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…”

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.


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

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james licata
Guest
0

There is a drug company in the UK (Futuru medical ) that has a topical ED drug called ( and I’m not kidding) Eroxon. It uses a drug called MED2002

Vitaros is available by prescription in the UK and it uses alprostadil. If anybody knows whether the UK is much more flexible than the FDA ( or more sympathetic to older men) that might be a signal to predict the FDA..

What does the science writer think?

alan
Guest
0

have fum hold long , wait & see stock

georai
Irregular
63

The one year share price chart tells a tale of disfunction. Price is on the slide. I’d wait till after the any FDA announcement. Less risk in losing the pop and catching the follow on.

roberthebel
Irregular
59
Well not sure about even the number part of it if I had read this imeadiatly after hearing that generics for viagra are now available I would of threw the money in the basket. BUT my problem being if it’s realeased already outside the USA and have not heard a single thing about this magic cream and not one foreign big Pharm interested than I would defiantly give it a pass but a couple hundred isn’t going to just disappear so can’t get hurt but I am defiantly on the no side of a yes and no question.i believe the… Read more »
orphan brigade
Guest
0

That is the $64,000 dollar question? Why hasn’t a big European pharmaceutical picked this up…

dotcat007
Irregular
3

Hope this is not out of line, I believe the word you want is “definitely” – not “defiantly”. Of course I do recognize that you just might be in a defiant mood!

fabian
Guest
0

Do we have any info about the success of this drug where it is already marketed? A new ED drug in our age of sexual harassment doesn’t look like a great timing. And the “wait darling in need to butter up” phase before the act could break the mood. But (no pun of course), who knows?
This aside Altu has pretty good ideas in general and I made good money following his recos in his cheap letter the Altucher Report.

niizajim
Irregular
968
$APRI long “Do we have any info about the success of this drug where it is already marketed?” I think you can find info about that on their website. I don’t think the drug is a blockbuster. It is not the go to treatment for ED, but meant more as a secondary treatment for me who are bothered by the side effects of the top 3 ED drugs or who have stopped responding well to those drugs. One benefit it does have over the top 3 ED drugs, is that is it effective almost immediately whereas Viagra and the others… Read more »
kevindkelly
Member
5

APRI IS a pure failure stock went from $3.15 to 0.26 cents overnight since their fda denial. Altucher was wrong on that pick and also his Amazon accepting bitcoin deadline of feb.2

jillsami
Irregular
58
Thanks Fabian, for your comment about the Altucher Report. I was looking for another newsletter to subscribe to, and I checked it out, and decided to subscribe to this inexpensive newsletter, plus I took advantage of the discounts they offer. I’m retired, and I’ve become a very active trader since my wife died. Fortunately, I had enough savings to risk trading stocks. I have lost several thousand dollars since I began trading a few years ago, & realized that I needed to learn more quickly than I have been. A close friend told me to invest for the long-term in… Read more »
roberthebel
Irregular
59

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

Robert Brink
Guest
0

I made a typo.
It should read: It’s “dysfunction,” not “disfunction.”

Howard Edgar
Guest
0

Respect Robert for acknowledging and correcting a typo. We need more of that.

orphan brigade
Guest
0

Wondering, in the countries that have approved it, are the physicians prescribing it and how effective it is ? Better yet what is the percentage of patients that say it works ?

gigi
Guest
0
orphan brigade
Guest
0

Thank you. Based on that information it seems like it is effective and works as described for a majority of the patients. I scratch my head as to why this stock hasn’t taken off. I understand the FDA aspect but the U. S. is not end all be all when it comes to making money and pharmaceuticals…Any thoughts ?

orphan brigade
Guest
0

I guess not a majority but 38.7 %. I stand corrected..

beanloop
Irregular
4
An excerpt from the above article A double-blind, placebo-controlled, efficacy study of 1% alprostadil topical gel for the treatment of ED further confirmed the drug’s efficacy.37 Sixty subjects received placebo gel at the first office visit; 2 weeks later, 29 received placebo and 31 were given alprostadil gel. After inducing erection, both the physician and the patient assessed the patient’s erection at 15-minute intervals during the first hour and 90 minutes after the initial application. A significant difference in erectile response was first apparent at 45 minutes, with the mean angle of erection for the alprostadil group reaching 42.9° vs… Read more »
orphan brigade
Guest
0

Thank you beanloop. That is the nformation that I was looking for. 38.7 % success rate. Not great, but better than nothing for those with the dysfunction…at least that is how I interpreted the study..

jonah_in_the_whale
Irregular
1

“… and if your erection should last more than 4 hours …”
No need to go see a Doctor because the Doctor is already “seeing you”

vivian
Guest
0

well I just came back from Whole Foods market with my 80-year-old husband. I bought hard cider and was carded! so here is a Valentine’s day pick for improving circulation in fingers and toes and ears and something else for us elders.

fabian
Guest
0

Yeah but you’ve to be rich enough to shop at WF.

James L
Guest
0

If it could be combined with lube, now that would be a killer app

jerlizd
Irregular
9
Just thinking, if this is a topical gel, does it need to be wiped clean prior to coitus as there may be the unintended side effect of induced swelling to the recipients genitalia, discomfort, and headache that my preclude future use of the medication? Gels, somewhat analogous to suppositories readily cross the thin epithelium in these areas of the body. Oral medications affect only the one who ingest the medication and give the desired side effect (yes, oral phosphodiesterase inhibitors were initially studied to treat pulmonary hypertension with the favorable side effect of phallic tumescence). There may be a reason… Read more »
dunnydame
Irregular
786

$APRI NP #Vitaros & topical application
cf the problems associated with incorrect application of the testosterone gel pump, Androgel.
Penny

StockMidas
Irregular
92

Used to prescribe Alprostadil injections when I practiced medicine in South Africa with varying (rather limited and by no means magic) results. Still available as inter alia Caverject. ED is such a wide spread problem, if Alprostadil (which has for some time been available in a variety of products and administration routes) is effective publications will be much more widespread. On account of the mechanism of action (Prostaglandin with vasodilatory effect) it should in theory be effective, but does not seem to translate well in practice.

Martin
Irregular
66

If this gel works and is approved by the FDA it would eliminate a problem that some of my friends have where they cannot take Viagra or any other pill because it has a undesired effect on their blood pressure. I have a few dollars that I can throw into this stock.
On a different note this is one of the best sites that I have joined and has clearly saved me from some foolish investments. Great job Travis 🙂

frank
Guest
0

2 well taken points, thanks to both of you.

Brainbox
Guest
0
Wow! If this guy hooks 250 mugs at $2000 a pop, he makes $500,000! Thats a nice little earner. It seems to me that putting any money is as risky as betting blind on a roulette wheel. As Travis says, 10 years ago the price dropped by 99% from $300, so unless theyve changed the nake up of the drug to turn it into a wonder cure, on a par with Vigra, this will continue to be a dead duck. I wouldn`t touch with a thousand foot barge pole. Better off putting your hard earned money into a solid blue… Read more »
Mark Wilgus
Guest
0

Investing in cryptocoins has been very profitable for me, since a wise person suggested I only invest 2-3 hundred $ in altcoins I really believed had a future.
Couldn’t that same speculative approach work her with Apricus? So I’ll buy 1 hundred shares.
Goofyist thing happened when I bought 1 bitcoin long ago at $300 and got really excited when I sold at $700. Then bitcoin exploded all the way to $20k. I didn’t try to buy back in and missed all that. I certainly learned a lot from that.

jjmurph
Irregular
4

With such large potential for the stock to swing either way, would this be a good time to buy small calls/puts to cover whichever way the decision goes?

orphan brigade
Guest
0

It definitely has potential,but if the Feds say no…it may not do well. Just more than my opinion..

TGGonzo
Guest
0

Before I even say this, I know I need to apologize…….but I can’t help but feel that taking investment advice from Altucher is like having Harpo Marx as your financial advisor.

jillsami
Irregular
58

Please substantiate your statement. I just subscribed to Altucher’s newsletter.

eiseman
Irregular
5

Guessing it’s from the appearance of James with his wild hair and unorthodox look in general. Not a bad thing, just a thing.

lzaut123
Member
12

I got caught at a weak moment. It is not just the newsletter, that can be ok, but every single one of the literally dozens of additional emails he sends he is trying to upsell you to others priced at $1500-3000. He plays in options also for Secret Income program. He is also connected to Agora. I’ m losing faith and have only been with him since 3/8/18. I have not the time to sit and watch/listen to his long videos to just find out I cannot or willnot invest thousands for it. 🙁

Skippy
Guest
0
Accepting tips on any type of share is like saying yes to someone who says “i have a good tip in the 5th at Belmont. However a friend of mine who has done well with stock market tips over the years from god knows where told me to look at NTLA, CRSP, & ONCE. I looked at them and apart from being too pricey for me, i could not tell if they where good long term things or not. I like the information that comes from fellow gummies, so could anyone give a quick thumbs up or down on these… Read more »
Skippy
Guest
0

Meant to say these three are Biotechs .

Ragnar
Irregular
3

I guess this is just one more “member” of the ED drug family that is not going to “firm” up.

JayBee
Guest
0

I bought 100 shares at $2.24 each last Thursday. If it goes up, great. If it goes down, the most I can lose is $230. This is a low risk, high reward gamble with MUCH better odds than throwing my money away week after week on MegaMillions or Powerball.

hedy1234
Irregular
1424

$NO TICKER

Jaybee-when posting info like you did you need to name the stock $XYZ so if we are following on email we know which stock you are referring to without having to do to the website. Thanks

tanglewood
Irregular
272

Hedy1234 isn’t it difficult following the threads via email. It seems like you would miss the context and flow by having multiple threads interspersed in your inbox. I think that this may have been what happened to DrKSS, at one point ToddBa said he was ‘not impressed ‘ and DrKSS thought he was talking about him but instead he was referencing Dr Norchi at $ARTH

hedy1234
Irregular
1424

$no ticker

Tanglewood-it is not difficult IF the author indicates the specific stock they are referring to. Thus the request to simply add this reference at the beginning of the note each time.

This has been an accepted practice and courtesy here for a number of years.