Small
investors in VaxGen's AidsVax are burnt by hype
artist Porter Stansberry
A midnight announcement on February 24 2003 that
the 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
Using mailshots
and web promotions, Porter Stansberry persuaded countless,
often naive, smalltime investors to put their
savings into VaxGen, even as insiders and
institutions were selling up ahead of AidsVax's widely-predicted
failure.
Below is a page, annoted by Brian Deer, from
Porter Stansberry's website in January 2003,
which bluntly claims "proof" that
AidsVax works. VaxGen stock collapsed to an
opening price of $3.31 (52-week high $23.25) on
the day the Wall Street Journal announced the
results
Any
Day Now, a Wall Street Journal
Story Will Make a Handful of Investors Rich
After
opening on this assertion, Porter Stansberry's
pitch to draw the unsophisticated to Vaxgen
(Nasdaq VXGN) begins "Dear investor"
and continues:
I've
uncovered a business currently worth $250
million that will soon be worth several
billion.
Today, you can buy it for less than $20 a
share.
In a matter of weeks, this stock will
skyrocket when a story about it appears in The
Wall Street Journal.
When the article appears, this company could
see its share price jump from less than $20 a
share today to $50... $100... $150... or
possibly much more.
Porter
Stansberry says "exactly how high it will
go" is impossible to predict. (It opened on
the day the story appeared at $3.31.) "But
one thing's for sure: This story will
appear." He says it's so big, the Journal
has already been following it for the past five
years. He gives dates on which the WSJ
has mentioned AidsVax, states that the next
report has "the potential to make
a small group of investors very rich" before
barking:
The
only realistic chance to make 50
times your money in the short term
My name
is Porter Stansberry. I'm an independent
equity analyst. It's my job to find
breakthrough investments - a job I've done
for tens of thousands of investors for more
than five years.
But this opportunity is, without a doubt, the
greatest investment opportunity I've ever
seen.
It's the only realistic chance you have to
make 50 times your money in the short term.
I'm talking about the only company in the
world with a vaccine for HIV (AIDS) in final,
Phase III clinical trials.
Right now, this full-scale AIDS vaccine test
is in its last few months. It involves 5,400
participants in North America, Puerto Rico,
and the Netherlands. And another 2,500
participants in Bangkok, Thailand.
As I mentioned, this is a Phase III trial.
The final step before government approval.
The U.S. Food and Drug Administration (FDA)
requires such a test for every new medical
treatment, before it can be licensed and sold
around the world.
The final results from North America will be
published in the next few weeks, in early
2003. The final results from Thailand will
follow.
As soon as these trial results are announced
- if they're as good as we expect - this
company could get immediate orders for
billions of dollars worth of its product.
Porter Stansberry withholds
the name of the company. Nowhere is VaxGen or
AidsVax mentioned by name. But this is evidently
little more than a tease to make investors think
they are smart and to rush into the stock with
the feeling they have done their homework. He has
already given enough information for investors to
proclaim on internet bulletin boards how easily
they found VaxGen through Google.
Porter Stansberry continues
with boasts about how close he has become with
the Brisbane, California-based VaxGen and its
president, Dr Donald Francis:
I've
been following this AIDS vaccine company for
more than two years personally. And I've
hired a full-time medical analyst who, as
part of his job, checks in with this company
every week. (His name is Dave Lashmet. He is
finishing up his PhD in Medical Studies, and
has more than 15 years experience analyzing
new medical treatments for universities, the
U.S. military, and private industry.)
I've visited this operation in California
three times myself... and I've sent Dave
Lashmet to check it out six times. Both of us
have met with not only this company's CEO,
but also its lead scientists and upper-level
managers. I've sent Dave to do follow up
research at the Canadian CDC laboratories,
the University of Washington, Harvard Medical
School, and Los Alamos National Labs, to
check on the science behind the vaccine.
Plus, Dave meets with this company quarterly
to check on the progress of its clinical
trials.
In an email exchange with Jon
Cohen, the pre-eminent journalist and author on
Aids vaccines, David Lashmet (apparently an
English major)said that his unfinished
dissertation was on "Aids in American
culture," the opening chapter of which
supports the argument "that the
screenwriters of 12 Monkeys framed their viral
dystopia around the suspicions of Curtis in
Rolling Stone." Meanwhile, none of the
institutions named above are known to have said
anything positive about AidsVax's prospects. But
Porter Stansberry is undaunted:
Naturally,
you're probably asking yourself...
