Seeking Alpha

Dr. John Faessel's  Instablog

Dr. John Faessel
Send Message
Dr. John L. Faessel is a seasoned and respected Wall Street professional with industry-wide recognition for expertise in market strategy and analysis. He is widely recognized for his insights in public companies. For over 20-years Dr. Faessel’s ON THE MARKET reports have been widely distributed... More
  • STAR SCIENTIFIC (STSI) - The Tipping Point Draws Near 4 comments
    Oct 9, 2012 11:23 AM

    10-9-2012­

    Dr. John L. Faessel

    ON THE MARKET

    Commentary and Insights

    The Tipping Point Draws Near

    STAR SCIENTIFIC (STSI)

    Very soon, IMHO, the Star Scientific landscape will change dramatically as Johns Hopkins is about to release their nine city study on the effects of Anatabine / Anatabloc on thyroid disease. Un-blinding, compilation and analysis of their study results are likely near or already finished by their contract research organization [CRO] prior to Johns Hopkins receiving and publishing the results.

    There is much riding on these scientific findings as naysayers (shorts) and the true believers (that would include me) are so dramatically on the different sides of the 'story' that's tied to the beneficial effects of Anatabine / Anatabloc. The naysayers / shorts have continually increased their mega million $ bet saying the compound doesn't work - or it's a scam - or the inventory levels are increasing or the company needs more money or the CEO wears a black hat and rides a black horse or whatever. Interestingly, they never question the results of the Johns Hopkins or Roskamp science but they are all-over the balance sheet and peripheral issues.

    Let's note that the 'reported' short interest for the 'last' two-week period is up 'another' 1.30 million shares. Two weeks prior it was up 1.24 million shares, (not counting the 'Naked Shorts' that some think could be 2 or 3 times that amount.)

    STSI - Short interest - 10/8/2012

    Settlement Date

    Short Interest

    Avg Daily Share Volume

    Days To Cover

    9/14/2012

    26,386,042

    1,140,436

    23.136802

    8/31/2012

    25,083,466

    1,334,802

    18.791900

    8/15/2012

    24,851,338

    1,628,612

    15.259213

    7/31/2012

    23,839,224

    1,285,669

    18.542272

    Notable is that Institutional Ownership is at record highs of 28,869,979 shares held by 155 holders plus the Institutional ownership of 'over' 10% holders - Tradewinds Master Fund, holds another 16,606,520 shares.

    For those of us on the long side, we give heed to the stunning and growing array of prestigious institutional and scientific names that hover around and about the Anatabine / Anatabloc science. And mind you, these names have told of/ published their research findings in professional venues of the highest order in prime time keynote lectures to assembled scientists and physicians. Moreover the results have been published with peer review back-up in the most prestigious of Science journals. To date the results off the Roskamp Institute, Johns Hopkins research has been nothing but exemplary. Comprehensive international patents have also been published telling of the myriad of conditions where the Anatabine / Anatabloc compound is deemed to be effective.

    Recent Roskamp and Johns Hopkins research funded in part by the Walton Family Foundation confirms that anatabine / (Stars) Anatabloc™: 1. is anti-inflammatory. 2. Lowers C-reactive Protein [CRP] levels in an Alzheimer's model in mice. 3. Inhibits NF-kB activation. NF-kB is the master regulator of inflammatory molecules such as cox-2. In January Star announced that it had completed a successful human clinical trial showing that Anatabloc™ lowers chronic inflammation as measured by C-reactive protein [CRP] levels in human subjects' blood.

    In Malcolm Gladwell's The Tipping Point: How Little Things Can Make a Big Difference Gladwell defines a tipping point as "the moment of critical mass, or the threshold point - I like to call it the defining moment when something changes the status quo and suddenly it becomes a movement change of dynamic force. In the case of a drug I can think of several drugs that have suddenly changed the way diseases and conditions were treated ― all breakthroughs, all disruptive to the previous treatment modality. Here's a few that come to mind - Tagamet (for ulcers, the discoverer won the Nobel Prize), Prozac (depression - 24 million prescriptions in 2010), Statins (lower cholesterol - Lipitor had sales of $12 billion in 2008) and Viagra / Cialis (treats erectile dysfunction and a whole lot could be said about that one.)

