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Passion is underrated. In its purest form, passion can be an infinite source of energy, devotion, innovation, and ingenuity. At times when fatigue is setting in, or discouragement is laying waste to ambition, it is often one man's passion which keeps invention moving forward. It is that one man's inexhaustible appetite for advancement that breaks through limitations, and redefines standards. While these qualities are valuable in any sector of commerce, it is perhaps in biotechnology and pharmaceuticals where boundless determination is most applicable. It is in this sector where one man, and his passion, can possess the potential to make a social impact on a magnificent scale.

Dr. David Platt, the founder, chairman, and CEO of Boston Therapeutics (OTCQB:BTHE) is such a man. At his New Hampshire based pharmaceutical company, Dr. Platt is leading his small, but dedicated team, on an ambitious expedition. His goal is to develop, manufacture, and commercialize compounds capable of taking on one of the most ardent of human ailments; diabetes.

Dr. David Platt, Ph.D.

Biotechnology companies, especially at the pre-clinical and developmental stages, are difficult to differentiate. What is it that makes one company more capable, or potentially more profitable, than another? Granted, the most obvious answer would be the science. After all, companies are built on products, and revenues are generated by sales of said products. However, in the biotechnology sector, management and leadership can be equally as pertinent to a company's future as is science and product development. Many failed companies, functioning in the pharmaceutical realm, have proven this over the years. These companies failed not due to fruitless science, but to lackluster management and misguided leadership. Boston Therapeutics has no such problem.

On September 26, 2013 an article was published in the New York Times which posed a thought provoking question. The article was entitled, Does This Man Care More About Your Health Than You Do; and the man in question was David Platt. The article opened most ominously, stating the following;

"You may not think twice before you scarf down or imbibe your sugar-laden foods or beverages-that yummy cookie, that full-calorie soda, that sugar-laden salad dressing. But one man would head you off at the pass if he could. He believes refined sugar-anything made of simply carbohydrates-is one of the worst things you could eat, and that the purveyors of such food and drink are doing us harm. Of course he's not alone in what some might consider a quixotic quest. Unlike most, he's putting his money where his mouth is, actively doing something to help us undo what we've done to ourselves."

The article was not a long one. However, it introduced readers to Dr. Platt as a man unrelentingly devoted to changing dietary health in America. Moreover, it focused on his ambition to treat those whose health has already been, perhaps irreversibly, compromised. While this task, undoubtedly, appears unnerving, for Dr. Platt this objective represents simply another lofty goal in a career full of exceeding expectations.

A world renowned expert in carbohydrate chemistry, Dr. Platt was educated at the highly regarded Hebrew University of Jerusalem. He has a track record of academic achievement, and professional accomplishment. Prior to his establishment of Boston Therapeutics, Dr. Platt founded three other publicly traded companies through which he successfully created nearly one billion dollars in investor returns. Included in these three companies was Pro-Pharmaceuticals, Inc., which today is known to investors as Galectin Therapeutics (NASDAQ:GALT). The other two entities referenced, which were once publicly traded, were SafeScience, Inc., and the International Gene Group.

Boston Therapeutics - The Pipeline

The pipeline at Boston Therapeutics currently carries three products; Ipoxyn, OxyFex, and PAZ320.

Ipoxyn and OxyFex are facsimiles of each other. Ipoxyn is designed for use in humans, whereas OxyFex is designed for use in veterinary science. Therefore, the description forthcoming of Ipoxyn stands as a reasonable definition for both. Ipoxyn, a universal oxygen carrier, is an injectable Rx for prevention of necrosis, and treatment of ischemic conditions which may lead to necrosis. Necrosis is, in its most humble of explanations, essentially cell death as a result of complications suffered from severe and traumatic injury. It is a component of pathological conditions such as, heart attacks, brain injuries and stroke. In addition, necrosis can also be associated with neurodegenerative diseases such as Alzheimer's disease, dementia, and Lou Gehrig's disease. It can also affect sufferers of diabetes. In truth, the list goes on and on. It suffices to say that necrosis is prevalent across multiple ailments.

Ipoxyn and OxyFex are both in the pre-clinical phase of development. What makes them potentially unique is the method of formulation being executed at Boston Therapeutics. For decades, oxygen carriers such as Ipoxyn have been developed for similar treatment of ischemic tissue. To date however, none of them have succeeded at late stage FDA trials. The common source of trial failure has been attributed to product design. These failed products fell into one of three categories; blood-derived elements, synthetic perfluorocarbons, or red blood cell modifiers. In trials, each of these formulations proved to contain unacceptable levels of nonfunctional methemoglobin impurities which led to their inevitable demise. At Boston Therapeutics, formulated design has taken these failures into account.

