Archive for December, 2012
There’s good news for Alzheimer’s patients after all…
This news comes at an opportune time. Just last summer, the whole effort suffered a major setback.
That’s when three Big Pharma firms said they were halting development of Alzheimer’s compounds because the medicines simply didn’t work. No doubt, that was a blow for both patients and investors in Eli Lilly & Co. (NYSE:LLY), Pfizer Inc. (NYSE:PFE), and Johnson & Johnson (NYSE:JNJ).
But this month we learned that a research team at Johns Hopkins has for the first time implanted a promising device into the brain of a U.S. Alzheimer’s patient. It seems to combat the effects of Alzheimer’s by providing deep-brain stimulation. It works very much like the pacemaker that’s normally used in the heart.
Over the next year or so, a total of 40 patients will receive the implants under a federally funded trial.
This is a big move with very promising potential. You see, doctors have used a similar device to control Parkinson’s disease for about the past 15 years, with some 80,000 patients receiving the implants. They report having fewer seizures and needing less medication.
I believe this very well could be the bridge technology we need until a true “cure” for Alzheimer’s is found. Right now, the chances look good that this interim step will succeed.
“This is a very different approach, whereby we are trying to enhance the function of the brain mechanically,” says Dr. Paul B. Rosenberg. “It’s a whole new avenue for potential treatment for a disease becoming all the more common with the aging of the population.”
As high-tech investors, we need to keep an eye on this research and be ready to pounce when a medical-device maker gets it to market.
I don’t know just when that will happen. But when it does, you can bet that I’ll drop you a line.
Meantime, I have four more fascinating developments to share with you this month.
Take a look…
At one time or another, I’m sure that we’ve all been outraged by stories of rampant government waste – especially in areas of aerospace- and defense-related research.
But today I’m going to tell you about a NASA-related tech program that led to a big payoff. In fact, investors who knew what to look for could’ve turned $10,000 into $41,900 – a 319% return – in just 29 months.
I’m relating this story for a couple of reasons. It shows you why I spend so much time looking at the research that’s underway in labs at both the university and national level. And it also explains why I write to you so frequently about cutting-edge science where I believe there’s a big potential payoff.
My ultimate goal, you see, is to tell you about profit opportunities like this one before they occur.
Futurist Ray Kurzweil is one of the world’s busiest people.
And that’s no surprise. A best-selling author and subject of a major documentary, Kurzweil has an unmatched talent for explaining how cutting-edge technology is going to change our lives. That means this “A-list” speaker is always on the go, traveling the globe as he spreads his futurist technology gospel.
That’s why I made sure to buttonhole Kurzweil at the recent Singularity Summit technology conference. As he headed into the San Francisco lecture hall to share the newest insights into how the brain works, I was able to walk along with him and have a quick chat.
As we talked, little did I know that Kurzweil was working on something that would stun the tech world in a manner that’s usually reserved for one of his predictions.
No, I’m not talking about the buzz that’s been generated by his new book, How to Create a Mind, the Secret of Human Thought Revealed.
Kurzweil, as it turned out, had accepted a major position at none other than Google Inc. (NasdaqGS: GOOG), the Web giant that is to search what the tech futurist is to prognostication.
And Monday was Kurzweil’s first day on the job as the company’s new Director of Engineering.
A lot of investors have glossed over this news. That’s a big mistake. As I see it, this single hire speaks volumes about how Google views itself, and how it intends to keep building shareholder value.
If you’re interested in Google, this is a bit of strategic intelligence that you absolutely have to know. Here’s why: With this single move, the world leader in Web search is telling investors like you that it intends to remain a growth company. This also tells us that Google wants to invent the types of technology that will change the world and make money for investors – even if it means breaking free of the Web itself.
I defy anyone to identify another leader in the tech field who will have more of an impact on the world in the Era of Radical Change. I’ve followed his career for years now and know firsthand that many of his predictions that people dismissed as crazy have actually come true.
Kurzweil began pushing the tech envelope as a teenage inventor and has literally never looked back. Along the way, he has invented dozens of new products, penned groundbreaking books on the technologies of the future, and altered our view of what is possible and even probable in the Era of Radical Change.
I can guess what the naysayers are already saying – that Kurzweil won’t fit in at Google because the company is so darn huge. Or that Google, with a market cap of $235 billion, can never recapture its free-wheeling days as an early-stage startup.
That’s high-tech balderdash.
If you could find a way harness the speed of light – 299,792,458 meters per second – in computer processing, processors could handle massive amounts of data at mind-numbing speeds.
At the very least, it could lead to computer speeds that are up to 100 times faster than those in use today.
That’s why industry leaders have been pursuing the promise of optical computing for decades now.