    So we await the John's Hopkins results. Buts let's first review a centerpiece quote by Dr. Paul Ladenson, Director of the Division of Endocrinology at Johns Hopkins in June 2011 when he stated that, "aside from RCP-006 (anatabine - now Star's Anatabloc™) there is no known compound that stops thyroiditis."

    By my reckoning Johns Hopkins has been specifically investigating anatabine's /now Anatabloc's ™ effects for about 4 years. Going back further to 2004 Dr. Ladenson and Johns Hopkins conducted studies among a group of flight attendants and found reduction of thyroiditis / Hashimoto's disease related to inhalation of second hand cigarette smoke. Dr. Ladenson has addressed several thyroid disease related conferences referencing Johns Hopkins work on the subject, usually in a keynote address at the conference. Just last month (9/21/2012) Dr. Ladenson was awarded the Lewis E. Braverman Award at the 82nd American Thyroid Association's [ATA] Annual Meeting in Québec City, Québec, Canada. In the press release announcing the award it mentioned that, "Currently, Dr. Ladenson is investigating effects of the nutritional supplement anatabine on autoimmune Thyroiditis." More below on Dr. Ladenson and the Conference.*

    So Johns Hopkins has been interested in the science for a number of years and has done a lot of work on it to put it mildly...

    Again; knowing that Johns Hopkins has been doing research on Anatabine / Anatabloc of some years and has had an interest in it for almost a decade and has expanded their study funded in part by the Walton Family Foundation (to now nine clinical sites in Michigan, Texas, New Jersey, Illinois, and Florida, and that the Johns Hopkins lead researcher and director of the Division of Endocrinology stated that, "aside from RCP-006 (anatabine - now Star's Anatabloc™) there is no known compound that stops thyroiditis." That mouthful said; now can you imagine that the results will be just, so-so, mediocre or lousy? Just, what if they are, "really good" or even let's say, "Spectacular"? I'm of the opinion that a positive report could / would be a defining moment / tipping point and put the cherry on top of the sundae if you will. The play-out, post results, could be all that those who have taken the compound and have personally seen the dramatic results believe.

    Positive results will validate the science and garner significant world-wide press. 100's of auto-immune diseases over and above Thyroiditis will be open to use with Anatabloc. And major-media will eat this story up, especially the, "something in tobacco is good for you aspect."** And a whole new group of institutional investors will also be able to take positions, in addition research from major brokers will also come to fore. What will follow on the medical side is that Thyroiditis and the other these auto-immense diseases will be 'now' be treated differently, with Anatabloc. IMHO... the play out of a defining moment / tipping point will have massive and positive benifits for mankind and also for Star Scientific.

    ** (Anatabine is from the Solanaceae family of plants that include tomato, cucumber, bell peppers and tobacco and Anatabloc is synthesized)

    Eight years ago I was diagnosed with hypothyroidism and have been treated for the disease since then. I just received my lab results back from my internist. My (NYSEMKT:TSH) Thyroid Stimulating Hormone test was 1.84, the lowest reading in 8-years and down from 6.29 (hypothyroidism) when I began my treatment. Since I began taking Anatabloc™ last year my TSH has fallen from 3.3 to the new low of 1.84.

    * Dr. Ladenson also gave the keynote lecture at the conference - and of note, American Thyroid Association President, James A. Fagin, MD, of Memorial Sloan-Kettering Cancer Center said, "Countless fellows and trainees have benefited from the opportunity to work directly with Dr. Ladenson over the years and have gone on to assume leadership positions in the field of endocrinology at various universities, research institutes, and within the ATA."

    Dr. Ladenson holds several distinguished positions at Johns Hopkins University, where he is the John Eager Howard Professor of Endocrinology, and Professor of Medicine, Pathology, Oncology, Radiology and Radiological Science. He is also director of the Division of Endocrinology and Metabolism and a Distinguished University Professor.

