by Travis Johnson, Stock Gumshoe | February 3, 2020 5:14 pm
Today we’ve got another ridiculous promise, made to sell you a subscription to a very expensive and nonrefundable newsletter — sound familiar?
This time it’s Jim Pearce[1] advertising Investing Daily[2]’s Radical Wealth Aliance, which will run you $2,495 (“on sale” from $5,000) with no hope of a refund (they offer the “if you don’t like it, we’ll give you another year for free!” guarantee)… and your reward will be the promised land: What Pearce says is an “opportunity to collect a 4,550% gain from the ‘end of pain in America.'”
Like many biotech newsletter ads, this one promises both that you’ll be doing good and that you’ll get rich — after all, you get to help “end Big Pharma’s sick opiate scam” even as you roll around in your massive piles of money, and who doesn’t hate the opiate companies right now?
Nobody should ever spend $2,495 to learn about a “secret” stock, of course, particularly if they don’t even know if that newsletter is right for them… so we’ll sniff out the clues in the ad, get you an answer from the Thinkolator so you can think for yourself about the stock being teased, and then you can make your own call, on your own time, about whether or not you want to pony up a couple thousand dollars for Radical Wealth Alliance.
Like pretty much all the nonrefundable high-priced products we’ve looked at, this one also comes with a deadline — they say they have “only 210 slots” and that you have to act by February 25, just a few weeks away! Odds are pretty good that this “deadline” doesn’t mean much beyond “I’m afraid that if you think it over, you won’t pull out your credit card… so hurry!” … but we’ll check out that “catalyst” as well to see if there’s news coming down the pike.
Here’s the headline of the ad that caught my eye, just to get you started:
“BREAKTHROUGH ALERT: A Duke University doctor just discovered an addiction-free CURE for chronic pain, and it’s about to replace opioid pain meds forever. On February 25th, his breakthrough is about to end Big Pharma’s sick opiate scam and send one tiny west coast stock VERTICAL”
Sounds good, right? Curing pain without addiction… that sounds like something we obviously need. What else do they say to pique our interest?
“A safe, addiction-free CURE for pain that’s about to hit the market with ZERO competition – It’s a miracle drug that targets a brand-new pathway… completely different from opioids. Which means it causes no tolerance, psychological effects, or dependence. On top of that, nowadays doctors are prescribing HALF the number of prescriptions they used to, and Trump is planning to slash that number by another third within 3 years… and he could erase them altogether. If that happens, this drug could be the only effective pain medication on the market.”
Great! What else? Do we get any hints about the actual company?
“The small research company with the patent is 1/600th the size of Big Pharma titans like Pfizer, Eli Lilly, and Merck – Which means there’s near-unprecedented room for growth. In the wave of new safe pain medications being developed, they’re the only company to have reached human trials so far… which gives them a mile-long lead in the all-important FDA[3] approval race”
OK… how about some absurd promises?
“In fact, it’s almost guaranteed that this miracle pain drug will surpass even Oxycontin[4] as one of the fastest-selling drugs in history.”
And, of course…
“Only 1 Company in the World Owns the Patent on the First Ever Addiction-FREE Cure for Pain…”
And what’s with that February 25 date? We’re told that…
“Just one small research company owns the patent. On February 25th, it’s poised to take Big Pharma’s $26.3 Billion pain market by storm — and hand you the biggest investment payout of your LIFE”
And we’re told that it’s already in clinical trials — with some recent results that were impressive:
“Scientists tested the new drug in a Phase 2a clinical trial… and the results were outstanding.
“Eleven men & women started the trial.
“Each one had severe chronic abdominal pain to begin with, lasting months or even years.
“In just 2 months, the new drug significantly reduced their pain.”
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And while there are already Phase 2a clinical trials, we’re told that this was somehow “discovered” in early 2019, which is essentially impossible (it takes time to go from discovering a biochemical pathway to developing a drug and initiating clinical trials)… from the ad:
“In early 2019, a doctor from Duke University discovered a brand new addiction-free biochemical pathway to treating chronic pain.
“And on February 25th, his announcement is going to change the world and mint countless new millionaires.”
So what’s the story? Thinkolator sez the stock being teased is Arena Pharmaceuticals (ARNA).
The pain medication being touted in this pitch is Olorinab, which is a cannabinoid receptor 2 (CR2) agonist that is being developed for abdominal pain, such as that associated with irritable bowel syndrome, Crohn’s Disease or any number of other painful indications.
