What’s Oxford Club’s $25 Billion “Miracle Molecule?”

By Travis Johnson, Stock Gumshoe, October 14, 2015

This pitch is not all that tough to decipher for those who are seasoned biotech investors, but it’s generating a lot of questions for us today so I thought we’d get a quick answer out for you — it’s certainly a stock that gets plenty of attention, so you won’t need much of a head start on your research from yours truly on this one.

The pitch is that there’s a “Miracle Molecule” which will save millions of lives, and that one company has “exclusive patent rights” — which doesn’t narrow it down all that much, that’s the promise of “miracle molecules” from hundreds of biotech companies… but the Oxford Club folks are claiming that this one is “an easy triple,” so let’s narrow it down for yo.

The ad starts with a comparison to arguably the biggest lifesaver in medical history…

“Penicillin completely reshaped human history…

“There was hardly a condition it couldn’t treat….

“That fateful day in the lab single-handedly launched billion-dollar biotech giants we know today as Pfizer (up 3,550%), Merck (up 3,456%) and Bristol-Myers Squibb (up 2,929%).

“Yet the discovery of penicillin pales in comparison to what you’re about to see…

“An elite group of scientists has recently uncovered something exponentially bigger… the profit potential is immense.

“I call it the ‘miracle molecule’…”

We even get a look at the chemical formula for this “miracle molecule” … as if the chemical formula will mean anything to most of us (though it can help to confirm the drug they’re talking about, for those of us who like to dot our i’s).

More on that “miracle” …

“How This $25 Billion “Miracle Molecule” Came Into Existence…

“This is not some one-in-a-million biotech that’s hinging on FDA approval or hoping to get lucky.

“This molecule is proven to work… and the cure rates on the first disease it’s treating get better and better by the day.

“In Baltimore, Johns Hopkins researchers at the Division of Infectious Diseases discovered a cure rate of 98%.

“The next set of clinical trials in New Haven, Connecticut, used the “miracle molecule” in a two-part therapy process… it cured 100% of its patients in an average of seven weeks.

“The company itself has confirmed a 100% cure rate in trials.”

And they include lots of little diagrams and images to try to explain now this company’s “miracle molecules” work to destroy viruses.

“Infected cells are constantly on “seek and destroy missions.” They attack your cells and replicate throughout the day….

“However, the “miracle molecule” stops the replication process.

“It acts like a double agent, concealing itself as though it’s already been infected.

“Camouflaged, it can slip past the virus, and stop the infected cells from replicating….

“In as little as 30 days, people are seeing diseases completely disappear from their blood…”

And we’re told that this company is a “sleeping giant” — and an “easy triple” … some more clues for you:

“First of all, insurance companies love the ‘miracle molecule.’

“You see, they pay billions of dollars per year treating chronic diseases like cancer, hepatitis C, cardiovascular disease and HIV.

“But often the treatments only manage the diseases.

“So the treatments essentially go on forever. And the bills never stop piling up.

“But a true cure like the “miracle molecule” can actually help people become truly healthy again.

“And healthy people are cheap for insurance companies.

“So although the ‘miracle molecule’ is expensive upfront, insurance companies are happy to pay for it.

“When you add up the medical expenses for 30,000 NEW patients a month… insurance companies are paying quite a bit to the one company behind it.

“It comes out to $30.2 billion in new revenue for the company I’m talking about today.

“That alone could double the stock.

“But with 36 drugs in its pipeline, we could easily see this sort of revenue explosion again and again… even if just a handful of those 36 drugs pass FDA approval.

“That’s why we believe this stock is an easy triple.”

I know what you’re thinking — $30.2 billion in new revenue, and the stock only doubles because of that? This must be a gigantic company. And it is, here Oxford Club is teasing: Gilead Sciences (GILD), maker of Sovaldi (which is the Hepatitis C drug whose chemical formula matches the “miracle molecule”) and Harvoni.

