Can you really “Retire Early From the Death of Monsanto?”

Jason Stutman teases that "A tiny biotech controls agricultural technology that could end food shortages forever... " what's the stock being hinted at in the ads for Technology & Opportunity?

By Travis Johnson, Stock Gumshoe, December 13, 2017

Jason Stutman has a teaser pitch going around for his Technology & Opportunity newsletter (currently $99), and the bait for us is that he’s promising a company that will get you rich as Monsanto dies.

Lots of folks have a deep hatred for Monsanto, of course, both because of anti-GMO fear and Roundup resistance/overuse/drift/cancer risk and because of their aggressive protection of their intellectual property (meaning, you’ve gotta pay a royalty to replant the seeds from your own crop if they’re Monsanto seeds), so that catches a lotta eyeballs.

So that’s the bait… and the hook is that $99 annual subscription. Is the bait something worth nibbling on? Let’s get a little sample of it first, before we bite the hook. What is this “tiny biotech” that could squash Monsanto and end food shortages?

For that, we head to the ad to see what clues Stutman drops… here’s how he gets us going, complete with the ridiculous promise if extraordinary wealth:

“A tiny biotech controls agricultural technology that could end food shortages forever… And, in the process, render Monsanto GMOs obsolete.

“This development stands to make early investors 181 times their money in just a few years.

“It’s why Citigroup, Wells Fargo, and other financial powerhouses have teamed up to launch the little company that’s responsible for all of it.

“And you can get in on the action, too. But time’s running out…

“I believe it could fund your early retirement with a payout I’ve calculated to be worth up to 181 times your money — a gain that would turn every $1,000 invested into a cool $181,000.”

So what is this company, and what’s the technology? It’s all about gene editing, which we’ve seen teased a few times when it comes to human diseases… but he’s talking it up as a potential game changer in agriculture. More from the ad:

Are you getting our free Daily Update
"reveal" emails? If not,
just click here...


“Picture editing a document on your computer… You see a phrase that you don’t like, so you highlight and delete it.

“Well, this analogy is the easiest way to explain how the technology of the little biotech I’ve been telling you about works.

“It’s called gene editing.

“You simply ‘snip’ parts of a plant’s DNA that are responsible for an unwanted trait and presto — the trait no longer exists.

“Want drought-resistant corn?

“Snip!”

And apparently there are already some products that are being developed by this “tiny biotech” … here are some more hints:

“So far, the little $10 company has used this gene-editing technology to develop food products that are near commercialization, including…

“Potatoes that you can store in the refrigerator, making them last far longer after you buy them.

“Wheat that could produce flour with up to three times more dietary fiber than the standard, thereby improving digestion, lowering cholesterol, stabilizing glucose levels, and helping to keep weight down.

“Reduced trans fat in soybean oil and lower saturated fat in canola oil, which studies show can lower the risk of heart disease.

“Wheat, corn, and rice that are immune to the devastating powdery mildew disease, resulting in farmers being able to forgo poisonous herbicides.”

And Stutman notes that “plants treated with this technology are not considered GMOs by the FDA,” which might help with public acceptance, and he says that means the approval process is much faster than it is with stuff like Monsanto’s GMO seeds.

We’re also told that Stutman’s “181X returns” number comes from dividing Monsanto’s market cap by this little company’s market cap… meaning that the upside comes because his biotech, which he says has a market cap of $280 million, will grow to the same size as Monsanto… and since Monsanto is a $50+ billion company, that means the tiny biotech has to rise 18,100%.

The math works, the reasoning is a bit more suspect. Yes, little biotechs do become behemoths sometimes… or get acquired at huge premiums… but you wouldn’t ever look at the latest biotech with a couple exploratory drugs in early stage trials and say that the likely price target is $220 billion because that’s how big Pfizer is.

But anyway… what’s the company? Thinkolator says this ad is using some old data, which probably means that Stutman made the recommendation to his subscribers back in July or August and they’ve repackaged it into an ad, but that the stock being hinted at is Calyxt (CLXT).

