This article was originally published on May 28, 2020, when we first saw these ads — they have recently been re-circulating as the June 30 date approaches and vaccine interest rises again. What follows has not been updated since May 28, though I did add an updated note at the bottom.
We haven’t covered a coronavirus stock for a little while now, so I guess it’s time to get back on that horse — Michael Robinson is pitching his rebranded Nexus-9 Network (which used to be called Radical Technology Profits) by promising that he has found “the ONLY solution” for the coronavirus crisis in the form of the leading vaccine… and it’s got some urgency, with “new trial results expected by June 30.”
So what’s the story? Let’s sift through the clues and get you some answers… here’s how the ad starts:
“The U.S. economy is finally starting to reopen.
“Life is finally starting to return to normal.
“But the coronavirus is NOT defeated.
“It will likely surge back – just like it’s doing right now in Singapore, Taiwan, Japan, and China.
“On April 21, the CDC director warned that a second wave of the coronavirus will arrive this winter and could be even more devastating than the first wave….
“The only way out of this pandemic…
“Is if we can create a vaccine.
“Dr. Anthony Fauci – the infectious disease expert who’s been on TV more than the president – says a vaccine would be ‘the ultimate game changer.'”
That’s definitely the conventional wisdom on Wall Street… which is why the whole stock market surges whenever there are good headline results from a COVID-19 treatment or vaccine. But which one is Robinson touting today?
First he explains vaccines, for those who don’t know what we’re talking about, running down how they have effectively rid most of hte world of smallpox, polio, and measles…
“Vaccines like these are nothing short of miracles.
“In fact, they’re one of the main reasons U.S. life expectancy has DOUBLED over the past century.
“But like any drug…
“Getting a vaccine into the world isn’t easy.
“First, it has to be developed…
“Then it has to go through the FDA’s rigorous five-stage approval process.
“And this process often takes up to 10 years.”
So that’s the challenge, of course, because although vaccines can sometimes be used in emergencies when something horrible and fast-moving has to be halted in its tracks (that’s why we had rapid approval for an anthrax vaccine a few years back, for example, despite the fact that it didn’t undergo a massive testing regime), the “normal” course of approval is very long for a prophylactic vaccine. Some drugs that occasionally are called “vaccines” are used to support people who have an illness, like immunotherapies for cancer, but for the most part when we think about vaccination against a contagious disease we’re talking about a vaccine that will be administered to hundreds of millions of otherwise healthy people… and the safety standards there are far, far higher than they are for a treatment for a deadly disease.
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Robinson says that with this pandemic, “the rules have changed”… more from the ad:
“Rather than the long and tedious FDA approval process that a vaccine would normally have to go through…
“The FDA has just issued a policy that will expedite this entire process exponentially….
“This vaccine is going to arrive MUCH sooner than anyone thinks….
“If you support the company that’s racing to develop this vaccine NOW – before it makes its final push towards worldwide distribution…
“You’re not just looking at the potential for a few hundred percent gains…
“You’re Looking at Potentially Making 3,000% Gains or More.”
And yes, he does say that. “Normally, I would NEVER – in a million years – make an outrageous claim like that” — but that’s pretty silly, he flogs tech-focused newsletters and makes similar claims to that all time time (he even sent out touts implying Nokia would create “the world’s first trillionaire”). He does note that this one is special because it’s biotech, which is a sector where crazy rapid-fire gains happen every day… which is true, though massive collapses happen every day, too.
And being a vaccine apparently makes it special, too…
“Vaccines are the holy grail of the biotech industry.
“Not only because they’re so difficult to develop…
“But because a vaccine can cost as much as $725 a dose.
“Multiply that number by the BILLIONS of people who need vaccines…
“And you’re looking at BILLIONS of dollars in revenue for a single company.
“For larger companies that develop vaccines, this kind of money can keep a business afloat for decades.
“For smaller companies, it can produce earth-shattering gains for early investors.”
He gives a few examples of those huge gains — two are “COVID-19 vaccine hype” story stocks this year, and the other is an established big pharma vaccine maker.
He cites: BioNTech (BNTX), which is really a cancer immunotherapy company but does also have a COVID-19 vaccine candidate they’ve talked up, which helped the shares spike briefly in March of this year (they came right back down)… Emergent Biosolutions (EBS), which is an established company that in part works on biodefense products and has collaborated with vaccine partners and plasma therapy programs and therefore has also traded as a “coronavirus stock” so far this year… and Merck (MRK), which had a nice run over many years and is a vaccine supplier, including established vaccines like MMR and other smaller ones as well as some newer vaccines like Gardasil — but though vaccines are important for Merck, generating roughly 20% of their revenue (second only to oncology — Merck’s most important product is the cancer immunotheraphy Keytrude), they sell a dozen or more vaccines and you certainly can’t say that a single vaccine breakthrough drove massive shareholder returns.