    If you would like a full copy (in pdf format) of the Johns Hopkins abstract, "Anatabine Ameliorates Experimental Autoimmune Thyroiditis" (containing colored slides / graphs and electron microscopy of the genes) from the journal Endocrinology, please email me your request and I'll shoot it to you... Dr.Faessel@onthemar.com

    For more on Star's Anatabloc™ science see a recent report of mine; Hypothesis no longer - New Peer Review Credibility from Johns Hopkins Could Drive Star Scientific Shares Higher go here:

    Also see an exceptional 13 page research report by Gilford Securities on (STSI) / CIGX by market maven Otis Bradley published on 8/1/2012.

    Disclosure: I'm an investor in Star Scientific shares and have bought shares on the open market and have no affiliation with the company other than as a shareholder.

    If you missed my previous reports-more specific in detail and scope on each of these themes send a request to: Dr.Faessel@onthemar.com

    To view the Anatabloc™ website; http://anatabloc.com/

    Disclosure: I am long STSI.

    Additional disclosure: I'm an investor in Star Scientific shares and have bought shares on the open market and have no affiliation with the company other than as a shareholder.

Back To Dr. John Faessel's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • silence_twain
    , contributor
    Comments (339) | Send Message
     
    John: The frequency to which you now post on this name makes me think you are getting more and more desperate. Did you perhaps buy your position on margin? Yes anatabine can help fight inflammation and yes inflammation shows up in many diseases, but that does not mean what you have here will help solve any real problems. Anatabloc is just another OTC dietary supplement that MAY fight inflammation. I don’t even think the fact that it fights inflammation has been proven in the science community. As I have pointed out in numerous other comments, there are already many products on the market that help fight inflammation. This is not a new idea.

     

    If people would like a list of inhibitors for NF-KB, they can feel free to follow this link:

     

    http://bit.ly/QEYyzm

     

    Seems like lots of things already inhibit NF-kb activation.

     

    Don't need anatabloc, just have to follow a few simple steps with regards to CRP:

     

    http://bit.ly/Svs8nJ

     

    http://bit.ly/QEYyzo

     

    http://yhoo.it/Svs73d

     

    Did you ever look into whether Johns Hopkins is being paid for doing the research? My guess is that they are. As I said earlier, this does not mean they will skew the results, it just makes them willing to look into it. I pointed out last time a failure of a company (Cel-Sci now trading at $0.34) which was associated with Hopkins.

     

    http://bit.ly/T3WEFb

     

    http://bit.ly/Pd6edB

     

    Finally, looks like that big settlement that you were looking for fizzled out. I can't wait to see the spin STSI uses in their next 10-Q to explain how they got nothing from Reynolds, but that is still okay.
    9 Oct 2012, 01:17 PM Reply Like
  • bazooooka
    , contributor
    Comments (2880) | Send Message
     
    STSI seems way overvalued as did CVM 2 years back. I'd think 1/10th the current market cap would be more appropriate. For some perspective read below>

     

    http://seekingalpha.co...
    10 Oct 2012, 01:56 AM Reply Like
  • Labman01
    , contributor
    Comments (48) | Send Message
     
    Anatabloc may be an OTC product now, to generate revenue, which by the way, GNC can't seem to keep in stock because of the very high demand that it's generating, because of the positive results it's having. We all know that Star is a much smaller company than Reynolds and needs operating capital to continue their research, which brings to me the question, why have The Walton Family Foundation, the John Hopkins Institute, and Rosekamp Research, why have you put your asses on the line, for just a shot in the dark, in hopes of hitting something? I don't think so. These three institutes are of the highest in their fields and have a tremendous liability to their reputations. These foundations have jumped on board with Star, because they now have the proven positive results of Anabine. Star Scientific has now secured two other patents, that they now hold, for the extraction of Anabine, that will be sold only through Pharm sales, and not OTC. The Anabloc that is now sold OTC relieves Inflammation pain, NOT A PAIN KILLER, but a relieve from the everyday symptoms of Inflamation , and it works, I know, I have RA and it's is a compete miracle from how I felt before taking Anabloc. The patens for Pharma sales of Anabine could be so strong that we are then looking at a possible cure for these painful illnesses. We can all talk it up and you can all talk it down, the bottom line is, Doctors will turn a blind eye to anything that overrides his efforts, that does nothing more than makes our medical insurance cost go up. You, that talk Star Scientific down and try to put the doubt of credibility towards the John Hopkins Institute and Rosekamp Institute, a Non-Profit research institute, and the Walton Family Foundation, GO AWAY! You bash good, positive science, when you trade stocks, buy shorts, push it down , when people that are suffering can finally find a relief from their suffering, and that are testifying that it works. I wonder if you had a family member that was suffering from inflamations pain, if you would even let them try it.
    19 Oct 2012, 01:35 PM Reply Like
  • silence_twain
    , contributor
    Comments (339) | Send Message
     
    Star Scientific's (STSI) "Flint" study is a flop.