And yes, Calyxt is a gene editing firm that’s focused on agriculture — the technology they’re building the company on is a proprietary editing technology called TALEN, which sounds similar to CRISPR/Cas9 but is not exactly the same.

I have no idea whether or not they’ll have a lead in this area, and haven’t researched the science to any great degree — but agricultural applications have not been lost on other companies and researchers, of course, CRISPR Therapeutics (CRSP) has a big research deal with Bayer that includes agricultural applications as a secondary focus… and even Monsanto has licensed CRISPR technology from the Broad Institute (the same patents that are licensed to Editas (EDIT)).

And yes, it was back in July and August, not long after the fairly unsuccessful IPO (with pricing well below the $15-18/share they had sought) that Calyxt traded around $10 and had a sub-$300 million market cap. So now, if Calyxt is going to grow to be as large as Monsanto, it would be less than a 10,000% gain.

Sheesh, hardly even worth rolling out of bed for that, right?

Financially, Calyxt will be familiar to folks who are used to biotech investing — it’s got essentially no revenue, it’s new (the IPO was July 20), and it will be burning cash for a while. They say they have a shorter runway than Monsanto’s typical GMO crops (or than human medicines, as you might guess), since their gene editing technology enables fast propagation of the altered plant and, presumably, faster approval, but I don’t have any insight into that.

Beyond the regulatory risk, of which I know nothing specific, there’s also the plain old “investor” risk — the lockup on that IPO expires on January 16, so that’s the date on which insiders could start selling if they want to. That often depresses the share price of IPOs roughly six months after they go public, so it’s possible that if you’re excited about this stock, there could be an opportunity buy when the insiders are selling in a month or so… though that, of course, is no guarantee, and that assumes they don’t release any exciting news that causes the stock to soar before that date.

So… there we have it, a quick and dirty answer for you, with no real insight. Perfect, right? If you’ve spent any time looking at Calyxt in the first five months of its public life, or have any thoughts about TALEN vs. CRISPR or whatever else in the world of agricultural biotechnology, please jump in and let us know what you think… just use the friendly little comment box below, and thanks for reading!


Irregulars Quick Take

Paid members get a quick summary of the stocks teased and our thoughts here. Join as a Stock Gumshoe Irregular today (already a member? Log in)
guest

12345

This site uses Akismet to reduce spam. Learn how your comment data is processed.

30 Comments
Inline Feedbacks
View all comments
SoGiAm
Irregular
December 13, 2017 3:12 pm

$CLXT – Jason finally caught up with me. : -)
Been tracking since spun-off from $CLLS: https://www.stockgumshoe.com/2016/09/microblog-food-discussion/
Long #TravisJohnson, the #Gr8Gummunity and #CLXT! #Best2ALL

👍 11476
paul
paul
Member
December 13, 2017 4:12 pm

How is this not considered Genetic Modification? (GMO)

👍 15874
John
John
Guest
Reply to  Travis Johnson, Stock Gumshoe
December 14, 2017 2:23 pm

That’s it in a nutshell I think, Travis. After all, cross pollination within a species affects genetic modification at some level, or why would it exist as a mechanism? For me the “creepy” or controversial thing about genetic modification is when cross-species genetic material is in play. Personally, I’m not too bothered by spider silk produced from goats’ milk, for instance; but do get a bit bent out of shape when DNA segments from say a snail are spliced into human beings (a hypothetical case, as far as I know) Also, motivation for the activity has a role in the ethics of the endeavour as “engineer” remindeds us.

sheila225
sheila225
Member
Reply to  paul
December 13, 2017 5:54 pm

I had the same question. Initially, products would have to be evaluated to see if they fit the definition of a GMO: namely “Genetically modified organisms (GMOs) can be defined as organisms (i.e. plants, animals or microorganisms) in which the genetic material (DNA) has been altered in a way that does not occur naturally by mating and/or natural recombination.”

