Dave Lashmet has teased a handful of biotech stocks since starting the Stansberry Venture service a couple years ago, and they usually get a lot of attention from our readers — so the new ad from Lashmet today has been forwarded to me dozens of times already.
And while I’m not sure we’ll be able to get a 100% certain answer on this one, we’ll do our best — after all, the promises are ripe… particularly because if you’re talking about Alzheimer’s Disease, we all know that the potential is enormous. Alzheimer’s is by far the most valuable pharmaceutical target that remains very poorly addressed by existing medicines, so even though billions have been wasted in failed drug trials we can’t help but feel greedy (and happy for society) about what could happen if one of the drugs in the Alzheimer’s treatment pipeline really helps patients in a dramatic way.
Lashmet isn’t really focused on that long-term potential for dramatic gains, though, he’s looking at a quick double or more — this is from the ad:
“… next month, I’ll be flying to Toronto, Canada to witness firsthand what I expect to be one of the biggest announcements in medical history…
“If this company’s new drug is declared a breakthrough drug, it will offer hope to the 5 million Americans plagued by Alzheimer’s disease today.
“And if the announcement goes the way I expect, this opportunity could also hand you the quickest double you’ve ever seen.
“You could see gains of up to 100% in a matter of weeks.”
The most recent couple of stocks that Lashmet has teased pretty actively, and that I’ve covered here, have done fairly well — those were Inovio (INO), which he was one of many pundits pitching as a play on Zika, and Ion Beam, which is a proton therapy company. Both are up, though the hyperbole used to “sell” IBAB to us as an idea was so dramatic that we’re perhaps well advised to be thoughtful about what Lashmet means about this July announcement in Toronto (for Ion Beam, Lashmet was pitching a poster session whose abstract had already been released as a “we’ll be in the room for the next great breakthrough” — which seemed quite disingenuous to me, though not, of course, the most absurd tease I’ve ever seen).
So what is this latest stock from Lashmet? Well, beyond the fact that it’s working on an Alzheimer’s Disease drug, we do get a few other clues:
“Just days ago, the same approach to a potential Alzheimer’s cure — a specialized form of immunotherapy — was classified as a medical breakthrough by Europe’s drug regulators.”
Ah, more mincing of words — “the same approach,” perhaps not the same actual drug. That likely means it was put into the “PRIME” fast track program by the European Medicines Agency, which, like similar FDA programs, is designed to speed up development and regulatory consideration for important drugs for unmet needs.
That’s a new program, and the first drugs were just added to the program a few weeks ago — so we know that this “same approach” is a reference to Biogen’s Aducanumab, which is in two Phase 3 studies for Alzheimer’s.
But no, it’s “the same approach”, not the same drug — Lashmet isn’t hinting at Biogen (BIIB) as his latest recommendation. So what is it?
“I’ve uncovered one drug company that should benefit most, if this new form of treatment for Alzheimer’s disease is approved….
“I believe this company is about to announce that regulators have agreed to let this drug’s clinical trials end, way ahead of schedule… at the Alzheimer’s Association International Conference I’ll be attending in Toronto.”
And then the clues that make clear that it’s not a big US company (like Biogen), or even a US-listed company:
“As lucrative as I expect this opportunity to be for investors who establish a position today… it’s ‘off limits’ to most ordinary investors….
“First, you can’t find this stock on the NYSE or Nasdaq. It only trades overseas.
“But more importantly, an investment in this company requires a larger commitment than most other stocks.
“You’re required to buy at least 100 shares of the company. At current prices, that’s a $6,000 investment, minimum.”
OK, so the stock trades at something in the neighborhood of $60 a share. That’s a clue! We can do division! Take that, copywriters!
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“Over the past few months, the CEO of this biotech company has been telling investors that clinical trials could stop, based on March 2016 data that showed real benefits to patients with Alzheimer’s.
“The CEO even said the trial could stop early, based on ‘the possibility for early clinical success.’
“The drug is currently in ‘Phase 2’ – about halfway through the testing process.”
OK, so this is presumably a reference to the actual drug and company Lashmet is recommending, not the “same approach” drug that’s further along under Biogen’s management.
And then he lays it on a little thicker:
“From the company’s perspective, this drug works so well that it’s now unethical for them to place anyone in the placebo group….
“… the company asked the FDA for permission to end Phase 2 trials early. And I’m predicting the drug will receive designation from the FDA that will allow this to happen, expediting its development and review processes.”
And Lashmet says that on the rare occasions this has happened, the drug also gets “fast track” treatment from the FDA and ends up a win for investors.
And one final bit of clues:
“… this company’s CEO recently just made another big move… one that signals to me that this drug’s fast-tracked approval could come any minute now…
“He just presented on how he’s reorganizing the entire company’s focus.
“He shifted the company’s focus away from most of its current business… approved drugs that are already profitable… to focus instead on untapped sectors of medicine like Alzheimer’s.
“It’s is a bold move for a mature drug company with a dozen successful drugs already on the market… all for a drug that still hasn’t received official approval from the FDA yet.”
And a final sum-up of the core catalyst Lashmet is expecting:
“I’m convinced that this company will receive permission from the FDA to end clinical trials of this drug early.
“And because of this, I expect its Alzheimer’s drug will be fast-tracked for approval… skipping Phase 3, and heading straight to market.”
I’ve perhaps gotten even more skeptical about Alzheimer’s Disease treatments over the past few years, so you may have to insert your own optimism here. The FDA has tried to open things up for Alzheimer’s Disease patients, and get drugs through review more quickly and with less stringent proof of success, by some estimations. But it’s also terrifying and, frankly, almost inconceivable to me that the FDA might skip a huge Phase 3 trial to confirm safety for any Alzheimer’s Disease drug — if only because any drug that claims an improvement in Alzheimer’s treatment could easily be prescribed to tens of millions of people in the first year or two. Maybe they can be loose about efficacy, since measures of dementia and cognition are notoriously squishy and there’s a push to try things that might help even if it’s not proven very well, but it’s hard to believe they’d be loose about safety.
So what’s the stock? Well, as I noted I probably can’t be 100% certain on this one… but I’m pretty sure the Thinkolator is correct in saying this is Eisai, the Japanese pharmaceutical company (ticker 4523 in Tokyo, though their is an OTC ADR trading in the US at ESALY). The shares closed in Japan at 5762 yen, which is roughly $56… and the ADR is trading close to that amount, which is to be expected for a large company.
You would have to buy 100 shares at a clip to buy directly in Japan, probably, and that would be difficult with most brokerages, but the ADR is easy enough to bu