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Investment Opportunities

Healthspan, Life Extension and Longevity Company Investment Opportunities 

January 2020

 

Question: “What’s the easiest way to make a small fortune?” 

Answer: “Start with a large one!”                                                                              

 

[Necessary disclaimer]:  Keep Health is not an investment advisor and the content of this website is not to be used for making or refraining from investment decisions. The information provided is for general information purposes only. It may not be suitable for your situation. Although Keep Health has made every effort to ensure accuracy of the information, Keep Health makes no representation about accuracy and completeness. Keep Health does not assume and hereby disclaims any liability to any party for any loss or commercial damages, including, but not limited to special, incidental, consequential, or other damages or disruption caused by errors or omissions which result from accident, negligence or any other cause. [End disclaimer]

 

How much does wealth matter for increasing healthspan? 

How much does wealth matter to enjoy living those extra healthy years? 

Does it make sense to invest in anti-aging, healthspan, life extension and longevity companies?

 

Keep Health does not recommend investing in this sector unless you are an expert or getting trusted expert advice. There has been a tremendous amount of money made and lost investing in life sciences and healthcare companies. We do not want you to be on the “lost” side, especially because of anything you read here. There are plenty of people who claim to be experts in healthspan investing and want you to pay them for their expertise. There are few with verifiable track records of success.

 

Below, we provide a list of some interesting emerging companies in the healthspan space. We attempt to highlight their strengths and weaknesses. They may or may not be successful and even if they are successful it is important to understand their fundamentals to determine whether they are valued appropriately. Emerging healthcare startups are speculative investments and are more likely to be overvalued than undervalued. It is risky to try to take advantage of over-valuations with short selling or buying put options because emerging companies may be bought by large companies for premium valuations.

 

Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”  Market timing for investments is important and following sources like CNN’s Fear and Greed Index and Investor’s Business Daily’s Market Trends can provide a sense for when the market is overbought or oversold.  Even with the recent pullback, market conditions and company valuations as of January 2020 are historically very high. 

 

Keep Health’s investment opportunities covers notable healthspan, life extension and longevity-focused Exchange-Traded Funds (ETFs), venture capital funds and a few individual public companies. Here they are:

 

Healthspan, Life Extension and Longevity ETF Investing Opportunities

There are three interesting ETFs focused on profiting from increasing number of elderly people in the world. To get a sense for the size of the rapidly growing market these companies are pursuing, see the 2019 Organizsation for Economic Cooperation and Development report:  Fiscal Challenges and Inclusive Growth in Ageing Societies.

  1. The Long-Term Care ETF (OLD) — Pessimistic View of Aging
    • Tracks a market-cap-weighted index of global companies focused on long-term care services and products required by an aging population.
    • OLD is 90+% invested in specialized Real Estate Investment Trusts (REITs) and healthcare facilities of which 75% are in the United States.
    • OLD has a reasonable expense ratio of 0.35% and a three year average return of ~8%, mostly from 2019 year-to-date results.
  2. Global X Longevity Thematic ETF (LNGR) — Optimistic View of Aging
    • Tracks an index of mostly large-cap equities from companies involved in lifespan extension and improved quality of life efforts for senior citizens.
    • Includes companies from developed countries who derive the majority of their revenue or whose stated business objective falls under the “longevity” label. 29% of companies are outside the United States.
    • LNGR has an expense ratio of 0.50% and a three year average return of ~9%.
  3. Goldman Sachs Motif Human Evolution ETF (GDNA)
    • Tracks a market-cap weighted index of global equities related to the development of medical treatments for overall human health.
    • Centered around companies with exposure to “the development of new knowledge, medicines, and technologies for the medical treatment of the human condition, from birth to end-of-life care”. The fund’s index is constructed from five sub-themes: Precision Medicine, Genomics, Life Extension, Robotic Surgery, and Digital Health. To select its constituent securities, the index provider uses automated semantic search algorithms to go through many datasets and documents to generate company correlations to key terms related to GDNA’s theme.
    • GDNA has an expense ratio of 0.50% and has generated a ~9% loss in its first year.  

