This article originally appeared on July 22, 2015, and the bulk of it has not been updated or revised since. The meat of the ad is essentially the same, and if Lichtenfeld really “bet his paycheck” on this stock (which was and is Alnylam) on July 22 he’s so far lost about 65% of that paycheck… though he would have had similar results with betting on any biotech stock at that time, since 7/22 was only about a week removed from the all-time peak in the biotech index.
A second version of the ad back in November had a different intro, implying that the company would surge because of an announcement at a “billion-dollar facility” in Orlando in the first week of November — the “billion-dollar facility” is the Orange County Convention Center in Orlando, where the American Heart Association meeting took place from November 7-11. The shares didn’t really move based on anything that happened that week, the data was more or less positive but it wasn’t a key moment for that particular drug (ALN-PCSc). The stock has generally been acting like a 2X leveraged play on the broader IBB biotech index in recent months, since November it’s down about 40% while the broader biotech group is down 20%.
There is a lot of data coming this year, so the story of Alnylam’s attempt to get RNAi drugs approved is likely to continue to evolve — they’ll have data released mid-year for a few of their programs, and the stock is down a bit over the last few days mostly because (as I interpret it) one of their earlier-stage drugs is not proving to be as effective as some investors had hoped and might be a complementary therapy instead of a first-line therapy. They posted an update and summary of the “data rich” year to come with their quarterly update here.
So with that intro, I’ll send you back to our original article about Lichtenfeld’s teaser, which started running almost a year ago… I still have never owned the stock, and don’t personally intend to get involved in this kind of multi-billion-dollar long-term science speculation. Enjoy!
A lot of readers have chimed in with questions about this latest ad from Marc Lichtenfeld — it’s a pitch for his higher-end newsletter service called Lightning Trend Trader, published by the Oxford Club, and he’s got a nice big promise to get your attention — not only does he “guarantee” that you’ll have (the opportunity to) double your money in his favorite pick soon (“starting August 30”), but he’s also “betting his paycheck” that this double will happen.
None of which really matters, of course, it’s just a way to get attention by demonstrating his conviction that the stock will be a big winner. Nearly every newsletter company of any size offers at least a short-term money-back guarantee, and many of them use these kinds of “I’ll guarantee you a 100% return by X date” promises in their ads, and that feels comforting… but they do not, of course, guarantee to “make good” on that guaranteed double. In this case, Lichtenfeld’s publishers will, if he fails to generate a 100% gain for you in this stock (or give you a few chances at 100% gains in the next year), give you… another year of the newsletter for free.
Which, of course, is no skin off their nose — if you’re calling out of anger and looking for a refund, you’re not going to renew anyway, and adding another free subscriber adds no marginal cost to a newsletter’s business… nothing wrong with making the guarantee, and Lichtenfeld may end up being right, but don’t make the mistake of assuming that these “guarantees” mean it’s a surer bet than any other investment idea — it’s just a marketing tactic, and every stock needs to be understood and evaluated on its own merits before you can think about buying it.
OK, lecture over — what is the stock Lichtenfeld is pitching? It’s in the hot RNAi space but he doesn’t use that term, since it would perhaps make it too easy to identify the stock — he renames this and calls it “Gene Mutation Silencing (GMS)” and says that his favorite GMS stock is “the most profitable stock opportunity I’ve found in my 20 years in the markets.”
Here’s a bit from the ad:
“It’s a business that just picked up seven different revenue streams that could be worth $329.8 million each… It just received favored legal status that gives it a monopoly for over seven years…
“It’s sitting on a mountain of cash (more than $1 billion) and has ZERO debt.
“I calculate revenues are set to jump as much as 3,733% (or more).
“And beyond all that, the company is in control of what is perhaps the biggest development in medical history.
“Dr. Phillip A. Sharp, Nobel Prize-winning MIT biologist and ‘Senior Statesman’ of biotechnology, called the initial discovery of the technological breakthrough being utilized by this company ‘the most important and exciting breakthrough of the last decade, perhaps multiple decades.’
“This thing is so good…
“I’m going all-in, betting my paycheck that it will give you the chance to – at minimum – double your money starting August 30.”
Sounds exciting, right? He gives lots of examples of biotech stocks that he says he picked for his subscribers, generating 100% plus returns in recent years on big short-term stock moves — presumably most biotech-focused newsletters have had at least a few such winners, given the incredible 400% return the average biotech stock (as represented by the biotech index ETFs) has generated over the past five years.
And, as with all exciting biotech ideas, Lichtenfeld has a couple catalysts in mind for this one that he thinks will spike the price higher…
“The fact is, two key events are quickly approaching that could send this stock doubling in the year ahead.
“The first catalyst will occur as early as August 30, the second in early 2016.
“I’m essentially guaranteeing you’ll make money.Are you getting our free Daily Update
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“I’m so confident in this that I’m offering to WORK for FREE if you don’t see the opportunity to make a certain amount.”
OK, so I can see why the biotech investors who’ve found a home here at Stock Gumshoe are excited about the idea of this one — what is it?
I’m not going to force you to sit through my examination of the entire ad, which got awfully long and involved in trying to describe his “Gene Mutation Silencing” science without actually mentioning RNAi, but you can check out the whole “presentation” here if you’re curious. The big push is that he sees them making huge earnings from each of what are mostly orphan drugs treating rare diseases, seven drugs that it has in clinical development now (plus eight more in preclinical development), but then he goes on to pitch this “August 30” catalyst for what he implies might be the “Most Lucrative Drug of All Time” (OK, he used a question mark at the end of that… but still).
