The big story of the next year will be what I call the "phytochemical and nutraceutical revolution."
Phytochemicals, as you may know, are chemical compounds that occur naturally in plants. Nutraceuticals are plant- or animal-derived products. Both, however, are meant to provide health benefits.
While these compounds may function exactly like FDA-approved pharmaceuticals, they are not categorized as such.
As investors, this gives you and me a huge opportunity to invest in early-stage, revolutionary companies working on plant- and animal-based health solutions that bypass the lengthy and extremely expensive FDA approval process.
Now, as you know, there's nothing new about phytochemical usage. . .
The Greeks used many plant products, including salicin, from which modern aspirin comes. Ayurvedic medicine from ancient India relied on a wide variety of medically useful phytochemicals, including the anti-diabetes compound pterostilbene, derived from pterocarpus marsupium, or the Indian kino tree.
There's a common assumption among proponents of "natural products" that phytochemicals are inherently safe because they are part of "nature." Many phytochemicals, however, are extremely toxic. Cyanide and hemlock, the poison that killed Socrates, are natural products that can easily kill you.
This naiveté, often bolstered with the pseudoscience and outright fraud common in health food store culture, in the past made me extremely cynical about the promise of phytochemicals, except for basic essential nutrients.
I was, however, wrong.
Clearly, I underestimated the impact of Moore's law, the accelerating power of computer technologies, on biotechnology. The tools needed to find effective phytochemicals, as well as the biological mechanisms behind their actions, have plummeted in price.
At the same time, the burden of regulation has increased.
Recently, I've heard from biotech executives that the Obama administration is afraid of medical innovation because of the mistaken belief that new therapies will increase the cost of healthcare, which they have a political interest in keeping down.
These two forces have combined to change the economics of drug discovery, shifting the focus toward natural, as opposed to man-made, compounds.
In short, the "phytochemical and nutraceutical revolution" has begun.
My first exposure to this phenomenon was through a company I've recommended to my Breakthrough Technology Alert readers called Galectin Therapeutics (GALT:NASDAQ). The company's cancer- and fibrosis-fighting compounds are, in fact, naturally occurring plant sugars. Currently, they have to be administered via transfusion, but that will, inevitably, change.
Galectin Therapeutics' galectin-3 blocking natural plant sugars are one of the most-important biotech breakthroughs of our era. Not only do their phytochemicals pierce the cancer-cloaking shield, they also reverse fibrosis.
The prestigious Ludwig Institute is in clinical tests right now with Galectin Therapeutics' drug candidate in conjunction with a cancer vaccine. Just yesterday, however, the company announced plans to initiate clinical trials for NASH, or fatty liver disease, in early 2013.
Let me repeat that for those who weren't paying close attention: early 2013.
Another company I've recommended has created a synthesized form of a natural alkaloid that I believe will extend healthy life spans. Equity in the company that makes this product could yield truly transformational returns.
I believe this company has a product that actually does what other supplements only wished they could do—it controls chronic low-level inflammation.
That effect may not sound very important. But as I explained in a recent issue of The Penny Sleuth, it is actually revolutionary.
The name of the neural circuit that regulates the immune response to injury and invasion is the "inflammatory reflex." Inflammation is an extremely complex mechanism that involves the destruction through apoptosis of damaged cells, the healing of salvageable cells and the growth of entirely new cells. The primary role of this important biological response is to heal injury or infection.
In fact, in the "olden days" before penicillin, being thrown from a horse, kicked by a cow or bitten by any kind of animal was a potentially life-ending matter. The only way to survive a nearly inevitable sequence of injuries throughout a lifetime was to possess a strong inflammatory immune response. If individuals didn't have the ability to mount a powerful inflammatory response, they were unlikely to live long enough to pass on their DNA.
But there is also a downside to the "inflammatory reflex."
In the last decade or so, it has become increasingly clear that inflammation plays a major complicating role in almost all diseases. In fact, inflammation increases the rate of aging itself and leads to various pathologies. This is why your dentist lectures you about flossing. Inflammation from unhealthy gums increases the odds of getting heart disease and even Alzheimer's.
Even with perfect gums, however, chronic inflammation increases as you age. Eventually, it cascades into a serious problem.
Uncontrolled inflammation causes the simultaneous healing and destruction of cells. This can lead to cancers, heart attacks, lupus, IBS, macular degeneration, stroke, obesity, ED, allergies, psoriasis, Crohn's disease, endometriosis, rheumatoid arthritis, hair loss, diseases of the organs such as the thyroid and liver as well as. . .well, you name it.
Clearly, the potential market for such a "miracle drug" is enormous. . .and that's why I am excited about the company that makes this product. But we are still in the early days of this story, which is probably why the company's stock has not yet "run away."
In conclusion, the "phytochemical and nutraceutical revolution" has begun.
To position yourself properly, I suggest looking at companies with the science and technology to produce these compounds. . .which bypass the increasingly regulated health care system.
Patrick Cox
The Daily Reckoning