The key point seems to be the alteration itself and whether or not the inserted material (gene) exists in nature and could be bred into the plants through conventional plant breeding mechanisms..

They apparently believe (it is not confirmed anywhere in their documentation that I could find) that the products that will go to market will not introduce unique “artificial” genes – unlike Monsanto’s many GMOs. If so, the products would be regulated by the USDA (in the USA), and existing products under development have thus far been classified by the USDA as a “non-regulated article” as defined under the Plant Protection Act.

The only potential hole in this logic is that the classification (under the PPA) can be challenged by petition, and competitors may even attempt a challenge the “not a GMO” if the purported precision of the TALEN technology introduces any genetic “noise” during the editing process.

At the moment I have no insight into their technology and am not qualified to know if there is any likelihood of a challenge to the “not a GMO” strategy.

Add a Topic
5916
Add a Topic
5916
Add a Topic
5916
👍 11
enginer
Irregular
December 13, 2017 4:55 pm

I have mixed feelings on GMO…natural selection has been messed with for years. The Peruvians bred Maise and potatoes to solve problems with high altitudes over 1000 years ago. A “sport” is natures GMO, The problem seems to be the purpose the modification is made for—or selected for—-for example to make more money for BASF. I dun know…

👍 5
John
John
Irregular
December 13, 2017 5:24 pm

Monsanto is the worst company on the stock exchange and Farmers don’t want to use their pesticides etc.. I wouldn’t buy them if they were suppose to go up 1000 %

Add a Topic
872
Add a Topic
5971
Dave S.
Dave S.
Member
Reply to  John
December 15, 2017 12:59 am

Farmers do surely want to use their fabulous herbicide (glyphosate).

mjorrin
Irregular
December 13, 2017 7:08 pm

Gene-editing by any method, whether CRISPR-Cas9 or its successors, is going to be a huge factor. But whether their particular approach “ends food shortages” and/or makes gigantic piles of loot for investors is speculative in the extreme. I worked on a program funded by the Rockefeller Brothers to popularize a strain of high-protein corn in communities in Central America where most of the children were protein-deficient. It went nowhere, because the people just didn’t like the taste. If people mostly like the taste of GMO food products, they’ll probably buy it and eat it. But unless they figure out how to make their produce taste pretty good, it will go nowhere. Best to all, Michael Jorrin (aka Doc Gumshoe)

👍 420
Rusty Brown in Canada
Rusty Brown in Canada
Member
Reply to  Michael Jorrin, "Doc Gumshoe"
December 14, 2017 3:01 am

.
Your comment reminded me of a report from Cambodia that Beriberi (caused by a deficiency in thiamine, a B1 vitamin found in brown rice, but not in white rice) is widespread simply because Cambodians don’t like brown rice. White rice makes up about 70 per cent of the diet, but the thiamine is all in the bran. Once they remove the outer bran they lose the B vitamins. Yet they refuse to consume brown rice because “…it’s a food that’s fed to prisoners, and the rice bran is fed to chickens and pigs.”
White rice is considered a sign of wealth and prosperity.
The solution in that case was to add thiamine to bottled fish sauce instead.

Add a Topic
739
Add a Topic
5198
Add a Topic
5399
Dave S.
Dave S.
Member
Reply to  Rusty Brown in Canada
December 15, 2017 1:29 am

Are you saying that’s the current state of affairs in Cambodia? In the USA, white rice has been enriched with thiamin (and niacin, another B-vitamin) for many decades. Perhaps that’s not done in Cambodia? Odd if they don’t, as the technology to do so has been around forever.

Add a Topic
739
Add a Topic
5514
Add a Topic
739
jrlartful
jrlartful
Irregular
Reply to  Dave S.
December 18, 2018 8:13 pm

Sadly Cambodia has yet to emulate Vietnam by pursuing trade opportunity with the United States. I’m not optimistic about the situation changing while Trump is in office since export of needed nutrients to Cambodia would be sensible and decent.

Add a Topic
739
Add a Topic
637
👍 15
Skippy
Skippy