The fascinating thing about the article as well as the U.N. materials is the organization’s proposed solution. Instead of medical technology, the U.N. response to the oncoming cost apocalypse is primarily “lifestyle” changes — 21st-century Calvinism. I envision a vast global network of U.N.-branded gyms and diet programs.

This is more magical thinking. I trust the U.N., by the way, to come up with effective fitness strategies about as much as I trust it to determine accurate climate science.

On the other hand, it does represent the first real acknowledgment from the so-called international community that civilization has moved to a point where obesity, rather than starvation, is the primary problem. It’s long overdue. Starvation, of course, is still a threat in some regions, but only because certain governments have replaced decentralized markets with top-down state enterprises.

I’m disappointed that the U.N. conference is ignoring scientific solutions to the problems they’ve described. Not that you shouldn’t exercise and watch your diet. We should, but why aren’t these so-called experts even talking about the biotechnologies that will abolish our biggest killers?

At the top of the most-wanted list of these serial killers is, of course, cardiovascular disease. Clearly, CV disease is obesity related. The fantasy that the U.N. can orchestrate a mass weight loss, however, ignores all the data.

Weight loss is a multibillion-dollar international industry. The clientele is comprised of wealthier and more-educated individuals who generally pay their own way. The impact of all these therapies, however, is extremely limited. Yes, temporary weight loss can be accomplished without drastic surgical approaches, but only long-term weight loss demonstrates significant health benefits.

There is, unfortunately, almost none of this kind of successful long-term weight loss. My wife, incidentally, was at one time in private practice as a registered dietitian. This statistical lack of success was one reason she left the profession.

The truth is that the human race has never before faced the dual conditions of vastly extended life spans with improved availability of nutrition. Even a generation ago, the poor tended to be thin. Real poverty meant malnutrition. Today, obesity among the poor is worse than among wealthier people. Nothing in our ancestral past has prepared us for this bizarre new world of long, calorically enhanced lives.

For most of our species’ history, hunger was the critical biological mechanism that compelled us into constant action. Most of us automatically ate as much as we could to store as much fat as possible for inevitable periods of scarcity.

Now, without scarcity, that hunger has turned from a survival mechanism into a source of disease. Nevertheless, the same instinctual drives are operating still. The chemical cravings generated by shrunken adipose cells are simply impossible for most of us to resist for long. Only the thin person believes that obesity is due to a simple lack of will. It’s far easier, in my opinion, to quit smoking than overeating.

Fortunately, there are solutions. They won’t come, however, from changing human nature. That’s a fool’s errand.

One reason that obesity increases with age is that we tend to lose brown adipose, or fat tissue (BAT). BAT is a type of fat that babies have in abundance. BAT is a kind of furnace that raises body temperature by burning calories. If you have children, you probably remember that period when infants kick off blankets and sleep comfortably in even very low temperatures.

In animal studies, transplants of cloned BAT cells have resulted in permanently lowered body fat content and improved health. Dr. Michael West has spoken publicly about his ability to create BAT stem cells.

As we age, the loss of fat under our eyes creates that sunken look, keeping many tens of thousands of cosmetic surgeons busy and wealthy. Imagine BAT SC injections using rejuvenated BAT cells derived from your own induced pluripotent stem cells. You could deal simultaneously with age-related cosmetic issues while gaining the calorie-burning cells needed to keep you trim and healthy.

Recent information released by West in a scientific conference reaffirms my confidence in his ability to deliver this technology. For any cell transplantation, it is critical that cell populations be absolutely pure.

I trust scientists will continue to give and solve more of these great problems. The government and the U.N., I have less confidence in.

Yours for transformational profits,

Patrick Cox
for The Penny sleuth

The UN Wants You to Consume Less Food and Exercise was originally featured in the Penny Sleuth.

The top cause of death in the United States is heart disease. More than 600,000 people die of heart disease in the U.S. alone. More than 1 million people suffer a heart attack. Worldwide, the number swells to 22 million. For the survivors, living with a damaged heart becomes their day-to-day reality. For those needing heart transplants, the waiting lists are long. Even when a recipient does receive a transplant, it is from a foreign donor, and a lifelong course of immunosuppressant therapy is needed so that they do not reject the organ. The health care costs associated with heart disease are vast.

Although heart cells are grown in culture and even made to beat, the heart is much more than a mere collection of cells. It has a complex structure that needs to be recreated in order for a whole, transplantable organ to be possible. Within the heart itself, there are different types of cells. Any kind of attempt at regrowing a heart will need to place the right kinds of cells in their correct locations within the organ.

