by Travis Johnson, Stock Gumshoe | December 13, 2017 2:26 pm
Jason Stutman[1] has a teaser pitch going around for his Technology & Opportunity[2] 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[3] 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[4]. More from the ad:
“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[5], stabilizing glucose levels, and helping to keep weight down.
“Reduced trans fat in soybean oil[6] and lower saturated fat[7] 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.”
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And Stutman notes that “plants treated with this technology are not considered GMOs by the FDA[8],” 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 TAL[9]EN, which sounds similar to CRISPR[10]/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)[11] 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[12] (the same patents that are licensed to Editas (EDIT)[13]).
And yes, it was back in July and August, not long after the fairly unsuccessful IPO[14] (with pricing well below the $15-18/share they had sought) that Calyxt traded around $10 and had a sub-$300 million market cap. So now, if Calyxt is going to grow to be as large as Monsanto, it would be less than a 10,000% gain.
Sheesh, hardly even worth rolling out of bed for that, right?
Financially, Calyxt will be familiar to folks who are used to biotech investing — it’s got essentially no revenue, it’s new (the IPO was July 20), and it will be burning cash for a while. They say they have a shorter runway than Monsanto’s typical GMO crops (or than human medicines, as you might guess), since their gene editing technology enables fast propagation of the altered plant and, presumably, faster approval, but I don’t have any insight into that.
Beyond the regulatory risk, of which I know nothing specific, there’s also the plain old “investor” risk — the lockup on that IPO expires on January 16, so that’s the date on which insiders could start selling if they want to. That often depresses the share price of IPOs roughly six months after they go public, so it’s possible that if you’re excited about this stock, there could be an opportunity buy when the insiders are selling in a month or so… though that, of course, is no guarantee, and that assumes they don’t release any exciting news that causes the stock to soar before that date.
So… there we have it, a quick and dirty answer for you, with no real insight. Perfect, right? If you’ve spent any time looking at Calyxt in the first five months of its public life, or have any thoughts about TALEN vs. CRISPR or whatever else in the world of agricultural biotechnology, please jump in and let us know what you think… just use the friendly little comment box below, and thanks for reading!
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$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
How is this not considered Genetic Modification? (GMO)
I think part of the distinction is in removing a gene instead of adding a gene from a different organism… but I may well not understand the nuance here.
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.
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.
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…
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 %
Farmers do surely want to use their fabulous herbicide (glyphosate).
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)
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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.
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.
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.
Outside of Stock Gumshoe, Technology and Opportunity (TAO) is the only other newsletter that i subscribe to. CALYXT (CLXT) is not in the TAO portfolio, where as EDITAS (EDIT) has been in the portfolio since August 2016. I find TAO a good subscription because of the success rates. This year 15 companies are being held at an overall average of 96.25% gain, and 3 companies held at an overall average of 26% loss. Previous years on closed positions have been about the same, so if you have bought,held, and sold as they have advised then one has done pretty good.
CALYXT could still be the company that he is trying to sell membership on but it is not yet in the portfolio.
Non-Genetically Modified Organism Processed Food Market in China – Demand for Transparency in Labeling Promotes the Growth of the Market https://www.businesswire.com/news/home/20171214006515/en/Non-Genetically-Modified-Organism-Processed-Food-Market-China
Except for game and most fish humans actually eat NO “natural” foods. All of our domestic animals and plants are the product of thousands of years of artificial breeding, radically altered from their “natural” state.
There are at last count 220 GMO foods that we all eat and are obvious to. . Gene editing has been in place for years in salmon farms and in land-based animals. This society is too chemophobic. Genetically modified wheat in the 40s was responsible for staving off mass starvation in the East. Nobel Prize winner Norman Borlaug ‘s modification of a Japanese mutant dwarf strain, Norin 10 was an enormous success.
Gene editing is nothing more than GMO with specificity.
I love Roundup as it is the only defense against mile-a-minute vines which is an invasive species commandeering my four country acres. Its cancer scare is junk science as explained by Steve Milloy at his blog: https://junkscience.com.
Exactly so! Borlaug’s “Green Revolution” wheat was short and stocky and would not lodge (bunch up) when it got wet. It responded better to irrigation and fertilizer, and produced bigger grains. It added to the nutrition of many millions everywhere in the world. Cross-breeding is nothing other than gene-editing by another name. The prejudice against GMOs is mostly superstition!
The ‘Green Revolution’ led to agro-industry creating a chemical agriculture with its nitrogen fertilizer, poisonous pesticides and herbicides which is destroying our soil, our water, our air. The major GMO crops like soy, corn, are going to feed animals not humans and that raises a whole other debate.
these people just scam u do all tour research first!!! These reports really help.
