We’ll do a quickie for you today — a reader sent this question in, and was kind enough to even send the answer along with it, so we double-checked, fed his info through the Thinkolator, and I’ll share it with you.

The pitch is from Chris Wood, dangling some bait to entice subscribers to his microcap-focused Project 5X service ($5,000/yr), and it’s embedded in an article about “anti aging” treatments… here’s what he says about the drug:

“I’ve been taking a “magical” pill every day for the past three years…

“Players from three of the last four Super Bowl Champions—the New England Patriots, Kansas City Chiefs, and Tampa Bay Buccaneers—also take this pill every day.

“Players on the New York Yankees, which have the best record in Major League Baseball this season, recently started taking it too….

“When I started taking this pill I was suffering from several lingering football and soccer injuries. Basically, everything from my mid-back down to my toes hurt constantly. And my right ankle had been swollen non-stop for more than a decade.

“After a couple months taking this pill, the swelling in my ankle disappeared. And I didn’t have as much pain in my back and knees.

“I also felt more energetic and generally just better overall.

“That’s because this pill helped my cells repair themselves.”

OK, as a guy who’s a couple years older than Chris Wood, and has plenty of aches and pains of his own, I admit that caught my attention. Here’s the rest of what he says about it:

“… scientific studies have shown that this pill can help with virtually every age-related medical condition. In other words, this is a true anti-aging pill. And it’s being sold by a tiny company set to explode in the coming years as more folks learn about its benefits.

“… I recommended this company to my paid-up Project 5X subscribers in my latest issue.”

He goes on to talk about a few other products being tested by other companies in the anti-aging field, you can check out his article here if you want more detail, but that’s mostly just to highlight the fact that his company has a product on the market today. One last bit of hinting from Wood…

“This company breaks this mold.

“It’s a tiny company that’s developed a patented anti-aging supplement… and it’s already on the market.

“As I mentioned, I take this company’s pill every day and it’s worked wonders.

“And best of all, this company’s stock is crazy cheap right now.”

So… what’s the stock? I can confirm that our reader who sent in the info was correct, this is the microcap ChromaDex (CDXC)… which has come up from time to time in reader questions about supplements and various different anti-aging stories, but I don’t think we’ve ever actually looked at the stock before.

ChromaDex makes a supplement called Tru Niagen, a member of the vitamin B3 family which they say is the “only patented form of nicotinamide riboside available in the world,” and it is indeed used by all those NFL teams and pro athletes that Wood cited in his pitch. The body changes this chemical to something called NAD+, so the idea is that taking the supplement can lift NAD+ levels. NAD+ plays a role in cellular repair and energy production, apparently, and naturally declines with age, and it has been studied in clinical trials to see whetehr it helps with energy, cardio function, muscle strength, memory, etc. There are other “precursors” that are used as supplements to increased NAD+ levels, too, but ChromaDex says that their nicotinamide riboside is more efficient and works better when the body is under stress than the others. I know nothing about this stuff, so don’t take my word for it.

The stock went through wild surge in early 2021, at the same time that so many stocks were booming in the meme-stock mania… looks like that was probably partly because there was some indication that Niagen helped with COVID-19 recovery, and they also a got a distribution deal with Walmart, but the wheels pretty quickly came off the bus after that. At the time, analysts were throwing around price targets of $18 a share and expecting steady sales growth for ChromaDex’s supplements, but then the first quarter 2021 numbers came out a bit soft (revenue 15-20% below what was expected), and it was all downhill from there. The shares are now at about $1.75, with a market cap of $120 million.

I guess part of the challenge for investors is that Tru Niagen has been available for a long time, and although it has been slowly expanding partnerships with distributors and retailers, including the big deal with Walmart last year, the revenue growth hsa not exactly been dramatic… at least, not for a company that got this much funding. They have grown sales by about 35-40% a year since 2018, but last year, even with the Walmart launch, they only grew sales by 20%. The hope seems to be that more recent partnerships to distribute their supplement in China and South Korea will give the stock a kick in the butt.

There have also been some patent fights regarding Tru Niagen, and I’m not exactly sure what those might mean — ChromaDex had licensed some patents related to nicotinamide riboside as a dietary supplement and pharmaceutical product, but some of those patents were declared invalid by a judge last year (a “you can’t patent a product of nature” ruling, since it’s a naturally occurring vitamin)… ChromaDex said they would appeal the ruling and they have other patents related to their methods for manufacturing the supplement and similar NAD precursors. That probably becomes more of an issue if this becomes a large market, but so far I guess they’re holding their own — otherwise, their gross margins would probably be falling if there was suddenly more competition in the niagen market, and they aren’t.

Analysts are holding out some hope for this one, the average price target is still about $8, and the forecast is for 15%+ revenue growth this year and more than 20% next year, though those same analysts do not think ChromaDex will be making a profit. That would mean their cash burn should slow down, which would be encouraging — they raised about $25 million in early 2021 at a pretty high price, but that’s also roughly the amount of cash they burned through in the past four quarters, so I would guess that when they report next (probably next week) they’ll have less than $15 million in cash on their books. That’s not terribly comfortable for a company that’s going to have to up its marketing spending to reach new customers, which means they might need to raise money in the next quarter or two (last year was the first time since 2018 that their marketing costs and overhead grew a lot faster than their sales). That puts the pressure on to report some good news or a blowout quarter or big partnership, because they surely don’t want to be raising a lot of money at these prices.

Interesting story, I don’t really know what the value of the supplement is, or whether they’ll end up developing some patented formulations that might also be treated as drugs for specific diseases in the future (though that would cost a LOT more than developing and marketing supplements), and they have been able to grow their revenue at a decent clip… my concern would be that the revenue growth isn’t high enough to excite investors at this point, and that might mean they’ll have to raise their next slug of growth capital at a much lower valuation than they would like, further diluting and irritating shareholders. That’s a tough spiral to break out of unless you have some really attention-getting good news.

So… whaddya think? Want to try some Tru Niagen or one of the other NAD+ boosting supplements? Think it’s hokum and just makes your urine more expensive? See great things ahead for ChromaDex, or a downward spiral if they can’t get revenue growth perked up? Let us know with a comment below.