This seems like an insurmountable problem, but a recent breakthrough based on research carried out by Doris Taylor and Harald Ott while working at the University of Minnesota is making it possible. They have found a way to create a complete structure to which stem cells can attach and grow into a working heart. When it comes to science and the human heart, there are no limits.

Plumbing for a Solution

The Minnesota researchers theorized that if a heart could somehow be reduced to its basic skeleton, it could then be used to create the framework for growing a new one. In order to do this, all the old cells would have to be removed while leaving behind the extracellular matrix (ECM). This matrix consists of the protein fibers that form the scaffolding that gives the body’s organs their shape and structure.

Decellularization techniques have been around for a long time. Existing methods immerse the organ in a solution containing a detergent. The detergent, in turn, reacts with the cells, in effect “scrubbing” the protein skeleton clean of cells from the outside in.

The problem with existing decellularization methods is that the protein scaffolding also takes some damage. The protein matrix not only provides the structure for the tissue, it also contains important biochemical markers that tell growing cells where they are in the organ and what they are supposed to be doing. Without the signals provided by these markers, called cytokines, stem cells do not reliably differentiate into the right kind of tissue in an extracellular matrix. In addition, stem cells seeded into this matrix to regrow the organ do not always end up close enough to food and oxygen to survive and multiply into new tissue.

In order to address this problem, Drs. Taylor and Ott invented a completely new method of stripping cells away from the protein skeleton called profusion decellularization. Instead of merely immersing an organ in a solution, they connected the blood vessels to pumps that circulated detergent solution throughout the entire organ’s blood supply. This keystone technology allows the vascular plumbing of the organ to act as a conduit to clean out the organ from the inside. It provides a far superior environment for stem cell seeding where the new cells are able to receive the nutrients and oxygen they need to proliferate and differentiate.

Following Their Heart

These findings were published in the prestigious peer-reviewed scientific journal Nature Medicine. The discovery won Popular Science’s award for best health innovation of 2008. Additionally, after acquiring full licensing for the technology from the University of Minnesota, the discovery provided the key technology for a new startup: Miromatrix Medical Inc.

Currently, Miromatrix is a very-early-stage company seeking additional private funding to continue developing the technology to realize its ultimate goal of whole organ regeneration. However, Miromatrix has a stepwise business plan for bringing new heart products onto the market in the next few years.

The first iteration of the technology will consist of a cardiac patch derived from decellularized pig hearts. Porcine ECMs are similar enough to those in humans to be useful in therapies. In order to simplify the FDA approval process for the first version, the patch itself will not be recellularized, but will be the protein matrix alone. When grafted into tissue damaged by a heart attack, it will provide the framework for the patient’s own stem cells to migrate, attach and regrow.

The second-stage product will be partially recellularized. In this version, the blood vessels in the patch will be regrown with endothelial stem cells. The final version of the patch will be fully populated with new heart cells for transplant. Miromatrix expects the first product to be available in three years.

Since Miromatrix is still a private company, we cannot add it to our portfolios, but I am watching it very closely and hope to do so in the future.

For transformational profits,
Patrick Cox
Penny Sleuth

August 4, 2010

The Startup That Could Build You New Organs — And Make Its Investors Rich was originally featured in the Penny Sleuth.

Have you ever wondered why it takes longer to recover from a strenuous workout or a muscle injury than it did when you were younger? As our knowledge of molecular cell repair machinery improves, we expect therapies that will restore different tissue types to a more youthful state.

For example, in September, scientists at the Children’s Hospital of Pittsburgh identified a group of stem cells taken from blood vessels that could be used to treat damaged heart tissue and rebuild muscle damage caused by diseases such as muscular dystrophy. In fact, these adult stem cells, known as myoendothelial cells, can not only be differentiated into muscle tissue, but bone and cartilage as well. These myoendothelial cells are much more efficient for creating new muscle than other adult stem cell types that can be taken from patients.

Muscle regeneration is particularly important when it comes to heart muscle. Heart attacks often destroy heart muscle, and there are currently no commercial options for regrowing it. However, Harvard Stem Cell Institute and Massachusetts General Hospital scientists were able to use stem cells to regrow functioning heart muscle in mice. The plan is to use these stem cell techniques to regrow heart muscle in patients that have had heart attacks.