Is
this really possible?
Porter Stansberry says he
knows it's hard to believe "we may be just a
few weeks away from the world's first successful
AIDS vaccine" and says that if he hadn't
visited VaxGen and talked to "dozens of
doctors and scientists outside the company"
(who he doesn't name), "I'd be skeptical
too."
But
keep in mind that this technology is
currently in Phase III testing. With positive
results, we expect the U.S. government's Food
and Drug Administration to approve this drug
very quickly. That's the final step. This
isn't junk science. Or science fiction. It
has already completed Phase I and II clinical
trials. After U.S. government approval, the
company can produce and sell it all over the
world.
In fact, this company is in the process right
now of building a production facility on
15,000 square feet of land south of San
Francisco.
And this company is building a larger
production facility in South Korea - a $120
million investment. At full capacity, these
two plants together can crank out 1.4 BILLION
doses a year. That's enough to supply the
whole world.
A
$15 billion dollar drug - in the developed
world alone
This
company estimates it will need to vaccinate
at least 350 million people in the developed
world alone. (Hundreds of millions more
people need to be vaccinated worldwide.) Each
person will require a minimum of three doses.
Then, probably several more 'booster' shots
over the next few years.
Look
at the numbers. If 300 million people in the
developed world receive a total of five
doses, and the company makes a $10 profit on
each dose (a low estimate), that's $15
billion. And that's not counting the
developing countries, where perhaps twice as
many people will need to be vaccinated.
While
the company won't be into the full production
and sales mode of this vaccine until 2005, The
Wall Street Journal and other major
newspapers will be all over this story when
the results appear in the next two
months...and the share price should skyrocket
long before the company ever sells a single
dose of the vaccine.
Do
you see why this is potentially such a big
deal?
It's
why every biotech company is trying to make
an AIDS vaccine.
And
the company we've been following is almost a
decade ahead of its competition.
It
could be one of the great medical
breakthroughs of our lifetimes...not to
mention one of the best opportunities to make
a lot of money beginning with only a small
initial investment.
In a plain text paragraph
somewhat out of synch with the narrative, Porter
Stansberry says: "All we have to do to
profit form these incredible numbers is make a
small investment in this company today. Of
course, there's no guarantee this vaccine will
pass the final test. Or that the government will
grant FDA approval if it does. This investment is
not for everyone, because you could lose money.
All I can guarantee are the facts: This vaccine
has already completed the first two safety tests.
The evidence we've seen over the past two years
indicates it will pass the third test as well.
The risk-to-reward ratio, therefore, is
outstanding." With
that out of the way, Stansberry shouts that he
knows AidsVax will work.
The
multi-million-dollar question: How do we know
that it will work?
Porter Stansberry says he has
"about 400 pages of research and scientific
evidence" and cites "two major
reasons" why AidsVax "will
succeed":
#1:
The guy who is developing this vaccine knows
more about AIDS than
anyone else in the world.
This is Dr Donald Francis,
president of VaxGen, who is not widely regarded
among experts as a central figure in Aids
research.
Dave
and I are on a first name basis with this
scientist. We've joined him for several-hour
meetings on multiple occasions. He's a
medical doctor (USC), with a Doctorate of
Science in virology from Harvard University.
His doctoral thesis was one of the first
formal works on feline Leukemia, a retrovirus
that is essentially AIDS in cats. (AIDS/HIV
is a retrovirus, which means it uses your
body's own DNA to reproduce.)
This
guy has more real-world field experience than
anyone in the AIDS vaccine business:
He
was a member of the Centers for
Disease Control's (CDC) elite Disease
Surveillance Team.
He
helped stomp out smallpox in India.
He
was one of only two doctors flown
from the United States to Sudan to
fight the Ebola virus.
Before
AIDS, he was the co-principal
investigator of the Phase III trial
for the Hepatitis B vaccine.
While
working at the Centers for Disease
Control and Prevention, he was part
of the team that confirmed the
identity of the AIDS virus.
You
get the point. He is THE expert in the field.
He's even been the subject of a Hollywood
movie - Matthew Modine starred in the role.
This doctor left the CDC about 10 years ago
and ultimately teamed up with one of the
world's leading vaccine designers - the guy
who helped build the vaccine for Hepatitis B,
a flu vaccine, and a successful herpes
vaccine.
They
hired several other top-notch virologists.