Venture Capital Firms Focused on Healthspan, Life Extension and Longevity Investment Opportunities

  • Deep Knowledge Ventures (DKV) and subsidiary Deep Knowledge Life Sciences (DKLS) (Hong Kong)
    • Focused on regenerative medicine
    • One of their board members is a computer algorithm called VITAL which they use to analyze huge amounts of data
    • DKLS investments include:
  • Juvenescence Ltd (UK)
    • Co-founded by British billionaire Jim Mellon.
    • Has raised $165MM.
    • Partnered with Buck Institute and Insilico AI to advance the understanding of a new molecular pathway potentially implicated in aging and age-related diseases and to discover and develop molecules to target this pathway.
    • Investments include:
      • AgeX Therapeutics (NASDAQ: AGE)
      • BYOMass to develop therapeutics to modulate the central control of metabolism associated with aging and age-related chronic illnesses
      • BHB Therapeutics to focus on novel approaches to inducing a state of ketosis, which may have protective effects against age-related disease
      • Fox Bio a 50/50 joint venture between Juvenescence and Antoxerene, a subsidiary of growing discovery/pre-clinical CRO Ichor Therapeutics. The company is focused on developing small molecule senolytics targeting a major survival pathway relied on by senescent cells.
      • Generait Pharmaceuticals (formerly Juvenescence AI), a 2017 joint venture with Insilico.  Generait Pharmaceuticals gets first dibs on any five compounds per year that Insilico’s AI drug discovery platform develops. Juvenescence AI was formed to investigate the therapeutic properties of specific compounds. Mellon is particularly optimistic that this venture can develop a “senolytic” drug that helps the body clear out cells that have stopped dividing and can damage other cells.
      • Insilico Medicine artificial intelligence for drug discovery, biomarker development and aging research.
      • LyGenesis focused on organ regeneration. Lead program is for liver regeneration.
      • Napa Therapeutics  —  Founded by The Buck Institute, Insilico Medicine, and Juvenescence to develop drugs to impede age-related disease. Focused on NAD-type solutions.
      • NetraPharma is a 50/50 partnership between Juvenescence and NetraMark Corp, and is a clinical-development focused machine learning company. NetraPharma plans to help companies with failed clinical trials identify overlooked subpopulations of responding patients.
      • Souvien Therapeutics is founded on the pioneering research of Professor Li-Huei Tsai, the director of The Picower Institute for Learning and Memory at MIT, and Associate Professor Stephen Haggarty, the director of the Chemical Neurobiology Laboratory at Harvard Medical School/Massachusetts General Hospital, on the epigenetic regulation of cellular aging in neurodegeneration.
  • Longevity Vision Fund
    • Founded by Sergey Young.
    • Raised $100MM and is dedicated to making longevity affordable and accessible to all.
    • Invested in Juvenescence in Oct, 2019.
  • Longevity Investor Network
  • Longevity VC (USA)

Small-Cap Publicly Traded Companies Focused on Healthspan, Life Extension and Longevity Opportunities

Although there are many large publicly traded companies focused on healthspan, life extension, longevity and anti-aging, Keep Health is only covering a few notable high risk, high reward small-cap companies at this time.

