The latest pitch for Dave Lashmet’s Stansberry Venture Technology leans heavily on Lashmet’s recommendation of NVIDIA many years ago…

“Our Top Tech Analyst’s A.I. Recommendation Soared 1,466% – the Highest Stock Gain Ever Recorded in Our Firm’s 24-Year History

“Here’s the NEXT breakthrough he says will soon improve millions of lives – and could 5X your money, starting October 31 – no matter where the market goes next.”

The “offer” period for that pitch closed at the end of last week, but I was still curious to see what Lashmet is recommending this time for potential 400% gains… so let’s see if we can solve for the clues he drops. I haven’t seen the order form for this pitch, but typically when they’re doing a big short-term promo they advertise Stansberry Venture Technology at something like $2,500/yr (“list price” is $5,500), and they usually offer “Stansberry credit” if you end up not liking the newsletter, but no cash refunds.

So what’s this latest “breakthrough” being teased by Lashmet’s publisher, Brett Aiken? It’s not AI, it’s something in the realm of health and pharmaceuticals… here’s a little bit of the “potential gains” hype in the pitch:

“… this new development will soon change millions of lives for the better as it rolls out…

“While potentially handing you 400% gains along the way.

“That’s more than any single A.I. stock has returned this year…

“And, as you’ll see… 400% could be just the beginning.

“This opportunity is much bigger… and much more profound than the day-to-day forces that can weigh on the broader market.”

And the urgency of not just Stansberry’s own deadline for that particular offer, but for news that’s about to come out of the company being teased — every successful ad needs a deadline or a catalyst or some kind of urgency, even if the copywriter has to make it up, but this sounds like it’s at least an actual date we can check:

“But your window to get in for a shot at the MAXIMUM upside is closing quickly.

“Because just a few days from now, this company is expected to release a crucial new report…

“And when it does, our analyst says Wall Street is going to find out just how lucrative this new breakthrough truly is.”

A little back story on Lashmet, who has been at Stansberry for a long time and been covered in this space many times…

“He’s sat shoulder to shoulder with executives from the Centers for Disease Control…. National Institutes of Health… and America’s most elite medical universities.

“In short, he’s spent a lot of time – and a lot of money – getting to know the inventors and key players behind the world’s most radical new developments…

“Typically, before their ideas go mainstream.

“That’s the real secret to Dave’s success.

“He has an uncanny ability to find the companies showing early dominance in emerging, revolutionary trends…

“The early-stage, venture-style businesses that can 5X to 10X your money as they grow.”

And yes, that specific date:

“An opportunity that could 5X your money starting as soon as October 31.

“It doesn’t matter what happens to the market or the economy.”

So what’s the news going to be “as soon as October 31?” Here’s when they start talking about the actual product — which is a drug that treats some sort of disease:

“Introducing Venture #87: A Breakthrough Treatment for a ‘Death Sentence’ Disease

“Venture #87 has developed a revolutionary new treatment for a previously untreatable disease.

“Thanks to this breakthrough, 500,000 Americans who are diagnosed each year have new hope.

“And for investors, the upside is tremendous.”

So what’s this disease that gets 500,000 new diagnoses in America each year? They don’t actually reveal that, which probably means it would be too clear a clue, but it’s apparently both very common and very deadline… this is what we’re told:

“You see, until very recently, if you were a doctor who had to tell your patients they had this disease, you were basically delivering a death sentence.

“Despite more than a century of research and testing, there simply was no viable treatment option.

“Once diagnosed, you were looking at an average life expectancy of just six years.

“But now, this breakthrough treatment is clinically shown to slow the progression of this insidious disease… and offer patients a more vibrant, higher quality of life after a diagnosis.”

