For some reason, the investment newsletter audience (and their publishers) find “anti-aging” pitches quite appealing… maybe it’s because so many of us are reaching those “golden years” and wondering how to extend them without pain or poverty. I’m not quite in the “core” demographic yet at 49, but I’ve got the knees and hips of a 75-year-old… so I feel like I can sympathize a little bit.
The pitch this time from Hilary Kramer, in an ad for her GameChangers newsletter, is that there’s a $6 “anti-aging” stock that’s about to soar to $100 a share… and that news coming soon will start that big run.
We know, of course, that newsletter ad copywriters like to dramatically over-emphasize the near-term catalyst a stock might have — after all, their one goal is to get you to subscribe NOW, they know that if they give you any breathing room or tell you that the big news won’t be coming for a few months, there’s much less likelihood that you’ll pull out your credit card. And, of course, time and thought are the enemies of the impulse newsletter purchase.
So we’ll check out Kramer’s clues, let you know what stock she’s teasing so we can defuse that “gotta subscribe NOW” urge a bit, and then you can think for yourself… deal?
Here’s the lead-in for the email that I saw over the weekend:
“A group of West Coast scientists have created the impossible. This miracle drug is being called the Immortality Switch, because it actually reverses age-related diseases.
“According to the Mayo Clinic, the Immortality Switch shows ‘very promising results…’
“And CNBC recently alerted investors it helps ‘stop or reverse age-related diseases.'”
Sounds pretty impressive, right? The Mayo Clinic is a big brand name, and CNBC is full of ratings-chasing clowns but still, people watch… so that’s a big deal if they’re “endorsing” this idea.
And we’ve got some other biggies on board as well, apparently… more from Kramer…
“… billionaires like Jeff Bezos, the founder of Amazon, and Peter Thiel, co-founder of PayPal, are pouring their own personal fortunes into the biotech company creating the Immortality Switch.”
OK, so sure, Jeff Bezos and Peter Thiel are on top of the world, and would like to live forever. I get it. If I had billions of dollars I’d be throwing it at my favorite causes, too.
Apparently some other big investment “brand names” are also buying…
“Wall Street heavy hitters, Fidelity, Goldman Sachs, Vanguard, and BlackRock can barely contain themselves—anticipating the profit potential ahead from this $6 stock.”
Or maybe they’re not buying? I have no idea what “can barely contain themselves” means, which probably means it doesn’t mean anything… those words are just there to build up a sense of urgency.
And then we get to the really urgent stuff — what’s going to make this stock start to “soar?”
“In a matter of days, the Immortality Switch goes into Phase II testing with the FDA.
“Expect a sudden surge of profits with each press release. A technology of this magnitude could double… triple your money with ease with this low-priced stock.”
And they even close out with a strong “fear of missing out” (FOMO) pitch in the P.S….
“If you bought either Amazon, Apple, or Netflix when they were $6 a share… you know you only need to hit one home run investment for lifetime wealth. My research shows each share of this $6 stock will get you $100… putting you in the same ballpark.”
So is this your next chance? If you think back to 10 or 20 years ago and kick yourself for not buying one of those tech titans and holding on to reap your fortune, will this be your opportunity as some biotech goes into Phase 2 clinical trials.
Well, let’s see. First we need some Thinkolator results — and this time, actually, it’s quick and easy… this is once again a tease of Unity Biotechnology (UBX), which was similarly pitched by a different newsletter about a month ago as the “#1 Penny Stock of 2020”.
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So I’m going to lean on the comments I wrote last month about Unity, since things haven’t changed much, but let’s look and see what’s actually going on.
Unity Biotechnology is an interesting story — there’s a good in-depth piece here from Quartz that appeared two years ago, before Unity went public. This is a little excerpt:
“The company’s approach is deceptively simple: clearing the body of senescent cells, which are trapped in a state of purgatory between division and death—they’re still alive, but they’re not making new tissues. Cells in this mode are found throughout the body, and research has shown that they can congregate in areas that start to wear with aging, like the eyes and in joints. A recent paper in Science, coauthored by Unity founders Van Deursen and Judith Campisi of the Buck Institute for Research on Aging, demonstrated that, in mice, senescent cells contribute to atherosclerosis, the buildup of plaque in the arteries.”
Unity went public during a happier market for biotech companies, in mid-2018, and is now trading at about $6.30 a share (it briefly got over $20 a share a little over a year ago, and has fallen about 10% in the past month since we covered it for that earlier Paradigm Press teaser).
That older tease was promising huge news on November 7, which was when they were supposed to report earnings — but there was essentially no chance that they would announce shocking results or a “cure for aging” on that day. How about now, with that latest earnings report under their belt?
Unity is actually in a fairly quiet period right now — we’ve seen their Phase 1 results from their first clinical trial for their first drug, UBX0101 for osteoarthritis, but we’ll probably have to wait quite a while before there’s any more meaningful drug development news.
