10/28 update: this article is about a week old, but the teaser ads have changed a bit — the newsletter is now also being pitched under the headline, “Has this Maine town bottled the fountain of youth?” and it’s now also going out under the name Dr. Richard Robinson, who apparently works on the newsletter with Teeka Tiwari (Dr. as in PhD, not medical).
The top of the ad is now “Dying New Jersey Doctor Doses Himself With Strange, White Substance from his Freezer—And Stops Cancer In Its Tracks,” but most of the meat of the ad is more or less the same… and it’s still pitching the same stock as far as I can tell, though now they call the mysterious secret fountain-of-youth drug “Compound R”. What follows is from last week, originally published on 10/22/15 and not updated or revised.
We haven’t looked at a Teeka Tiwari ad in a while, so I thought you might like to see some answers about this one — today was the first time I saw this particular ad, which is one in a long line of pitches from newsletters about breakthrough treatments or techniques that can extend life… from new drugs to genetic editing to supplements to God knows what. The idea of a “Fountain of Youth” has been plumbed by most of the newsletter publishers out there.
So which life extension idea is being touted here in the ads for Teeka’s Mega Trends newsletter? Tiwari says the owner of this compound might become a quarter-trillion-dollar company, which is a big claim to make (unless it’s already awfully close — more on that in a moment), and that it’s all made possible by a “mystical” ancient bacteria found on Easter Island.
Ring a bell? That’s right, we were talking up an ancient bacteria found on Mount Ararat just a few weeks ago — but don’t worry, this is completely different (that was an antibiotic, this one was mostly interesting, at first, as an antifungal treatment… before they got the idea that it could slow aging).
Here’s how Tiwari’s ad opens:
“Flipping the ‘God Switch’
“Science Meets Mysticism as Top Researcher Proclaims that an Ancient Bacteria Could Be the Key to the World’s First ‘Immortality’ Drug”
We’ve actually even seen that “God switch” term used before, though that was for an entirely different “breakthrough” biotech idea — stem cells, as touted by Patrick Cox when he was enamored of BioTime (BTX)… and we’ve seen other companies, most recently Alnylam (ALNY), touted heavily for their “immortality” potential (by both Michael Robinson and the Oxford Club folks).
But I risk getting off track again here — what’s the idea touted by Tiwari? Here’s a brief snippet to give you the basics:
“… this company has found a way to turn this amazing natural organism into what could be the First Legitimate Anti-Aging Drug. Early investors could secure their financial future… forever.Are you getting our free Daily Update
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“What Is 10 to 17 More Years of Your Life Worth?
“This amazing drug could add up to 14% more quality years to your life!
“The company you’re going to learn about today is more than just the next big pharmaceutical stock on Wall Street…
“It could soon be the biggest name in all of medicine, as its discovery may be the biggest medical breakthrough since Jonas Salk developed the cure for polio.
“What this company has done is nothing short of astonishing…
“Basing its research on a stone-age bacteria excavated from a secluded island in the South Pacific (the specifics of which we’ll get into later)—scientists may have just created something that could be even BIGGER than the end of polio.”
Well, sort of. Here’s more:
“… with something this gargantuan—it may be just a matter of time until this company becomes the biggest prescription drug company on the planet…
“Bigger than Pfizer… bigger than Merck… COMBINED!
“You would think with something this big—we’d be hearing all about it from every major news source on the planet—CNN, MSNBC, FOX—or at the very least, reading about it in publications like Time, Newsweek, and National Geographic.
“And when you learn there’s even MORE this incredible drug can do, that publicity would be well deserved…
“Because once you learn what else this medical wonder is capable of—you’ll be wondering why you haven’t heard of this drug sooner!”
I know what you’re thinking — how can this little discovery turn into such a gargantuan company? Merck and Pfizer have been built up over decades from mergers, acquisitions, lots of multi-billion-dollar drug discoveries and developments… is this stock really going to make it to that level?
Well, what you’ll notice is that the ad doesn’t actually get into any detail on how big the company is now, or what else they might be doing. Tiwari’s really selling the story of this possible drug, not the company as a whole. That’s kind of important… more on that in a sec.