An Australian company is doing just that. In Stage II clinical trials in the United States, Mesoblast Ltd. (ASX: MSB) showed that its stem cell-based therapy, Revascor, showed sustained improvement in heart muscle function six months after patients received the minimal dose of the drug in a single injection. Ultimately, more-powerful pluripotent stem cells will do the same thing even more efficiently, but this product could come to market first. The company is currently presenting its findings at the American Heart Association annual conference.

Researchers at the Northwestern University Feinberg School of Medicine have also been trying to repair damaged hearts through stem cell therapies. In a double-blind placebo-controlled study, they transplanted adult stem cells into patients with severe angina and heart disease. The results were astonishing: Patients that had received the stem cell treatment doubled the amount of time they were able to walk without feeling pain, and overall experienced less pain over the course of the day. The stem cell therapy caused new blood vessels to grow in the heart tissue, supplying the muscle with a more adequate blood supply.

Also, University of California researchers have found some of the molecular triggers that lead to aging in muscle tissue. Researchers took biopsies from the quadriceps of the participant’s muscle at the beginning of the study and then immobilized it in a cast for two weeks. Immobilized muscle tends to atrophy. After removing the casts, the participants went through an exercise regimen to restore the lost muscle mass and further biopsies were taken.

They found that the actual number of adult stem cells responsible for tissue regeneration is halved in old muscle compared with young muscle. They also found that younger participants had four times more regenerative cells working at repairing the muscle compared with older subjects in the study. They knew from previous studies that there are biochemical signals that tell stem cells where to go to repair muscle tissue and that these signals decline as part of aging.

The molecular receptor on the adult stem cells, called Notch, causes growth when it is activated. These cells also have a molecular receptor for the TGF-beta protein that reduces the stem cell’s ability to divide when it is excessively activated. Past studies in mice revealed that aging causes a decline in the Notch receptor and an increase in the amount of TGF-beta. This state causes a decline in the ability of the stem cells to rebuild tissue.

The latest study showed that these pathways found in mice are also present in humans. However, this study also showed for the first time the importance of another biochemical regulator of the activity of the Notch receptor. Known as MAPK, this enzyme is well-known for its function in forming organs in a wide variety of animals, from worms to insects and mammals and now to humans. The researchers discovered that when they raised old human muscle in a culture and forced the activation of this enzyme, the ability of the muscle to regenerate was improved. This is a technology with enormous financial promise.

I’ll fill you in when more of these emergent stem cell technologies become investable.

For transformational profits,
Patrick Cox
Penny Sleuth

May 13, 2010

Making Sense of Stem Cell Investments: An Update was originally featured in the Penny Sleuth.

I’m finishing this month’s Breakthrough Technology Alert issue right now. Nevertheless, there are big things happening, and I have to tell you about some of them. I’m also excited about the company I’m covering this month. It is a leader in search for the next generation of weight loss drugs and poised to take off, probably this year.

Weight loss is an area we’ve been looking at for a long time now. The economics are compelling. Obesity is a major risk factor in various diseases, from arthritis and cancer to diabetes, hypertension and heart disease. Any drug that can help people lose weight safely is, therefore, going to offer true value. Moreover, obesity increases with age. As the baby boom, the wealthiest generation in history, rolls into its senior years, the demand and the need for an obesity treatment is growing dramatically.

Until now, we haven’t chosen a company in this sector, for several reasons. One is simply that the field is crowded. There were a lot of companies and technologies to vet. Many people are working on fat drugs. Normally, this might have kept me out of the sector, but there’s room in this market for more than one winner. Buyers of these products often use them in combination.

Another reason we were particularly careful is that we’re going to see brand-new strategies for weight control in coming years. These new approaches, which I expect from several new sciences, including RNA interference, will probably leapfrog anything that comes out in the next year or so. Nevertheless, the demand is so great and the FDA is so resistant to new technologies, I expect some serious profits from innovators over the next five years. More importantly, this company has the potential and platform to evolve into a major biotech success story with many other targeted therapies.

Speaking of health and weight, I hope you’ve studied the new research regarding vitamin D I’ve told you about (for a refresher check the middle section of this article). Your health, after all, is your biggest asset. The newly discovered importance of optimal serum D levels should be seen as an opportunity to garner significant yields in health at very low costs.

Personally, since I’ve gotten my serum D levels up, I’ve noticed a number of obvious changes and benefits. One of the most welcome is that long-standing rotator cuff problems in my shoulders have nearly disappeared. I didn’t expect those results, but I’ve been able to increase the intensity of my workouts. For the first time in years, I’m adding pounds and reps to my weight training routine.

