Star Scientific: Astonishing Research With Unfathomable Market Potential

| About: Rock Creek (RCPI)

Last Wednesday (June 1) I attended a tour and overview of important new discoveries being made at the renowned Roskamp Institute in Sarasota, Florida. The gathering was attended by about 125 scientists, money managers, institutional investors, and assorted interested parties that ran the gamut from the wife of a sitting governor to some famous people in the public eye.

The conference lasted about four hours. In that time we were the recipients of a comprehensive recap and update of the science surrounding the "astonishing" compound RCP-006. The scientific part of the presentation included lead scientists and researchers from the Roskamp Institute and Johns Hopkins School of Medicine, who discussed their breakthrough research currently underway at the Institute, at Johns Hopkins, the Flint Study (see press release of Feb. 28) and a newly announced 500-person study in Pisa, Italy. Roskamp is funded by the National Institutes of Health and private donations.

First, we turn to the meat of some of the landmark news that was communicated at the meeting. Of foremost impact was the careful explanation from the director of research at Roskamp, Michael J. Mullan, MD, Ph.D, that was worth the cost of the trip as far as I am concerned. His comments about the beta-amyloid that produces the plaque in the brain that causes Alzheimer’s disease and is central to the disease's pathogenesis were informative, thorough, and presented in an easy and clear manner. Readers need to bear with the science in what follows; this is the short narrative version, minus all the charts that make explaining the science even more understandable.

There are two types of the protein complex NF-kB: One that does the good work of regulating cellular function, and another that in certain cases may go “haywire” and cause the brain to create fewer (or block formation of) “bace” enzymes that control inflammation and, subsequently, the formation of beta-amyloid, which generates the plaque that causes Alzheimer’s. The shorthand to remember here is: Less inflammation, less accumulation of beta-amyloid, less plaque, less Alzheimer’s.

Crucially, the compound RCP-006 dramatically reduces inflammation, thereby inhibiting production of beta-amyloid and, therefore, resulting in less Alzheimer’s disease — that scourge of pain and money that the Alzheimer’s Association says will cost the US $20 trillion over the next 40 years.

Medical research is now resolute in its belief that low grade inflammations, once they become chronic, do significant harm to the body. Today clinicians treat many diseases like asthma, arthritis, diabetes, periodontal disease, lupus, cancer, ulcers, heart disease and many others with anti-inflammatory drugs to neutralize, dampen or block the inflammatory process.

Mullan played videos showing once-Alzheimer’s-afflicted mice beginning not only to remember again, but becoming able to add critical new information to the cognitive equation and, thus, to change behavior so as even to improve their lot. That’s impossible for a “demented” mouse. A split screen video depicted a mouse fully impaired with the diseased for comparison. He went on to say that CRP levels also fell 50% in these test animals, indicating less inflammation. Dr. Mullan called the research “profound” and announced that it is now being readied for the all-important step of peer review.

In addition, Dr. Mullan reported that there are no approved amyloid-reducing drugs, and noted pointedly that the FDA would consider one the “Holy Grail” of treatment. An anecdote that in my estimation sums up the pregnancy of these findings was his answer to an audience question. The question was, “Would you give a loved one or a close relative RCP-006 if they were showing signs of Alzheimer’s?” He paused ever so briefly and said, “Yes!"

Another high point for attendees of the meeting came when Star Scientific (CIGX) CEO Jonnie Williams introduced the First Lady of Virginia, Virginia Governor Bob McDonnell’s wife Maureen, who in a brief talk offered the governor’s mansion for the “launch” of the product Anatabloc that Star is now packaging and readying for market (likely by the end of the month, I hear). Williams called the upcoming event an “historic occasion.” Star Scientific’s home base is in Glen Allen, Virginia. Anatabloc is the preparation of the focused compound (RCP-006) that is used in the studies at Roskamp and Johns Hopkins, and in the Flint Study.

Some notable recent milestones were referenced at the meeting. The first is that about 100,000 people have now taken RCP-006 compounds. Secondly, the RCP-006 product CigRx, which reduces the urge to smoke, has over 22,000 “friends” on Facebook, up from about 5,000 a month ago. It appears to be on its way to going viral.

Two prominent Johns Hopkins Professors of Medicine also presented at the meeting: widely known and acclaimed endocrinologist Dr. Paul Ladenson, and internationally known Dr. Patrizo Caturegli. They seemed about ready to split the seams of their very reserved demeanor when they spoke of their research on RCP-006 in stopping thyroiditis., etc. Roskamp is conducting research using RCP-006 in gastroenterology, rheumatology, cancer, auto-immune diseases (lupus), and cardio-atherogenesis (the process of atheromatous plaque development in arteries), among other conditions. Significantly, Dr. Ladenson added that aside from RCP-006 there is no known compound that stops thyroiditis,

The final speaker at the conference was famed science author and economist Patrick Cox of Breakthrough Technologies, who spoke eloquently about what RCP-006 will do for humankind. Patrick didn't mince any words and I believe that the scientists in attendance were “all in” after hearing the earlier speakers. Mr. Cox suggested that the impact of this compound will be "unfathomable” for society at large, and said the reduction of NF-kB proteins will increase the average lifespan significantly, with attendant impacts on insurance, Social Security, and Medicare. If you've read any of his work on Star Scientific, you’ll know that he sees the entire general population of our planet one day consuming this nutritional supplement. He may well be right.

Also in attendance at the Roskamp meeting were several important fund managers who have heard the story but have yet to invest in Star Scientific shares. They manage billions of dollars. After the meeting that basically focused only on the use of the compound RCP-006 for medically-related conditions, I believe from my conversations with them that they will become new buyers. As you may know there is much more to the Star story; indeed, it has multiple aspects that taken together could result in a market cap of many billions.

Let's also note that the institutional holders in CIGX are up to 96 from about 85 from the last reporting period and from 78 the period before that. Institutional holdings now approach $200 million in share worth. Tradewinds Investment Management alone now holds over $90 million in shares and is “over” the 5% threshold that necessitates a filing before any selling could occur.

It gets better: Insiders continue to be huge buyers of over 4 million shares in the last six months and Robert Roskamp founder of the Institute added another $1 million in shares at $4.00 in March. This entire narrative surrounding CIGX improves and gets more compelling by the day; it has the feeling of mythic consequence. After about a year of watching the CIGX story evolve (and the stock more than triple) and after listening to the discussion of the new discoveries just made at Roskamp, I’m adding to my position.

Naturally, the recent opportunistic retreat in share price presents us with an occasion to buy more, or begin new positions.

Disclosure: I am long CIGX.