Gardasil is by far Merck’s biggest vaccine product, incidentally, and that accounts for roughly 8% of Merck’s revenue — notable mostly because lots of other pharmaceutical companies dropped their vaccines businesses ten or twenty years ago as it had been commoditized and consisted largely of generic products, with expensive and challenging oversight and pricing pressures compared to the “anything goes” areas like cancer treatment (the business has picked up in the past decade or so, largely because of growing immunizations worldwide and the new push for vaccination against Hepatitis-B, among a few others, but in 1990 or 2000 there was a lot of fear that pharma companies would just drop out of the vaccine business entirely).
So yes, there’s some money in vaccines again after a few decades when there really wasn’t… and lately, of course, there’s a ton of money chasing the “story” of a coronavirus vaccine as we all live through this pandemic and look for solutions.
But which one is Robinson touting? Here we finally get to some specifics:
“After Governor Gavin Newsom issued a statewide “stay at home” order here in California back on March 19…
“I reached out to every CEO, scientist, vaccinologist, and biochemist I could think of.
“That’s how I found out about this lab…
“It’s a short drive from my house in Silicon Valley.
“Now, this has not made the front page of the news yet…
“But the researchers inside this lab have developed an experimental vaccine for the coronavirus….
“… the company who owns this lab is about 1/200 the size of Pfizer, Merck, and GlaxoSmithKline.”
So this is a $1-2 billion company, and he does include a photo of the outside of the lab, so we’ve actually already got our answer… but if you’re playing along at home here are the other clues:
“According to a member of the company’s advisory board – a well-respected immunologist known as the ‘Godfather of Vaccines…’
“Proof that a COVID-19 vaccine works likely will not take a year.
“It may not even take six months.
‘We’re talking two, three months” — The ‘Godfather of Vaccines'”
So Robinson says we…
“… could know the full effectiveness of a COVID-19 vaccine by late June….
“What do you think is possible if in late June this tiny lab announces positive results?
“I’ll tell you what can happen…
“This vaccine could go straight to the very people who need it most and send this stock flying into the next hemisphere.
“That’s why the company is already getting its first million doses ready to ship out before the year ends.”
And he goes into some more detail about the company, about how he thinks their prior work on a MERS vaccine has fast-tracked their COVID-19 vaccine (thanks to the similarities in those viruses), and that their DNA technology for vaccine development will also speed things up, getting us past the historical reliance on chicken eggs as a growth medium for new vaccines….
“Instead of spending six months on this process…
“This DNA technology can take a snapshot of the virus.
“And by using computer algorithms, it can ‘decode the puzzle’ behind these viruses…
“And render what could be a viable vaccine in less than a day…
“Without a single chicken egg!!!”
So how much money is up for grabs here? I have no idea what the pricing will look like for COVID-19 vaccines once they’re approved for mass use (assuming we get there), but Robinson takes a stab at it:
“… how much do you think a single vaccine is going to cost?
“… TIME magazine and the New York Times both published an op-ed suggesting a COVID vaccine could cost $500!!!
“Based on the U.S. population alone, that could yield up to $165 billion in revenue.
“That’s why the New York Times doubled down on this, calling a COVID-19 vaccine… ‘Potentially one of the most profitable drugs in history’….
“I’ve gotten a look at documents with CDC vaccination pricing…
“And even though the media may tell you this vaccine will cost $500, I’m expecting it to cost around $103 – give or take.
“At that rate – with just one million sales – this company could still have a potential $103 MILLION revenue surge….
“When you factor in this company’s price-to-sales trajectory, this giant injection of cash would bump shares by an estimated 758%.”
So that’s the promise to get you to sign up — a stock he thinks has 758% potential. What is it? Thinkolator sez this is the oft-touted Inovio Pharmaceuticals (INO), the very promotional biotech company which has been publicly traded for over 20 years now (without its “rapid development” DNA-based vaccine technology generating any meaningful revenue).
And in case you want some confirmation, the photo of the R&D lab that Robinson includes matches this photo from Inovio’s website… all Robinson did was scrub off the “Inovio” sign…
(That lab is in San Diego, incidentally, so you’re a really seasoned driver if you consider that nearly 500-mile trip to be a “short drive” from Silicon Valley, but I’m sure Robinson is counting on the fact that everyone wants to be associated with Silicon Valley and its dreams of high-tech riches — Inovio’s headquarters, in case you’re curious, is in the Philadelphia suburbs… a little less glamorous).
Inovio was one of the first names on pundits’ lips when everyone started looking for the vaccine plays — and that was the case in past outbreaks like MERS, Ebola and SARS, too. I can’t imagine trusting this company with a long-term investment, given what has always seemed to me to be a tendency of the company to overpromise and overpromote (Citron earlier this year called them “The COVID-19 Version of Theranos”, which is a great image but, of course, may not be fair)… but that doesn’t mean the stock won’t go up if they have good clinical trial results from the vaccine trials underway (or even good headlines).
