some fancy way to fight cancer)… though I don’t think they’re “set to begin testing in humans this year.” They’ve also partnered with Regeneron and Caribou, in addition to Ospedale San Raffaele, and they do have a market cap of about $700 million.
Intellia has the most interesting visualization I’ve seen about how CRISPR/Cas9 works, but I suppose that doesn’t automatically make them the best company in the space.
And number three? Can you guess who it might be?
“‘God Key’ Stock #3
“This company has some great partnerships lined up… but it’s taking a slightly different, though potentially very lucrative, approach to the ‘God Key.’
“One of its backers is pharma giant Bayer AG.
“What’s interesting about this collaboration is that a large portion of the focus will be on the agriculture sector.
“Just three companies hold nearly all the patents on the ‘God Key’…
“But this is the only one I’ve seen putting a special effort into agriculture.”
And yes, this one must indeed be the third leg of the CRISPR patent stool, CRISPR Therapeutics (CRSP), which is in a joint venture (called Casebia) with Bayer. And they do have some focus on agriculture (Bayer gets any agricultural “know how” from the joint venture beyond the original focus of the research, CRSP gets the human applications), though it’s awfully early to guess what that will mean. CRSP is about the same size as Intellia, roughly $800 million, and, they also have buckets of cash.
So is one of these companies about to make it into “Phase 1” and begin clinical trials of one of their advancements? Well, they’re all trying — Editas for a long time was expected to file for permission to start clinical trials by the end of 2017, which might be where Brown’s dates are coming from, though they’ve since pushed that back and it sounds like it will be mid-2018 before they get to that point.
And that’s about all I can tell you — Jeff Brown has been teasing the publicly traded CRISPR stocks since they went public (we covered his pitch of EDIT here back in March, and his “jump in on the NTLA IPO” pitch here), and I suspect that in his commentary to subscribers he’s probably a bit more sober than he is in these hype-filled ads, but this will be a long slog to find out which companies end up doing the most important work in gene editing (and it might not be one of these three).
I wouldn’t argue with the approach of investing a bit of money in all of these well-funded R&D projects, if you like being involved in long-term R&D stocks, but I have no idea which one of them might be favored over the others… or if any of them will end up becoming profitable businesses. It will be interesting to watch the more conventional gene therapies advance through clinical trials, like Spark Therapeutics (ONCE), which has a genetic therapy likely to be approved soon for another eye disease, partly because those are going to provide signals about how the medical marketplace might deal with “one shot” cure.
There have been commercial failures in conventional gene therapy in the past, both because of the risks of editing genes and because of the extraordinarily high cost of these products (patient deaths in trials have slowed the progress of gene therapy in the past, and insurance companies are being very cautious about how much they’ll pay for a possible “cure”, particularly because opening up for coverage of these small diseases could wildly change the business if larger genetic diseases lend themselves to CRISPR or other gene therapy “cures”).
So yes, it’s early… and yes, if you ask pretty much any investing pundit out there about CRISPR they’ll point you toward EDIT, CRSP and NTLA… and maybe Caribou, if it ends up going public. Will Jeff Brown tell you something far wiser about those three companies, or explain the science better than I can? I hope so, for $2,500 (that’s the two-year price for his Exponential Tech Investor), but beyond that, well, you’re on your own. If you’ve delved into the delights of CRISPR in the past and have strong feelings about which, if any, of the three current leaders are the most appealing investments (or if you prefer some other gene therapy stock that uses other technologies), please share your thinking with a comment below.
P.S. We’re collecting investor opinions about newsletters, hoping to help people make more informed choices when buying investment information, so if you’ve ever subscribed to Brown’s Exponential Tech Investor, please click here to share your experience with your fellow investors. Thanks!
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