Together, these scientists and doctors have
more years of experience than any other group
working on AIDS vaccines. And they have
landmark successes over Hepatitis B,
smallpox, and herpes simplex to their credit.
Porter Stansberry then
misleads potential investors with his second
"reason", claiming:
#2:
This vaccine has passed every test along the
way with flying colors.
It hasn't. Before the phase
III trial commenced, scores of independent
scientists made an unprecented protest, aimed at
the US government, claiming that on the basis of
laboratory, animal and initial human tests,
VaxGen's technology had failed and should not be
allowed to proceed to a phase III evaluation. The
pivotal independent study of the technology was
published in the Journal of Virology in February
1998 by a team from the Aaron Diamond Aids
Research Center, New York, Los Alamos National
Laboratory, New Mexico, Vanderbilt School of
Medicine, Nashville, University of Alabama,
Birmingham, Massachussets General Hospital and
Harvard Medical School, and Northwestern
University Medical School, Chicago (Connor,
Korber, Graham, Hahn, Ho, Walker, Neumann,
Mestecky, Jackson, Fenamore, Cao, Gao, Kalams,
Kunstman, McDonald, McWilliams, Trkola, Moore,
Wolinsky: "Immunological and virological
analyses of persons infected by Human
Immunogenicity Virus Type 1 while participating
in trials of recombinant gp120 subunit
vaccines").
In place of the scientific
consensus that the AidsVax technology, which
dated to the 1980s, simply couldn't be effective
at tackling the Aids epidemic, Porter Stansberry
cites (without author attribution) VaxGen's
in-house papers (in some cases published at
VaxGen's expense):
First,
after nearly 20 years of clinical lab work,
this company ran two separate tests to prove
this vaccine could protect chimpanzees from a
live HIV infection. In both tests, half of
the chimps got the vaccine, and half got a
placebo. Then, they received high doses of
the HIV virus.
The
results were exactly the same in both tests:
The chimps that got the HIV vaccine were
protected. Not a single one got HIV. All of
the unvaccinated chimps became infected. (Source: 'Protection
of Chimpanzees from Infection by HIV-1 After
Vaccination with Recombinant Glycoprotein
gp120 but not gp160' Nature, June 14, 1990;
and 'Protection of MN-rgp-120-Immunized
Chimpanzees from Heterologous Infection with
a Primary Isolate of Human Immunodeficiency
Virus Type 1,'The Journal of Infectious
Diseases, January 1996.)
The
chimp work, carried out in a handful of animals
by the biotech giant Genentech before that
company abandoned the technology, involved
specially weakened lab strains of HIV, rather
than those found in the real world. But Porter
Stansberry's pitch for VaxGen's AidsVax doesn't
give this critical information.
Next, the
company entered a three-stage human test,
following U.S. Food and Drug Administration
guidelines.
The first
two stages of the human tests, Phase I and
II, proved successful. The AIDS vaccine is
100% safe. And everyone who takes it develops
the all-important antibodies needed to fight
the disease. (Source:
AIDS Research and Human Retroviruses, 1999
Jul 1; and AIDS Research and Human
Retroviruses, 2000 Jun 10)
This work was not found to
have protected volunteers and antibodies were
discovered to be weak and transient. But
political momentum, including pressure from Dr
William Heyward at CDC (who was subsequently
prosecuted and fined for his role), caused
critics to be overruled by health chiefs. Porter
Stansberry's promotion continues with a sketch of
the phase III trial, then claims:
It's
a less-than-$20 stock today that could easily
be $100 in the next few months
You may
think I'm exaggerating when I tell you these
kinds of returns are possible. But in the
business of medicine, it's news and test
results that drive stock prices.
A Phase
III study, with upcoming FDA approval - which
this company is in the middle of pursuing
right now - is the best news a medical
company can have.
Successful
Phase III tests mean a drug or medical
treatment works. It means the company is
about to start reaping the rewards of its
investment.
It
happens over and over again in the world of
new drugs: 1) A small medical company
introduces a valuable new medicine or
treatment. 2) The FDA approves it. 3) Early
investors get rich. For example...
- When
a pharmaceutical company called Amgen
developed two new drugs in the early
1990s (Epogen to treat anemia and
Neupogen to prevent infections in
cancer patients), early investors
made profits of 6,085%.