The only thing I’ve seen about specific results announcements from Arena regarding its Phase 2b CAPTIVATE trial for Olorinab (APD371) is that they expect to report data sometime in the next 6-12 months… in their words, “We look forward to seeing additional data from our Phase 2b CAPTIVATE trial which we expect to read out in the second half of 2020.”
Things are likely to be pretty busy for Arena over the next couple years, and they’re in good shape financially — they sold a significant drug not long ago (Ralinepag, to United Therapeutics (UTHR)[5] for $800 million up front plus possible milestones and royalties), so they’re well financed with close to $1 billion in cash. That’s why the stock looks to some degree like a “value” stock right now, at only about 2X book value and with the big one-time earnings jolt from selling that drug driving their trailing PE ratio down below 5 — but you can ignore that PE, that will revert to a negative number this year as the sale rolls off and they spend hundreds of millions of dollars on drug development. They now have designs on building a company with a meaningful portfolio of drugs… focused, for the most part, on gastrointestinal diseases.
There’s some logic to that — they have partnered or sold drugs in the past, including their (once heavily teased) weight loss[6] drug Belviq to Eisai a few years ago, but if they have two compelling drugs that can be sold to the same kinds of GI doctors, then there’s a chance to invest more efficiently in building a sales force and a company around those drugs… which seems to be their plan. At least for now.
The lead drug candidate is etrasimod, which they say is a “potential best-in-class” treatment for ulcerative colitis and Crohn’s Disease, among other indications, and that’s in Phase 3 trials now with results likely in the second half of 2021, with a new drug application submission to the FDA probable (assuming those results are good, of course) in 2022.
Olorinab is at least a couple years behind that, absent some shocking results that shake up the typical approval timeline — though it will certainly be interesting to see what the results are, since I’m pretty sure this is the first Olorinab trial that includes a placebo comparison, and the placebo effect can sometimes be dramatic in pain medications.
Their other programs are very early stage or are really R&D partnerships or projects in the lab — they are just about to start their Phase 1 trial of APD418 for decompensated heart failure, so that could eventually turn into something notable – it’s a drug that also just got FDA “Fast Track” designation just a couple weeks ago (that really just means that they get more input from the FDA during the development process, and are eligible for accelerated or priority review because the drug is designed to address a big unmet need).
But as to that February 25 deadline? Well, we will likely hear some news from Arena on February 26, because that’s the day on which they’re scheduled to report their quarterly financials… but it’s not likely that there will be meaningful news about their lead drug programs in three weeks. They just did the rounds of investment conferences and their strategic update in January[7], only a few weeks ago, and posted an updated presentation for investors here[8] that indicates we shouldn’t expect any big news from their GI trials in the next few months.
I don’t know whether they’ve fully enrolled for the CAPTIVATE trial yet for Olorinab, so it’s possible that we could get an update at some point before they’ve planned that data release in the second half of the year (they started the trial in July, and it requires about 16 weeks per patient, so there might even be just an “enrollment completed” press release at some point, though that’s not really necessary), but this is a fairly small trial, with 240 patients spread across four different dosage regimens (including placebo), so I doubt they’d want to jump the gun and release any real information before the trial is complete — and since they’re well-funded already for their clinical work and don’t need to raise money right now, they don’t necessarily have to focus on keeping the stock price elevated in the near term (the more a company needs to raise money by selling new shares into the market, the more likely they are to issue a lot of extra press releases).
And as for other clues from the ad, I did actually look — the person who arguably deserves the credit for discovering this compound (in 2017, not 2019)[9] is Dr. Robert Jones, who was a longtime executive and “drug hunter” at Arena (he works elsewhere now and has no connection to Duke University)… though yes, the current head of R&D and former Chief Medical Officer at Arena, Dr. Preston Klassen, was on the Duke faculty, and before that he was the Head of Clinical Development, so I guess he or the current Chief Medical Officer Dr. Chris Cabell (also with a Duke connection) would be a reasonable person to present the results to investors whenever they do come out (not February 26, but perhaps later this year). I don’t know that they had anything to do with discovering or pushing the drug forward in clinical trials, or if it’s part of their ‘life’s work’ in a meaningful way, as the ad teases… but sure, they match the clues.
