Lashmet’s “Next 100% Winner” in Alzheimer’s?

What's being teased by Stansberry Venture today?

By Travis Johnson, Stock Gumshoe, June 28, 2016

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.”

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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?

More clues:

“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!

More clues?

“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 buy. It’s pretty illiquid compared to other $15 billion companies, with only about 5,000 ADR shares traded on an given day, but small investors ought to be able to buy it if they’re interested. I know Interactive Brokers will let you trade in Japan direct if you like, and that’s what I’d probably do if I were to invest in Eisai, but the ADR is not terrible.

Why is this the match?

Well, Eisai is actually in partnership with Biogen on two monoclonal antibodies for Alzheimer’s Disease — the first one is Aducanumab, which went by BIIB037 before it was named, and the second is BAN2401, which is indeed in Phase II trials now and expected to have the next stage of interim analysis done this month… so there could be news at any moment, though Eisai is not always as aggressive about releasing updates as most US pharma companies tend to be.

And they have reorganized recently to focus on two major therapeutic areas: Alzheimer’s and related neurological diseases, and cancer.

And they did have interim data in March, near the time that BIIB had encouraging data about Aducanumab — this is what Eisai’s latest presentation notes about BAN2401:

“• Phase II interim analysis at 650-patient-randomization occurred at the end of March 2016, and
IMC* recommended study continuation without any modification
• Next interim analysis at 700-patient-randomization is expected to occur in June 2016
• Continue to explore with Health Authorities on how to leverage the ongoing Phase II study in
future pivotal programs should the Phase II study achieve positive outcomes”

The anticipated end date of that study is 2018, though it wouldn’t be unheard of to end the trial earlier if they want to push faster — they have gotten to 700 of the anticipated 800 patients at this point. They also have been including the note, “possibility of early success” in their presentations about past interim results for BAN2401, I don’t know if that’s a technical term or just a reference to the possibility that they might be able to move to Phase 3 before completing the 800 patient regimen.

I haven’t seen anything about the actual efficacy of BAN2401 (and wouldn’t be very qualified to actually understand that data anyway)… but presumably it hasn’t created big safety concerns if they’re still moving forward, so I guess that’s good. Updates on clinical trial results in Alzheimer’s trials can certainly move the shares of even very large stocks, as we’ve seen Eisai (and Biogen) shares rise and fall based on announcements about Aducanumab results over the past year or two, but I haven’t seen anything about BAN2401 results other than the notations in their presentations that say they’re continuing to do their interim analyses of the results.

And… that’s about all I’ve got for you. Eisai seems very likely to me to be the stock Lashmet is hinting at, and it’s a major global pharmaceutical firm that is likely to at least be at the Toronto conference he’s talking about (they’re a major sponsor), is focused on Alzheimer’s, mostly in partnership with Biogen, and should have interim data from their current Phase II trial of BAN2401 very soon if it’s not already in hand (though I don’t know if they’ll release it in any detail).

And yes, they will likely be a stronger stock play on Alzheimer’s than Biogen IF either Aducanumab or BAN2401 turns out to be fantastic, because they have partnership rights on both and they’re about a third the size of Biogen (which, even after falling 40% from its highs, still has a $50 billion market cap, thanks largely to their past success in Multiple Sclerosis). I don’t know anything about the pipeline or products of either company, and I get quickly out of my depth in discussing medical stuff and don’t invest in specific healthcare stocks very often… so I’ll leave it for you to discuss.

Think you’ve a better match for the tease? Think Eisai’s an interesting idea in Alzheimer’s (they did develop the only real Alzheimer’s drug we’ve seen in recent decades, the now-generic symptom treatment Aricept)? Think it’s all hooey and we’ll keep seeing 95-99% failure rates for Alzheimer’s Disease clinical trials? Let us know with a comment below.


