Become a Member

Altucher’s Feb. 17 Deadline “Windfall Profit Opportunity” from a “Tiny California Biotech”

What's being promoted as "“The Greatest Biotech Opportunity of the Decade” in ads for Microcap X Advisory? Their special report is called "Windfall Profits: Biotech’s Next 54,600% Medical Breakthrough"

By Travis Johnson, Stock Gumshoe, February 8, 2018

James Altucher took a little break from his self-chosen role as “most overmarketed cryptocurrency pundit on earth” to promote his publisher’s Microcap X Advisory recently, talking up the possibility that a particular little biotech stock could surge 54,000% because of expected FDA approval on February 17.

So… let’s dig into it, shall we? The ad appears to no longer be open for subscription, so perhaps he hit his “maximum” of 250 subscribers at $2,000 a pop (no refunds, as seems the trend for pricey letters these days, so that’s a nice payday), but we can at least ID the stock for you and give you a bit of perspective. That Microcap X Advisory, by the way, is published by Altucher’s group but helmed by Bob Byrne (I don’t know anything about him).

Even the “disclaimer” at the top of his ad is enticing:

“Disclaimer: The opportunity detailed below results from rare circumstances in which a microcap company could capture the majority share of a multibillion-dollar market. Based on our projections, we believe this company could surge in value, landing early investors up to 108X their money. Still, gains like these are exceptional and do not come around every day.”

So what’s the story? In brief, Altucher says that there’s a tiny biotech that has a topical treatment for erectile disfunction… and he thinks that could take a huge piece of the market away from leaders like Cialis and Viagra, since it sidesteps the blood pressure risks of those pills.

Here’s a bit of the pitch:

“A tiny $2.70 biotech company could be approved for a solution to E.D. that is nothing short of a medical breakthrough…

“And a miracle for millions of American men suffering from this condition who are unable to receive treatment.

“In other words, this little company is about to launch a treatment for E.D. that can be used by the 75% of men who either CAN’T or choose not to take Viagra or Cialis.

“Staking a claim right now could make you a 54,661% gain….

“I’m talking about a single opportunity where a single dollar invested today could turn into $546.”

I include that “$1 into $546” bit not because it’s rational, but because we like to go back and check on these from time to time — so we need to keep track of what exactly was “promised” by the pitch.

So what makes this product unique and exciting?

“This company has created the first EVER on-demand, topical cure for E.D.

“That means NO dangerous pills to swallow…

“And FAR fewer negative side effects.

“Instead, it’s a simple cream.”

OK, so that sounds reasonably compelling. Certainly the topical injections of this drug were NOT a big hit, for obvious reasons… as Altucher notes, the active ingredient of this cream is aprostadil, so that makes the Thinkolator’s work quite a bit easier…

“Alprostadil works by dilating blood vessels to boost blood flow locally….

“… although this company’s drug is NOT approved to use in the United States (yet!)…

“It IS approved in more than 29 countries in the world….

“When this drug is approved here in the United States…

MILLIONS of men will finally have access to a cure for E.D. for the first time EVER…”

Are you getting our free Daily Update
"reveal" emails? If not,
just click here...


And, as is pretty typical of biotech teaser pitches, he throws out some estimates that are wildly optimistic, yet are couched as “conservative”

“If this company could capture just 1% of the men who suffer from E.D. in America…

“At a cost we project to be around $100 per month per customer…

“That alone could have a $768 million impact on their yearly revenue.

“And considering the company’s entire market cap is currently $42 million…

“That’s over 18 times the current market value of the entire company! ….”

“Now, assuming a conservative 6X ratio between the company’s revenue and market cap…

“A 1% market share would put this company at $2.2 billion.

“Which would add up to a 10,842% gain if this plays out the way I expect…

“Enough to turn a modest $500 investment into $54,210.”

You can hopefully guess that assuming a 1% market share among a huge population group is not necessarily “conservative,” nor is pricing a company at 6X sales. Maybe those things will make sense, but don’t take them for granted when you do your research — start at zero and work your way up when you’re doing your thinking, don’t let this kind of hypothetical price be your starting point or you’ll lose all ability to think rationally about it (investors have a very strong tendency to “anchor” their opinion of a company on the first information they learn about it — even if they know, intellectually, that the info is too hyped up).

And what’s the story with that deadline? More from Altucher:

“This company has already submitted an NDA for their revolutionary new E.D. drug…

“And they’re set to receive an answer from the United States government on or around February 17, 2018.”

And there must be some sort of partnering deal as well, as Altucher dangles some other “secret” info for you…

“The ‘contingency’ deal this company worked out with a large biotech company that could hand investors an immediate 100%+ gain upon approval of this new drug…

“The ‘secret weapon’ this company is planning to use to protect their claim on the E.D. market until 2032…”

Enough, right? So what’s the stock? This is, sez the Thinkolator, the teensy weensy Apricus Biosciences (APRI).