  • AgeX Therapeutics (NASDAQ: AGE)
    • Key points from 2019 Year End Letter to Shareholders
      • Focusing on two platforms:
        • Immunotolerance UniverCyte™ platform for the generation of universal cells
        • Pluripotent stem cell-based PureStem® platform for the derivation and manufacturing of allogeneic, off-the-shelf cells
      • Partial cellular reprogramming to reverse the age of cells is set to open up a whole new field of pioneering therapeutics. We aspire to lead in this revolution using our partial cellular reprogramming technology “iTR™”.
      • Acquisition of ‘universal’ cell generation patents was timely and strategic. There is growing interest by large biotechnology and pharmaceutical companies.
      • Plan to execute on external licensing and collaboration cell therapy deals with third parties.
    • Leader in high purity induced pluripotent stem cells (IPS)  to restore organ function or grow replacement organs.
      • IPS can be re-differentiated into human tissue types. Non-pure IPS have minority of cells in undifferentiated stage or differentiated in the wrong direction. 
      • Can repair organs by eliminating cells in a damaged state and then restore using AgeX IPS in-situ (in the body).
      • 400+ patents and patent applications worldwide for pluripotency therapeutics.
    • Market valuation: ~70MM.
    • IPO’d in November 2018. Stock peaked at $5.95/share before falling to $1.64. Juvenescence has substantial ownership, acquired at ~$2/share.
    • ~4MM in tangible assets minus current liabilities. ~3MM quarterly burn rate. Insignificant current revenue streams.
    • Need to raise substantial cash soon and create high value partnerships for non-core applications of pluripotency such as Cytiva II adult cardiac cells for drug testing.
    • Near-term commercialization activities are focused on bailment of UniverCyte master cell banks.
    • Long-term, have four therapies in preclinical trials:
      • AGEX-BAT1 to correct metabolic imbalances in aging including to reverse age-related changes in metabolism, especially those who suffer from obesity and Type 2 diabetes.
      • AGEX-VASC1 to restore vascular support in ischemic tissues respectively. Initial focus is on the development of young vascular cells to rebuild circulation in the context of age-related ischemic disease. Vascular progenitor therapy would deliver a youthful endothelium to rejuvenate and protect the cardiovascular system.
      • AGEX-iTR1547 is a drug-based formulation in preclinical development through Reverse Bioengineering subsidiary intended to restore regenerative potential in a wide array of aged tissues afflicted with degenerative disease using the company’s proprietary Induced Tissue Regeneration ( iTR) technology. Some animals in nature can regenerate damaged tissues after trauma; for instance an amputated leg of a Mexican salamander completely regenerates. 
      • Renelon™ is a first-generation iTR product designed to promote scarless tissue repair which the Company plans to initially develop as a topically-administered device for commercial development through a 510(k) application.
  • Amarin (NASDAQ:AMRN)
    • Provide Vascepa (icosapent ethyl), the active ingredient in fish oil.
    • Clinically proven to reduce triglycerides and cardiovascular risks such as heart attacks and strokes.
    • Amarin’s Reduce-IT trial showed it substantially cut major adverse CV events by 25% over about 4.9 years in statin takers with blood fat levels of 150 mg/dL or higher.
    • Market Cap of $7.5B.
    • 2019 revenue of $400MM. Projecting 2020 revenue from $650-700MM. Analysts predicting peak sales of $3-4B.
    • $600MM+ in assets – liabilities.
    • Regulatory exclusivity in major global markets for 9-12 years.
    • Major competitors alternative solutions such as Epanova have been discontinued.
    • Vascepa contains only purified EPA, whereas Epanova included both EPA and DHA. As FiercePharma writes, “Evidence suggests that DHA may raise the level of bad LDL cholesterol, which is itself a risk factor for heart disease and stroke. So, it’s possible that DHA’s presence has compromised Epanova’s CV disease reduction ability.” This impurity is rather ironic given EPAnova’s name.
  • Chromadex (NASDAQ: CDXC)
    • Leader in product sales and IP for anti-aging dietary supplement  Nicotinamide Riboside (NR).
    • Market cap of ~$260MM.
    • $40MM runrate from Tru-Niagen brand NR sales. 134% YoY sales growth. Tru-Niagen is available directly from Chromadex and on Amazon.
    • ~28MM annual loss. Need to get to ~80MM in annual sales for break-even.
    • Less than $25MM liquid assets less current liabilities.
    • Although raised another $7MM from international investors in Q4, 2019, will need to raise cash again before they achieve profitability.
    • Lawsuits against competitor Elysium Health. October 2019 legal discovery found egregious behavior by Elysium related to the theft of trade secrets and confidential information including text messages revealing unethical conduct and a stated intention to “destroy” ChromaDex. The near-term stock price movement on a win or a loss could be significant. Another good article on the history of the lawsuits is here.