GILD is indeed, as teased, on track to maybe having the best-selling drug in the world as the needs of millions of HCV sufferers are finally met, and is expanding quickly across the globe — though I don’t know that it’s gospel that “insurance companies love the ‘miracle molecule.'” There is obviously a strong argument to be made for stopping Hepatitis C before it becomes even more expensive for insurers, but governments and some insurance companies are also balking at the high cost of Sovaldi and Harvoni and the other new HCV drugs from Gilead and others. Often, these drugs — solely because of their very high cost — are available only with preapproval, or are being restricted to patients who are already in desperate straits with cirrhosis or other serious HCV complications or symptoms (many of the people who have Hepatitis C have lived with it for decades and are arguably not yet in crisis, and millions likely don’t yet know that they have the virus). The big price tag for these drugs, which are widely acknowledged to be fantastically (or miraculously, if you prefer) effective, has also really primed the pump for the more recent debates about drug profiteering and price controls, helping to bring down stocks throughout the biotech sector.

So it’s not an easy answer like “miracle cure equals huge payday” — Gilead has grown to this point largely because of the huge HCV market and the promise of Sovaldi and Harvoni, and they are indeed generating huge revenue numbers right now. The market cap is now, after a bit of a dip along with most biotechs over the last couple months, down to about $145 billion after peaking at $175 billion back in June. Sales hit about $25 billion last year and are expected to be $31 billion this year, with analysts forecasting $31 billion in 2016… so while they have a couple hot drugs that are selling hugely well, and ramping up sales perhaps faster than any other drug in history, they’re a substantial amount of skepticism, it appears, about whether or not they’ll be able to turn that into more growth.

Which is why GILD looks awfully cheap on a PE basis, particularly for an exciting, headline-generating biotech stock — it’s only trading for 10X earnings, and they don’t have any debt to speak of… and they also have a fully-stocked pipeline of other drugs in development. The worry, really, is that once you’ve got your huge payday from curing HCV in this giant wave of sales for Sovaldi and Harvoni, what’s next? And if insurers really use the huge ticket price of those drugs (and the rage over the much less justifiable prices of many drugs from other companies) to play hardball on pricing, or the government ends up actually getting involved and instituting drug price controls for Medicaid or Medicare patients, then the profits could be substantially lower than expected.

I don’t know much about Gilead’s pipeline, and I can rarely offer any wisdom on biotech stocks in general — Dr. KSS, who leads biotech discussions for the Irregulars, has spoken kindly of Gilead in the past, partly because of the promise of their pipeline. They do have the luxury of funding the pipeline with the huge revenue spikes from their Hepatitis C drugs in recent years, and probably for at least the next few years, so if their compounds for cancer, other liver diseases, etc., do continue to show promise they’ll have some potential to grow — it’s hard, though, to build on a blockbuster without there being a bit of a letdown if and when the initial sales surge falters, either because the pent-up demand for the treatment has been sated or because the pricing is unsustainable.

The big cash surge from Sovaldi and Harvoni has investors speculating about what Gilead will do to keep moving the ball down the field — will they just invest in their current pipeline, or buy some small biotechs to create more potential growth avenues, or do some sort of large, transformative deal? I have no idea, but GILD is likely to be quite volatile — especially for a company of this size — as we watch and wonder what they’ll do with this Hepatitis C cash windfall, and as the drug pricing debate percolates in the leadup to next year’s elections. Should be interesting to watch, and you certainly could see GILD shares triple — you could justify that by comparing it to most any profitable biotech stock, just using price/sales numbers or PE ratios. I’d be surprised if that happened anytime soon, particularly given the heebie-jeebies torturing the biotech market these days, but, well, damned if I know.


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32 Comments on "What’s Oxford Club’s $25 Billion “Miracle Molecule?”"

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chuck
Guest
0
chuck

Travis: Am a bit puzzled by the performance of GiLD stock, Bought in June of this year and am down approximately 14% so far. So when did your “buddies” at Oxford Club say this wonderful stock would at least have a valuation where it was bought in June? It does not seem that all of this speculation has done much for the stock price.