Which was around $2.70 a few weeks ago, with a $44 million market cap… though it’s now down to about $2.25 and $34 million.

And yes, Apricus Biosciences is trying to get FDA approval for its Vitaros, a topical cream formulation of alprostadil which is already available in some countries (they sold the ex-US rigths to Ferring International).

In terms of forecasting, it’s probably worth noting that Vitarus US peak sales potential is estimated, by Apricus itself, at $350 million. That’s half of the number that Altucher posed as “conservative.” I don’t know if one of them will be right or not, but Apricus certainly has more info on which to base their assumption. You can see that estimate in their investor presentation from last month.

So what’s the story? Well, Vitaros was left for dead back in 2008, at least in FDA terms, because it got a complete response letter (CRL) back then, which is effectively a rejection. They started meeting with the FDA about a year and a half ago to try to restart the NDA for Vitarus, and their resubmission last year did leave them with an anticipated PDUFA date of February 17 (that’s the date by which the FDA is expected to respond to their new drug application).

So yes, there really is a catalyst coming soon… the company has had almost nothing to say publicly this year, other than their presentation at the JP Morgan Conference last month that reiterated their optimism about approval.

And they do claim a “strong IP estate” with patent protection, at least partially, out to 2032… though some of their patents expired last year, too, and I have no idea which patents are important for this particular drug. Their next and only drug in development is RayVa, which is essentially the same thing for a different use — a topical application of alprostadil for Raynaud’s Phenomenon (which is caused by reduced blood flow to extremities, like fingers, toes and ears), and developing that drug seems to depend on getting some commercialization cash flow from Vitaros starting, they hope, sometime this year.

Here’s what Apricus says about their licensing/option deal with Allergan:

“Pursuant to the terms of the license agreement, upon FDA approval of the NDA for Vitaros, Allergan may elect to exercise a one-time opt-in right to assume all future marketing and selling activities in the United States. If Allergan exercises its opt-in right, Apricus may receive up to a total of $25 million in upfront and potential launch milestone payments, plus a double-digit royalty on net sales of Vitaros. If Allergan elects not to exercise its opt-in right, Apricus may commercialize Vitaros and in return will pay Allergan a double-digit royalty on net sales of Vitaros.”

If the FDA approves Vitaros, and Allergan opts to do the developing, and the sales do get to the $300+ million level and stay there for a while, then Apricus would be in lovely shape — they’d be getting a $25 million milestone payment plus royalties that peak out at something better than $30 million a year for some undetermined time period, which is a huge deal for a tiny stock.

That is, however, quite a few “If” statements in one paragraph. If the FDA rejects it again next week (or sometime soon), they’re clearly sunk. And if Allergan doesn’t turn out to be interested in doing the heavy lifting, and would rather just collect their royalty, then things become much more uncertain and any commercial ramp-up becomes a lot more work… and, of course, the product could be a complete dud either way and fail to generate anything like the sales projections of Apricus, let alone Altucher.

I don’t know the odds of any of those events, but it is a very, very small company so it is likely to move pretty dramatically with any meaningful news — and the investing world is certainly aware of that PDUFA date, so even though Apricus is too small to attract much institutional investment there is likely to be a lot of attention on the shares as that date comes and goes, good or bad.

And in case you’re wondering, yes, Apricus was also publicly traded back in 2008, when they got that complete response letter from the FDA — and that caused the market cap to drop from about $130 million to $10 million. I don’t know the details, or whether they had any other assets to speak of back then, but the stock has fallen about 99% in the past decade while churning through about $300 million in cash, as is the we-should-remember-this risk of most little development-stage single-product biotech stocks. You don’t get those hoped-for crazy gains without taking the risk of losing (almost) everything…. but this is, at the least, a story that should begin to play out very, very soon.

So with that, dear friends, I’ll leave you to your own research — think Apricus is worth a gamble on that Vitaros decision, or might be a hidden gem? Think it’s a little too risky, or think the product will fail or be worth less than Altucher hopes? Let us know with a comment below.

P.S. Before you ask about his more famous ads… I never covered that Altucher cryptocurrency pitch, mostly because it was too irritating to sit through, I’ve been highly skeptical of the cryptocurrencies, and he didn’t seem to have much underneath the hype that sounded interesting… but if you want to read through a bit of skepticism on that particular product that cryptocurrency ad campaign did get a lot of coverage from the press, including a Yahoo Finance piece here and an article in Inc. here.

