by Travis Johnson, Stock Gumshoe | February 7, 2019 12:15 pm
The latest ad from Ray Blanco[1] has been circulating and generating reader questions for about a week, though I just got it in my own email accounts for the first time yesterday evening… about an hour before the purported “catalyst” was about to come.
The ad is from Blanco’s FDA[2] Trader (current $1,499, no refunds). Here’s the part that made me think I should check up on it:
“… on Wednesday, February 6…
“This tiny startup lab will stun the world with the biggest discovery in the history of capitalism…
“The discovery that has the $6.38 trillion medical industry speechless…
“The potential end of all diseases….
“… when they make this announcement this Wednesday at 6:15 P.M. Pacific Time…
“It could result in a surge in the company’s value by billions of dollars.”
Yes, twelve years of sifting through promises much like this has made me somewhat immune to the profit-lust that they’re designed to evoke… but still, who can resist wanting to at least find out what the company is?
I have some sad news, though, Wednesday was yesterday… so you’ve missed your chance at billions of dollars, and it’s all over. Capitalism changed, disease is over, and the company surged in value by billions of dollars.
Kidding! It’s OK, you didn’t miss anything.
Or, to be more precise, you missed the announcement about an hour ago about the preliminary results of this “secret” company’s clinical trial… and therefore, you missed out on the chance to see your shares drop in value by 25% at 11am today.
Why do we know this already without even going through the clues yet? Well, because Ray Blanco sent out essentially the same ad in September[3], promising that the “world would stand still” when this company announced its results on September 5. And that time, too, the results were really released at a scientific conference at a time fairly close to Blanco’s “world stands still” moment, but they didn’t provide the earthshaking news investors were hoping for.
So I won’t delay you by going through all the clues again, which are mostly unchanged from September[4]. Yes, this is again Sangamo Therapeutics (SGMO)[5], which is the most advanced (in terms of maturity of the science and progress in clinical trials) of the gene editing stocks — mostly because the technology they developed, zinc[6]-finger gene editing, has been around and in development for decades longer than the CRISPR[7] gene editing technology.
It’s still awfully new in terms of testing whether or not it can cure disease, though, and that’s the reason for the ugly stock performance — they released preliminary data on one of their clinical trials back in September which disappointed, and released more data this morning that also disappointed. Probably mostly because investors are hoping for Blanco-like “earthshaking” news and the science is not providing that, even with a bit of optimism from Sangamo.
The CEO described the data that Sangamo released as “an encouraging first step in the translation of genome editing technology from basic research to genomic medicine,” and the lead study investigator used words like “preliminary” and “more data are needed” in his note in one of the press releases[8]:
“‘The interim results from the CHAMPIONS Study provide preliminary evidence that in vivo genome editing occurred and that genome-edited liver cells are able to generate active IDS enzyme in patients with MPS II,’ said Dr. Joseph Muenzer, a professor of pediatrics and genetics at the University of North Carolina School of Medicine in Chapel Hill and a lead study investigator. ‘More data are needed to understand whether the small increases in IDS enzyme activity observed can translate into improved outcomes in MPS II patients treated with this first generation of SB-913. I look forward to reviewing additional data later this year from the five patients who have received the high-dose of SB-913.'”
So yes, there is good news — the treatment from Sangamo apparently didn’t make the disease worse or kill anyone, though there were some side effects. You can see the detailed presentation slides from the two different trials that were released here (MPS I)[9] and here (MPS II)[10].
But these are also Phase 1 studies with tiny numbers of patients (nine patients, with data available about six of them — and that’s the big study in Hunter Syndrome (MPS II), the other one, for Hurler Syndrome (MPS I), had three patients enrolled). And there was no magic moment when all of those patients walked to a podium and said, “all better, it’s a miracle!”
That’s not what should have been expected, of course, but when you talk about investor expectations it can be like judging an ultra-marathon runner based on how fast he went during the 100 yard stretch that he ran while you could see him. It won’t make a difference in whether he wins or loses the race, or even whether or not he finishes it, but it makes all the difference in the world in forming your opinion about whether he’s going to win. With traders speculating on data releases all the time in biotech, looking for quick wins, sentiment shifts immediately and few speculators want to just plunk down their investment and wait five years to see if any of their treatments ever make it to Phase 3 trials or possible commercialization.
