With over 120 million Americans now defined as overweight or obese by the government… this tiny biotech company could be sitting on the biggest selling drug of all time!

They have an anti-obesity drug in Phase III that's nearly 3x more effective than the best fat-reduction pill currently on the market!

But before I let you in on this true Taipan profiteering opportunity, let me back up for a moment! Because last summer, on July 26, hell froze over.

If you thought that America’s culture of shameless litigiousness and professional “the devil-made-me-do-it” victimhood had reached its apex when an old lady sued a fast-food chain for its coffee being too hot (and won!), American trial lawyers went to great lengths to prove they could do even better.

Because on July 26, Caesar Barber, a 56-year-old, 5-foot-10 maintenance worker weighing 272 pounds, filed a lawsuit in Bronx Supreme Court, naming McDonald’s, Wendy’s, Burger King and Kentucky Fried Chicken and claiming he became obese and suffered from serious health problems from eating fast food several days a week since the 1950s.

The man—who apparently was napping when nutrition was discussed in elementary school and dozed through every health and nutrition fad since Sydney Rome first hitched up her legwarmers in the early 1980s—had this to say: “They said ‘100% beef.’ I thought that meant it was good for you.”

Need money? Ask an attorney!

The filing of the lawsuit proved to be a public relations belly flop for Barber’s lawyers, among them John Banzhaf, George Washington University Law Professor and point man on the Barber case. After all, while adults with IQs to match their waist size may be a dime a dozen, most reasonable Americans still would confirm that a man allowed to drive a car, own a gun and vote might be expected to be held personally responsible for the food he chooses to ingest.

But this issue is only beginning to rear its ugly head.

With revenues from tobacco and asbestos lawsuits drying up, trial lawyers are measuring up the fast food industry for its potential to keep firms in limos, baseball teams, and escorts. Taipan’s prediction: chubby children will be the new pawns in this litigation game.

It’s so easy. Just go on the Web and the gentle folks at Injuryboard.com will delight you with a veritable smorgasbord of possible ways for you to play the system. Fast food is just one of the delightful menu options you have to put money in your pockets and a smile on the lips of your attorney. Even I was licking my chops when I read the following teaser:

“There are over 300,000 fast food restaurants in this country alone. The mega-corporations such as McDonald’s, Burger King, Wendy’s and others intentionally market their products to children, essentially ensuring the prosperity of the industry by getting people hooked and hooked early. Fast food meals are typically high in calories, fat, sodium, and cholesterol. Such diets often lead to obesity and diabetes.”

And, potentially, to billion-dollar settlements! While childhood obesity is a complex issue involving such unfashionable sentiments as personal and parental responsibility and encompassing diet, exercise and lifestyle, Banzhaf—his eyes on the prize—reportedly has vowed to “sue them and sue them and sue them,” hoping to eventually find a sympathetic jury and a multi-billion dollar payday.

Soup Nazis and food nannies

The building blocks for the coming wave of doughboy litigation have been painstakingly assembled for years. At its base is the common liberal prejudice that Americans are so stupid they should not be allowed to make lifestyle choices—and that government should actively and passively modify an individual’s decision-making process about things like food and drink.

Vocal protagonists such as the so-called Center for Science in the Public Interest (CSPI) are lobbying for new taxes on “nutritionally incorrect” foods, as well as a 5% tax on new television sets and video equipment, plus a US$65 tax on each new motor vehicle or an extra penny of tax per gallon of gasoline.

Upping the ante

When the government released the findings of its National Health and Nutrition Examination Survey last month, I did a double take.

Check this out:

The government found that 64.5% of all American adults were either “overweight” or “obese.” Just wrap your mind around this: 64.5% of the American population translates into 120 million people. 120 million! That’s more than the populations of Canada and Germany combined!

Check out these statistics:

u 64.5% of all American adults are either overweight or obese!

u 64.5% = 120 million people, or 5x the population of Iraq!

u 31%—or roughly 59 million adults—are obese!

u 5% of Americans (or 14 million people) are extremely obese!

u Heart disease—the number-one cause of death in the U.S., killing over 700,000 each year—is a direct result of being overweight!

Look here, I’ll be the first to say that America may have a weight problem. Go to Wal-Mart, Sam’s Club, Costco or Price Club any weekend, and count how many people you would like to trade physiques with.

But 120 million people?

So I did some research for myself. And I found that the way the researchers arrived at this startling number is questionable, to say the least.

To find a person’s fat content, for example, they used a calculation known as the Body Mass Index (BMI). BMI measures a person’s north against their south—height versus weight. From that score, the government determines if you’re underweight, normal, overweight, or obese.

If your BMI score is under 24.99, you’re okay. If it’s between 25 and 30, you’re overweight. And if it’s over 30, you’re obese.

Sounds simple enough, right? Well, check out the list of the fat and unfortunate at the bottom of this page.

Unbelievable? Absolutely, especially when you consider that Tom Cruise isn’t merely overweight—according to his BMI score of 32, he is obese! Standing 5’7” and weighing in at a “grotesque” 201 pounds, Tom would need to shed nearly 50 pounds to achieve a BMI score of 24.99, which would put him at the government’s outer limit of normalcy.

Even more dramatic is the BMI score of Priest Holmes, the star running back for the Kansas City Chiefs. This mountain of muscle is leading the league with 857 yards rushing. Priest also has 13 touchdowns… more than 10 of the AFC quarterbacks have passing touchdowns! But despite his athletic achievements, he must have a problem. Priest stands 5’9” and weighs 214 pounds. That gives him a BMI score of 34, and makes him obese by government standards. In fact, he’s really obese.

Now, according to our microcap specialist Brian Hicks—who brought this whole mess to my attention—Priest Holmes used to play for the Baltimore Ravens. Brian has seen him and claims he’s built like Adonis. But according to the government, he has to lose 50 pounds to have a normal BMI score.

Crisis and opportunity

The pieces are falling into place. We’re on the brink of a veritable media blitz about obesity. The trial lawyers can’t wait to turn obesity into a cash cow. And with the U.S. government expanding the circle of people who should consider themselves overweight to nearly two thirds of the American population, we think we see the makings of a powerful trend.

Let’s not forget, while trial lawyers and government statisticians may have their own agendas, obesity is indeed a serious medical problem.

The Journal of the American Medical Association (JAMA) reports that over 300,000 persons die of obesity every year. Most of the top ten leading causes of death in the U.S. can be attributed to two things (outside of genetics): tobacco and fat.

Heart disease, certain types of cancer, stroke, diabetes, hypertension and high cholesterol are all direct results of being overweight. Heart disease alone—the number-one killer in America with 700,000+ deaths per year—accounts for US$120+ billion in healthcare expenses annually.

Estimates of the social costs of obesity—the secondary effects of being overweight—range from US$60 to US$100 billion a year.

Which explains why I immediately asked Brian Hicks to figure out a way for Taipan members to profit from this mega-trend. As you know, Brian has been on Taipan’s editorial board since 1995. As editor of the hugely successful microcap newsletter The Cutting Edge, Brian has established an incredible track record recommending biotech and pharma companies.

Here's his report: