A midnight announcement on February 24 2003 that a candidate HIV vaccine, "AidsVax", showed no effect in a phase III clinical trial was long predicted by independent scientists. Inquiries by Brian Deer during his 1999 Sunday Times investigation of VaxGen, unearthed a worrying picture, and led to the prosecution of Dr William Heyward, who as HIV vaccine chief at the Centers for Disease Control and Prevention cheer-led for VaxGen's technology and arranged federal grants whilst secretly engaged to join the company.
As the pivotal clinical trial of AidsVax progressed, the company forged another close relationship - with stock hypester Porter Stansberry. Annotated extracts from material at the Stansberry website is reproduced at another page here, claiming to prove that AidsVax works, and below are excerpts from "Blast", a mailshot to his followers before the stock markets opened on February 24. VaxGen opened at $3.31, shedding a staggering twenty bucks from its 52-week high and more than $30 from its post-IPO peak.
Porter Stansberry's "Blast" is dated February 24, 2003 and opens with the following heading:
IN CERTAIN ETHNIC GROUPS;
APPROACH SHOULD LEAD TO END OF EPIDEMIC
Porter Stansberry says:
I have stunningly good news to report.
He claims that the vaccine was "proved" to be "broadly effective in stopping HIV infection in two ethnic groups". He says: "Specifically, the incidence of infection in black people was reduced by 78%; in Asian volunteers infections were reduced by 67%."
Thus, AIDSVAX seems to work.
He says the challenge will be to "improve the immune response" in whites and Asians, but that he wouldn't be surprised to see news organizations report that the vaccine was a failure.
The press has covered this story almost solely from the perspective of their primary sources, government-backed scientists, most of whom hate Don Francis, VaxGen's founder and president. Also, because VaxGen's approach was so widely dismissed, there is an enormous short position in the stock. These investors are now in enormous jeopardy and, more than likely, will lobby the reporters covering the story to accentuate the negatives in the data.
In the early hours before the stock crashed to $3, from a 52-week high of $23.25, Porter Stansberry told his followers:
I suspect the stock will soar tomorrow.
And he offers to tell us why. He says the trial was carried out "flawlessly", the vaccine is "safe and impressively effective in the two ethnic groups", and "being effective in black people may be worth more to VaxGen".
But to really understand why these results are so impressive, you need to know what the previous chimp and monkey data has always suggested: that there's a correlation between antibody production and protection - a "correlate of protection." In the monkey tests there was a range of antibody responses. The strongest responders were protected from infection and the weaker responders didn't develop AIDS. If that's also true for the human volunteers, VaxGen has a profoundly valuable vaccine - one that prevents infection in some subjects and prevents AIDS in almost everyone.
It also seems likely to me that VaxGen will attempt to alter their vaccine formula slightly to induce a stronger immune response in whites and hispanics. One way of doing this could be to use Antigenics' adjuvant, QS-21.
Porter Stansberry concludes his hype mail by speaking of "a very brave group of medical entrepreneurs" who he says "have something fantastic to celebrate" after putting their "reputations on the line" to stop HIV.
Tonight for the first time since the outbreak of AIDS in the early 1980s the disease is in reach of being stopped. Fittingly, Don Francis, who saw the first cases of AIDS from his post at the CDC, has played a key role in stopping this epidemic.
Not surprisingly, the government scientists are wrong. Again.
Congratulations Don. We never doubted.
Porter Stansberry complained about this page - and about another highlighting a promotion in which he claimed that VaxGen was "the greatest investment opportunity I've ever seen". Read Porter Stansberry hype. Read Porter Stansberry complaint.
Later, Stansberry was prosecuted for securities fraud. Read the result of the SEC prosecution