And we’re back! Today, it’s a biotech teaser from Brian Hicks for Steve Christ’s The Wealth Advisory (we last looked at one of his a few months back, when he was predicting a big move in Geron by this Spring — that one’s still on the clock, so we’ll see).
This time the tease is for a company that’s significantly smaller, but also in a potentially revolutionary area of medicine — with Geron it was stem cells, with this one it’s new vaccine technology, particularly therapeutic DNA vaccines. So how does he tease us? Let us read the ways …
“One overlooked American biotech just made your immune system 1,000 times more effective…
…Here’s how it could make your portfolio 1,000 times healthier.”
The ad goes on to establish the market — listing some of the major diseases and concluding that, just in the US, major diseases kill 360,000 people a year…
“If the U.S. loses 360,000 people a year in the world’s most advanced, highest-tech health-care system, the rest of the world must lose tens of millions to these diseases, easily.
“Now, what if I told you that one miniscule, all-but-ignored American bio-pharma firm owns the breakthrough that could soon render all these millions of deaths a thing of the past?
“What if I told you that this company is already seeing success on human subjects using this technology that turns the genes of viruses and cancerous cells against themselves?
“Then what if I said that right now, you have a brief window of opportunity to scoop up shares of this destined-to-change-the-world company for less than $1.50 a piece?
“That’s the kind of once-in-your-life profit play that could conceivably turn every dollar you invest into $100 at least – and maybe $1000 or more…”Are you getting our free Daily Update
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To make the case for huge gains the ad also mentions, as they always do, a few stocks that have had massive returns — including Human Genome Sciences in the fight against lupus, and Dendreon’s rollercoaster ride with Provenge, a therapeutic vaccine for prostate cancer. And they speculate about the huge impact that this new vaccine breakthrough could have had on the Spanish Flu epidemic of 1918, potentially saving some of those lost 50 million lives.
So that’s a nice backgrounder — we know that a “perfect” vaccine for many diseases would save lots of lives, that the market is potentially huge, and that big medical results can lead to huge stock market returns. Probably not a surprise to anyone, but it sets the stage … which leads us to the actual company that Christ is touting here.
They call this company’s innovation a “cell shock” — some kind of electric impulse that makes it easier to get a DNA vaccine into your cells to build an immune response. Here’s some more on the technology they’re developing, with a few clues thrown in:
“While they’ve kept themselves under the radar, our featured micro-biotech firm is also not new to the vaccine scene- they’ve been developing this particular technology for the past 14 years…
“… our firm’s unique genetic vaccines utilize the virus’s own DNA, which is genetically altered and then injected into cells to produce antibodies that are not fooled by the virus’ change …
“This news is just the beginning, too.
* “Because DNA is easily replicated in laboratory settings, the vaccine does not need to rely upon chicken eggs to incubate the virus…
* “Which not only means they have a more reliable source for the vaccine, but the turn-around time for its production is now a mere 2-3 weeks!
* “Moreover, this type of vaccine, because it doesn’t rely on a live virus, is able to be shipped and stored in a variety of conditions…
* “Including those areas in third-world countries that have difficulty storing traditional vaccines because of their lack of refrigeration.
“Add to this the ridiculously cheap cost of manufacturing genetic vaccines, and you have some great news for an industry already worth over $22.5 billion.”
And then the ad goes on to describe what this “cell shock” stuff means:
“‘Cell-shock’ technology is a delivery method which uses a small jolt of electricity to open the pores of the cells.
“Normally DNA molecules are too large to enter in the cell by themselves- it’s a natural cellular defense to keep unwanted objects from entering.
“But with the cell doors artificially stimulated, more of the genetic material in the vaccine is able to make it to the cell’s replication center, increasing the number of antibodies the cell is able to produce.
“This cell-shock technology is able to increase the uptake of DNA without the side effects normally associated with traditional vaccine types.
“In other words: Cell-shock technology is unmatched in its ability to safely, effectively, and economically deliver a genetically tailored vaccine to disease-ridden cells.
“After 25 years and over $100 million in research, this overlooked micro-cap company has the dominant patent estate on this technology.”
And we get a few more clues that are specific to this company:
“But you must hurry if you expect to cash in: Research universities and biotech companies across the world are already using this company’s cell-shock method to deliver genetic vaccines with astounding success…
“One European company using this technology has already completed phase I vaccine trials for Hepatitis C, which is the leading cause of chronic liver disease in the U.S.
“That’s just one of three other research partners using this company’s patented cell-shock technology- and it doesn’t end there, either…
“This company has received over $25.1 million from both the government and various philanthropists and charities to develop a range of vaccines for everything from biodefense to third-world diseases like malaria….
“Preliminary animal tests of this company’s “cell shock” system have already shown 100% protection against the H1N1 version currently sweeping the globe!
“This is why you must get in on this stock RIGHT NOW. Even overcoming an obstacle as small as moving this vaccine into animal trials is enough to push this stock’s gains well over 200%.
“That’s right: This stock has already tripled in recent months on early word of what it can do.”