Ipoxyn will not be of similar structure to those failed treatments. Ipoxyn is a new chemical entity, and thus not a biologic blood substitute. The design includes a modified chemical structure which represents potentially significant improvement over the aforementioned failed treatments. Essentially, since Ipoxyn is of extremely small molecular size, it is able to perfuse constricted, ischemic capillaries, which are inaccessible to red blood cells. This mobility and efficacy minimizes adverse effects, and maximizes drug delivery. This small molecular size has particular significance in treating vascular complications of diabetes, since red blood cells may already be enlarged, and lower limb vasculature may be compromised.

However, while Ipoxyn and OxyFex offer long term potential for Boston Therapeutics, it is their third pipeline product, PAZ320, which offers perhaps the most immediate market impact. To quote directly from the company's website, a cursory explanation of PAZ320 is as follows;

"PAZ320 is a non-systemic, non-toxic, chewable drug candidate designed to improve glycemic control in type II diabetes patients who are currently taking metformin. Taken before meals, PAZ320 inhibits the enzymes that release glucose from complex carbohydrates in foods during digestion, reducing the amount of glucose available for absorption into the bloodstream. We believe PAZ320 will be an effective agent for people living with type II diabetes in their daily management of blood glucose levels, fulfilling an unmet medical need."

That explanation, in all honesty, is likely a modest one. It makes PAZ320 sound like a niche product, as opposed to a potential treatment capable of becoming a supplementary standard for a massive market. Type II diabetes is the most common form of diabetes. In fact, globally, there are roughly 300 million people suffering from diabetes, and 90% of those cases are qualified as type II. It is also growing at an astonishing rate. In 1985 the number of cases of diabetes was estimated at 30 million. In 1995, that number had grown to 135 million. By 2005, the number of diabetes sufferers had exceeded 200 million. Of course, today, this rate of diabetic proliferation continues. This is why the World Health Organization considers the disease a global epidemic.

According to the International Diabetes Federation, the addressable global market for type I and type II diabetes is 13 billion dollars. Assuming that 90% of those cases are in fact type II diabetes, the addressable market for type II alone can be estimated at 11.7 billion dollars. In an effort to be conservative as it pertains to forecasting potential market impact, let's focus strictly on domestic markets. The World Health Organization believes that 22 million people in the United States currently suffer from, and are enrolled in treatment for, type II diabetes. Of the 270 million people suffering from the disease worldwide, the 22 million in the United States represents 12.27%. When that 12.27% is applied to the global addressable market of 11.7 billion dollars, the total addressable market for type II diabetes in the United States becomes 1.44 billion.

In a continued effort to be as conservative as possible, consider the statement identified previously from the Boston Therapeutics website. It stated that PAZ320 was designed specifically to improve glycemic control in patients currently taking metformin. Metformin, the most common oral treatment for type II diabetes, is preferred by 60% of patients in the United States. Therefore, assuming that PAZ320 is, in fact, specific to metformin users specifically, that would give PAZ320 a potentially addressable market domestically equal to 860 million dollars. Therefore, even when one employs the most unadventurous of forecasting standards, PAZ320 stands to enter a considerable market.

PAZ320 - Trials

On September 4, 2013, Boston Therapeutics announced that Phase IIa trial results for PAZ320 were published in the August issue of Endocrine Practice. These results were quite promising. Nearly half of the subjects responded with a 40% reduction of post-meal glucose in the blood, compared to the baseline in a dose-dependent manner. Additionally, results showed the effect of PAZ320 did not correlate solely with longevity of diabetic diagnosis, and effects were statistically noteworthy regardless of concurrent diabetes medications. In other words, PAZ320 showed treatment improvement regardless of how long someone has suffered from the disease, and regardless of what primary medication the clinical subject was already taking. There was also no severe hypoglycemia, and gastrointestinal side effects were minimal at worst. Satiety was also observed.

On November 12, 2013, the company announced that it had begun enrolling patients in a Phase IIb clinical study for PAZ320. A total of 24 patients, with type II diabetes, currently being treated with metformin, will be administered PAZ320 under double-blind, placebo-controlled conditions. Patients' blood glucose will be monitored using continuous glucose monitors, and their postprandial blood glucose levels will be measured following a test meal. The primary objective of the study is to evaluate the effect of PAZ320, compared to a placebo, in the area under the curve of blood glucose levels, and on insulin levels in the blood, for four hours following intake of the meal. The study is being conducted at Centre Hospitalier Robert Bisson in Lisieux, France.

According to an interview conducted by, Dr. Platt stated unequivocally, and confidentially, that the data collected from Phase II trials thus far, have led to Boston Therapeutics already being "in the planning stage to submit Phase III clinical trials for PAZ320 to the FDA."

PAZ320 - Potential

Dr. Platt, in the same above referenced interview, was quoted as having said the following in regards to PAZ320;

"The drug works the same for pre-diabetics and all diabetics. PAZ320 may reverse diabetes."