Dr. KSS MD PhD
Author
44619
Chuck: I will try to speak to that. It is by any means of reckoning a wonderful company, and yet has underperformed for the last 12 months by any traditional metric: P/E, P/E/G. One reason for this is that despite the pretty penny its HCV treatments command, these bother the market because each successful treatment dereplenishes the pool: it’s one less patient who will need treatment. Second, although it’s HCV medicines have been good, in fact ledipasvir is not an excellent NS5A inhibitor. Though it has a better one coming to market, others, particularly Merck, have caught up. Merck’s HCV… Read more »
chuck
Guest
0
chuck
Thank your prompt and comprehensive reply. While I am down significant % with Gild — it was worse earlier on and I did consider selling and moving on, but hung-on just to see what would happen. Don’t quite have the ability to judge investor sentiment — am into such things as P/E. PEG, P/CF and discounted cash flow. Also, don’t have the technical insight for evaluating announced new drug company products — am an electrical engineer by trade. Find your analysis very useful, but don’t act on them very often . Again thanks for your reply.
dcohn
Irregular
169

Hey Doc,
I know this is surely wildly controversial. I am NOT posting this to push it out to people. I truly mean that. I posted it for one reason, to hear your opinion on it.
https://go.thetruthaboutcancer.com/
My opinion is irrelevant in this context and will not even say whether I agree or disagree.
Would love to hear your thoughts after you watch it or if you will watch it. If you ignore this I understand 100%. You are a busy man and have much to do. This is depressing if nothing.

Dr. KSS MD PhD
Author
44619
The mainstream doesn’t profess to have all the answers. This is why the research annual budget of my former home, MD Anderson Cancer Center, is greater than the entire medical research expenditures yearly in total for the nation of Canada. But the answer does not lie in shamans, perps, pseuds and quacks. I have squared off against one of the people in this video, Stanislaw Bruzynski, in person. He is a sociopathic monster. Ditto for Matthias Rath, who is probably insane in a formal clinical sense. Joseph Mercola is a scam artist of rare proportions who will likely end up… Read more »
Patricia
Member
686
Wow – I’m not familiar with the others mentioned but in regards to Dr. Joseph Mercola, you are way out of line. So many people, including some I know personally, have experienced vastly improved health in following his recommendations. They include the registered nurse who first told me about him in 2008. Our family doctor knows Mercola personally and thinks him a good man. But then, our family doctor is more interested in the actual causes of cancer than in profiting from biotech’s stream of treatments. Pursuing only treatments, rather than cures, is where the money is. Oddly enough, the… Read more »
Steve
Guest
0
Steve
I have been a Dr. Mercola follower for years and I have benefitted greatly from his recommendations. He is not the quack that the traditional medical field tries to portray him. He comes out with helpful information years ahead of what Western medicine provides. I believe it is the fact traditional Western Medicine is dependent on a pill for every ill, (that simply masks conditions and requires additional medications for the side effects), rather than focus on prevention by following healthy practices. Alternative medicine won’t make the billions of dollars for Big Pharma which is why you see Dr. KSS… Read more »
BJI
Guest
0
BJI

“our family doctor is more interested in the actual causes of cancer than in profiting from biotech’s stream of treatments”
How much did you pay Dr. Mercola? The other “alternative” treatment providers?