(You don’t need to do Navy SEAL levels of exercise to get real benefits, by the way. The benefits of exercise kick in quickly at relatively low levels. Just 20 minutes of walking or time on a treadmill or climber three times a week produces remarkable benefits, as I’m sure you know.)

Among the benefits that would interest investors are increased mental acuity. It seems like a new article on this subject appears practically every week, but a recent New York Times article is relatively comprehensive. I find this line extremely interesting: “Exercise causes the release of growth factors, proteins that increase the number of connections between neurons, and the birth of neurons in the hippocampus, a brain region important for memory.”

Of even more importance both to your portfolio and to your health is a recent article published in the American Heart Association’s journal, Circulation. It is titled “Physical Exercise Prevents Cellular Senescence in Circulating Leukocytes and in the Vessel Wall.” According to this research, the increased health and life spans associated with exercise come from the increased production of telomerase.

Telomerase, as you may know, is the enzyme that triggers regeneration of telomeres. Telomeres are the end caps that protect the double strands of DNA. As we age, our cells reproduce. Each time a cell’s DNA splits and reproduces, a telomere is used up. When the supply of telomeres is exhausted, the cell’s “Hayflick limit” is reached and it dies.

Even before cell death, however, cell function begins to suffer. We get “old.” In the journal article, German scientists show that exercise provokes telomerase production. Telomerase, the “immortalizing” enzyme, protects and restores telomeres. This, in turn, increases health and lengthens life spans.

The financial importance of the study is that it emphasizes the power of telomeres and telomerase. This is what regenerative medicine is all about. Stem cells have full youthful telomeres. When those cells are adopted by a patient, that patient’s new cells are functionally youthful, with full human life spans ahead of them.

Another exciting possibility is either to provoke telomerase production or actually introduce telomerase into our cells. This would restore our telomeres to youthful levels. I’m talking to world-renowned scientists now, each working on a different means of accomplishing this goal. There’s no way to know who’s going to solve the problem first. I have no doubt, however, that it will be solved.

In the meantime, practical steps like an exercise regimen and vitamin D supplementation are a good option. And on the investing front, I’m excited about the potential my new weight loss play has to offer. To learn more, visit the Breakthrough Technology Alert website…

For transformational profits,
Patrick Cox
The Penny Sleuth

February 26, 2010

What the Telomerase Breakthrough Means for Weight Loss Companies was originally featured in the Penny Sleuth.

Two weeks ago, I told my Breakthrough Technology Alert readers that there were reports that our SC companies were under “short attack.” As you know, a short attack involves the coordinated selling of large blocks of stock. This creates a huge, rapid downward price plunge, intended to panic investors into selling. The point of a short attack is that the attackers get to buy back their own stock, and more, at artificially deflated prices.

They do so, of course, because they expect the stocks to return to or surpass their previous prices.

Stem cell companies are a logical target for such a strategy: The sector remains relatively small compared with other medical industries, and they are known for volatility. A really well strategized short attack would even include some sort of insider information that would send the company or sector careening back up quickly so the attackers could take a huge quick profit.

So it didn’t surprise me that on Dec. 2, the day after I warned readers about the short attack rumors, SC stocks shot up again. The National Institutes of Health approved 13 more embryonic stem cell lines for use by organizations that accept federal research funds and announced many more lines would be approved soon. As usual, such an announcement had a widespread and completely illogical impact on SC company prices.

Even companies working on adult SC therapies rode the news up. StemCells Inc. (NASDAQ: STEM) increased by more that 30%. This, obviously, makes no sense, because STEM works only with adult stem cells and sells nothing in the market of NIH-funded researchers. (At least several of my BTA holdings are in the business of selling SC research products.)

I can’t know for sure, incidentally, if there was any real connection between the huge dip in prices before the NIH announcement that drove them back up. I probably never will. The take-home lesson, however, is to look at the science, instead of market fluctuations. If the science is valid and the demand for the product is legitimate, you should buy transformational stocks and forget about them. These stocks, by definition, yield such extraordinary gains that you can afford to sit on them for years before they pay off.

So let’s review the market potential and the science of regenerative medicine once again. The market potential is, in my opinion, unmatched. Regenerative medicine is completely unlike even other transformational medical technologies for one simple reason. Most medical technologies cure or treat the causes of premature death. Regenerative medicine, however, is unique in that it can actually turn the clock back, extending maximum healthy life spans.

