Responding to investor concerns that TheStreet.Com has continued targeting thriving small-cap biomedical companies with inaccurate articles, BioMedReports has been repeatedly contacted by officials of publicly traded companies-- among them, Hoji Alimi who serves as CEO of Petaluma, California based Oculus Innovative Sciences (NASDAQ:OCLS).
Mr. Alimi’s breakthrough Microcyn® Technology- a water based, biocompatible solution used increasingly around the world to help prevent and treat infections in chronic and acute wounds- has been gaining attention both on Wall Street and in the national media due to its rapid kill anti-microbial and healing properties.
A San Francisco bay area television station recently reported that the technology is a promising path to a major medical advance and earlier this month, Oculus shares rose after the company received an expanded 510(k) label clearance from the U.S. Food and Drug Administration (FDA) to market its Microcyn® Skin and Wound Cleanser with preservatives as both a prescription and over-the-counter formulation. The new prescription product is indicated for use by health care professionals to manage the debridement of wounds such as stage I-IV pressure ulcers, diabetic foot ulcers, post-surgical wounds, first- and second-degree wounds, grafted and donor sites.
Not long after the announcement, TheStreet.Com’s biomedical columnist Adam Feuerstein leveled an accusation that Oculus “appeared to be skirting U.S. drug laws by claiming that its wound-cleansing product containing common diluted bleach has drug-like therapeutic properties.”
Calls from angry and confused patients, doctors and investors flooded the offices of the company and shares were negatively impacted. It certainly wasn’t the first time, TheStreet.Com’s coverage has impacted a stock's price and its shareholders, but company officials became concerned when they heard reports that members of the medical community and patients who use Microcyn® products were adversely affected by the report.
“This is becoming a patient safety issue and putting public safety at risk,” Alimi told BioMedReports in an exclusive recorded interview. “It’s no longer [about] attacking a company and the market potential and market cap. You’re damaging public safety.”
Alimi, was concerned enough to craft a letter to CNBC’s Jim Cramer who co-founded TheStreet.com in 1996 and took the company public in 1999.
“[I] copied the gentleman [Feuerstein] who had written the report, “explained the Iranian-born, Alimi. While the Oculus CEO made it clear that he believed the publication and writer were entitled to their constitutionally protected opinion he felt that the publication had fallen short of reporting the truth and science behind the technology accurately.
“When you haven’t done your due diligence and you don’t understand the basic chemistry of our product [and] you make recommendations like that you are putting patients’ safety at risk,” insists Alimi. “There has to be a level of integrity in the research written and I think that’s really lacking in their case.”
Last month, Dr. William A. Carter, the CEO of Hemispherx Biopharma (NASDAQ:HEB) angrily reacted to slanted attacks and base-less reports by stating that “Adam Feuerstein wouldn’t know good science if it bit him in the ass.”
Investors across the internet have also lashed out against Feuerstein’s coverage on message boards - many of them leveling threats of physical violence while others have called for investigations by federal authorities and even lawsuits. Feuerstein has responded to some of the anger by stating that “Carter's bluster [was] designed to divert attention away from the real matter at hand” and by clarifying to his reader that he writes his columns and stories when he uncovers information that he thinks is important for investors to have.
Recently, Thomas Clarke, who had served as CEO of the financial news website, announced that he was leaving the publicly traded company “effective immediately.” It was reported that Clarke’s abrupt departure came less than a day after Jon Stewart’s Comedy Central cable hit, The Daily Show, aired tape of Jim Cramer explaining in a Street.com webcast how he, as a hedge fund manager, manipulated value to serve some publicly traded companies and investors at the expense of others.
Stewart’s show took Cramer, CNBC, and financial “journalism,” in general, to the cleaners but Feuerstein has insisted and written: “I don't make this job personal. I like to find good stories to write about -- stories that hopefully help investors make some money in biotech. (The best way to do that, sometimes, is to avoid buying certain stocks) If the stories are controversial, it's all the better, because those are usually the most fun.”
In the case of Oculus, the “story” has definitely not been perceived as “fun” and appears to fall short of fact- scientific or otherwise- according to Alimi.
Bleach is sodium hypochlorite which is anti-microbial at a high pH (pH scale of 8 and higher).
“When you take that solution to a lower pH, you no longer have sodium hypochlorite as your active [ingredient], you have Hypochlorus acid (HOCI)” explains Alimi. “It’s a different chemistry. And Hypochlorus acid can be converted to different chemicals in a wound depending on how it’s manufactured, so that is a significant difference in the chemistry of our product.”
Alimi points out that when a physician uses bleach in a wound, he will surely kill the infection in that wound, but he will also kill tissue and cause harm in the wound bed. In addition, diluted bleach solutions have not shown any wound healing impact- something that independent medical studies and trials have attributed to Microcyn®.
Some feel that this type of reporting can be directly blamed for TheStreet’s continued troubles and decline in the current bear market.
As recently reported, the publication’s stock recently dropped below $2 per share, down from $9.50 per share a year ago. In recent years it had traded as high as $16 per, but it has also suffered with the decline in the media and advertising markets as well as a major purge of subscriber newsletter operations. Its success was initially tied closely to Mr. Cramer’s popularity, but the recent heavy criticism may finally be reflecting in the company’s (NASDAQ:TSCM) stock price performance.
In a strange twist, many have noted that stocks which have been the subject of slanted reports by Mr. Feuerstein, have just been added to the Russell 3000 index while TSCM itself has been booted as a financial services sector stock.
An excerpt of Mr. Almi’s interview with BioMedReports can be heard here. In it, he reacts to investors’ questions about litigation, TheStreet.Com’s coverage and whether or not Oculus has considered issuing additional common shares.
Disclosure: no positions