The beginning of the latest ad from Marc Lichtenfeld’s Lightning Trend Trader is good and juicy, at the very least… how could you not open up the ad and pay attention?
“The KILLER Hiding in Your Medicine Cabinet
“These Common Drugs Take a Life Every 12 Minutes (Who’s at Risk?)
“Here’s the NEW Breakthrough and How You Could Collect $220,000 Starting on May 10, 2018”
He goes on to talk up the risks of opioid drugs, and the ongoing horror of the opioid epidemic… which is certainly being helped along by the fact that yes, the marketing push from Purdue Pharma a few years back helped to make sure that lots of folks had OxyContin in their medicine cabinet.
So that’s the basic back story — in case you happen to have missed the stories of the opioid and heroin epidemic, or in case you’re one of the few folks not to have had family or friends touched by this awful addiction, yes, the estimates are that 137 people a day die from overdoses of prescription painkillers, heroin, or fentanyl… a lot of them initially “hooked” by a legitimate pain prescription from a doctor who thought he was doing the right thing.
And Lichtenfeld goes on to tease the stock of a company that he thinks will profit from going after the opioid addiction problem… something that there are certainly hundreds of researchers working on at this moment (and public policy folks, and health insurance companies, etc. etc.)
Here’s a taste of the ad:
“There’s ONE company tackling this problem…
“They stand to replace these deadly little pills with one that’s better in every imaginable way.
“And it could hand you up to a $1.6 million fortune….
“One tiny Massachusetts lab owns the exclusive patents to this revolutionary treatment for the next 18 years.
“Soon, its discovery will go down in history books…
“It could change modern medicine forever… save millions of lives… and make investors incredibly wealthy.”
We know, of course, to take such dramatic claims with a huge grain of salt… but still, we want to figure out what the company is, and give us a chance to research the full story, before ponying up $4,000 for a subscription to his Lightning Trend Trader. So… what other clues do we get?
“Revenue is set to surge as much as 907%.
“And on May 10, a special announcement could make this company’s shares explode.
“If you get in now, you could buy this stock for around $20…
“And watch with excitement as it climbs to $80… jumps to $140… and rockets past $200!”
And the promises are not at all subtle, no surprise there…
“The Best Painkiller Ever Invented…
“I believe this obscure company could become the No. 1 performing stock out of every publicly traded company in 2018….
“… it uses an abuse-deterrent, extended release technology.
“And because of that, insurers absolutely love it.
“Cigna, Humana, Navitus and other top health insurance companies have inked deals with the producer of this drug.
“These deals could be worth as much as $3 billion based on the revenues of previous top-selling medications.
“You can imagine what $3 billion in NEW revenue will do to a company with only $27 million in revenue right now…”
Other clues? He tells us a little bit about the actual technology…
“Packed inside every capsule are tiny microspheres.
“These microspheres are like miniature versions of the painkiller itself.
“They’re made of hard, waxy materials designed to release more slowly than traditional painkillers.
“Thanks to this patented technology, it takes longer to break down and releases into the body much more slowly.
“It also sustains its pharmaceutical profile, meaning it doesn’t turn into an ultra-addictive substance.
“It may be the only drug in its class that can make this claim.”
And we’re told a little bit about some of the bigwigs who already own shares…
“… one small Massachusetts lab holds the exclusive rights to it until 2036.
“The Biggest Names in Venture Capital Are Already on Board
“It’s no wonder the biggest names in venture capital have already claimed their stakes.
“A $50 million funding round for this tiny company included investments from Frazier Healthcare, Skyline Ventures and Longitude Capital….
“… it’s Skyline founder John G. Freund’s involvement that I’m most excited about.”
So what’s our little secret stock? Thinkolator sex we’re being steered toward: Collegium Pharmaceutical (COLL).
And yes, there could be news that moves the shares on May 10 — they release their next earnings report on May 9, so if their revenue growth is faster than expected, or they say anything else about future growth accelerating, perhaps the shares will rise. I don’t know what the likelihood is.
And Lichtenfeld has certainly pitched massive returns (and claimed huge profits) by using options trades in the past, so it’s possible that those huge numbers he’s touting for possible returns include some options speculation on a big jump after earnings… that’s just a guess, he doesn’t mention options in the ad.
Their primary drug, the time-release oxycodone that they call Xtampza ER, was approved by the FDA almost exactly two years ago, so it’s important to note that this is not the only abuse-deterrent opioid or pain medication, and it’s not guaranteed to win over the whole pain market overnight. If that were the case, it would already, two years into its commercial life, be posting those billion-dollar revenue numbers.
There’s a good piece here from STAT (from late last year)that goes more into the story of Xtampza ER, both the hope the company has for market share inroads against other abuse-deterrent or long-term opioid prescriptions (including variations on OxyContin, by far the market leader), and the challenges it faces in ramping up to scale. I don’t know if the piece is fair, but it seems reasonable to me and might help to provide some perspective.
And yes, their extended-release technology, called DETERx, is patented, and they do claim patents that expire as late as 2036 (thought some of their patents expire as soon as five years from now, too, I have no idea which patents are significant or pivotal for this particular technology). Xtampza ER is still an opioid drug, it’s just that it benefits from a delivery system that slows the absorption of the drug and makes it harder — though certainly not impossible — to abuse.
So this is a real company, they do have an abuse-deterrent oxycodone that is approved for sale (and has been for a while)… and they’ve recently expanded their pain medicine portfolio by licensing in Nucynta (another opioid pain drug, from Depomed), which, according to their announcement in January, will be “immediately accretive” and will accelerate their “time to profitability.”
The company looks like it’s not in terrible shape financially, with more than $100 million in cash and sales and cash flow sufficient, they believe, to keep them operating at least until 2020… but that’s not the hope being pushed here. The hope, expressed between the lines of Lichtenfeld’s ad, is that Extampza ER will become a blockbuster drug, and that sales will be shockingly strong and cause the stock to surge higher in short order. I don’t know what the odds of that might be, or whether their deals with insurers will push the volume of prescriptions as folks look for pain solutions that are less dangerous, but it is an established company with a real business, and the company itself says they’re on a path to profitability.
Beyond that, I have no idea what the full story is for Collegium Pharmaceutical, and haven’t researched them before… so I’ll pass it back to you, dear readers, to see what wisdom you might find. Have any thoughts to share about Collegium or Extampza… or about Lichtenfeld and his Lightning Trend Trader, for that matter? Feel free to toss ’em on the pile for consideration with a comment below. Thanks for reading!