So how are they doing? I am completely enthused by the progress that the stocks I’ve already endorsed are making. One company continues to solve the riddle of how stem cells develop into their many end forms. Another’s breakthrough, which allows it to use unfertilizable eggs to create its bank of cell types immune-matched to 95% of the population, is an incredible advance. Few understand these points now, but word will get out.

Speaking of which, I’ve learned from sources that National Geographic is working on a documentary about the “immortalizing enzyme,” telomerase. This is good news not only for the stocks that control telomerase IP. It’s good for the entire regenerative medicine industry. Word is that the producer working on the show is smart enough to understand the science involved. Here’s hoping.

For transformational profits,
Patrick Cox

December 18, 2009

An Update on Stem Cell Stocks was originally featured in the Penny Sleuth.

During the last several decades, there has been a dramatic increase in obesity in the developed world. With the rise in body mass indexes are negative effects on metabolism, including cholesterol, blood pressure and insulin resistance.

A recent CDC study estimates that more than $147 billion per year of health care expenses are attributable to obesity. The Department of Health and Human Services believes that obesity may account for 300,000 deaths a year in America. A plethora of pills, potions, creams and lotions of dubious effectiveness are peddled in order to satisfy this growing need to reduce body fat.

Usually, we treat weight loss as an act of willpower and discipline. There are, however, clear biological signaling pathways that influence appetite, metabolism and body weight beyond our direct conscious control.

For instance, in 2007, researchers demonstrated that when a population of mice were fed a high-fat diet, some grew obese, while others did not. Fatty tissue produces a hormone called leptin.

Leptin sends a signal to the brain that makes it control appetite and metabolism. The researchers thought that increasing leptin levels in the obese mice would cause weight loss. It didn’t. They discovered that while both obese and normal mice had leptin circulating in their bloodstreams, the mice that gained weight had a deficiency in leptin receptors in the hypothalamus region of the brain. These mice did not respond to increased body fat in the same way as the others did.

More recently, Harvard Medical School collected blood samples from newborns and measured them for the leptin hormone. They discovered that the more leptin the babies were born with, the lower their body mass index was at the age of 3.

But that’s not all. There may also be a viral vector that leads to an increased risk of obesity.

Closely related to the common cold, human adenovirus 36 (AD-36) was first identified in humans in 1978. More recently, this virus has been shown to be associated with obesity. For example, in 1988, a viral epidemic had swept through poultry flocks, killing thousands. Oddly enough, however, the dead poultry had a larger amount of body fat than healthy birds.

This got Dr. Nikhil Dhurandhar of Louisiana State University researching a possible connection. He showed that AD-36, when injected into chickens, caused a large increase in body fat. This effect has also been demonstrated in nonhuman primates.

Further investigation revealed that stem cells infected with a gene from AD-36, called E4 ORF-1, were much more likely to differentiate into fat cells than cells that did not express the gene. This, by the way, makes obesity a prime candidate for the anti-viral technologies of last month’s Breakthrough Technology Alert pick. These therapies also have the potential to turn off the fat switch.

Dr. Dhurandhar has coined a neologism for this kind of obesity, “infectobesity.” According to him, seven viruses have to date been reported to cause obesity in animals. The possibility that the origin for much obesity is viral has enormous health and investment implications.

If this new theory of obesity seems unlikely to you, remember the resistance to the discovery that H. pylori bacterium caused stomach ulcers. The medical establishment ridiculed such an unconventional explanation for a condition widely attributed to the anxiety produced by modern living. Ultimately, however, these researchers who identified the bacterial cause were proven right and received the Nobel Prize for their efforts.

To quote Baruch Spinoza: “Be not astonished at new ideas; for it is well-known to you that a thing does not therefore cease to be true because it is not accepted by many.”

In the meantime, privately held Cambridge, Mass.-based Zafgen is designing a nanotechnology-enabled drug that directly homes in on human fat tissue. Most experimental drugs for obesity work by helping the brain improve its ability to interpret biological signals to regulate appetite and metabolism. Zafgen takes an entirely novel and revolutionary approach, based in part on research by MD Anderson Cancer Center researchers Wadih Arap, Renata Pasqualini and Mikhail Kolonin. Essentially, they treat adipose tissue similarly to tumors.

Understand that all cells have expiration dates. When the signal comes to die, they should do so. But in some cells, mutations arise that cause them to ignore these signals. So they continue to divide uncontrollably and cancers develop. These researchers had been developing technology to cure cancerous tumors by destroying their blood supplies, literally starving these cells to death.