Irregulars Quick Take

Paid members get a quick summary of the stocks teased and our thoughts here. Join as a Stock Gumshoe Irregular today (already a member? Log in)
guest

12345

This site uses Akismet to reduce spam. Learn how your comment data is processed.

76 Comments
Inline Feedbacks
View all comments
sigmull
sigmull
February 11, 2018 7:45 pm

Phase 3 study submitted to FDA has P value of .001 Also Chairman of Bd of Directors is quite experienced with Pharma. Looks interesting.

Add a Topic
3022
👍 120
hedy1234
hedy1234
February 11, 2018 7:58 pm
Reply to  sigmull

$no ticker
Sigmull please put ticker symbol $ABC in your posts…..

👍 1691
hedy1234
hedy1234
February 12, 2018 12:36 pm
Reply to  sigmull

$NO TICKER

sigmull – second request for ticker symbol in your posts….

👍 1691
swgoombah
swgoombah
February 12, 2018 1:11 pm

$APRI – Nice run up today, I was able to buy the dip today and got in at $2.58, heres to good news coming out for all those swinging this.

👍 410
martinkip
February 13, 2018 8:00 am

Well I’ve got to say thanks on the heads-up on $APRI, up 22% since I bought it on Friday, looks like it is still moving with a .05 cent gain this morning in premarket trades. Going sell part of my holding to cover most of my cost and then see what happens 🙂

ggswift
February 14, 2018 11:52 am

ONE Medication for erectile function is TriMix . Unless your half dead already this prescription is about 90% Effective. Look Here https://www.reference.com/web?qsrc=999&qo=semQuery&ad=semD&o=35223&l=sem&askid=4ae760c8-ae80-483b-b956-79a4a5201253-0-rf_gsm&q=trimix%20injection&dqi=&am=modifiedbroad&an=google_s

👍 185
Scott
Guest
Scott
February 16, 2018 8:12 am

Oops! Denied approval again. Down 75% pre-market

👍 21650
Mellquist
Guest
Mellquist
February 16, 2018 8:37 am

This guy, really bugs me. I liked it when he was a guest commentator at the FT because I imagine he was heavily edited by pithy and aristocratic Oxonians. But I personally think he is a bit all over the place and there is no way anyone could humanly do as much as he is trying to do in the public realm with newsletters, commentary, books, pranks etc and do it all well and with integrity. Just my thoughts.

Add a Topic
6096
Add a Topic
7
Add a Topic
4656
socr
socr
February 16, 2018 4:01 pm
Reply to  Mellquist

What a joke ,he offered a discount at $3000 from $5000 for his ‘Microcap X advisory’ he was shure about the FDA aproval,this guy is a complete but very expensive joke bragging about being a millionaire,if he can find enough idiots to pay $3000 for such lousy advise,I should set up something like he does ,this is a very easy way to become rich for in return offering nothing but losses for naive subscribers. He predicts also that bitcoin will get $1 million in over 2 years also charging $3000 for his crypto service,that guy is nuts.

Add a Topic
3022
Add a Topic
372
Add a Topic
3640
nilsmellquist
Irregular
February 16, 2018 9:09 am

I question the mental sanity of this fellow given some of his antics and lack of filter when it comes to discussing his personal life. If he has a cohesive investment philosophy apart from “leveraging his network” of super smart “in the know” smart money investors, I struggle to identify what exactly such an investment philosophy might be.

Add a Topic
6096
Add a Topic
4656
Add a Topic
6096
👍 37
nilsmellquist
Irregular
February 16, 2018 10:37 am

Well FDA came out a bit earlier and looks like Mr. Altucher is eating humble pie. Stock down 63% today. “Buy the rumor sell the news,” as the old saw goes.

Add a Topic
6096
Add a Topic
4656
Add a Topic
6096
👍 37
Brian
February 16, 2018 11:57 am

APRI denied by FDA. Stock taking a beating.

Add a Topic
3022
Add a Topic
5971
👍 116
Bradley short
Member
Bradley short
February 16, 2018 4:30 pm

The FDA denied the drug, subsequentially the stock price tanked today…..
Oh well…. better luck next time I suppose

Add a Topic
3022
Add a Topic
5971
jerome50
jerome50
February 16, 2018 11:22 pm
Reply to  Bradley short

Another biotech stock goes flaccid !!

Add a Topic
5971
👍 207
DBMD
Irregular
DBMD
February 17, 2018 7:29 am

Well I’m glad I didn’t read this post until today because I had Stock in APRI and sold because it went up, the day before it dropped 63%. I’ve never had that good of timing before. If I had read this I probably would’ve kept it. But I appreciate your coverage as I have been in and out of this one for awhile. I hate it when they are going strong then just go limp on bad news. I will review the data and probably reinvest. It may be a good entry point. I think it can be used for female sexual arousal problems as well and may work for hair regrowth. It is already available in Canada.