- After
Biogen launched its drug Avonex to
treat multiple sclerosis in 1996, its
stock
shot up 667%
- When
Idec Pharmaceuticals, a San Diego
biotech company, introduced its
cancer-tumor shrinking drug Rituxan,
its stock went from $2 to $125.
That's an increase of 6,150%!
And keep
in mind: An AIDS vaccine is for healthy
people. In other words, it has about
1,000-times the patient potential of the
other successful drugs I just mentioned.
I
recommend you buy shares of this company
right away. It's still unbelievably cheap.
Keep in
mind, you need only a very small stake in
this company to have the potential for a huge
payoff. In fact, I recommend you never put
more than 4% of your portfolio into any one
investment.
Believe
me, if this company takes off as I expect,
even with a small investment, our profits
will be tremendous.
Although a big part of Porter
Stansberry's strategy appears to be to purchase
stock himself and, through such hype, enjoy the
benefit, he continues his sales pitch with
details of a £1,000 "report". This, he
says, includes studies which "prove this
vaccine works" and says it "provides
further proof - in a very different kind of way -
that this vaccine works".
If you are
interested in investing in this company, I
will send you a full Investigative Report,
called The AIDS Vaccine - The Holy
Grail of Medicine, which details 1)
the studies that prove this vaccine works 2)
the people behind this company, and 3) the
reasons why this is such a smart investment.
This
report will also detail an 'unpublished'
study of this vaccine, presented at a
National Institutes of Health (NIH)
conference.
Technically,
these results are public information. They
were presented at a scientific conference
sponsored by the NIH in 1997. But no one who
attended the NIH conference ever spoke to
Wall Street. And to the best of our
knowledge, the information we'll share with
you is completely unknown outside of a very
small group of AIDS researchers.
The
reason this study is so important is because
it provides further proof - in a very
different kind of way - that this vaccine
works. I believe that if the investment
public and other Wall Street analysts knew
about this study, this company's share price
would be a lot higher than it is right now.
I charge
$1,000 to give investors a single investment
selection such as this. Many people have been
happy to pay that rate. And I think it's a
reasonable fee, considering 1) the level of
research that goes into it and 2) the profit
potential.
For
people who want to receive my top technology
selections throughout the year, I charge a
discounted rate of $5,000 for 12
recommendations.
Porter
Stansberry's pitch continues:
Through a
limited offer, because I want to introduce
more people to my investment service, I am
willing to send you all of the research
details on this AIDS vaccine for only $149.
You can do the math. That's a huge savings.
And it
gets even better. If you order now,
I'll cut the price in half. That
means you will have the exact same valuable
research in your hands for only $74.50, a
tiny fraction of what others have paid. Think
about what that means.
For about
the cost of a decent dinner for two, you have
the opportunity to completely change the
outlook of your financial future. You could
make back the money you've lost in the
market. You could turn a small investment
into a giant fortune.
As I
mentioned earlier, all in all, we've spent
more than $250,000 on the research that went
into creating this report. Nobody else does
this kind of research that I'm aware of - on
Wall Street or off.
And there's
more giveaway goodies from Porter Stansberry:
When you
order The AIDS Vaccine - The Holy Grail
of Medicine, I'll also send you 2
more of my recent Research Prospectus
Reports, absolutely FREE.
You see,
right now, there are two other medical
breakthroughs I'm very excited about, which
are also nearing the final stages of full
U.S. government approval. Today, these stocks
are extremely cheap. In a few months, I
believe they both have the potential to
increase at least 10 times in value.
FREE
Research Prospectus Report #1: Heat Shock
Proteins - The Biggest Cancer Development of
the Decade
The
narrative continues in similar vein to the VaxGen
promotion. "How much money would a safe,
pain-free treatment for cancer be worth..? A new
treatment developed by a small company in New
York... No more chemo.. No more radiation... No
more surgery... Government-approved Phase III
tests... Dave Lashmet and I... the single most
promising medical technology I've ever seen....
It's pain-free and side-effect free... can be
used to fight any type of cancer."
You'll
get a copy of this Research Report FREE -
others have paid $416 for this information -
when you order The AIDS Vaccine: The
Holy Grail of Medicine.
While stocks
last.
Porter Stansberry
complained about this page - and about another
page at this site excerpting from a hype email
Stansberry sent investors hours before VaxGen's
stock crashed to $3. Read Porter Stansberry email. Read Porter Stansberry
complaint.
Later, Stansberry
was prosecuted for securities fraud. Read the result of the SEC
prosecution
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