And when it comes to the idea that “starting Phase II” will cause the stock to take off, that’s both a bizarre promise to make and, in this case, an outdated one — starting dosing of a drug in Phase 2 almost never means anything, it’s almost never a surprise that a reasonably successful Phase 1 leads to starting Phase 2. It’s not the beginning of that trial that means anything… it’s the data you get out of the trial later on.
But, to add on to the silliness of the Kramer promise here, they also initiated Phase 2 back in October and the first dosing of a patient in their Phase 2 study of UBX0101 was announced on Halloween — by the time we saw this ad, the “start of Phase 2” that was supposed to be a massive catalyst was already a couple weeks in the rearview mirror. And, naturally, had no real impact on the stock price.
Those first results for their knee osteoarthritis treatment in Phase 1 were, at least from my perspective, pretty unimpressive — Phase 1 is mostly designed to make sure a drug is safe enough to try on a broader group of patients, but they also want to see if it is effective… and for many of the indications, the placebo did as well or nearly as well in reducing pain in osteoarthritis sufferers. The press release headline was that “topline results demonstrate a dose-dependent and clinically meaningful impact on pain,” and that they showed enough progress to plan for Phase 2, but it certainly wasn’t a “wow, this is amazing!” result.
And that disappointing efficacy is reinforced, to some degree, by the fact that in addition to moving on to Phase 2 with UBX0101, they’re also taking a step back and doing a second Phase 1 study (they call it “1b”) — incorporating both a higher dose and repeat doses to see if those are safe and tolerable enough to move forward with a more assertive application of the drug, in hopes that it will work better.
The company’s goal is to extend the “health span” of humans, dealing with some diseases and conditions that significantly impact the joy of living like osteoarthritis and macular degeneration, and this first clinical trial is important in that the drug at least seemed safe and well-tolerated. Whether things improve from here, I have no idea — but it will presumably be a while before we know anything more, they have said that they expect results from both this Phase 2 and the Phase 1B in the second half of 2020… so unless there’s some shockingly good result that they feel the need to announce before the study is complete, it will be probably close to a year before we get any big news — and even if things are shocking and they do come out with something early, it’s hard to imagine that happening before three or four months have passed to at least get most of the patients recruited and dosed.
And there isn’t really anything else that seems likely to move the needle right away. The next wave of research they do will be in Ophthalmology, where they have identified their first clinical candidates, UBX1967 and UBX1325 — but they haven’t even filed an IND for those yet (that’s an Investigational New Drug application — basically, sharing their toxicology results and other background info, including stuff about the manufacturing of the compound, outlining the clinical trial protocols they intend to follow, and requesting approval to test the drug in humans)… so we won’t be seeing any actual clinical trial results from those drugs in the next few months, either. They expect to file the IND early next year.
As of the latest earnings update, UBX expects to have about $110 million in cash to fuel their R&D programs at the end of 2019, so they should be OK for a little while — even with a Phase 2 trial underway which should increase their costs, that would be enough to get them at least a quarter into 2020, though in their earnings press release they went much further than that and said that their current balance sheet is sufficient to fund them into the second half of 2021 (that seems like a stretch — so far this year, they’ve been burning through almost $20 million in cash per quarter, and I’ve never seen a biotech company spend less on Phase 2 than they did on Phase 1… but I assume they know their expected costs, and maybe they’ll be more conservative in their spending than the average biotech startup).
Like any early-stage biotech, they will probably use any moments of investor optimism to raise more money — I would have told you last month that they’ll need to raise funds before they have Phase 2 results from their lead drug next year, but they’re now saying that’s not the case, so I guess their clinical trials must not be super expensive… and perhaps they can hold off on raising more money until after they get clinical results. Which poses an interesting question, too — if they go to raise more money before the results come out in the second half of next year, does that send a signal about the results being disappointing? That’s just a hypothetical to keep in mind.
So is Unity Biotechnology a good candidate for you? Only you can answer that, I’m afraid — the story is interesting, the science is widely admired, but results so far have been underwhelming and there won’t be real results for at least many months, so investors will have to be patient and weigh the odds of success for Unity’s approach before thinking about how much money to risk on this story.
I don’t like to dabble in early stage biotechs because I can be fairly sure that I’m buying shares from someone who understands the science a lot better than I do, and I don’t see any reason to expect a big “price catalyst” bit of news from Unity anytime in the next few months that might attract the biotech crowd, so this one isn’t for me… but they do have plenty of backers and some interesting-sounding science, so perhaps it will eventually become a big winner. You’ll have to make your call on where you see the probabilities falling for this one, and I hope you’ll share your thoughts with a comment below… thanks for reading!
Disclosure: Of the stocks mentioned above, I own long positions (through shares and/or call options) in Amazon and Apple. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.