The ad also goes through some of the big moves that Pfizer and Merck made in the past, using them as examples of name-brand drug companies that every knows — and Tiwari notes that many folks hadn’t heard of Pfizer before Viagra was approved in 1998, helping to drive the shares higher….
“What you may not know—is that just four years prior to Viagra’s public debut—Pfizer (currently at about $35 per share) was trading at less than $5 and wallowing in obscurity.
Which, just like the Mount Ararat ad from Bill Patalon a couple weeks ago, misrepresents the reasons for Pfizer’s huge growth — Viagra was a profitable drug, with peak annual sales of almost $2 billion… but it was approved two years after the most profitable drug of all time (until recently), Lipitor, which had peak annual sales of well over $10 billion. Pfizer’s run from a $25 billion company in 1995 to a $275 billion company in 2000 had a little bit to do with Viagra, and with the dozens of other marketed drugs they sold, but it was largely due to Lipitor’s incredible success (and, if one wants to argue the point, to the newly expanded role of direct-to-consumer advertising of drugs, which boomed following regulatory changes in the 1990s).
But anyway, that’s mostly beside the point — Pfizer is probably the best example of a single huge drug creating $100+ billion of stock market value over a few years (you might dispute that point — Lipitor was never really more than half of PFE’s revenue, and they had other substantial drugs, including the much smaller Viagra, but the stock rose more than $200 billion in value with Lipitor’s sales explosion, and dropped more than $100 billion in value as Lipitor’s patent expired), though I don’t know why they used the wrong drug to make this point. Maybe it’s just better-known.
More hype for you, in case you’re getting a bit bored with my blather:
“What you’re reading right now isn’t so much a special report as it is a winning lottery ticket—and all you really have to do to collect is know the name and ticker symbol of said company.”
That’s horse hockey, of course. Now let’s get into the clues about this particular miracle drug — from the ad again:
“The Medical Marvel That Shouldn’t Have Been—How One Man’s Persistence Could Make You Rich
“The only thing more amazing than this medication’s potential…
“Is that fact that we’re talking about it all.
“The organism was found back in 1964, about 4,264 miles south of Los Angeles on a tiny Pacific island known to its inhabitants as Rapa Nui. (You may know it as Easter Island.)”
Well, dang — then you might, if you read the investing press, already know this one. I’ll try to keep the surprise for just a few more paragraphs, don’t want to ruin it for the whole class.
“… this wonder was more ‘stumbled upon’ by a group of Canadian scientists that journeyed to the Pacific to collect soil samples and other biological oddities this mysterious island had to offer….
“… the TRUE excitement started after the study of the organism began.
“You see, it was found to secrete a new kind of antibiotic that showed so much promise that it was too hard to narrow down to just one application….
“One of the discoveries the team made was that the drug lowers the body’s natural immune response.
“Normally, this would be a BAD thing—a lowered immune response means the body becomes a walking target for all kinds nasty illnesses…
“But in the medical world—sometimes a medication’s worst side effect also becomes its greatest asset.
“See, with this side effect, the drug can dramatically increase the odds of a transplant recipient’s body accepting a new organ.”
Apparently the research was then cut off, as the drug couldn’t be modified to treat diseases without causing immune system problems.
Say it with me, “but wait, there’s more!” …
“That should be the end of our story… and if it weren’t for the determination and foresight of a member of that team—it would be.
“But luckily, Dr. Suren Sehgal had the insight and faith to follow through with what he started—so much faith, in fact, that he basically smuggled the remaining samples out and kept working on them in his home lab…
“Keeping them in his family’s freezer—right next to the ice cream—with a label reading, ‘DON’T EAT!’
“This is where the REAL work began…
“Dr. Sehgal worked tirelessly in his home laboratory, getting a firm understanding of how this new antibiotic worked wonders—often times using himself as his own guinea pig!
“Dr. Sehgal made incredible headway—and personally ingested his concoctions up to a few years before he died. He even credited it with keeping him healthy after he was diagnosed with stage 4 metastatic colon cancer.
