The folks at Money Map/Money Morning have really taken the “most aggressive advertisers” mantle from the other Agora affiliates of late — we can pretty much count on a new promotional campaign from this publisher becoming the “most asked about” pitch by our readers almost instantly, whether it’s Michael Robinson or Keith Fitz-Gerald or Dr. Kent Moors or one of the others… or, as is the case today, Sid Riggs.
This ad is all about getting rich from Zika panic, and it’s a pitch for the Small Cap Rocket Alert (edited by Riggs, current price $1,500).
The short version is: Panics about pandemics have created fortunes before, even though those feared pandemics are almost forgotten today… and the same will happen with Zika, it will create some huge fortunes and then be all but forgotten in a few years.
And, of course, there’s “one small company” that he thinks will be the big winner. Here’s a bit from the ad:
“One tiny biotech firm has developed a treatment that can eradicate every trace of diseases like Zika from the blood.
“And it has been approved by the U.S. Food and Drug Administration.
“This makes it the first and only treatment that can fight Zika to receive approval in the United States.
‘This guidance is for immediate implementation.’
– U.S. Food and Drug Administration
“Already, in their latest guidance, the FDA and the World Health Organization informed every hospital, clinic, and lab in the U.S. that they must use this breakthrough.
“And this tiny firm is the only one approved to provide it.
“Now they’re all scrambling to get their hands on it in preparation for preventing a large-scale Zika outbreak in the U.S.
“Ahead you’ll see how this relatively unknown biotech firm has quietly locked up a virtual monopoly for their treatment in this country.
“Its stock is currently trading for around $5.”
So what clues do we get about this little stock? here are a few:
“its executives, including the CEO, Chief Scientific Officer, and board member after board member, are buying all the shares they can….
“This small lab’s share price could be on the verge of surging 16,025%.
“That’s the equivalent of transforming a modest $1,000 stake into $161,250…”
And Riggs gives a few examples of past beneficiaries of pandemics:
“… just like with Ebola, funding poured into the small biotech firms that were working to make the Swine Flu yesterday’s news.
“Look at Endo Pharmaceuticals.
“They developed Symmetrel, one of the first Swine Flu vaccines.
“Before the world began fearing this “next pandemic”… Endo Pharmaceuticals’ market cap was $479 million.
“But with the help of their life-saving Symmetrel treatment, it rose 35-fold, hitting $16.9 billion.”Are you getting our free Daily Update
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Swine Flu panic was way back in 2009, when Endo already had a $2-3 billion market cap, though it did benefit from some of the panic. And yes, they did sell Symmetrel, which is an antiviral that has been around for about 50 years now (and is no longer recommended for use, since pretty much every flu virus is resistant to adamantane). I’m sure Endo made some folks some money in its big move (it did go from $2 billion to $16 billion, rising 700% or so, before falling 80% in the past year), but I wouldn’t say it was primarily because of swine flu.
And another example:
“But the biggest winner of the Swine Flu funding frenzy is, without a doubt, Gilead Sciences.
“It may be a household name now, but before Swine Flu became a story, Gilead Sciences had a measly $250 million market cap.
“That changed when it got FDA approval for its drug Tamiflu…
“This became one of the most effective treatments we had at the time for the Swine Flu.
“President Bush requested $1 billion in funding to stockpile the drug. And Congress approved $1.8 billion for military use.
Since those early days, Gilead Sciences has grown into a $154.6 billion behemoth.
“Its stock has also been one of the market’s biggest stories, shooting up from $0.68 to nearly $104 a share.”
I suppose that’s all technically true, though Tamiflu is but one of Gilead’s businesses (they licensed it to Roche decades ago, they get a good near-20% royalty — though the money train for that one probably stops in a few years as patents expire), and isn’t the only (or even primary) reason the stock rose so dramatically.
And, of course, the move from 68 cents to over $100 took about 20 years. We wrote some about Gilead a couple weeks ago here, just FYI.
One more example:
“Teva Pharmaceuticals used to be simply a ‘pretty large’ company, sporting a market cap of $1.5 billion.
“That was until they developed the Adenovirus Type 4 and Type 7 Vaccine, which treats SARS.
“It helped drive Teva’s market cap up over 37-fold, landing at $56 billion.
“And you know where I’m going with this…
“Teva’s share price surged from $0.43 to $66.92 a share.”
Teva did rise dramatically — but, again, it wasn’t a sharp rise based on this Adenovirus vaccine (which was approved in 2011 or 2012, and I think is primarily sold to the military), it had a lot more to do with Teva’s massive growth in generic drug sales. Teva’s share price was last under a dollar, and market cap down below $2 billion, in the late 1980s, the rise took 25 years or so.
Riggs summarizes his argument thusly:
“Each time “the next pandemic” surfaces, the same lucrative pattern plays out… and it’s about to happen again with the Zika virus!
“Step 1: The media and health groups begin warning about “the next pandemic”
“Step 2: Fear grips the public.
“Step 3: World governments and international agencies announce massive funding initiatives.
“Step 4: This money floods into small biotech firms working to stop these health threats.
“Step 5: The value of these tiny stocks surge 1,500%… even 15,000% or more, as the on