And finally, we get a summary of the company’s pipeline:
“This company is on the verge of surpassing several major obstacles in the next couple months-
* “1 vaccine is already in the middle of phase II human trials
* “6 vaccines are nearing the end of phase I human trials
* “1 vaccine is awaiting confirmation to move into phase I human trials
* “4 others are finishing up their animal trials and on the verge of applying to continue to humans
“Every phase that one of these 12 vaccines moves up is another good bump to this company’s stock.
“The further along the vaccine is, the more you can expect the stock to rise…
“…Completing any one of the human trials could easily see your gains reach triple-digits – or even more.”
So who is this company? Well, all the clues match up — including the fact that the company talks about successfully backtesting with the 1918 flu … this must be …
Inovio Biomedical (INO)
Inovio is indeed a vaccine-focused biotech company, with a good match on all of those clues. They are working on most of the diseases mentioned in the teaser, with their most advanced pipeline products (those six phase 1 clinical trial candidates) being for cervical cancer, HIV (three trials, both preventive and therapeutic), prostate cancer, and breast/lung/prostate cancer. They do have one product that’s probably moving beyond phase 1, the one that’s teased as being with a European partner, in this case it’s a Hepatitis C vaccine that’s been partnered with Tripep, a Swedish company and that reported Phase 1 results back in December. When this trial launched it was called a Phase I/II trial, so I suppose they could technically be in Phase II now with their continuing patients, but the announcement didn’t offer any further details on that front.
The CEO has been making the rounds of conferences recently, and noted that “2010 will be a strong inflection point for our company.” But of course, CEOs say that kind of thing … and probably believe it … all the time. The previous CEO was equally optimistic in 2007 when their Phase I/II trials for various cancers were moving forward in Europe, trials that apparently fizzled or were reworked (I didn’t dig too deeply into those) — the new CEO, Joseph Kim, came in as part of their merger last summer with his VGX Pharmaceuticals, a merger that also moved Inovio into the DNA vaccine research business in a big way … the merger essentially marries VGX’s DNA vaccine development technology with Inovio’s delivery technology (that “cell shock” bit, which they call “electroporation”).
And I should probably insert the standard warning here about tiny stocks — this one is trading at just about $1.05 right now, with a market cap just a bit above $100 million and less than a half million shares traded a day, so the stock usually moves one way or another on real news, and is probably just as likely to move on no news at all, or on the mentions by Steve Christ, if this is indeed his stock, or by yours truly — the stock has already seen dramatic highs and lows this year, so remember that though the stock got well over $3 back when swine flu was in the news every day, it also got down under 30 cents when the market was falling apart back in March … and either of those extremes is probably possible in the year to come.
It’s quite possible that you’ve heard of Inovio — probably because they were one of the popular swine flu names last summer when that investment craze peaked, and their stock did triple in a very brief period of time and then collapse shortly afterward. Scott Eden at TheStreet.com did a nice story on Inovio not long after that swine flu spike in the shares (a spike that has almost completely evaporated now, the stock got well over $3 a share, albeit very briefly, and is now trading at just over a buck). That article noted, as have previous ones on this company and others, that the bets on new vaccine technology have largely gone nowhere over the last decade — when it came to the panic over swine flu, the governments placing huge commodity orders were focused on the tried and true and on big pharma, there’s certainly research money going into advanced vaccine development but we’re not going to see these drugs for this (now significantly less fearsome) pandemic, and quite possibly not in the next one, either.
As I’ve written many, many times, I’m no scientist — Inovio’s products revolve around technology that they call SynCon for DNA-based vaccines, and around the electroporation technology for ensuring that those vaccines get into the cells as required (that electroporation bit appears to me to be the “Cell Shock” that Christ talks about) … and we should all be very skeptical about new vaccine technologies and new delivery techniques … or at the very least, extremely patient. The FDA has proven to be cautious about approving new vaccines, particularly novel ones (as anyone who has watched Dendreon’s share price could tell you over the years) … Inovio’s pipeline looks impressive but is all very early-stage stuff and, save for the swine flu excitement (the vaccine they were testing was still in animal studies … pigs, naturally), it looks to me like there’s not yet a headline-maker in the pipeline, they’re still waiting for the clinical trial that shows outstanding results, shocks investors into excitement, and gets them big partner deals.
Will one of the current pipeline products be the one that breaks through? That’s the big question, of course … it is certainly promising that they have a half-dozen different clinical trials ongoing, including a couple partnered trials with Merck and the aforementioned Tripep, but while that improves the odds it does seem likely that the odds remain quite long for an immediate breakthrough — this is still early-stage biotech and what seems to me a yet-to-be-proven platform of technologies. I wouldn’t argue against trading these shares and hoping for spikes on big news, it does seem like they will have a lot of news that’s likely to come this year … but I would say that it would probably behoove investors to be prepared for that news to be uninspiring.
What do you think? Have a better candidate for Steve Christ’s biotech teaser here, or were you one of the lucky (or unlucky) traders who rode Inovio up or down last Summer? Willing to take a chance on a new vaccine technology, or do you want to wait for it to get a bit further along first? Personally, I’m more comfortable with Christ’s Geron pick just because it seems like a stodgy old man compared to this little whippersnapper, but I don’t own any of these stocks right now — let us know what you think with a comment below.