Stop me if you’ve heard this one before…

“Nobel Prize Winner And Doctors From Harvard, Yale, Stanford & Johns Hopkins Have Made A Shocking New Type Of Discovery:

“Did A.I. Just Find The Hidden Cure To Cancer?

“One Tiny Company Is About To Announce The Biggest Healthcare Advancement In History… Potentially Sending This $6 Stock To $600 Or More Over The Next Decade.”

That’s the intro from Ray Blanco’s latest teaser pitch for his Catalyst Trader newsletter out of Paradigm Press ($995/yr, no refunds)… and it’s a long-winded video about the brilliance of a groundbreaking patent and a pending “biggest cancer news in history” moment that will make you rich… here are a few tidbits from the presentation, which unfortunately did not offer a nice transcript to skim…

“… in pre-clinical trials, this artificial intelligence breakthrough resulted in complete tumor progression”

“just one tiny $6 stock is behind this massive AI cancer discovery”

And some massive promises…

“Before long, I think oncologists everywhere could use this discovery to help patients become 100% disease free”

“This stock could rocket from just $6 to $60, or even $600, potentially very quickly.”

“I discovered a number of smoking guns regarding this company… proof that this company is set to change everything about cancer in the coming days, weeks and months.”

There are some other tidbits thrown in, including the hint that Bill Gates owns shares because he “knows that this tiny stock is on the cusp of completely changing everything.” Despite the fact that he usually only buys “big stocks.”

Which isn’t particularly true, Gates has funded a lot of early-stage and venture projects, both in biotech and in clean energy.

And that BlackRock is “quietly loading up on this tiny stock” so they must be “certain something big is on the horizon”

That’s not true, either — almost all of BlackRock’s money is invested through index funds, which means they’re not picking stocks with an eye to the future… they’re just buying all the stocks in the index.

Is Blanco new to investing, or unaware of the fact that he’s blowing smoke about how those rich folks and institutions are “sure something big is coming” for this particular small company?  No… he’s just hoping you are.

So what’s that “major cancer news” this company is about to announce?

Blanco says that the CDK-7 protein powers the growth of cells, telling the cells how much they should grow… and it becomes overactive and can drive tumor growth. And that drugmakers have never had a safe way of targeting CDK-7 until now, and that “using A.I., this company discovered a secret, highly potent molecule which stops CDK-7 from becoming overactive, preventing uncontrollable growth of cells — and with it, cancerous tumors from forming.”

So that’s the pitch, this CDK-7 inhibitor led to 100% tumor regression in mice… and is a true “miracle molecule” that he believes will change the world… starting “in the coming months.”

CDK inhibitors have been a focus of cancer researchers for a long time, and it does seem, at least to this non-expert outsider, that interest has accelerated over the past couple years. That’s about the limit of my understanding. From articles I’ve skimmed in the past few minutes, it appears that there are at least half a dozen CDK-7 inhibitors in clinical trials right now, targeting a bunch of different cancers, though there have been clinical trials running for various drugs of this type since at least 2017. I don’t think any CDK-7 inhibitors have specifically been approved, or made it into Phase 3 trials at this point, but I’m not certain — there are other CDK inhibitors that are approved and in use as cancer drugs today.

And that “major announcement” that Blanco thinks this company will be making “within as little as just a few weeks?” Apparently, it’s that the results of this company’s clinical trial could come out sometime soon… shaking the world with their stunning results.

What’s going on here? To this skeptic, it looks like Ray Blanco is just following his tired playbook for promoting smallish stocks to entice subscribers — make a grandiose claim about a historic technological breakthrough, show a blurry image of a patent to make it seem real and unique, pick out some clues from press releases or insider behavior like any good conspiracy theorist, and let it half-bake in our greed-addled brains as we suffer through FOMO after a year of crazy AI stock surges… voila! A secret stock that will make you rich!

Or not.

Just to give you some context, Blanco makes similar claims of imminent life-changing returns with almost all of his teaser ads… usually following a very similar format, building on “smoking gun” items to create a case that a tiny company will soar. For about a year he promoted MyMD Pharmaceuticals (MYMD) this way, with a “tiny stock wins major patent” pitch in incessant ads from mid-2022 through the Spring of 2023… culminating with an “urgent change to the world on March 20” last year as this little company was bound to cure arthritis… here’s how that one has done (that orange line at the top is the S&P 500, just for some comparison):

Before that it was Cyclo Therapeutics (CYTH) and their patent on a cure for Alzheimer’s Disease, back in June of 2021… here’s how investors in that story did…

As you can see, those stocks did rise for a hot minute, in the moments after the start of Blanco’s big promo campaign, probably at least in part because Ray Blanco’s heavily distributed ads convinced people to buy in… but once that wave of attention subsided, things went downhill quickly. I haven’t followed those stocks since, so I don’t know if anything good or bad is going on lately, but story stocks need fuel to survive — that fuel can be a hyped-up pitch for a little while, but eventually they have to have actual good results, earnings or clinical progress or partnership deals or something, or investors move on to a better story… or, God forbid, a company that actually has meaningful revenue. Or even profits.