Which isn’t to say you should be patient with this particular company and technology… I have no idea, and have never owned Sangamo. I don’t like betting on futures that are this uncertain, particularly because even likely “winners” have an opacity when it comes to pricing and profitability that I find inscrutable, so I don’t typically invest in clinical-stage biotechs. That means I’ll miss lots of 500% gainers, but will also miss a lot of money-burning losers… I can live with the tradeoff, mostly because I don’t think researching the individual scientific stories and trying to handicap them is worth my time as a non-expert and non-scientist.
But perhaps you’re one of the many folks who does love speculating in biotech, or dreaming about the future world when disease has been eradicated. That’s a long way off, of course, and is not predicated on whether one company makes progress in a gene-editing treatment for a rare disease, but it’s a lovely goal to hope for — and, yes, it’s within the realm of possibility that Sangamo’s zinc-finger editing will become the most important gene-editing technology on earth someday, beating all the various CRISPR and TALEN technologies to market because it’s safer, or works better, or whatever… I would just say that we’re not much closer to knowing that then we were last summer before they started releasing this early clinical data.
Sangamo did raise a ton of money about a year ago, so they are not in any financial stress[11] and can certainly keep moving as they look to get more data from these trials later in 2019 (they haven’t said exactly when yet), and from their hematology trials that are also in phase 1. They are hosting a conference call to discuss the results in more detail right about now, at 12:30 EST, so perhaps that will have some impact on future expectations… I’ll leave it to you to make your own call.
But hopefully this will at least provide another reminder not to buy into these “the world is changing tomorrow thanks to this secret stock” pitches… particularly when they come with high price tags and no refunds.
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Seemed to take other gene editing stocks down with it today.
Yes, these are all story stocks without much data or certainty about the future — sentiment tends to leak over to competitors sometimes. It’s hard to sustain the “this will change the world” sentiment for years when there’s no firm “catalyst” that tells you their odds have improved dramatically or definitively…. I think of it this way: slow progress, uncertainty and a high risk of failure are the norm for early stage R&D and clinical work, but that doesn’t mean investors have to like it.
I’ve always found the expression “Clinical stage” confusing for the description of biotech companies performing R&D, or funding early FDA phase clinical trials given that any drug requires a completion of PhIII trials and months-years of review of clinical trial results to get FDA approval before the drug can be sold to the public and used in the medical practice and get reimbursement from third party payers. I realize the confusion probably arises from the term clinical trials to describe the FDA testing phase. But just because a drug candidate is being tested in clinical trials does not mean that it is appropriate to call the biotech firms involved in such testing “clinical stage” before the drug candidate is ready for the medical clinic or routine medical practice; and when in fact it has a high probability of failing before it does. Obviously there are biotech companies that have completed the process of getting FDA approval for at least one drug candidate while in the process for getting approval for additional drug candidates that are still in testing. Perhaps the use of the term “clinical stage” should be restricted to this group of biotech firms who have passed this milestone of success and use the term IP stage, testing stage or pre-clinical stage for those that haven’t.
Good points. I use “clinical stage” to refer to companies who have started testing their drug in humans but not commercialized any drugs yet.
I have more respect for weather guessers
Weather forecasters have made amazing progress using “big data,” probably much more than most investment forecasters — though I guess that’s because they’re dealing with physics and rules, however complex the system is, not human beings who change the rules and act irrationally all the time.
I was in the aviation community for three decades. As much as you want to believe weather forecasters can tell you the weather, it is more like someone using a program to determine the lottery numbers. Sometimes a few numbers fall into place, but the odds of getting a completely accurate forecast from one source is still a long shot. Much like the tarot readers in the stock market, a person needs to look at more than one forecast and then use a little bit of their own intuition to see how the picture will unfold. Travis, I am a new subscriber to your free service, but you avoid the hype and stick to the facts. Awhile back I did subscribe to a couple of different places that used the hook of having inside information about the Cannabis industry, mostly to learn about the industry, not with the intention of getting rich instantly. All I got for my money was the opportunity to pay more money to get more advertisements asking for more money. They deliver the sermon without revealing the actual information they promise, then pass the collection plate in the form of a payment link at the bottom of the page.
“I have some sad news, though, Wednesday was yesterday… so you’ve missed your chance at billions of dollars, and it’s all over. Capitalism changed, disease is over, and the company surged in value by billions of dollars.”
That made me laugh. Thanks for that.
I laughed out loud too. I love how Travis’s tears these newsletters apart.
But I’m not sure which is worse – investment newsletters or “Financial Advisors”.
This week my “full service” broker had the nerve to charge a 2% commission on a muni bond purchase ($50k). Well that’s it I’m done trying to avoid being taken by these guys. I’m moving the rest of my stuff to a discount broker.