“In fact, one of his biggest regrets was stopping treatment—as his tumors returned shortly after his last dose. On his deathbed, he was quoted as saying…
“‘The stupidest thing I’ve done is stop taking the drug.'”
OK, so what is it?
The compound they isolated, from bacteria found on Rapa Nui (Easter Island), was discovered more than 40 years ago and studied for decades — Dr. Sehgal, who isolated the compound, honored that location and called it rapamycin. There was a big cover story on rapamycin and the exciting possibility of age extension in Bloomberg Business Week back in February, but only about a million people get that magazine — so it sounds exciting and mysterious and like something you can only learn about from Teeka Tiwari and the Palm Beach folks.
It is a cool story, and rapamycin is real — though read that whole article, it’s not going to be out there as an “anti aging” drug within the next decade, if at all… the aging stuff is from testing in mice, and it’s extremely early. There are some extremely vocal proponents of rapamycin around the world, and Dr. Sehgal did credit it with fighting off his cancer (though that’s anecdotal, of course). There are lots of analogs of rapamycin and lots of related drugs being investigated, they’re usually called mTOR drugs and they seem to largely be ways to evoke a rapamycin response (mTOR is “mammalian target of rapamycin”), inhibiting the mTOR pathway, without being just plain old (and perhaps unpatentable) rapamycin. This has been proven to extend life in mice, and it’s also part of several approved drugs in oncology and other areas and may have use in diabetes or Alzheimer’s Disease, possibly, but it’s not, so far, a blockbuster.
Rapamycin’s biggest commercial use now is in transplant rejection — suppressing the immune response is obviously critical for these folks, so it’s sometimes used to coat stents and stuff like that.
But what’s the stock? Well, in the absence of any other clues about this company we have to conclude that they are teasing the company that’s doing more rapamycin research than others, and that employed Dr. Sehgal and currently is actively advancing some mTOR/rapamycin drugs like everolimus (Afinitor in oncology, Zortress for transplant support). That’s Novartis (NVS).
Which is why I had to mention those things about market cap and size and the impact of a single drug. It’s possible that rapamycin’s big news in anti-aging from last Winter will eventually lead to some monster new drugs, many years into the future, but Novartis is already one of the largest pharmaceutical companies on Earth — whether you’re ranking by sales, profits, or market capitalization they’re right up there in the top three with Roche (RHHBY) and Johnson & Johnson (JNJ), with a $200+ billion market cap and about $50 billion in annual revenue.
That’s right, $50 billion. They’d have to find and market four Lipitors to double their sales. When Pfizer developed Lipitor, which turned into a drug with peak sales of almost $14 billion, they were a $25 billion company… so Lipitor made a HUGE impact on Pfizer’s bottom line over the subsequent decade when they were selling the heck out of that wonder-statin. Novartis, already ten times that large today, needs something much, much bigger to spur that kind of growth.
Could it be something else? Theoretically, I suppose — but there isn’t some patent owner out there who’s got a lock on rapamycin derivatives, Novartis is the company that has researched it more than anyone else, and more successfully than others as far as I can tell… though there are other companies who have patented their own mTOR inhibitors (and some rapamycin analogs have failed to get approved as drugs, so this is not necessarily a “gimme” — Merck lost hundreds of millions of dollars and gave ridaforolimus back to Ariad last year because the cancer-fighitng potential of that rapamycin analog flopped).
I’m definitely not an expert on rapamycin or its analogs — I’m barely informed at all, frankly — but I don’t see how this tease could be referring to anyone but Novartis.
This is from the ad:
“If this new drug does only half of what it’s supposed to do—this company still has the potential to become a quarter-trillion dollar company!”
And that I can agree with — Novartis was a quarter-trillion dollar company, with a market cap over $250 billion, back in July… and it could certainly get back there again. That would be a 12% gain.