Inovio raised money this quarter, and they were already in pretty good shape on the cash front, so they will get through this fine as they try to push their various vaccines through clinical trials — but whether the stock is at $25 or $4 in six months depends a lot more on what the “story” of the COVID-19 vaccine candidate turns out to be, and on that front, of course, I have no clue what the future holds. They treated their first patient on April 6th in this Phase 1 trial for INO-4800 (that’s the COVID-19 vaccine), and they expect “preliminary safety and immune response data by late June” — so that’s where Robinson’s June 30 date comes from. Their other vaccines may well generate some news before too long as well, they have several other clinical trials ongoing both on their own and with partners, but I imagine the stock will trade based almost exclusively on these COVID-19 results in the near future.
And yes, that “godfather of vaccines,” Stanley Plotkin (who led development of the Rubella vaccine) is on Inovio’s Board. He may be talking about vaccine development being dramatically faster thanks to Inovio’s technology (or the dozens of other companies who are similarly developing vaccine candidates right now), but in most of his press appearances he’ll also talk about the optimistic timeline for widespread vaccine availability being a year or so. I don’t imagine that it matters, investment-wise, whether the first vaccine will be ready for early use in six months or in a year and a half, what matters is that investors have some inkling about which vaccine will be first and think it has good enough odds of success that they want to bet on it — it’s not financials that are driving the vaccine stocks right now, it’s gambling on a horse race (meanwhile, the rest of the stock market seems to be essentially placing the same bet but not choosing a jockey — just wagering that at least one horse makes it to the finish line alive).
So that’s the first candidate, and it’s also the one that’s been probably the second-most touted vaccine stock of the coronavirus pandemic, behind only headline-generator Moderna (MRNA), which beat them into the clinic by a few days. It’s no coincidence that both companies are highly promotional and have been accused of overpromising and releasing only the most basic promising data, these firms seem quite aware of the fact that they can only get to the promised land of creating real vaccines if they first excel at creating press releases.
Will the stock price go up? Probably so, if they generate good clinical trial results. Trade it if you like, it’s not a company I want to own but the casinos are closed and we missed our chance to bet on March Madness, so I can see the temptation fo trying to trade the headlines in these kinds of ideas. I’ll be sitting this one out, but the vaccine race is a fascinating story.
And Robinson also throws a couple other candidates on the pile for you to consider, too — he doesn’t say he’s actually recommending these, but they’re the two others he hints at:
“There Are Two MORE Vaccine Candidates Entering Clinical Trials… And I’m Watching BOTH like a Hawk.
“Normally with one firm so far ahead, I wouldn’t be telling you about the second and third best.
“But due to the situation and the UNPRECEDENTED demand for as many as seven billion doses of a COVID-19 vaccine…
“There’s some room, at least for the next year, for these three companies to coexist simultaneously.
“Ultimately, we see our number-one pick as edging these other two out of the race.
“But like I said before…
“In the world of biotech, it’s not about winning…
“It’s about making progress….
“ANY vaccine company showing some competency in clinical trials is in position for a price explosion.”
He cites Moderna (MRNA), Regeneron (REGN) and GenMark (GNMK), all stocks that surged on COVID-19 news in April, but says there are some smaller ones with promise as well.
“One of These Candidates Has NEVER Had a Drug Approved… And yet, they’re still worth over $1 billion.
“Most investors would look at a clinical-stage firm like this and never buy in, including myself.
“But this company has made incredible progress in the last six months.
“Last year, they were working on their Ebola and Influenza vaccines…
“And now as they enter clinical trials for a COVID-19 vaccine…
“The number of shares changing hands each day has grown exponentially.”
And this one is going to generate news fairly soon, too…
“They’re about to test their vaccine on humans. And they’re expecting to announce the results of those trails in July.
“If this goes anything like their other vaccine trials…
“The stock could jump 213% within a week.”
That’s very likely Novavax (NVAX), which just announced the enrollment of their first participants in a Phase 1 trial for their COVID-19 vaccine candidate, NVX-CoV2373… and yes, they expect preliminary results in July. I don’t know much about what Novavax is doing, but they have been through this before — the stock surged five years ago on their progress toward an Ebola vaccine. And like Inovio, they’ve been in vaccine development for about 25 years without any real products to show for it.
And the third one:
“… this third company that I’m eyeing is an extremely unique play in the vaccine sector.
“Because they’re ditching this whole injection-based model…
“And instead, opting for an oral delivery system…
“Where you can literally take a pill, swallow it, and that’s it – you have the vaccine inside your body.”
That’s almost certainly Vaxart (VXRT), which is working with partners to manufacture their first oral vaccine candidate for COVID-19, though they’re probably at least a couple months from starting their first clinical trial… here’s what they said in a press release last week:
“Manufacturing of our COVID-19 vaccine is on track to start a first phase 1 study in the second half of this year, possibly as early as the summer.”
Their most important projects pre-COVID were a couple flu vaccines, including a universal flu vaccine partnered with Janssen, and a norovirus vaccine, both of which ar