There are quite a few diseases that get roughly that many new patients diagnosed per year, or more — about 1.4 million Americans find out they have diabetes every year, and 1.6 million get a cancer diagnosis… but there are very good treatments for diabetes, which certainly isn’t a “death sentence” for most people, and the most dismal and terrifying forms of cancer, the ones with very short survival times of six years or less, are not the most widespread. The most common cancers are prostate and breast cancer, depending on your gender, and neither reaches 400,000 diagnoses per year. The average life expectancy varies widely, but for most big cancers it’s probably no longer accurate to say there is “no viable treatment option.”

So what’s the disease that this drug must be targeting, with that many patients and that long a period of “no viable treatment options” and a low life expectancy… with a drug that can “slow the progression?” They don’t drop any further hints, but I think they must be talking about Alzheimer’s Disease.

And that’s bolstered by the fact that he’s teasing a company with a recent FDA approval…

“Dave’s projecting the company known as Venture #87 could grow 400% as the treatment rolls out.

“And it’s starting right now.

“As Dave predicted, the FDA granted the treatment full approval this summer following a positive Phase 3 trial.

“Within moments of the FDA’s approval, Medicare agreed to pay for it.”

And he’s expecting sales to go bonkers…

“If only 10% of the eligible market takes this treatment, it would equate to more than $13 billion in sales in the first year alone.

“And by 2032?

“The drugmaker forecasts 3 million people around the world will be taking it…

“Boosting global sales to nearly $80 billion a year.

“That’s more than the top two selling drugs of 2022 combined.”

OK, so those are indeed big numbers. The top-selling drugs in recent years, other than the various COVID treatments and vaccines, have been Humira (from AbbVie), which has been number one for a long time and has probably surpassed Lipitor when it comes to highest lifetime sales, and Merck’s multi-cancer drug Keytruda, which has probably taken the top spot this year. Those drugs are in the neighborhood of $20 billion/year for worldwide sales.

And apparently Lashmet is more optimistic about sales than the average analysts, who haven’t yet ramped up their forecasts for some reason:

“But here’s the real opportunity today: No one on Wall Street has seen the sales figures yet.

“They’ll get their first look on October 31, when the company is expected to report its first earnings following FDA approval for their new drug.

“That’s why those who stand to see the biggest gains are those who get in right now.

“AFTER the drug has been fully approved by the FDA and funded by Medicare…

“And BEFORE Wall Street finds out just how much Venture #87 stands to make.”

Why is that? They say it’s because analysts don’t forecast out big sales ramps for drugs, though that’s certainly not always true… in their words:

“Dave projects this drug will generate more money every quarter for the next SIX YEARS as more and more patients qualify. But Wall Street projections don’t work that way. They only look at CURRENT earnings. That’s why this is such a massive opportunity – we’re getting in at what is essentially the ground floor of a huge breakthrough Dave says will continue to grow higher and higher over the next several years.”

So what’s the drug? Well, if we’re talking about a newly approved Alzheimer’s Disease drug that hasn’t yet really generated sales, and will be sharing the first sales numbers in the next quarterly update, that’s almost certainly a tease of Leqembi, which is the first fully FDA-approved (on July 6) disease-modifying therapy for the treatment of Alzheimer’s Disease. Leqembi is a 50/50 joint venture between Biogen (BIIB) and Eisai (ESAIY ESALF 4523.T), both of whom have been “all in” on Alzheimer’s drug development for many years, though the drug was initially developed by a little company called BioArctic (BIOA-B.ST in Sweden, BRCTF OTC in the US), a Swedish lab that partnered the drug off to Eisai 16 years ago (Biogen later joined the partnership, in 2014, and Biogen and Eisai are 50/50 partners in the commercialization).

Which means there are really three potential companies who could profit from Leqembi being a big success… assuming that it is indeed a commercial hit.

BioArctic is likely to be the most levered play on this particular drug — from past articles I’ve seen it looks like they get a royalty of about 8%, which seems awfully high (the only official disclosure is that BioArctic has confirmed they get “high single digit” royalties on Leqembi… I get that more specific 8% number from the FT‘s assessment that if sales peak at $13 billion at some future date, maybe in the 2030s, BioArctic’s royalty that year would be about $1 billion), and they have also retained the commercialization rights in the Nordic countries.