Blanco doesn’t just over-hype these nutty “smoking gun” and “critical patent” stories for biotech, battery-day-10x-announcement-summit/">he has pointed investors at similarly disappointing stocks like Novonix (NVX), based on the idea that it was about to be personally blessed by Elon Musk, with ads running heavily from September of 2020 through January of 2021… that story played well through the 2021 market mania, but hasn’t turned into anything “real” yet…

And similar teaser promos go back years — I’ll stop with the examples, because it kind of feels mean at this point. And yes, before you ask, pretty much every time he includes a promise along the lines of “I’m staking my entire reputation on this idea” because “I’ve never been more certain of anything in my life.” And he usually guarantees that on the off chance he’s wrong, and the company doesn’t go up 10X in value (or whatever the promise is), you can have an extra year of his newsletter for free (but, of course, no refunds — just the typical, “you didn’t like the service? Here’s more for free!” offer… this time, with the newsletter business in a bit more of a funk than usual, he promises that if he fails to deliver, you can call and complain and get your membership extended for a lifetime).

As Blanco ironically notes in this latest ad, “the ‘big medical breakthrough’ claims that most companies tout often turn out to go nowhere and end in failure.”  My favorite example was back in 2016, when he predicted that the results would be so fantastic they’d lead to the Nobel Prize… but the clinical trial was halted not long after the ad started running — and the company changed its name and stopped being a drug developer within a couple years.

I don’t know what the performance might be for actual subscribers to Blanco’s Catalyst Trader newsletter, and I’m sure he’s picked some winners, nobody gets all of them wrong, even when they’re picking very speculative stocks in tech and biotech… but most of the teaser stocks we’ve covered for that newsletter have certainly been heavily over-promised disappointments.

But enough context from me… let’s ID the actual stock he’s teasing… some clues:

“This company owns patent BG261154A….

“This A.I. biotech company was founded by a world-famous scientist who we’ll simply call ‘Doctor H,’ in order to protect his identity.”

Um, he’s not a super hero or a whistleblower, it’s OK, you don’t have to protect his identity.

Oh, except he was fired by the company back in February, after they said he had “inappropriate” relationships with two employees… just a month or so after he had been appointed Commander of the Order of the British Empire by King Charles for his achievements. His name’s Andrew Hopkins, by the way.

And that means, thanks be unto the heavens, that I don’t have to actually listen to the whole rest of this tiresome presentation… the stock is Exscientia (EXAI), one of the half-dozen or so “AI drug discovery” startups that have gotten a fair amount of attention during the AI mania of the past year.

And it isn’t a six-dollar stock at the moment, though it was a couple weeks ago. It’s drifting around $5 at the moment.

The big argument for all of the “AI drug discovery” stocks (and for the AI work that lots of pharmaceutical companies have been investing in over the past decade or so), is that new machine learning advancements will make the process of new drug development much faster and better — particularly the initial discovery and identification of potential new drugs. AI can sift through data about millions of molecules, helping to identify compounds that scientists might not have identified through traditional research, and pick out the ones that might work best, or have the fewest side effects, or be particularly well-suited to fighting specific diseases in specific people.

What’s the “miracle molecule” that Blanco is talking about? That’s the drug that they currently call GTAEXS617, which is the CDK7 inhibitor that they have in Phase 1/2 clinical trials right now, being tested on solid tumors. That drug is co-owned with their partner Apeiron, and entered clinical trials about a year ago, with the first patient actually enrolled and dosed back in July of 2023 (the trial is called ELUCIDATE).

Blanco says, “you must hurry, because the FDA has already rushed this cancer breakthrough into clinical trials… my research shows that it’s only a matter of time before big news breaks and sends this stock soaring much, much higher.”

It is possible that some news from this clinical trial could be shared in a presentation at some point, I suppose, but the company is not expecting to have results to share particularly soon — their latest update is that they plan to “announce a transition from the dose escalation to dose expansion phase in the second half of 2024.”

The goal was to enroll 170 patients, and we don’t know how many have been dosed with the drug to this point, but the estimate was that it would take six months or so to get to that “dose expansion” phase, so they must have a decent cohort enrolled by now if they expect to “transition’ by the end of the year. My guess is that the actual Phase 2 results that might talk about any impact on tumors or cancer regression (fingers crossed) would probably come pretty late in 2025, but that’s just a wild guess, the company hasn’t said anything else specific about that timeline.

