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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