BioArctic is a small company, market cap around US$1.9 billion (SEK21 billion), so that would obviously have a much bigger impact on them than half of $13 billion would have on either Biogen or Eisai… but on the flip side, it’s also not at all a passive or investor-focused royalty company, it’s a research lab, and they are likely to use spend that money to invest more heavily in R&D to develop more new drugs. I have no idea how it will play out for BioArctic, but it’s an interesting levered play on Leqembi, with some other possible drivers in future years (Leqembi/lecanemab is by far their most advanced compound, with additional Alzheimer’s trials and preclinical studies for other diseases, their only other relatively advanced project is a Phase 1 drug for Parkinson’s Disease). And interestingly, BioArctic shares are now below where they were before Leqembi got its provisional approval back in January, and far below where they were when full “traditional” FDA approval came in July.

Of the three companies involved with Leqembi, Biogen (BIIB) is by far the cheapest — the stock is trading at about 14X trailing earnings, even before any sales of Leqembi go through, and it has essentially been a five-year disappointment for investors following the big runup from 2010-2014 that was driven by progress on Aduhelm, the previous great hope in Alzheimer’s (Aduhelm did get FDA approval, but there has been a lot of criticism of the efficacy and safety results, and the rollout was pretty tepid, it’s still being studied in some clinical trials but it seems to have largely been commercially abandoned). Biogen has been dealing with a string of “patent cliffs” in recent years, for drugs like Tysabri, Spinraza and Tecfidera, so that’s presumably at least part of the reason for their revenue softness of late, and Aduhelm seemed like quite a black eye for them after the initial hope faded.

And Eisai is sort of the middle ground — they have long been an Alzheimer’s leader, mostly in partnership with Biogen, and for a long time they had the only approved Alzheimer’s Disease treatment, Aricept, which generated billions in annual sales even though the drug was of very limited help to patients. They’re also much smaller than Biogen, roughly half the size, and they’ve had pretty flat earnings in recent years, so they’d see a more dramatic impact from a big surge of Leqembi sales. Today, Eisai at US $54 is valued at about 100X trailing earnings, but it’s at only about 35X last year’s earnings, so investors are clearly anticipating at least some sales from Leqembi to come through and boost those numbers — revenue for Eisai has been in the $5-7 billion range for a decade, so if Leqembi really turns out to be a $10-20 billion/year drug, or higher, as Lashmet seems to think is possible, then Eisai’s half of that revenue would be hugely impactful.

BioArctic and Biogen report on November 8, Eisai on November 7, so we don’t have a lot of certainty here. That’s about in keeping with their earnings release dates a year ago, though Eisai used to report about a week earlier…. and Biogen used to report about two weeks earlier. Don’t know why those schedules have slipped for this year, but I guess if you were someone who followed these stocks for several years you might be accustomed to Eisai reporting on or around November 1. Dave Lashmet has recommended and teased both of those stocks in the past: we covered his tease of Eisai back in 2016, when aducanumab/Aduhelm was starting to look promising and Leqembi was still called BAN2401; and his pitch of Biogen, mostly focused on aducanumab as the biggest-ever Alzheimer’s breathrough about a year later.

In truth, that squishiness over reporting dates is a little bit of a stretch as an argument for one of these stocks over another, but still, my guess would be that Eisai (ESALY) is the “Venture #87” recommendation from Lashmet, since he has more aggressively recommended Biogen in the past and that is a more complicated and diversified company. Given the lack of any specific clues to differentiate between the three participants in Leqembi, it’s impossible to be sure.