That’s when they had the game-changing idea. The same technologies could be applied to obesity.

Zafgen is testing new drugs that shrink fat tissue by attacking its blood supply and inducing apoptosis — cell death. In animal studies, subjects lost 25% of their body weight in weeks. The method not only removed external body fat, which makes up beer guts and love handles, but it also removed the dangerous fat that envelopes organs. Moreover, the drug took out only the “bad” white fat, leaving beneficial brown fat untouched. Obese mice used for the early tests remained healthy. They also ate less. Once their weight leveled off, they started to eat more food without putting on weight.

No one is really sure why this happens, but it is possible that fat tissue creates its own positive feedback loop to encourage more fat tissue to form. Possibly, it creates a source of stem cells that differentiate into new fat cells and grow into more fat tissue.

Zafgen plans on putting its new pharmaceutical into clinical trials soon. If successful, it will have developed a “magic bullet” cure for obesity. We are watching this space carefully and will keep you up-to-date. This could come to market before almost anyone expects.

For transformational profits,
Patrick Cox

December 9, 2009

The Fat Burning Technology That Could Make You Rich was originally featured in the Penny Sleuth.

It seems callous, I suppose, to enjoy the effects of a storm that has already killed scores and could still claim more. That, however, is exactly what I’m suggesting you do in regard to the economy.

An economic storm continues to wreak havoc globally. Moreover, the same idiotic policies that caused the problem are now being offered as solutions. The “crowding-out effect” guarantees that it will continue for some time.

This view, that government spending and debt crowds out investment in areas that produce the greatest economic growth, is widely held at the University of Chicago Economics Department. Though this department has dominated the Nobel Memorial Prize for economics for decades, it has little or no sway with the current Chicago-centric administration.

The House’s just-passed health care bill, for example, is written primarily by Ivy League lawyers. As a result, it contains no real malpractice tort reform, the one public policy change that has been proven to lower significantly both medical and insurance costs. Instead, it puts a huge and incredibly complex part of our economy under control of the same people whose blunders stalled H1N1 vaccine delivery. Additionally, uncertainty on the part of businesses about the costs that health care “reform” will impose on employers is a major contributor to the current unemployment rate.

Regardless, my job is to identify the financial opportunities created by such blunders. The answer, more than ever, is emerging technologies stocks.

The market in general has edged back somewhat. Index and other broad financial instruments are no longer the bargains they were when the market was on its knees and whimpering. No one has real faith that this uptick will last, though, so most investors are still “playing it safe.” This means they are avoiding emerging technologies, which are, in turn, underpriced.

This is always the case in uncertain markets. When markets are shaky, the vast majority of individual and institutional investors flee risk in favor of “proven” investment opportunities. This is clearly the case today, and we may never see another time like this.

So let’s review. Scientific and technological progress cannot be stopped. It is, in fact, accelerating. If you need evidence, check out the newly released Motorola Droid.

Moreover, globalization has expanded the scientific and financial playing fields dramatically. Top American researchers are being wooed by Asian and Eastern European companies. If the U.S. legal/legislative oligarchy hobbles our pharm industry, research and development will shift offshore. So will our portfolios.

That’s one reason I’m happy to see one of our most important companies is strengthening its global strategy. For about a year and a half, the company’s founder and chairman of the board has led the executive search to replace its former CEO, who died unexpectedly last year. In fact, he has been replaced by two people: one with important international connections and one with domestic big pharm experience.

The company just announced that a noted Russian scientist and businessman will become CEO. The press release makes it clear, I’m happy to say, that his selection is in keeping with plans to explore international opportunities. The new CEO is a member of the Russian Academy of Science, specializing in management theory, strategic planning and system analysis. He has written several books in those fields and is the recipient of the Russian Federation Government Award in Science and Technology.

This man has serious influence in Russia, which is one of the world’s hotbeds of stem cell science. I wrote about Dr. Sanjay Gupta’s book Chasing Life when Gupta turned down the administration’s request to become surgeon general. In his book, the neurosurgeon details trips to Russian stem cell clinics where some of the world’s wealthiest people are receiving crest-of-the-wave stem cell therapies that are years away from approval by the FDA.

Other Russian clinics, I should add, are selling pure stem cell quackery and snake oil, so I’m not recommending that you fly off to Moscow yet. Nevertheless, Gupta reports that the wealthiest of the wealthy have succeeded in virtually stopping the aging process.