And yes, the Phase 2a trial for Olorinab[10] was arguably 100% successful — in that 11 out of 11 patients “with evaluable data” after week 8 (out of 14 total patients enrolled) exhibited a “clinically relevant improvement” in abdominal pain of at least 30% from baseline. Apparently the other three didn’t have “evaluable data” after the full term of the trial, or dropped out of the trial for some other reason. I’m absolutely not an expert on clinical trials or drug development, but it strikes me that’s a very small group of people, and the measure of abdominal pain is almost certainly somewhat subjective (there was no placebo, from what I can tell, it looks like the comparison was to the normal baseline amount of pain).
The good news for sufferers, I suppose, is that this cannabinoid receptor agonist looks like it might help with abdominal pain… and that it’s believed to be peripherally selective, which I think means it acts directly on the pain without entering the central nervous system, which should mean that it’s not likely to be addictive in the same way as opiates, or have other nasty side effects (like constipation, which would be an obvious problem for Crohn’s or IBS sufferers).
Whether it’s going to be a meaningful pain medication for those with gastrointestinal diseases, or, indeed, if it’s effective for any other kinds of pain, is still really yet to be determined. And no, this is definitely not the only non-addictive pain treatment in clinical trials around the world, or even the only cannabinoid receptor agonist that people are investigating for pain-killing properties (whether it’s the best or most promising, I have no idea, but this seems to be a pretty active area of research).
We probably won’t know much more on February 26 than we do today, sadly, but sometime in the second half of this year we’ll probably learn, in a somewhat larger trial whether the dosage matters and whether the drug is more effective at pain control than the placebo. And that could certainly impact the share price.
As to whether you’d like to ride along with Arena while it looks to answer those questions and develop this and other drugs, well you’ll have to make that call — the drugs sound interesting, and they are well-funded and focused on a fairly small number of projects, and will know a lot more about their two lead compounds over the next 18-24 months, so it’s likely that something will happen to the stock by 2022… the problem won’t be a lack of news. Whether the news will be good or bad, though, I’d just be guessing. If you’ve a guess of your own, or other input on Arena or these clinical trials, feel free to share with a comment below… thanks for reading!
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got to believe that if there was real “uniqueness and efficacy” in this as to pertains to pain management that Purdue Pharma or other big Pharma would have snapped this up …… maybe this might happen.. certainly pain management is huge business especially if there are no “Oxycontin” knock on effects but the spiel doesnt excite the rational part of me and the FOMO candle isn’t lit either
I’ve been out of the loop for quite a while, but didn’t there used to be a “Resident Doctor” on the Gumshoe “Staff” that could add to this commentary?
If you are referring to Dr. KSS, he quit writing for this site about two years ago.
A stock that this “resident doctor” you mentioned recommended in the past in this space was Antibe Therapeutics. I have a few shares — very few shares unfortunately – of this company so have been following it for 2 years or so. It was originally recommended when it was under $.25 and it almost hit $.50 today. (ATBPF / ATE.V) They are getting close to releasing important Phase II results for their non-opioid /non NSAID pain killing drug. It has a much better safety profile than other NSAID pain killers that can often cause stomach ulcers. Anyway, they should release their results sometime this quarter. IF the results are positive, this stock will do VERY well. They will have to do a Phase III for sure, but it will be huge for the stock. The company also has some other drugs in the development stage as well that seem promising, so long term, this stock looks very good. Although the stock is a non-opoid pain killer, it is not intended for severe pain – more to replace aspirin type of pain killers I believe.
I am not a member of Dr. Kss’s new service so I do not know what his current recommendations are, but since some of his followers are still promoting the stock, it would seem that he is still positive on the stock. But again, I don’t know any details. I’m going to be watching this one though and might put more into this because of the huge potential.
If I came across a Newsletter article About some Miracle product Company with 10,000% Returns coming any day now…is there a way to search Gumshoe to find their write up on it?
Sure, There’s a search box at the top or you can browse by newsletter title.
How can it be a cannabinoid receptor agonist without affecting the brain, which is where the cannabinoid receptors dwell? What particular properties make it non-addictive? My guess is that when the maker says “non-addictive,” what that means is that it hasn’t shown any addictive effects yet. We’ll see.
Good question! Further reinforces that I don’t understand this pain science at all 🙂
First, ARNA’s CB2 agonist was designed to avoid penetration of the blood-brain barrier and thus there is no chance of addiction. Secondly, there are many CB2 receptors spread throughout the gut and these are upregulated in inflammatory conditions.