Personally, I always find little royalty stories more interesting, so I’ve placed a small bet on BioArctic, just in case they get a real boost from rapid or surprisingly huge Leqembi sales… it looks like Leqembi is being treated pretty cautiously by investors, after they were burned by Aduhelm, but perhaps Lashmet will be right, and the Medicare approval and continuing testing of Leqembi in earlier-stage patients will create a genuine blockbuster drug here. Certainly Alzheimer’s patients and their families are crossing their fingers that this will offer more hope than Aduhelm.

There are, for a change, quite a few other Alzheimer’s Disease drugs in clinical trials, too, and the big pharmaceutical companies have focused on these kinds of neurological diseases once again, after most of them had cut their losses and gotten rid of their R&D projects in this area after decades of failed returns and billion-dollar cash burns for potential Alzheimer’s Disease treatments… now that there have been a couple approved drugs that seem to at least slow progression, and provide a pathway for others to follow, they’re following. Drug development is driven by fashion and copycats, just like any other field.

The most immediate potential for a similar drug to get approval is Eli Lilly’s (LLY) donanemab, which will probably get FDA approval by the end of the year (they completed their full application for approval in July), and the impact of that drug on patients seems to be fairly similar, with the possibility that that the safety profile might be a little worse, though it’s awfully early for making those kinds of fine distinctions. It wouldn’t be surprising if those drugs both turn into blockbusters if donanemab also gets full approval, with the possibility that they’ll each be targeted at somewhat different cohorts of Alzheimer’s Disease patients, given how much specificity seems to be included in these first FDA approvals when it comes to patient selection, but we’ll see. Neither is easy or risk-free or convenient, Leqembi requires infusions every two weeks and donanemab every four weeks, and both have meaningful side effect concerns and face the possibility that the improvement they grant, something like a 20-30% slowdown in the decline for these dementia patients, is not dramatic enough to really help those patients. I certainly can’t make the call on that, I’m out of my league with pretty much all of this detailed biotech talk, but Lashmet is clearly optimistic about the commercial opportunity.

The story could also change pretty dramatically if ongoing studies further expand our understanding of these drugs, new clinical progress from other drugs steals their thunder and makes doctors or patients more willing to wait for something better, or if the safety profile changes dramatically once the commercial rollout leads to more information (the big concern for all of these drugs, including Aduhelm, has generally been the side effect risks of brain bleeds or swelling). Perhaps investors expect Eli Lilly to beat out Eisai/Biogen/BioArctic in Alzheimer’s, since those companies have all been drifting down since they got their little pop on the June FDA approval announcement, or maybe folks are just a little cautious because of the disappointment of Aduhelm, but we’ll see (Lilly’s shares have been soaring all year, but that’s probably much more driven by Mounjaro, their diabetes and potentially obesity drug that looks like the best of the GLP-1 inhibitors).

That’s what I think, anyway — looks to me like Lashmet is very optimistic about Leqembi as the first really meaningful Alzheimer’s drug approval, and sees a huge rampup in sales given the Medicare approval, and I expect he’s probably recommending Eisai as the best play on that drug, though it could also be either BioArctic or Biogen. Personally, I think the risk/reward profile for BioArctic is more interesting, just because their royalty on Leqembi could have a much larger impact on that smaller company than blockbuster Leqembi sales would have for either Biogen or Eisaly, but if this drug has a very strong launch and turns into a real $10+ billion annual seller as ongoing clinical trials bolster the effectiveness or safety claims for Leqembi, or expand the patient group to include more people, then all three of these companies will do very well.

It’s your money, though, so what say you? See big things ahead for Leqembi, or do you think other Alzheimer’s Disease treatments will supplant it quickly as science keeps moving forward? Will it be the next blockbuster, or the next Alzheimer’s disappointment? Have a favorite way to play this drug, or other favorite companies who are working on Alzheimer’s treatments? Let us know with a comment below.

P.S. We don’t hear so often from folks who’ve tried the uber-expensive newsletters like Lashmet’s Stansberry Venture Technology, so if you’ve ever subscribed please click here to visit our reviews page and let your fellow investors know what you think. Thanks!