Not to mention the wrap fee (~1%) that full service brokerage firms charge just to park your IRA on their platform. They justify it saying Dodd Frank forced them to act as a Fiduciary on IRAs. Well neither Schwab nor Vanguard have IRA wrap fees. So it’s bye bye to ML and Ed Jones.
Big thanks to Gumshoe for cutting thru newletter hype.
Great info
Thx
SGMO is down 34% at 1:30 EST. Down more at 11:30, but seem to have risen a little.
My guess is this as….e Blanco was probably all in on a short position
Huge publishers like Agora make almost unfathomable amounts of money from subscriptions, there’s little reason for them to tempt the SEC (or anger their subscribers) with illegal behavior like undisclosed trading against their own recommendations. Maybe it happens sometimes, human nature loves a quick buck, but the big publishers tend to protect their golden goose (subscription renewals) against employees who would risk extra SEC scrutiny.
There are certainly pump-and-dump operators all around in the bloggersphere and twitterverse, particularly among fly-by-night newsletters and promoters, but the big publishers don’t have to go down that (often illegal) road and I suspect it’s rare in that group.
Wow, so real people actually subscribe to these newsletters at those unfathomable rates?
Online publishers have perfected the marketing funnel — recruit free
Subscribers, then convince them to pay a little ($30-100), and with the right push a few of those folks will buy the $500 service, and a few of those will
finally upgrade to the super-pricey letters and $5-10,000 “lifetime” deals. As long as you can feed enough people in at the top of the hopper and break even on the low-priced letters, the tip of the funnel can be insanely profitable.
Thanks, I clearly have undervalued the power of greed (or overestimated common sense) yet again! After perusing BBB.org about Agora Financial for 5-6 complaints, I am a full believer now:
https://www.bbb.org/us/md/baltimore/profile/publishers-periodical/agora-financial-llc-0011-90207864/complaints
Apparently actual refunds are not uncommon — at least when third parties are involved, but certainly never easy. The 11/29/18 complaint by Tim Skyes’ subscriber was my favourite.
Ooops, I meant the 11/28/18 complaint, continuing into 12/11/18, resolved (presumably) on 1/17/19
An absolute fortune. That’s why am intrigued to see if Stansberry doubling down on his bbf Sjuggerud 2019 will pull them out of the 2018 hole on China and the US. If he is to be believed, S. is betting the farm on it too — that was before Powell saw the light and recognized his true masters.
It’s basically if u pull the trigger and do what they say, if not and u set there thinking about it!
U LOOSE!!!
Instead of a refund, Blanco was offering lifetime subscription to his newsletter if his “historic” stock didn’t pan out. Who would want lifetime subscription after the ridiculous dud he pumped? Not me.
The famously exciting, “if you don’t like it, we’ll give you more” guarantee!
I agree, (new to the market), these people with all these “buy this now” and it all cost an arm and leg to connect to their program. I find it stressful.
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This is a community of honest open people trying to sift through the piles of rubbish these promoters push. Please keep that in mind when you attempt to co opt it to push Mampilly and his promotions.
Easy, it’s probably just a request for us to cover that ad.
I interpreted it as a shared example of the type of over-the-top hyperbole Travis was making fun of.
Just dropped 31% today, good recommend!
Illumina is one of the major “pick and shovel” companies in this field. They sell both genetic processing machines and consumables.
Have to confess, at the 34% drop I did pick up a small lot as a speculative bet…
Got that!
Another one! Latest? Or re-cycled pump!?
Just saw the “Halo-WiFi!” by Blanco! Better priced “info-pac” at just under $50. , but a caution- For low fliers, that’s part of the ultra bargain principle investment!?
Have you -“Gumshoed” that? [new verb, old teach thinks!]
You are code word on my yellow notes page=“THINKO!”
His deadline for the pre-IPO is 2/19/2019! Says his team have visited the “‘Tiny’ company head quarters! Knows re. Florida Satellite automated hi-speed manu plant.@, etc?
Now ensconced in a new leader-role is a historical figure-“King of the Turn Around” named “Sam” of rescue fame of a $13M drowning in-payable debts now thriving Telecom with first 3 yr. post his installation ann. ⬆️11%!?
The Halo-WiFi technology is boosted by Japanese investment wizard named “Masa” called the Midas Touch!
With these clues you may with no other research reading know the Ticker!
Nancy.
A fool and his money are soon parted, or something like that.
on a down trend for a year from 27 now at 11$. ??
If SGMO had anything worth pursuing they would have been bought out by now. Wait until they get approval and start making decent money before investing a dime.