    • 37 registered clinical studies in progress on NR.
    • Partnerships with Nestlé and Watsons, the largest healthcare chain store in Asia. Nestlé revenue will come onboard in 2H 2020. Pursuing markets in Hong Kong, Macau, China and Turkey. Recently approved in the European Union (EU), Australia, Canada and New Zealand. In the EU, received market exclusivity through February, 2025.
    • Competition comes from many new market entrants including Juvenescence’s Napa Therapeutics and David Sinclair’s MetroBiotech along with emerging biosimilar supplements such as Nicotinamide Mononucleotide (NMN). 
  • ResTorBio (NASDAQ: TORC)
    • Leader in solutions focused on the mechanistic target of rapamycin or mTOR. mTOR regulates the process of aging and aging-related diseases.
    • Inhibition of the mTOR pathway in the TORC1 protein complex has been observed to extend lifespan and healthspan in multiple animal studies.
    • When mTOR is inhibited during periods of fasting, cells activate pathways that protect and repair damage in cells.
    • IP is licensed from Novartis.
    • Pipeline of clinical trials:
      • RTB101 is their lead drug focused on reducing respiratory tract infections (RTIs) caused by viruses. In the U.S., RTIs are the fourth leading cause of hospitalization and seventh leading cause of death in people aged 65 and older.
        • Results from Phase 2a and Phase 2b clinical trials with more than 900 people age 65 years and older suggest that RTB101 may improve the function of the aging immune system and reduce the incidence of clinically symptomatic respiratory illness in older adults.  There are some questions on the data that any potential investor should carefully consider.
        • PROTECTOR 1, the first RTB101 Phase 3 clinical trial, completed enrollment of 1,024 patients from the Southern Hemisphere in July 2019. In November 2019, top-line data  failed to meet its primary endpoint. If RTB101 succeeded and received FDA approval, it would have competed with drugs like Genentech’s Xofluza and generic Tamiflu for market share.
      • RTB101 is in Phase 1B/2A trials to ameliorate Parkinson’s and other neurodegenerative diseases by inducing lysosomal biogenesis and autophagy.
        • Study initiated in Q4, 2019 with data in mid-2020.
        • If fails, then could potentially close down the company and return cash to shareholders. See below.
    • Market valuation is ~55MM at $1.5 / share down from IPO in Jan, 2018 at $15 / share.
    • $105MM liquid assets – liabilities, about twice their market cap!
    • $10-15MM quarterly burn rate.
    • Sufficient cash to get through key clinical trial milestones.
  • Unity Biotechnology (NASDAQ: UBX)
    • Leader in senolytics, the selective removal of senescent (old, poorly functioning) cells from the body to halt, slow or reverse age-associated disease and restore tissue to a more functionally healthy state.
    • Senescent cells secrete large quantities of harmful proteins, which cause inflammation, tissue degradation and the production of unwanted growth factors.
    • Unity’s injectable therapies disrupt proteins that sensecent cells need for survival.
    • Pipeline of targeted therapies:
      • Osteoarthritis in the knee
        • Phase 1 complete.  Achieved some reduction in pain and improved functionality. Phase 2 study results in 2H, 2020.
        • Success will be determined by whether Unity can produce more durable benefits than lower cost alternative treatments.
      • Age-related eye disease targets include macular degeneration, diabetic macular edema and proliferative diabetic retinopathy (Preclinical).
      • Liver, kidney and neurodegenerative diseases (Preclinical).
    • Market valuation is ~340MM.
    • Tangible assets – liabilities of ~115MM as of Sept 30, 2019.
    • Quarterly burn rate of $24MM, mostly from research and development.
    • Will need to raise additional capital to bring therapies through clinical trials and potential FDA approval.
    • Co-founded by Judy Campisi, a member of the faculty at the Buck Institute for Aging Research, Jan van Deursen of the Mayo Clinic College of Medicine and Dr. Daohong Zhou. In 2008, Campisi showed that senescent cells produce damaging proteins, the same year that van Deursen showed that mice engineered to produce large amounts of senescent cells aged rapidly. In 2015,  Zhou showed at the University of Arkansas for Medical Sciences that a single drug-like molecule could eliminate senescent cells.
    • Investments from Jeff Bezos and Amazon provided beneficial early publicity.
    • For more, see webcast and company presentation as of October 2019.

 

[Disclosure]: Keep Health wrote this article and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. We have no positions in the ETFs or venture capital funds mentioned. We may at times take either long or short positions in the individual public stocks mentioned.

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