But that’s not all…

The company’s new president brings connections and experience working with big pharm. He is trained in immunology, molecular biology, finance and marketing.

Moreover, he worked previously with companies that address many of the markets that I believe stem cell therapies someday will control. This puts him in a position to further collaborations with pharm. If the market misinterprets this bolstering of our company’s executive team, I’m recommending my Breakthrough Technology Alert readers to buy on the dip.

For transformational profits,
Patrick Cox

November 12, 2009

Profit from the Government’s Blunders with Overseas Breakthroughs was originally featured in the Penny Sleuth.

Now, with one company’s failure all but assured, our path to stem cell fortunes is clearer than it’s ever been.

If you had been listening to mainstream financial media, you probably believed that Osiris (NASDAQ: OSIR) was going to be the first company to deliver real stem cell-based therapies. Now Osiris is all but out of the running…

I’ve written about Osiris several times in the past to my Breakthrough Technology Alert readers, always to explain why I wasn’t recommending its stock. Briefly, I’ll recap.

Osiris has led the effort to utilize adult or mesenchymal stem cells. These MSCs are found in bone marrow and are capable of becoming multiple types of tissues. They are, therefore, “multipotent” stem cells. Embryonic and induced pluripotent stem cells, however, can become any cell types. They are, therefore, “pluripotent.”

Osiris was working on ways to jump the hurdles associated with programming embryonic stem cells to do specific tasks. This was before it became known that one researcher had figured out how to convert any cell in your body to an induced pluripotent stem cell with all the same potentials of embryonic stem cells. Big Pharm invested considerable hope and money in OSIR’s technology as a result.

At the time, I speculated that MSCs might have some therapeutic value, but even so, they would inevitably be superseded by pluripotent stem cells. I’ve spoken on several occasions to Osiris people, including one of its top scientists. He told me the company believed its MSC therapies had a 15-year window of profitability. Then he admitted programmed pluripotent cells would take the market away from less-effective MSCs.

I didn’t believe the 15-year projection for several reasons. One, I knew about the progress being made by elsewhere by one very exciting company. They’d essentially developed a methodology for cracking the programming codes that turn pluripotent cells into specific cell types.

The company has already announced the discovery and successful creation of various cell types, including cartilage cells. Recently, as you know, the platform won the biggest grant in the history of the California Institute for Regenerative Medicine. Cartilage, incidentally, was the focus of Osiris’ MSC efforts. It was also testing what it believed were immune-suppressive qualities of MSCs.

Last week, however, it was announced that Osiris’ MSC-derived Prochymal failed two late-stage studies. The company’s stock plunged and the CFO resigned, “to pursue new professional opportunities, effective immediately.”

So what does this mean for stem cell stocks? It means that Big Pharm’s attention is returning to the stem cells that we know turn into cartilage: pluripotent stem cells. All the cartilage in your body, for example, came from embryonic stem cells. Now induced pluripotent stem cells can do the same thing.

Osiris, however, was among those companies that hoped a shortcut to effective SC therapies existed in MSCs. That hope has apparently been dashed, or at least severely set back.

This leaves a single researcher, the creator of the regenerative medicine industry, in the veritable catbird seat. Once again, I’m awed by his vision and dedication.

And as I’ve mentioned, on September 23, his presentation could be the next catalyst for his company’s share price to rocket – why not, the company has already shot up 150% in 2009. And with the developments going on behind the scenes, the chances of seeing even more triple-digit growth are phenomenal. Stay tuned for details on this one…

For transformational profits,
Patrick Cox

September 18, 2009

This Company’s Failure Clears Your Path to Real Stem Cell Fortunes was originally featured in the Penny Sleuth.

For those of you who are not familiar with RNA interference, here’s what it is and how it works: DNA is, in a sense, the operating system software for our cells. As such, DNA does not directly interact with genes. It’s too important to risk corruption through unnecessary exposure. Instead, DNA operates by sending out chemical instructions. These instructions are in the form of complex RNA molecules. They are similar to double-stranded DNA, but are usually single stranded.

Basically, these extraordinarily complex RNA molecules control gene activity or expression. This is important because nearly all diseases are either caused or cured by the proteins produced by genes. You can, therefore, think of the ability to increase or decrease the production of these proteins as an on/off switch for diseases.