“Breaking News Coming August 30…
“The GMS company is expected to make a very important announcement on that day.
“It involves a drug that treats a cholesterol condition that directly affects more than 71 million Americans.
“Now… to give you some idea of how important cholesterol drugs can be… consider that Pfizer company’s Lipitor is the highest-grossing drug of all time.
“It’s made $131 billion for Pfizer.
“So there’s a lot of money to be made in this field… if you can produce a drug that truly works.
“And that’s what has me so excited.
“On August 30, our GMS company is set to release the data on its drug.
“And let me tell you, I’ve already seen the numbers… and they are impressive.
“Levels of low-density lipoprotein cholesterol – or “bad cholesterol – are down as much as 57% for patients taking the drug.
“And tests show ‘no serious adverse effects.’
“On August 30, it’s going to release this positive data….
“… the company might have THE premier drug in a $19 billion-a-year market.”
And just in case that wasn’t enough, he tosses a few more clues on the pile — that it might get get bought out by one of the giant pharma companies, and that Genzyme bought 12% of the company, and the CEO has been buying shares, adding $950,000 worth to his holdings in January.
And the second catalyst, coming in “early 2016” he thinks, is that the stock could be added to the S&P 500. That’s possible, I suppose — I haven’t checked to see whether it meets the basic criteria for public float and liquidity, but it probably does, and it’s definitely big enough with a market cap over $10 billion.
So yes, we do know who this is — Lichtenfeld is teasing Alnylam (ALNY)
I know, again. ALNY is the poster child for RNAi and “fountain of youth” stocks, and has been an irresistible target of teaser campaigns for years, from the Oxford Club and others. We recently re-posted an article from 2013 about the “Magic Keys to Immortality” when the Oxford Club first started touting this company, and Michael Robinson teased the stock for his Nova-X report a couple months ago as well.
That first pitch, from the Oxford Club two years ago, was nicely timed — the stock was around $30 now and it’s now at about $130, so that’s a 300%+ gain during a time when the broad biotech index, as represented by the IBB ETF, was up “only” 125%.
And yes, the clues still match perfectly in the ad, though the short-term impact from their cholesterol drug is likely to be quite muted compared to Lichtenfeld’s excitement over the “August 30” news. They do have a drug that has shown a very powerful ability to reduce cholesterol levels, but that’s in patients who have Hypercholesterolemia, extremely high cholesterol levels that almost guarantees heart problems. This is an area where there’s critical need for treatment, but a small number of sufferers, typical of orphan drugs (I didn’t check to see whether this particular drug, ALN-PCS and the subcutaneouo ALN-PCSsc, has orphan status from the FDA). When Lichtenfeld tosses out the 71 million number and the Lipitor sales numbers, and dreams of blockbuster drugs surge in your head, that’s assuming that this drug moves on from their very small-scale orphan treatment of people with extremely high cholesterol and gets used more broadly at some point in the future — 71 million is the number usually tossed around for the number of people who have “high cholesterol” … the kind of folks who are told to maybe take a statin, exercise, and improve their diet, not the folks with Familial Hypercholesterolemia (there are other varieties as well) who live in fear of having their first heart attack before they become teenagers.
There are other drugs that are far ahead of ALN-PCS in treating Hypercholesterolemia, particularly the monoclonal antibody PCSK9 inhibitors that seem to be on the doorstep of getting approved by the FDA (Sanofi/Regeneron’s Praluent, which will probably be approved this week, and Amgen’s Repatha, which was approved in Europe yesterday and is looking for an FDA response in a month or so). I don’t know if they’ll turn out to be better or not, but they’ll probably be in use several years before ALN-PCSsc since that drug is still in Phase 1 trials. It’s true that they expect to have some results available from that trial by “mid year” as of their last announcements, so perhaps that’s what the August 30 date points to, but that’s not going to generate real revenue immediately. That particular drug is partnered with The Medicines Company (MDCO), and it did indeed achieve excellent results in the first Phase 1 trial of ALN-PCS back in 2013 (that’s where the 57% reduction in LDL cholesterol number comes from)… presumably Lichtenfeld (or his copywriter) is implying that he already knows the results of this current trial because the prior trial was successful — I can’t imagine he actually has any inside information on the trial results of the ongoing trial, since that would be illegal. Even implying that he knows how the trial is going in the ad is pushing it a bit, frankly.
Not that ALN-PCS is the most important drug for Alnylam — I don’t want to imply that this $10 billion company is trading just based on one Phase 1 trial. They’ve been pioneers in RNAi and have partnerships with several big pharma companies — their lead drugs, including one in Phase III trials, are aimed at TTR-Mediated Amyloidosis and you can see the full pipeline here.
Beyond that, you’re on your own — folks here have looked at ALNY many times over the past couple years, our biotech columnist Dr. KSS commented on their progress and valuation back in May and the stock comes up in his discussions about RNAi from time to time. I’ve learned to avoid getting too detailed with biotech companies because the valuations have little to do with financials or business prospects and everything to do with science and sentiment — and I am not going to become an expert on the science, so the more I write about these stocks the more I make mistakes. I’ll leave it to you to discuss. Enjoy!
P.S. So… are the folks who subscribe to Lightning Trend Trader for $1,495 because they’re excited to learn about this stock going to be mad when they learn that it was previously a special report stock heavily touted by the $149 Oxford Club Communique for most of the past two years? Seems a bit odd that they’re using the same stock to push these two different letters, and that the $149 Communique promo has still been circulating as recently as last month.