Patricia
Member
686
Not sure what you mean BJI. I have no relationship with Mercola other than having been a subscriber of his emails for seven years, and I find his information helpful most of the time. I don’t agree with him about everything – I think he probably goes too far in his objections to vaccines, for example. The only $ of mine that’s gone his way is for his brand of multivites, which I trust and have had good results from. I always defend someone who is being attacked unfairly, and I’ve defended Dr. KSS when HE was being attacked without… Read more »
dcohn
Irregular
169
Parts of it are quite controversial. The part that got me was the the supposed story that no oncologist would allow their own family members to take Chemo. This seemed just too far gone for me. But what is quite scary is that they claim if you take Chemo meds, but do not have cancer, it will cause cancer. Is the relevant? They also stated (and stated in a way that made it sound like a problem) that anyone that works on Chemo drugs must wear Hazmat suits because of the danger of the drugs. They go on to say… Read more »
James
Guest
0
James

How do you explain this? Confirmed liver cancer and pancreatic cancer complete with tumors growing on the neck…. No chemo. No slash and burn…. Only a diet change with prayer and Wendy is back working. But big pharma can’t make any money this way, so we need to run it down in public. Thankfully there is research we can do thanks to the web. For those who get paid by big pharma, nutrition and prayer wouldn’t be too profitable for them. Here is a great web site, The Truth About Cancer.

Kathleen
Guest
0
Kathleen
Wow, I think you go to far, way to much here. I have a friend who was diagnosed with stage 4 lung cancer that also went to her brain and no she never smoked a cigarette not even a drag, she tried to eat healthy exercised and appeared to be very healthy and fit. They were going to remove a lung but when they went in to operate it was to widespread and so closed her up and said they could not operate and there was not much else they could do but chemo and that she should start getting… Read more »
Liz
Guest
0
Liz

Watch this documentary from the BBC for some insightful information and research about diet and health.
http://www.dailymotion.com/video/xvdbtt_eat-fast-live-longer-hd_shortfilms

backoffice
Irregular
181

I’m perplexed by the whole thing. The company comes out with a cure, not a treatment, and it’s being beat up due to the cost. Not to mention there are no side effects, and it works in 100% of cases, It actually works in 2 weeks, This stock should be moving up. Plus they have other drugs in the pipeline.I’m long on this and will remain there. What do you think Travis?

Mark
Guest
0
Mark

I agree with the Dr. Competition from other companies and govt pressures are starting to get priced in which really means downward pressure after the initial run up. There could be other drugs in the pipeline which could drive the sp but I don’t see Harvoni being a multiple driver since upside is already priced in to a large extent.

clairmont
Member
6

Hi, about thetruthaboutcancer.com/ Iwould say that nobody is 100% rite or wrong.

Dr. KSS MD PhD
Author
44619

OK, 99.997 per cent wrong. Rapscallions have been selling magic beans since the beginning of time. Some will always buy.

arch1
Irregular
7406

DR Hope is often beyond price,,,or rationality in its effects on the human organism.
IMHO frank

Nano
Guest
0

Interesting, so your answer is to ignore 99.997% of everyone who is not conventional, or mainstream medicine as if nothing else is possible. You sound like the typical PhD, or as I call them Pin HeaDs, who never will know what they don’t know. With that pompous know it all attitude, I expect nothing of value, other than a closed mind. And here in lies the problem with advancing medicine, if it is not mainstream, it doesn’t exist. I have seen the same in all sciences, so keep the blinders on doc.

tfris
Irregular
287
tfris
I’m sure that cuts both ways-being blinded. If there were placebo controlled, independent studies done, instead of anecdotal stories, I’m sure that would lend to people changing their beliefs. I’m so sick of the “there’s a cure for cancer but big drug companies don’t want people to know about it” bullshit. Legitimate cures are worth billions and doctors for the most part compassionate people wanting the best outcome for their patients. And by the way, for the most part smarter than you. The best is the “you can’t get a patent on this cure” so big pharma and doctors don’t… Read more »
Patricia
Member
686
a) How does one discover cures without focusing on underlying causes? b) Where prevention or early reversal of a condition, based upon lifestyle choices, is the best approach – where are the billions to be made in emphasizing that? c) As long as doctors show so little interest in all the cases of so-called “spontaneous remission” and data on all of those isn’t even formally collected, how can we expect valid studies and conclusions regarding them? Never underestimate the profit motive, which is a fine motive as long as what’s being sold is doing more good than harm, and better… Read more »
R. Simpson
Guest
0
R. Simpson

Dear travis, a minnow in the biotech world is Benitec Biopharma, a small Oz company with potentially a one-shot cure for a range of maladies including HepC. They are newly listed on Nasdaq as BNTCW. When time permits, would be of interest to read your views.