The remarkably young science of RNA interference is based on the accidental discovery that it is possible to flip these switches. The remote control, so to speak, for these switches consists of portions of RNA molecules. Because these portions are recognized as invaders by the body, they provoke the rejection of larger disease causing RNA molecules. The other side of the coin is “RNA activation.” This is the process that increases gene expression.

The birthday of the science, according to many, was in 1998. That was when an academic paper by Craig Mello and Andrew Fire was published. Based on RNA interference in a nematode worm, it won them the Nobel Prize in physiology or medicine in 2006.

RNAi companies, unlike stem cell firms, have grown very rapidly. Many have already been gobbled up and their value diluted in big pharma umbrella companies. This is not, by the way, because RNAi is further along. Nor is it because RNAi has more potential than regenerative medicine.

It is because RNAi was spared the legal and ethical concerns that stem cell companies had to deal with. Now the legal situation has been clarified and embryonic stem cells have been replaced for therapeutic uses by iPS and parthenogenetic cells. As a result, we can expect important stem cell companies to make similar deals.

Regardless, many RNAi companies already have significant capitalization and big pharma partnerships. Even at that stage of their development, however, they still have profound transformational potential. For example, I would have added RNAi pioneer Sirna Therapeutics to our portfolio. Sirna, however, was acquired in 2006 by Merck & Co. Inc. in a deal worth $1.1 billion.

That deal, the largest in the RNAi space so far, was followed by others:

Anglo-Swedish pharm firm AstraZeneca Intl. made a $400 million deal with a European RNAi firm Silence Therapeutics.

Alnylam formed a $1 billion partnership with Swiss giant Roche.

The high-water mark for RNAi stockholders, however, is still the Sirna Therapeutics acquisition by Merck in October 2006.

As I’ve written before, RNA interfering molecules work. There is no question that they flip the switches they’re supposed to flip. The challenge, however, is getting them to their target genes before they are recognized and destroyed by the body’s immune system. Various companies are homing in on specific delivery solutions now. There are, however, many different solutions to the delivery problem. Each gene switch has its own special considerations and there is no “one size fits all” solution.

For transformational profits,
Patrick Cox

March 31, 2009

RNAi’s Huge Buyout Deals: Who Will Benefit? was originally featured in the Penny Sleuth.

Mencken had a genius for stating overlooked truths. One, which I’ll paraphrase, is that we all know that the media get it wrong when they’re covering our areas of expertise. Then, defying logic, we believe the media when it covers something outside our fields. There are exceptions, of course, but his observation is too often true.

This is the case, by the way, not only for the newspapers and networks. Even the more respected scientific journals are making huge mistakes. If you subscribe to Nature, you may have seen the recent article titled “Virus-free pluripotency for human cells.” The authors write, “For the first time, specialized human cells have been transformed into a state similar to that seen in embryonic stem cells, without using viruses.”

If you’ve been reading Breakthrough Technology Alert for any length of time, you know this is not true. In fact, there was one doctor who accomplished this virus-free transformation several years ago…

I suppose I should actually be happy when journalists get it wrong. It means that my readers are among the very few people outside of the scientists doing the research who know what’s really going on.

Incidentally, my colleague Chris Mayer once took a group of us to the bar, not far from Agora Financial headquarters, where Mencken often drank. Let me give you one more quote from the Sage of Baltimore. He wrote, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety).”

The new administration is now saying the economy is “fundamentally sound.” Since it mocked Sen. McCain for saying the same thing before the election, we are being asked to believe that the stimulus bill has fixed the problem.

Unfortunately, this is not true. I agree that the economy is sound in the sense that it will overcome the damage done by the political classes. Most stocks, though, continue to suffer. The evaporation of investment capital is even more of a problem. Some startups and small-caps that would have succeeded wildly will not survive.

That’s why I’ve always diversified into transformational stocks. If you had bought into the leading six or seven computer companies at the start of the computer revolution, more than half would have failed, but the winners would have made you rich.

It’s important to remember that there are several sectors now that will be bigger than computers. Stem cells is one of them, but so are RNAi and nanotechnology. Don’t be alarmed. Don’t mistake temporary problems for long-term trends.

The people who are getting their cues from the mainstream media have bid up stem cell companies, including the wrong ones. For that reason, I’m going back to RNA interference in the next issue. This industry is making miraculous progress toward controlling the genetic switches that cause most diseases.

Sincerely,
Patrick Cox

March 19, 2009

How Transformational Biotech Will Make You Richer Than Early Computer Investors was originally featured in the Penny Sleuth.