The only real question is, is Tiwari (or his copywriter) just blowing smoke about Pfizer or Lilly buying Novartis at some huge premium, or does he really think this is feasible, or is he teasing some other company with a tenuous patent claim on one of the rapamycin analogs? Here’s what he says:
“With Pfizer and Eli Lilly also swimming in the waters—it wouldn’t be out of the realm of possibility that one or both of them would want to get their hands on the drug of the future. Because the truth is, the winning bidder could soon find itself in the industry’s driver’s seat.
“All three companies stand to win huge if they could make an offer big enough—and the losers on the sidelines could be kicking themselves as they watch the revenues roll in
“That’s how a bidding war starts. Big companies with deep pockets trying to outbid the next—and in this case—they’d be crazy not to.
“But which company is the best fit?
“Which company would get the most out of having our company’s innovations under its umbrella?
“It’s a toss up, really… and a little too hard to determine whether Merck, Pfizer, or Eli Lilly would benefit the most. What I can tell you with absolute certainty is that if a bidding war does start…
“It’s the shareholders who will make out the best! And in actuality, just the rumor of a potential buyout by a single company could double, triple, or even QUADRUPLE shares—LITERALLY overnight!”
I don’t get it, frankly… but I suspect he’s just blowing smoke and is really recommending Novartis to his readers, and just using this as a florid story to get you excited enough to buy the newsletter.
There have been lots of patent suits regarding rapamycin analogs over the years, and different flavors have been sold by other companies — Pfizer has one for transplant rejection and a few other indications (Rapamune) just like Novartis does, and there are probably others… and Novartis itself has been sued at least once. Rapamycin itself isn’t under patent and isn’t controlled by any secret little biotech company, or could control… it’s been known and growing increasingly well-understood for a long time now, and lots of companies have developed (and will develop) ways to inhibit the mTOR pathway using different rapamycin analogs that they can patent — if that turns out to be a magical way to stop aging, I suspect there will be a lot of different chemicals that do similar things, patented by different companies, and it might well be that generic forms of rapamycin end up working, too. Maybe it will be fantastic for Novartis, but I didn’t get the impression that their rapamycin analog is the only one that might slow aging… just that they’re the ones focusing on (or talking about) the research now. Whatever happens, I bet it will be slow.
Actually, in some ways this does come up as eerily similar to that “Mount Ararat” pitch of a few weeks ago that was touting the new antibiotics developed by Cubicin, because in the end that pitch was about groundbreaking antibiotics and fantastic advances that will send a company soaring, but they were pitching the stock of what is already a mammoth pharmaceutical company (Merck, which bought Cubicin a while back)… which means there’s essentially no chance of the hinted at 1,000%+ gains in any meaningful timeframe (like, less than a decade or two). And I hate to cause distress, but I’d be surprised if the FDA approved an immunosuppressant as an anti-aging drug without many, many years, probably a decade or more, of big safety trials.
Much the same situation plagues the ad from Tiwari here — Novartis is the researcher going big into mTOR inhibitors and researching analogs of rapamycin for potential anti-aging properties, though they’re targeting specific age-related symptoms more than the actual act of aging itself (which is not, as you may have noted, a disease)… and some of their rapamycin analogs, whether Afinitor or some of the others they’re researching, may be a great boon either to Novartis or to humankind… but almost nothing is going to cause Novartis stock to double overnight (or over several months). You can take your time and research this one, think about how you like it compared to other giant pharmaceutical firms like JNJ, Roche, Bristol-Myers (BMY), Merck (MRK), etc. — and let us know what you think with a comment below.
I’ve owned Novartis in the past, several years ago, and generally would probably say nice things about the stock, which is not terribly expensive — but they have had their own “patent cliff” concerns as big drugs have lost protection, revenue has been in slow decline for several years largely because of that, and they are massive and can’t change or move quickly. I don’t own any individual big pharma stocks currently.
P.S. Lest I forget, let me apologize for any mistakes I made in describing the science or the medical stuff above — I don’t invest much in biotech, partly because the technical chatter goes over my head and partly because I often have a failure of imagination when it comes to future riches from early-stage clinical work… but I did the best I could to describe what’s going on with this ad, given my tiny little brain, two pots of coffee, and a couple hours. If something’s incorrect in my description, feel free to let me know.