Indeed, we’ve figured out how to pump light through fiber optics for super-high-speed communications in computer networks and the Web. That’s become routine today.
But still, no one could find a way to solve the challenge of focusing light in tiny spaces like computer chips. It’s a brick wall known as the “diffraction limit.” Simply stated, it means that once you get into tiny spaces – like the postage-stamp size of a semiconductor – you can no longer focus a light beam.
Two teams of computer researchers have just announced major advances that promise to make optical computing a reality in the very near future.
One comes from a famous tech leader whose shares are publicly traded; the other out of academia. Of course, major advances in the lab often make it to market in ways that mean profits for early investors. This is one of those rare cases where a breakthrough happens at a prestigious university… and you could literally invest in the field today.
So let’s start with the breakthrough from Caltech.
Synthetic biology is now set to have a major impact on the whole biotech industry. And that’s just for starters.
You see, creating artificial genes in the lab or factory also will at the very least play a role in the development of new drugs and the bioengineered fuels of the very near future. And all three of these areas could mean big profits for tech investors.
Here’s the thing. Drug, chemical, and biofuel firms are relying more than ever on artificial fragments of DNA — the building blocks of life — to invent new products. Trouble is, the process is so complex that it can take days to synthesize these man-made genes, usually in small batches.
Not only is it time consuming, but it requires the use of costly robots and other advanced gear. Simply stated, if someone came along with a breakthrough that greatly speeded up the development of synthetic genes, it could affect several industries at once, not to mention its own value in the market.
Allow me to introduce you to Gen9 Inc. The company is blazing a trail in the development of scalable technologies for synthesizing genes. Gen9 formed last summer around a unique new device that greatly speeds up the process, while at the same time cutting the costs of synthetic biology.
This is where it gets interesting…
With the world going through so much fast-paced change, high-tech execs need to keep their eyes clearly focused on the future.
Sadly, some are still looking in the rearview mirror.
Take the case of Intel Corp. (NasdaqGS:INTC). The world leader in PC chips has just announced it’s borrowing another $6 billion.
Of course, borrowing money isn’t necessarily a bad thing. It’s the purpose of the debt that matters most.
Here’s the thing. Intel is taking on more debt to help it buy back more of its flagging stock. See, the senior brass think that at $20 a share, this is a great value. And on paper, they’re right.
After all, Intel has strong profit margins. Not only that, but its 15% return on assets is solid. It means that for every dollar the firm invests in assets, it earns 15 cents.
Try getting that rate on a bank CD. Or a T-bill, for that matter. Pretty much, it’s impossible.
No, the problem for Intel and its shareholders is the stock has become a “value trap.” In other words, investors buy the stock because they see they only have to pay nine times earnings and think it’s a great bargain.
But, as I like to remind tech investors, a $20 stock that goes down is a lot more expensive than a $200 stock that goes up. Look at it this way, if you had simply bought an index fund tied directly to the S&P 500 you would have made a nice 12% return so far this year.
Holding Intel, however, would have cost you more than 19% as of the market’s close yesterday. By buying its own stock, Intel isn’t getting anywhere near the return it could by simply buying a basket of equities.
And it’s actually much worse than it seems. This next number will blow your mind…
The U.S. Supreme Court has just agreed to hear a landmark case that could have extreme money-making ramifications for biotech investors like us.
Next June, the nine justices are expected to settle – once and for all – whether companies can patent human genes in the United States.
The Patent and Trademark Office has been issuing patents on DNA for nearly 30 years, according to Bloomberg Businessweek. Roughly 4,000 of the 22,000 human genes now have some form of patent. But the American Civil Liberties Union has challenged the practice in Association for Molecular Pathology v. Myriad Genetics. Now that case will go to the highest court in the country.
At heart, the legal question sounds simple: Does Myriad Genetics Inc. (NasdaqGS:MYGN) have the right to patent two genes that signal whether a woman is at higher risk of getting cancer of the breasts or ovaries?
Myriad of course did not invent or create the breast cancer predisposition genes, referred to as BRCA genes. But it did create something called the BRACAnalysis test that looks for mutations on these genes. Those mutations are associated with much greater risks of breast and ovarian cancer. Usually firms cannot get that kind of market protection for something that is clearly a product of nature. But in this case, Myriad has developed a process of extracting a gene that makes the resulting molecule novel and chemically different from DNA that naturally occurs in our bodies.
And, after all, it took Myriad 17 years and $500 million to develop the test. Without barriers to entry, other firms could simply come in, take advantage of all that costly effort and sell a knockoff for less money.
Even if that weren’t illegal, it’s obviously unfair.
Let’s dig into the case and why it matters to you…