Upon watching 60 Minutes tonight and conducting further research, it’s evident that the benefits of Resveratrol may result in both the most prominent advance in human medicine in decades, as well as provide investors with the right player a substantial return on investment. I somehow manage to turn every hot topic into a finance/investment idea and this one could be a multi-bagger.
What is Resveratrol You Ask?
I have to admit, I didn’t know much about Resveratrol until I was watching 60 Minutes tonight, which I consider to be a legitimate news outlet that prodigiously checks their sources, challenges assertions and injects skepticism into their reporting. The segment outlined the science and the discovery process behind Resveratrol, which was intriguing from a human health standpoint, but of course, as I was watching, in the back of my mind, I was thinking, “what’s the best Resveratrol stock” to own right now? My only other exposure to Resveratrol was some Google image ads (possibly like one that Google’s serving up somewhere on my site now) touting hot actresses and Dr. Oz in some fashion endorsing the chemical; but I had never investigated those ads – the lightbulb just went off tonight.
Resveratrol is a naturally occurring substance that has been shown to have both protective and regenerative properties in all sorts of plants and animals. Resveratrol has been proven in numerous independent studies to have substantial benefits in everything from yeast to mice and monkeys in various therapeutic categories. While that’s encouraging, the vast majority of drugs that enter the clinical lifecycle cleared that similar hurdle and never make it to market, so here’s where the skeptic in me comes out. What has already made it to market of course, is Resveratrol supplements, which don’t require the rigor clinical trials and subsequent review and approval by the FDA in the US. In this article, I’m going to elaborate on Resveratrol itself, the vast differences I see in the commercial potential between Resveratrol supplement companies and an FDA approved source of Resveratrol, and try to separate the facts from the hype.
If a safe and efficacious form of Resveratrol can be demonstrated in humans, the benefits are enormous:
- Extension of lifespan to the tune of over 10 years
- In the later stages of life, a much more healthy/disease-free existence
- Diabetes treatment
- Weight Loss
- Cancer Prevention
- Delay/Eliminate the onset of Alzheimer’s Disease
…the list goes on. While this sounds too good to be true, some Resveratrol companies are making these claims now, which I do not believe can be substantiated just yet until I see data from clinically controlled studies. But, within the next few years, we’ll see actual data from formal clinical trials.
How does Resveratrol work and how could these benefits be achieved?
Resveratrol: The Facts
Resveratrol is naturally occurring and the most commonly consumed material providing Resveratrol in any meaningful quantity is in red wine due to the concentration of the material in grapes. People have looked at the marginally higher life expectancy in Europeans who drink red wine en masse compared to the rest of the world and proclaimed, “Alas! Correlation is Causation! We have found the fountain of youth”. Unfortunately for those looking to draw a direct link, in order to derive the benefits that are being seen in animals at the human scale, the amount of Resveratrol required to achieve those levels would amount to more wine than a human could reasonably consume without incurring other, much more serious side effects that would more than offset any benefit. So, perhaps there’s something going on there, but don’t go start drinking more red wine based on this possible correlation and improbably causation.
The Real Breakthrough came not from a supplement company, but from an actual biotech startup named Sirtris. Initially, they showed that Resveratrol could significantly extend the lifespan of yeast. Sounds funny, but read on. There’s a “magic gene” called Sirtuin, that is normally turned off. When turned on, it has regenerative and healing effects that are pretty incredible. The trouble is, you can’t just turn it on and off. Several studies including one ongoing by CDC have shown that caloric restriction appears to turn this gene on and significantly increase lifespans of highly evolved creatures like monkeys while forstalling disease. In a search to turn this gene on, Sinclair, a co-founder of Sirtris, screened thousands of compounds in an attempt to activate the gene and guess what he arrived at? The compound that activated the gene was none other than Resveratrol! That’s when the alarm bells went off for him. This was the same chemical evident in red wine.