     

    Follow along as I pick apart Star's latest press release spin job designed to bamboozle investors about its Anatabloc dietary supplement.

     

    Here's what Star Scientific said Wednesday:
    The "Flint" study... is a multi-site study of the safety, tolerability, dosing, and biological effects of the anatabine citrate used in Rock Creek Pharmaceutical's Anatabloc product. Subjects in the study are individuals with high levels of C-reactive protein (CRP) in the blood, which is a marker of systemic inflammation in a number of common medical conditions. The subjects were screened for eligibility and then were studied for three months. In the first month they were given placebo, in the second month they were given the Anatabloc supplement, and in the third month they were given placebo again. Blood samples were taken at the beginning of the study and also were taken after each treatment period... The intent of the study is to determine if the Anatabloc supplement is helpful in lowering CRP.

     

    It's true that CRP is a biomarker for systemic inflammation and can be a risk factor for cardiovascular and other diseases. But assessing CRP levels in a vacuum is clinically meaningless because 1) the correlation between increased CRP levels and disease is disputed and unclear, and 2) FDA doesn't approve drugs based on an ability to lower CRP.

     

    Anatabloc lowers CRP? So what, lots of stuff lowers CRP. Aspirin, NSAID anti-inflammatories and a host of other drugs lower CRP. Exercise and dieting can lower CRP, as can vitamins E and C. Heck, even eating dark chocolate lowers CRP by 17%, according to Italian researchers. If you don't like chocolate, eat more fruits and vegetables because they lower CRP, too.

     

    Maybe Anatabloc does a really super job of lowering CRP? Maybe the over-the-counter diet supplement is more effective than chocolate?

     

    Not so much. Here's Star Scientific again:

     

    The subjects who showed relative reductions in CRP were diabetics on metformin, the most common drug used to treat diabetes. The diabetics were twice as likely to have a reduction in CRP levels, as compared with other subjects in the "Flint" study who had other non-diabetes medical disorders. After one month of supplementation, CRP levels dropped in 26% of the subjects with diabetes, compared with a drop in CRP levels in 12% of the general trial population of subjects who did not have diabetes.

     

    The goal of the study was to find specific sub-populations in which the Anatabloc supplement might be of benefit; therefore, this finding, though based on a small number of diabetics (18 in the total study population), is very encouraging. The investigators are currently evaluating whether to modify the rest of the study or conduct a study focused on diabetes.

     

    Let's do some math. Star Scientific at the top of today's press release that 100 patients completed the Flint study. [Later in the release, Star says 117 patients completed treatment.]

     

    Let's go with the 100 patients, of which 18 had diabetes, according to Star. CRP levels dropped in 26% of diabetic patients after one month of Anatabloc, which equates to five (!!) diabetic patients.

     

    It also means that 13 diabetic patients either had CRP levels that remained unchanged or went up!

     

    Of course, Star also neglects to tell us anything about the numerical reduction in CRP levels. What was the mean baseline CRP level for diabetics entering the Anatabloc study? How low did CRP levels go? Star Scientific doesn't disclose. Why not? If Anatabloc lowers CRP as the company claims, then tell us by how much.

     

    More math: If there were 18 diabetic patients analyzed, that leaves 82 non-diabetic patients, of which 12% or 10 patients, showed lower CRP levels after swallowing Antabloc.

     

    Again, that implies 72 non-diabetic patients had CRP levels that remained unchanged or went up.

     

    Star Scientific calls these results positive. I call them a total joke and completely misleading. The timing of today's release is also interesting, coming one day after disclosure of the paltry $5 million settlement in the long-running legal spat with R.J. Reynolds.

     

    If you want to lower CRP levels, take an Advil or buy a chocolate bar.
    24 Oct 2012, 05:10 PM Reply Like
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.