Has this Motley Fool teaser been covered yet?
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You may be interested in this article: https://www.stockgumshoe.com/reviews/cutting-edge-the/whats-being-teased-as-project-iris-the-5-stock-behind-apples-top-secret-device/
Best2YouAlwayz – Ben
Why when I examine these two companies I visualize a large Cricket (Monsanto) and a piece of Grain (Calyxt).
Genetic engineering has already proven its ability to change human circumstances. I know that the basic facts of what I am going to say are true, but the year, country etc. is likely not quite right. A number of years ago there were persisting flood conditions in some country in SE Asia. They couldn’t grow rice because if they grew the short strain it drowned and the tall strain launched (fell over). So scientists genetically engineered a crossing of the two plants and ended up with a medium height plant that made lots of rice. Thus, famine was averted.
That, to me is not genetically modified…..its the same as a black person and white person have a baby, both are human and still a human born. Rice crossed with rice is still rice. I’m not afraid of spiders but I’d rather not have spider DNA in my food, crops, meat etc.
Calyxt…I believe in the long-term potential of this spin-off from Cellectis; I predicted the spin-off; and posted “Gene Therapy for Potatoes” some time ago.
However I have come to the conclusion that for my own objectives and time frames, the natural resource sector presents better opportunities for me.
So I am patting myself on the back for early calls on these, but no longer carry positions in CLLS or Calyxt.
While Monsanto’s legal tactics on GMOs are revolting, while its soybean GMO allows use of herbicides that taint our foods, and while its corn GMO generates pesticides internally that may end up in your tummy or that of your pigs , the company’s stock exhibits one commanding attraction — Warren Buffet made it a significant add to the Berkshire portfolio as reported in the latest round of 13Fs. Dare we judge investments from our own moral perspectives when the great sage of Omaha foresees a harvest of green backs ahead?
YES, we dare!
I enjoy eating Pomelo or Shaddock, as they are sometimes still called, after the captain who took them to the Caribbean from China in the late 17th century. These large fruit store well and are very enduring, which was intended to have a huge benefit to sailors against scurvy. Unfortunately the West Indian farmers were not skilled at budding, and continued only to grow the plants from seed, which created a harsher and more sour fruit. Thus their use and benefits became overlooked.
However the Citrus maxima, their trees, overcame their neglect by cross-fertilising with orange trees. Oranges themselves were already a cross between mandarins, Citrus reticulata, and Pomelos; this interaction, though, was almost certainly engineered by the Chinese. Nobody has been complaining about that or the multiple other citrus derivatives that have been created.
In the Caribbean, the inter-breeding of the oranges and shaddocks was natural, and in the 19th century produced our grapefruits.
I just don’t think people get it. Someone needs to explain the difference between crossing fruit with fruit to get fruit and GMO which is adding mouse gene into a fish. Good lord
Hi out there,
I’ve spent a lot of time trying to find out what company has the magic chip that’s 50 times faster! Anyone have the name and ticker cymbal? Thanks if you know.
MP
Dear fellow investors: don’t be fooled by the safety and efficacy of gene editing. It is in reality inaccurate and dangerous from a health perspective. They lead you to believe that it is very accurate, “snip-snip” I believe is how they describe it, with inconsistent outcomes. Monsanto began claiming higher yields for genetically modified crops, which has been shown to be entirely false. Natural, unaltered seeds produce far better yields than GMO altered seeds. Monsanto also claims that GMO crops require less herbicides….again NOT true. Every year since introducing GMO modified crops (corn, soy, etc.) farmers have had to use more and more Round-Up/acre to control weeds, and weeds are morphing into super-weeds, resistant to Round-up and its active ingredient glyphosate. As a result, Monsanto is petitioning the FDA to begin using 2-4D in conjunction with glyphosate to better control weeds. To those of us old enough to have survived the Viet Nam era, 2-4D is also known as agent orange. Many servicemen and women are suffering and many have died from the after effects of agent orange exposure. Yet the FDA is considering allowing the spraying of a cocktail of glyphosate and 2-4D of 2-4D on our food supply intended for our consumption. Many are unaware that the incidence of all auto-immune diseases, including cancer, irritable bowel, rheumatoid arthritis, Crohn’s, diabetes, fibromyalgia to name only a few, began to substantially increase the exact year GMO foods were introduced into our food supply, unknown to us the consumer. This uptrend continues to this day. Be smart, get educated, and besides, any profits will be wiped out in litigations involving health related deaths caused by the use of GMO “technology”, We need to take back control of our food supply, otherwise we won’t be around to talk about investing in stocks. In closing, do not confuse this topic with immunotherapy, which has great merit. Good day
a regular subscriber