So, to recap, the breakthrough isn’t that caloric restriction increases life, it isn’t that we discovered grapes have Resveratrol, it’s that scientists have figured out a way to activate the Sirtuin gene, which is known to have beneficial properties in humans when active. Since humans, especially Americans have not demonstrated the ability or willingness to practice caloric restriction when confronted with ample nutrition options (I certainly haven’t!), providing an effective delivery of Resveratrol to the system would be a way to achieve the same benefits of caloric restriction (besides just weight loss, remember, extension of life – disease delay onset, etc.) while maintaining a routine lifestyle.
Where’s the Proof? Well, the supplement companies don’t have any. They don’t need it; that’s how our system works. However, besides several animal studies backing up their claims, Sirtris has conducted some fast-tracked human studies on people with untreated diabetes. The result? Significantly lowered insulin and glucose levels without a change in diet or any other therapy. They’re now conducting human trials to consider the benefit to cancer patients.
Resveratrol: The Hype
Undoubtedly, you’ll be seeing ads for Resveratrol supplements all over the internet, but with the supplement industry needing no actual data to back up their claims in this regard, and the lack of a proven formulation to actually deliver the compound in the concentration needed to derive any benefit, it is my opinion that you’re throwing money down a rat hole. I don’t view supplement companies as viable competitors to the Sirtris formulation if approved a few years out.
According to wikipedia, “oral bioavailability of resveratrol is low because it is rapidly metabolized in intestines and liver into conjugated forms: glucuronate and sulfonate. Only trace amounts (below 5 ng/mL) of unchanged resveratrol could be detected in the blood after 25 mg oral dose. Even when a very large dose of resveratrol (2.5 and 5 g) was given as an uncoated pill, the concentration of resveratrol in blood failed to reach the level necessary for the systemic cancer prevention. However, resveratrol given in a proprietary formulation SRT-501 (3 or 5 g), developed by Sirtris Pharmaceuticals, reached 5Ã¢â‚¬â€œ8 times higher blood levels. These levels did approach the concentration necessary to exert the effects shown in animal models and in vitro experiments.”
What this is saying is that the standard formulation being offered currently by supplement companies is likely not deliver an adequate amount of Resveratrol to derive any meaningful benefit, but Sirtris is. I’d go with that horse and save all the money you’re considering spending on unproven supplements now and invest accordingly if Resveratrol is something you truly believe in. Then buy it from a proven source if/once FDA approved.
With the vast number of indications a successful drug candidate like this could garner, this may be the biggest blockbuster drug ever. Consider that Lipitor had only one therapeutic category and Resveratrol has several – with no competition. While clinical trials are still in Phase IIa and earlier depending on the compound and indication, a commercialized product could be available within about 5 years. Last year, Sirtris was acquired by GSK for close to $1 Billion. Granted, GSK is a large company if this drug has peak sales of say, $1Billion per year, it won’t have a meaningful impact on shares over a prolonged period of time. However, if Resveratrol can deliver Lipitor-style returns early in its lifecycle, it could completely transform the company. With $35 Billion in revenue in 2008, the prospect of $10-$20 Billion per year in additional revenue during patent protected years would be nothing to yawn at. Here’s a snapshot of the Sirtris pipeline for various indications:
The Trade: As a long term investment, the obvious choice is GSK – slow accumulation of shares. As a “trade”, note the clinical trial results due out in September. As options are cheap now with the VIX approaching a low, perhaps you consider the November 40 Strike Call options. They’re going for .50 now and I’d envision a successful trial would send the stock skyrocketing, if for nothing other than the media sensationalism and hype that would follow, even if you still need to get through Phase III and beyond before a single dollar is made (heck, how these Swine Flu Stocks from earlier in the year more than doubled on pure hype). Evidently, there are other biotechs working on their own versions, but Sirtris appears to be the clear leader in the field.
Disclosure: No relationship with Sirtris and no position in GSK at the time of publication.
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