A few things I’d like to say about this unconscionable teaser…
First, 11 patients is not statistically relevant. Second, a double blind study with a control group is the gold standard and a required step for regulatory approval. Naturally the study group size will be MUCH larger.
Perhaps some have heard there are a multitude of cannabinoids. Almost everyone has heard of THC and CBD. There are other complimentary molecules that are the active subject of research by universities and big Pharma. Why? A simple answer lies with the basic definition of a drug (any and all drugs). A drug is a substance that either activates or blocks a given receptor site or sites in the body. Keeping this very simple, we have many many receptors for a great many classes of molecules. No two people are alike, we all have different proportions of these receptors spread throughout our bodies. The Holy Grail of pharmacology would be the activation or blockade of these target sites with pinpoint accuracy. Side effects are the result of the shotgun effect of inadvertent activation/inactivation of receptor sites from a drug therapy.
Let’s look at Cannabinoid receptors 1 and 2.
The main difference between the two is in their distribution throughout the body: CB1 is highly expressed in neurons within the brain (except the respiratory center, where it is almost nonexistent). CB2 is present in 100-fold lower numbers in the central nervous system and mainly expresses on immune cells, including those of the brain (called microglia).
The classical effects, in the brain, for CB1 activation are reductions in neurotransmitter release. CB2 activation dampens microglial activation and reduces neuroinflammation. These are the basic mechanisms to reduce pain ( scientists call them “antinociception”).
A unique feature of CB1 and CB2 receptors is their ability to “team up” with other neuroreceptors, such as dopamine, opioid, orexigenic (regulate appetite) and adenosine. This cooperation changes their neurotransmission.
In the periphery of the body (outside the central nervous system), reduction of inflammation and neuropathic injury has been primarily ascribed to the activation of CB2. CB2 receptors are present in the peripheral nerves, as well as within the inflamed linings of the joints and skin. Reduction of colitis in rodents, for example, has been possible using CBD acting through CB2.
Soapbox:
Lastly, opiates are not evil. The body has an endogenous opiate mechanism. People with acute, chronic and cancer pain process the opiate differently than someone with an absence of pain. The people who don’t need pain management are the ones who get high. Those in pain get to function, engage in the activities of daily living and reduce the chance of depression, anxiety and social withdrawal known to be the sequelae of pain. Pain patients receiving opiate class medications still feel pain, but are able to function. That is dependence on opiates. It is not a bad thing.
People not being pain patients taking opiates and feeling high, or euphoric or “comfortably numb” are addicted. That is a problem.
Chinese imports of unbelievably cheap carfentanil are a problem. It’s so cheap it’s being used to cut all recreational drugs including marijuana and ecstasy. The war on drugs approach that creates scarcity and profitability too lucrative for criminals to ignore is a problem. When drugs of choice dried up people went under their kitchen sinks and cooked up crystal meth. Until the societal ills and inequities that create the widespread desperation that people seek to escape can be addressed, surely public health and safety is better served by funds from the “war” being used instead for treatment and counselling.
Saying opiates are universally dangerous and have no therapeutic value or role in a treatment plan is a lie and an attempt to distract from the underlying problems that lead to escapism by substance misuse. It’s a lie that threatens the quality of life of patients devastated by a life marked by chronic, intractable pain. Chronic pain patients don’t start on opiates, it is a graduation in treatment modalities and when standard of care is observed all lower risk interventions have tried and failed.
Acute pain patients deserve consideration for analgesia after risk stratification. The idea that it is better to allow suffering in all acute pain patients to prevent one possible addiction is backwards and barbaric.
Please consider the lives that would be destroyed without access to opiate class medication before jumping on a knee jerk populist movement; mine is one of them.
The web link has a diagram showing pain pathways and where different drugs come into play.
https://www.optimyz.com/pain-explained-an-infographic-on-pain/
Thank you for this post, a breath of fresh air. I have several friends that suffer with rheumatoid arthritis and have to jump thru an incredible number of hoops in pain management as to be ridiculous just to be able to function at a minimal level.
If true, this would be a miracle drug or miracle non drug. Too many people getting hooked on oxycontin and other pain relievers. Just think of all the people who have severe arthritis. The drug per se….would be worth a lot. Interesting anyway…
Travis, while we’re on the subject of pain medications have you ever looked into a small company which has been around for adecades called Wex Pharmaceuticals? Allegedly, they are in Phase 3 trials for a pain medication which is thousands of tines, …perhaps tens of thousands of times more effective than morphine yet has no psychotropic or addictive qualities. Unfortunately, I cannot recall the drugs nane at the moment. If nemory serves me well the drug is derived from blowfish.