That is a sizeable statement. It is also, potentially game changing. It is well established in the scientific community that a considerable correlation exists between high blood sugar and diabetes. This relationship is one of the core reasons why lifestyle changes such as diet and exercise help combat the adverse effects of the disease. Furthermore, this is why nearly all diabetes drugs are designed, in part, to lower blood sugar levels. PAZ320 is a drug designed to do this in a unique way; by blocking the enzymes in the intestine that digest the sugar being consumed. This is a potentially groundbreaking approach.

By employing this method, PAZ320 is recognizing the importance of the fact that people with a blood sugar problem cannot eliminate blood sugar quickly after a meal. This systematic failure results in an increased amount of glucose bound to hemoglobin, which restricts the amount of oxygen in the red blood cells. This process leads to a condition called hypoxia, or lack of oxygen, which damages tissue and organs in the body. This effect prevents healing, and can lead to deterioration of antibodies and healthy bodily matter.

If PAZ320 successfully navigates the upcoming FDA hurdles, the process of treating and preventing type II diabetes could change forever.

Boston Therapeutics as an Investment

Boston Therapeutics currently maintains a market cap of less than 50 million dollars. Needless to say, given the potential which exists in PAZ320 alone, this is likely a considerable undervaluation. Assuming one abides by the most conservative of forecasting standards identified earlier, the potential market cap for Boston Therapeutics, when it eventually enters into Phase III clinical trials, should be closer to 860 million. An 860 million dollar market cap would increase the current valuation by a factor of more than 17. That is substantial. Even in the event of future dilution, which is always a possibility with developmental biopharmaceutical companies, such a significant undervaluation could absorb considerably more shares into the marketplace and still maintain an upside factor of close to 10.

Furthermore, the financial situation at Boston Therapeutics, when compared to entities of similar size, is reasonably strong. The company closed on a 5.3 million dollar private placement agreement in October, and maintained a relatively healthy balance sheet even prior to that closing.

(click to enlarge)

Admittedly, the company's cash flow and revenue's leave much to be desired, however operating a net loss, and incurring repeated operating losses, are regular occurrences in the biotechnology sector. The costs associated with developing science are exuberant. One bit of criteria offering peace of mind of Boston Therapeutics investors however, should be the presence of Dr. David Platt. He has navigated these waters before, and gives every indication that he is more than capable of doing so again.


As it pertains to associative risks exclusive to Boston Therapeutics, there are only a few. First, the company maintains only five employees. While this could be seen as a proactive measure to keep down operating expenses, it also opens them up to unforeseen vulnerability. When a company has only five employees, the loss of any one of them could profoundly affect operations and functionality. This could potentially be a concern. Secondly, despite having recently procured investment, and Dr. Platt having a track record of developmental biotechnology success, the costs moving forward into late stage trials will be excessive. The eventual need for a large biopharmaceutical partner is all but inevitable. If, for any reason, procurement of a significant partner failed to materialize, further advancement of PAZ320, or any other pipeline product, would be highly unlikely. Lastly, as was mentioned previously, preceding efforts to bring drugs to the market similar to Ipoxyn and OxyFex have all failed. While the chemical formulation of products at Boston Therapeutics is different, it is also a first time endeavor. Success is not guaranteed despite scientific promise. Therefore, developmental risks exist with all of the products in the company's pipeline.

Beyond those three concerns, the usual suspects remain. The diabetes marketplace is a highly competitive one. If someone else were to get a similar product to market first, or perform better in late stage trials, Boston Therapeutics could be left wanting, and their shareholders would be there beside them. At the end of the day, late stage trial failure remains the biggest threat to developmental biopharmaceutical companies, and their cautiously optimistic investors.


For the speculative investor, Boston Therapeutics has all the signs of future promise. They have an innovative scientific product, a capable and proven leader, and a measurably significant upside. Assuming the company did bring PAZ320 through a phase III trial successfully, and managed to do so with less than suffocating dilution, the company's current share price could see growth by a factor of nearly 10. Based on the PPS at the time of this article, upside measured by a factor of 10 would equate to a potential long term price target of 14 dollars. Now, that is highly speculative given the road ahead, and it is not suggested that anyone anticipate that price. However, it is conservatively practical nonetheless given the fact that the forecasted potential market share has been reduced herein to represent a specific niche of the domestic market only.

Investment into Boston Therapeutics should be a consideration for long investors, with a reasonable tolerance for risk, and moderate patience. Like so many other developmental stage companies, Boston Therapeutics is a speculative endeavor. However, the leadership and track record of Dr. Platt help this company to stand out among comparable entities. If one is going to invest in a speculative biopharmaceutical company, Boston Therapeutics could very well be the company to speculate in. Further consideration is warranted.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.