Is this particular molecule the “holy grail” that will cure all cancers? That seems to be a bit of a stretch. Lots of things cure cancer in mice, or kill tumors in a petri dish, and things usually get a little more complicated once you start testing them in a few hundred (or thousand) human beings… but they are very optimistic about it, and devote a good chunk of their latest investor presentation to the potential for fighting lots of different cancers with this drug. They have so far said nothing, as far as I’ve seen, about the impact the drug has had on the first patients who have been treated. I’d be delighted to see them succeed, of course.  This is an early-stage trial, but it’s not just about safety and pharmacokinetics — the drug is being tested in people who actually have solid tumors, and they will eventually report on the observed “anti-tumor activity” of GTAEXS617 (they usually just call it ‘617).

So Blanco’s primary “catalyst” here is that he thinks they’ll announce results soon, and that if it has the same “complete tumor regression” in humans that it did in mice, which is what he expects, then he thinks the stock will soar higher.

Maybe it will. We’ll see. But even “second half of 2024” seems an optimistic timeline for real results from this trial. And of course, I would be hesitant about betting on one of Blanco’s “most important news release in history coming” promises, given the many such promises we’ve covered over the years… but Exscientia and its partners are likely to report clinical results eventually, and they might be very good, and investors might get excited about that.

That particular drug hasn’t been the real story driving Exscientia higher over the past year, though, I’d guess that investors are much more interested in the partnership programs they have with a few big pharma companies — those programs are not quite as far along in terms of drugs actually getting into the clinic, but they will generate some milestone payments along the way if attractive drugs are identified and do enter clinical trials, and, perhaps eventually, royalties on those future drugs if they actually get approved for commercial sale. That’s the general promise of most of the “AI drug discovery” stocks, they all want to partner with big companies and earn milestone and royalty payments, they don’t generally want to do the heavy lifting of running expensive clinical trials on their own.

And that’s an attractive business model, but it does take time — even if using AI does speed up drug discovery, and get drugs into the clinic faster (meaning, out of “preclinical” studies, which are on ex-vivo tissue and animals, and into “clinical trials,” which is when they’re tested on humans, the Phase 1-3 trials that we often talk about with biotech companies), that doesn’t necessarily mean the clinical trials part goes a lot faster. It could speed things up in some cases, particularly in analyzing trials or adjusting them along the way, or selecting patients, though we haven’t seen that play out in the real world yet and the FDA might not be all that flexible… but however things go, you’ve still got to prove safety and efficacy in actual human beings, which means recruiting patients and going through the steps of at least two or three clinical trials, and that usually takes many years, even if things go very well.  There are sometimes shocking breakthroughs, where the drug is so much more effective (and safe) than the treatments now on the market that the clinical trials and approval are accelerated, but not very often.

Exscientia isn’t new to you if you’ve been keeping up with your Stock Gumshoe reading — Keith Kohl pitched it last September in Topline Trader ads, and Alexander Green at the Oxford Club has been flogging it pretty steadily since October.

And they’re not alone… beyond the wheelbarrows of venture capital money being thrown at AI biotech startups over the past year, the relatively small number of public companies have been popular picks in biotech teaserdom over the past year and a half… the ones that have gotten the most attention so far, beyond Exscientia (EXAI), are AbCellera (ABCL), Schrödinger (SDGR), Absci (ABSI) and Recursion (RXRX), though most biotech investors probably want to forget BioXcel Therapeutics (BTAI), one of the prominent “Drug discovery AI” IPOs from the pre-COVID era… and if you want to stretch the AI story a little in the biotech world you can throw in Lantern Pharma (LTRN), Benevolent AI (BAI in Amsterdam), Relay Therapeutics (RLAY), Predictive Oncology (POAI), or a few of the other “precision/targeted” biotech stocks that are starting to more prominently sell themselves as artificial intelligence stories. We’ve written about most of those at least once or twice, and I’m sure many of them will come up again. None have changed the world yet… but we remain ever hopeful, of course, especially when it comes to breakthroughs for cancer and other terrible diseases, and it’s still early days for AI trying to prove itself in drug development.

So what’s your call, dear friend? It’s your money, after all — want to hazard a bet on Exscientia, either because of the early hopes for their cancer drug, or because of their partnership programs with a few big pharmaceutical companies that could eventually bear fruit? Have other favorite biotech AI stories that you think are more appealing? Let us know with a comment below.

Disclosure: Of the companies mentioned above, I own shares of Schrödinger in our $100K Lock Box portfolio. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.