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Rusty Brown
Member
Rusty Brown
June 28, 2016 2:24 pm

“Recent research has shown that smoking is a significant risk factor for vascular dementia and Alzheimer’s disease, with smokers twice as likely to develop the disease as non smokers…”
https://www.alzheimers.org.uk/site/scripts/documents_info.php?documentID=878

“Controlling for study design, quality, secular trend and tobacco industry affiliation, we found a significant increase in AD risk associated with smoking…”
National Center for Biotechnology Information
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2906761/

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hedy1234
Irregular
hedy1234
June 28, 2016 2:24 pm

Nice job Travis

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Michael Jorrin,
Member
June 28, 2016 3:06 pm

Sounds right. Aducanumab, along with other BACE inhibitors, may have dosing issues – huge molecule, hard to get enough concentration to the site. Eisiai has two candidates – BAN2401 and E2609, another BACE inhibitor, both early on the development ladder. These were discussed in detail in a Doc Gumshoe last December. Hard to accept regulatory approval without more study, but who knows?

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new_novice
Irregular
new_novice
July 10, 2016 6:35 pm

Given that Aducanumab is for prevention of very early Alz. there would necessarily have to be a measure of success that could detect significant differences at such an early stage where patients are still very functional . What disappoints me about their trials is that one of their measures is the Folstein Mini Mental Status assessment. This test has very poor discriminatory ability at this early stage, therefore no change in the score of this test doesn’t mean much. There are several other measures (e.g. “Slums” test, used by the VA) that have more discriminatory capability. Using a measure such as the Mini Mental Status assessment should almost guarantee good results. If the FDA falls for this trap (which it shouldn’t) then the hype may make the stock go up quite a bit. But if a drug should help prevent progression, then a trial that only measures lack of progression at one year seems to miss the mark. –just some thoughts.

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JayBee
Guest
JayBee
June 28, 2016 3:07 pm

It’s hard to get excited about a stock that’s trading for $56 per share.

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credenhill
Irregular
credenhill
June 28, 2016 3:53 pm

Well, it can’t be any worse that aricept and meds like it.
They are completely ineffective with significant side effects.

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Bob Schubring
June 28, 2016 4:10 pm

Another candidate is the Spanish company PharmaMar. They underwent a reverse merger 2 yrs ago with a paint-and-varnish company whose shares traded in an ADR on the OTC Pink Sheets. So, PharmaMar is now listed in the US…albeit on the Pink sheets.

Last month Michael Robinson at Money Map teased the stock, through an I-bank who were offering round lots in the PharmaMar ADR, bundled with a US tax credit for making the investment in an Orphaned Drug…as potentially a huge deal, because PharmaMar intended to transfer their listing off the Pink Sheets and onto the NASDAQ, after a major announcement on a new breast cancer drug.

In the course of Michael Robinson’s pitch, they mentioned another catalyst for the stock, was an Alzheimer’s drug that PharmaMar has in the pipeline.

From the sound of things, the deal Money Map was pitching was probably a chance to buy shares from an insider or angel investor who had taken a private placement (which was eligible for the tax credit) that’s convertible into common shares (which are legal to offer in the US, as part of the ADR). So from the smell of things, an insider wanted to cash out, ahead of any Brexit turbulence, part of his PharmaMar private placement. And once the SEC had approved the Equity Crowdfunding regulations, the I-bank had a clean shot at selling this weird hybrid of a private placement that converts to a NASDAQ-traded stock, which might bounce like an IPO, but also comes with a US tax credit.

Bottom line: I’m watching PharmaMar but have not nibbled. If I needed the tax credit I’d have gone ahead and paid the big money for an introduction to the players…the tax credit represents money someone needs to spend on taxes, and any profit from the drug business is gravy. For someone who doesn’t have immense amounts of taxes to pay, it’s a bit rich for my blood.

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Raphael Angelo Carpini
Irregular
Raphael Angelo Carpini
June 28, 2016 4:48 pm

I MUCH prefer your former format – much simpler (especially for OLDER people who are NOT too computer savvy) to get a QUICK synopsis and opinion of the subject matter at that time – Sincerely, RAC