Stansberry Venture and their next “Biotech Buyout Watch” for a New Antibiotic

What's the "superbug" fighting stock teased by Dave Lashmet?

By, March 26, 2015

Antibiotic resistance is a big deal, as you undoubtedly already know — and resistant strains of various cooties are becoming more and more of a problem, particularly in hospital settings where they seem to spread like wildfire among the sick, infirm and open-wounded, but elsewhere as well.

And the new wave of antibiotics is certainly making some fortunes as doctors look for new ways to fight these resistant bugs, and as the government in recent years has (belatedly) pushed on this oft-neglected part of the pharmaceutical research business — lots of big pharma companies stopped developing new antibiotics a decade or two ago, antibiotics in many ways became a victim of their own success when there seemed little additional profit to be wrung from that product category.

But now, of course, they’re back in the headlines — we need new antibiotics, and we need them now. The government has thrown drug developers a couple bones, in increasing the potential market for novel antibiotics and extending their patent life, and that has helped to make the investment case stronger… even if the market wasn’t obviously growing, as it is, thanks largely to overuse of antibiotics breeding ever more resistant strains of bacteria.

So that’s the context of the latest pitch for Stansberry Venture from Dave Lashmet — he recommended two biotech companies in this area last year that were bought out, Durata Therapeutics and Cubist, and he thinks he’s got another one that stands a good chance of a buyout later this year. Does he provide us with enough clues to tell you which company it is? Well, let’s see… here’s how he piques our interest:

“Phase 2 Showed 100% Success Rate

“Phase 3 Results Expected in 90 Days…

“One tiny firm set to explode….

“An announcement is scheduled for the middle of this year that will change the lives of millions of people… Including — most likely — your own.

“The announcement concerns the final clinical trial results of a drug so revolutionary, it’s the only one of its kind — and promises to cure a disease that kills more people than HIV and tuberculosis combined…

“This disease is caused by a class of pathogens that the Director of the U.S. Centers for Disease Control (CDC) says could ‘devastate our economy’ … and kill millions….

“For Americans, and people all over the world, the release of this drug could be as monumental as the discovery of penicillin.

“And for investors, it could mean a windfall…

“Because once the drug’s final clinical trial results are announced, I believe one of the largest pharmaceutical companies in the world is going to swoop in and buy this tiny drug maker to get its hands on the valuable drug they’ve developed…”

There’s quite a bit in the ad about the threat of “superbugs” and antibiotic-resistant bacteria, I won’t go into all of it but you can always check out the ad yourself if you like.

There is, however, more than one smallish biotech firm developing new antibiotics — and even more than one that will likely be releasing Phase III data this year. So which one is he talking about? Let’s see if we can sniff out any further clues:

“We must buy into this tiny firm before the phase 3 results are announced – which could be in a matter of weeks.

“I’ve tracked the final trial’s completion date — and all testing should already be finished.

“All that’s left is for the small drug maker to compile its data and announce to the world if its potentially life-saving drug is a proven success…”

OK…. that’s not enough. Anything else we can scare up in this long ad?

“I expect we have about nine weeks… But we might have just a few short days or weeks before the results are made public….

“It’s a tiny startup, and consists of about 50 employees, most of them scientists….”

And then a bit about where they are in clinical trials…