Lannas
Irregular
766
Lannas

R. Simpson: You must be new to Gumshoe. If you read the Dr. KSS threads you will learn more about Benitec then you want to know. Most are out of this stock because of poor management (CEO). Milking equity for all it worth with no trial results.
No position, I was long when Dr. KSS was positive on stock.

tfris
Irregular
287
tfris

Join the irregulars and you can read talk about Benitec for hours.
I’ve read when Steve Jobs was diagnosed with pancreatic cancer, it was early enough to have a good chance of being cured. He tried alternative or holistic “cures” and by the time he used traditional medicine, it was too late. When Bill Gates was diagnosed with prostate cancer- he told him to listen to his doctors.

arch1
Irregular
7406

Benitec had great potential two years ago. Unfortunately that has been squandered by
failure of management to execute promptly, but rather to dither in the trials phase through inept criteria. IMHO fa

yankeelover
Member
2
yankeelover

How do I know the truth?

arch1
Irregular
7406

yankeelover That is a profound question. The truth is not always a constant,,, ie , It may vary over time . In the affairs of men what is true today may not be so tomorrow.
Eternal truth is another question,,,,more suited for this thread;

http://www.stockgumshoe.com/2015/04/microblog-club-house-for-the-discussion-of-religion-politics-and-other-unmentionables

Douglas Hvistendahl
Guest
0
Back in college, I stumbled over a card that helped the question of truth greatly. One side of the card said “The statement on the other side of the card is true.” The other side said “The statement on the other side of this card is false.” Historically, an existing paradox points out a logic error. It took time, and I needed to add another category. My current definitions: A true statement agrees with reality. A false statement disagrees with reality and therefore is not true. A fantasy statement only points to other words without a connection to reality, and… Read more »
Michael Jorrin,
Guest
0
Michael Jorrin (aka Doc Gumshmoe)

I’m 99.97% in agreement with Dr KSS on this. No comments on “the truth about cancer,” beyond a resigned shrug. I’ve been a Gilead investor for over 5 years, long before their HCV drugs came on, based on their HIV program. The corporate culture is excellent, by which I mean not only they carry out new drug development but the way they go about distributing and promoting their products and the way they manage the company. All the same I’d be surprised if it tripled any time soon.

Patricia
Member
686
Just so not to be labelled a complete extremist, I should have mentioned above (as I have in the past) that of course aggressive approaches like surgery, chemotherapy and radiation are sometimes necessary. When a tumor is growing very quickly and/or is obstructing a basic bodily process, doctors must do what they can to ensure the patient’s immediate survival. I’m also not claiming that all or even most advanced cancers can be reversed by natural means – sometimes they’ve simply progressed too much, or too much damage has been done. But – I don’t care how much most doctors hate… Read more »
dcohn
Irregular
169
There is the concept that we humans have tremendous power but we have no understanding of it any longer (certainly as westerners). When we believe something will work then the strength of that belief, no matter what treatment you use, you will get well. On the other hand if you believe you will die then no matter what you take you likely will die. This rational is what is used by how can Chemo, which is claimed to be poison to your body, can possibly help someone. By having blind faith in the doctor and the doctor truly believing in… Read more »
hendrixnuzzles
Irregular
7516
No comments in a while on this thread but I just came across it and I think the subject is quite interesting. My focus is on the PLACEBO EFFECT, which is recognized so explicitly by the conventional authorities that it is measured and accounted for in every trial, with greatly varying results. Think about that…it is measured in every trial ! It means that the mind has the power to cure, but there is no understanding about how this comes to be. That is, how the conscious and unconscious mind able to actually bring about physiological and pathological changes in… Read more »
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