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Saving Lives (And Making Billions) With Opioid Alternatives

Written by Samuel Taube
Posted January 26, 2019

We don’t need to remind you how severe America’s opioid crisis has gotten. Chances are you personally know someone (or someone who knows someone) who has struggled with this terrible addiction.

But I’m not writing this article to depress you. Quite the opposite, in fact — I’m writing to share a piece of good news.

A few days ago, the CDC released preliminary data showing that drug overdose deaths actually declined last year. The numbers, which are not yet finalized, suggest that deaths peaked in the 12-month period ending in November 2017.


They’ve apparently fallen by about 4.5% in the months since, ending a decades-long trend of rising mortality.   

Who — or what — can we thank for this pullback?

Better Bystanders, Better Regulations, or Better Drugs?

For one thing, people are getting better at responding effectively when they witness a drug overdose.

Naloxone, a fast-acting rescue antidote for opioid overdoses, has been made available over-the-counter in many U.S. cities. (Our senior technology analyst Jason Stutman wrote about Naloxone-related investment opportunities here.)

Some policy changes, like state-imposed prescription restrictions, have helped, too.

But there’s another, even more powerful weapon against the opioid epidemic that investors can’t ignore: the rapid development of opioid alternatives for pain relief.

Pharmaceutical companies may have helped create the opioid crisis by overproducing (and over-marketing) these powerful drugs. But today, they’ve realized their mistake, and they’re helping to fix it by developing new drugs that provide the same powerful pain relief as opioids — without the potential for addiction and fatal overdoses. Let’s learn about some of them...

The Most Promising Opioid Alternatives


Marijuana and its derivatives have long been known for their powerful pain-relieving effects. Chronic pain was one of the first use cases for medical marijuana. And a growing body of research suggests that tetrahydrocannabinol (THC, the main active ingredient in marijuana) is one of the best treatments ever discovered for neuropathic pain.

This type of chronic pain consists of “false” pain signals that are sent to the brain by damaged nerves. It’s especially common among multiple sclerosis (MS) patients and people who have had very invasive surgeries. And since neuropathic pain doesn’t have a “real” physiological cause, it’s very difficult to treat with conventional painkillers.

In fact, many neuropathic pain sufferers have just two options when it comes to effective pain relief. One is dangerously high doses of opioids like morphine. The other is Sativex, an oral THC spray developed by GW Pharmaceuticals (NASDAQ: GWPH).

Sativex is already approved for MS-related spasticity and neuropathic pain in the European Union. It’s currently being evaluated by the FDA for U.S. approval and could see its use cases expanded to include cancer pain (another symptom that is often treated through high doses of opioids).       

Nonsteroidal anti-inflammatory drugs (NSAIDs)

Another major use case for opioids is severe pain in a hospital setting. And it’s easy to understand why emergency rooms dispense a lot of these powerful drugs. They often treat patients who are in agonizing pain from gunshot wounds, broken bones, severe burns, etc.

ER caregivers are often tempted to give these grievously wounded patients a shot of morphine or other opioids, thinking their superior powers of pain relief outweigh the risk of addiction and overdose.

But here’s the shocking truth about ER opioids: In a 2017 study of ER patients with severe pain, opioids showed no significant advantage over a combination of Tylenol and Motrin for pain relief.

This study has an exciting implication. It suggests that many hospital-setting opioids could be replaced with special formulations of plain old nonsteroidal anti-inflammatory drugs (NSAIDs, the active ingredients in common pain medications like Motrin and aspirin).

In fact, Roche Holding (OTC: RHHBY) developed Toradol for exactly that purpose. In 2010, the FDA approved the injectable and nasal spray formulations of this NSAID to treat “moderately severe pain requiring analgesia at the opioid level.”

The graph below shows the stock performance of GW Pharmaceuticals (blue line) and Roche (orange line) over the last three years.


As you can see, GW Pharma has gained quite a bit of value in recent years, while Roche has held remarkably steady at $32 and some change.

The Best Way to Profit from New Opioid Alternatives

Both of the stocks discussed above provide easy exposure to the non-opioid pain management segment of the pharmaceutical industry. But it would be dishonest of us to suggest that you’ll see huge short-term gains on these stocks.

For one thing, these are both large-cap companies that don’t see big moves because of a single drug. GW Pharmaceuticals is worth more than $50 billion; Roche, more than $220 billion.  

And more generally, investing in pharmaceutical companies based on their already approved medications isn’t the best strategy. That’s because a new drug’s sales potential is usually priced in before approval. In other words, it’s already accounted for in the company’s stock price by the time the drug makes it through the multi-year FDA review process.

The best way to invest in companies that develop opioid alternatives — or any other drugs, for that matter — is to buy stock in smaller, more specialized biotech companies before their drugs are approved.

Ordinarily, following a drug through the approval process involves reading a lot of boring clinical trial data and then waiting months for the painfully slow-moving FDA to review it.

Our senior technology analyst Jason Stutman recently launched Topline Trader, a biotech trading service that does all of this tedious research work for you. This service sends you email notifications of upcoming catalysts like clinical data releases and approval decisions, allowing you to reap big gains from early-stage drug development with minimal effort.

One catalyst coming up in the next few months is an approval decision on a powerful NSAID for postsurgical pain.

If it’s approved, it could replace dangerous opioids like morphine and oxycodone in thousands of operating rooms across America. And it could make its developer — an early-stage biotech company worth less than $200 million — explode in value. Click here to learn more.

Until next time,

Samuel Taube
Wealth Daily


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