Doesn’t ring a bell, but thanks for the input.
Tetrodotoxin, or a derivative possibly?
Of course, if there is zero potential for addiction there’s also zero potential for the kind of sales Oxycontin enjoyed. Oxycontin was a blockbuster BECAUSE it was addictive.
Yes, we need a replacement for opiates in pain control, & yes, such a drug would become a major seller. But it appears to non-professionals who follow news reports & documentaries (but aren’t industry insiders) that companies like Purdue Pharma were interested in benefitting from medically-induced addiction.
I’d guess the pharma field will be interested in non-addictive pain med but only a little more than they appear to have been in making vaccines. That industry that is very nearly dead: pharma execs want to sell treatments – ideally for chronic conditions, forever – rather than simply cure them, or worse, sell one of two shots that stop you from needing treatment at all. Or perhaps we shouldn’t blame pharma execs: the prob is stock investors who prefer lifelong chronic treatment drugs that cure or preventative vaccines.
Not trying to be super cynical here (though the pharma industry can induce that almost as much as the investment industry!) but the investor advice letter you’ve investigated did invoke Oxy to suggest opportunity.
Well done- this is not cynicism- this is as they say on the streets “ keeping it real”- and when it comes to making money its important to understand that addiction is precisely what is making money for opioid based pain meds. We can discuss morals and ethics later-
In 2019, I bought a few shares of HRTX, another option that’s further along in approval processes. This past December Heron Therapeutics (NASDAQ:HRTX) was granted Priority Review Status, a six-month accelerated approval process by Health Canada as a New Drug Submission (NDS) for HTX-011 for the management of postoperative pain. Likewise, The FDA has designated it as a Breakthrough Therapy and accepted its New Drug Application (NDA) resubmission with the goal date of March 26, 2020.
At Heron’s website, Barry Quart, Pharm.D., the CEO of Heron explains “The recently reported topline results from Study 306 in patients undergoing knee replacement surgery who received HTX-011 as part of a common multimodal analgesic regimen showed that patients maintained an average pain score in the mild range for 72 hours after surgery with only 25% receiving a prescription for opioids upon hospital discharge. These results provide additional evidence that even in large painful surgical procedures HTX-011 can help to reduce both pain and the amount of opioid pills going out into society.”
HRTX has been written about in Seeking Alpha, WSJ, The Motley Fool, etc. & the company’s website is
https://herontherapeutics.gcs-web.com/news-releases
Check into Phoenix PharmaLabs and PPL-103. It is a startup listed on NETCAPITAL. I have invested in it
just notified today that Phoenix PharmaLabs just received a grant of over $8.7M from NIDA, National Institutes of Drug Abuse, to use to cover cost of Phase 1 human clinical trial with PPL-138.
As I understand it the product is an opioid which, unlike most opioids, is not addictive! All opioids are effective to treat pain syndromes but this one does not cause addiction whereas the others do.
Here is a link to the news released on Business Wire: https://www.businesswire.com/news/home/20221006005212/en/Phoenix-PharmaLabs-Awarded-8.7-Million-Grant-from-NIDA-to-Study-Compound-for-Treatment-of-Cocaine-Use-Disorder.
Contact person:
Bev Jedynak
IR/PR and shareholder relations consultant for Phoenix PharmaLabs
312-943-1123
I received this in an email and it ended with the following:
This message is private and may contain confidential and proprietary information. If you have received this message in error, please notify us and remove it from your system and note that you must not copy, distribute or take any action in reliance on it. Any unauthorized use of disclosure of the contents of this message is not permitted and may be unlawful. Bev Jedynak/Bevlyn Consulting provides IR/PR and shareholder relations services to Phoenix PharmaLabs and all information is provided as a means of information only with no intend to solicit or sell anything.
I am invested in cannabis and only hope it proves to be a pain effective product,but charging patients 400.00 to 500.00 dollars a month for medical mj is absurd. Lets hope somewhere down the line it will be more cost effective. I`m in the cannabis market for the long run. Does anyone have some good advice for a newbie investor or should I forget about post stocks all together?
Got pretty much same pitch today from Amer Hestla for her Precision Pot Trader. Seems these pitches make the rounds between newsletters.
Trevena (trvn) has an interesting candidate in this field as well. I believe the drug is called olinvo