Add a Topic
5971
Add a Topic
1515
👍 1097
SoGiAm
February 17, 2018 4:18 pm
Reply to  DBMD

$APRI np – Good to hear from you DBMD.
From 20180930 quarterly report: “Net income for the nine months ended September 30, 2017 was $2.8 million, or income per share of $0.26, compared to a net loss of $7.1 million, or loss per share of $1.17, for the third quarter of 2016. Net income during the nine months ended September 30, 2017 was primarily due to the $12.3 million gain recorded for the sale of our ex-U.S. Vitaros rights and assets to Ferring.”

Do you have any comment on their RayVa candidate?
January Presentation available: http://www.apricusbio.com/
#Best2ALL!

Add a Topic
6096
👍 11604
DBMD
Irregular
DBMD
February 18, 2018 4:11 am
Reply to  SoGiAm

$APRI small residual holding. Thanks for the question Ben.
Allergan is a prostaglandins seeking sponge. They are looking at Setipiprant PG D blocker for hair growth, and they already have Latisse and Lumigan for eyelashes and glaucoma (alprostadil). They could easily try to tie up the market on these prostaglandin products, so they keep the profits rolling. Latisse was discovered serendipitously when glaucoma patients were noted to have long lashes while on the PGE1 alprostadil. The generic was then not allowed to be used since patent rights for Latisse was for eyelash restoration. Ray Va does seem to work for Raynauds and causes angiogenesis, which is why I think it would work well in hair growth. One problem is alprostadil has many preparations that can be used for what vitraros is trying to do in the US. I don’t think the FDA has sunk them yet. I remained in SNWV way back down to .04 and bought 100k shares. Dermapace was finally approved and the stock is not as high as when we discussed it, but still a handsome profit. I will probably reenter APRI, but I don’t think there is any hurry.

Add a Topic
3022
Add a Topic
5971
SoGiAm
February 18, 2018 6:19 am
Reply to  DBMD

$APRI – Maybe it’s time geaux bottom fishin’.
Just looked at a random handful and was surprised.

When Toledo Bend opened, dad and I were there every weekend after tax season for years. We used to get a good laugh at folks casting out their newest shiny lures and catching the “mini-bass” that were schooling. We’d speed past the crowd to the old river bed, rig up our plastic worms and catch the lunkers. 🙂
https://www.stockgumshoe.com/2015/02/saving-jack-kerouac/comment-page-6/#comment-4354352

👍 11604
kevindkelly
Member
kevindkelly
February 18, 2018 1:36 pm

the company failed their FDA Approval . Bad pick there James.

Add a Topic
3022
👍 8
jillsami
February 23, 2018 2:09 pm
Reply to  kevindkelly

In the past few months I’ve subscribed to half a dozen
newsletters. It’s too early to judge which ones will help
me to get a better return than I had been getting without
the help of paid subscriptions. James Altucher has not
helped me one bit. He’s a very entertaining character,
that’s flamboyant & creative. He’s cleaver at making money,
but it’s for himself, not his subscribers. Bill Spentrino has consistently had good yearly returns (better than 20%). His
‘By Invitation Only’ forum is pretty much what you get here
on Stock Gumshoe (bringing traders together where they can
discuss their views. Travis also provides us with clues about
the “Teasers” that are mentioned in various newsletters. Bill,
& all the other members of the B.I.O. forum allow subscribers
to send them emails to exchange stock info. I have yet to come across a member who doesn’t think highly of Bill, as a sincere person, and a talented stock advisor. I think Paul Mampilly
is also a good stock advisor, but he adds up the stocks & gains
to make it appear as if you are getting a fantastic return. I am
already to the point where I just glance at what James sends,
without any intention of investing in the stocks he recommends.

Add a Topic
3813
Add a Topic
5971
Add a Topic
5971
👍 170
ssanford
February 23, 2018 10:37 pm

Looks like APRI had another premature deflation. Couldn’t resist!

Add a Topic
5400
👍 23
Craig Hilles
Member
March 29, 2018 2:32 pm

As of 3/29/18 APRI is now at $.40/share. I’m a subscriber to Altucher Microcap.
Well they did say, sell all your shares on Feb 16. So at least they admitted it didn’t work out and advised selling out. But now there is news “Apricus Biosciences Announced Its End-Of-Review Meeting With FDA To Discuss New Drug Application For Vitaros Will Be Held On April 12, 2018”. I wonder if it would be a good bet at .40/share that they might be able to address FDA concerns…

Add a Topic
3022
Add a Topic
3022

We use cookies on this site to enhance your user experience. By clicking any link on this page you are giving your consent for us to set cookies.

More Info  
32
0
Would love your thoughts, please comment.x
()
x