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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
  • Report From The Harvard Club Meeting Re CIGX - Snowballing Progress -  0 comments
    May 14, 2012 12:40 PM

    Dr. John L. Faessel

    ON THE MARKET

    Commentary and Insights

    Report from the Harvard Club Meeting

    Star Scientific Inc. (CIGX) Nasdaq

    "Gentlemen this is no humbug!"*

    What, sir, is no humbug? This time, we refer to reputable opinion that;

    1. "it is 'overwhelmingly likely' that multiple sclerosis [MS] is fundamentally an inflammatory disease, and not a neurodegenerative Alzheimer-like disease." ** (quotation source: the Mayo Clinic and Cleveland Clinic study published in the December 8, 2011 issue of the New England Journal of Medicine).

    2. Anatabine reduces the incidence of hind limb paralysis in the standard mice model of Multiple Sclerosis and reduces the levels of peripheral cytokines associated with the model maintaining them at normal levels. (See Dr. Mullan's summary below.) ***

    * I have always loved the epic proclamation enunciated back in 1846 when a surgeon, Professor John Warren, the first dean of the Harvard Medical School (and previous naysayer) on seeing ether first successfully demonstrated as an anesthetic, exclaimed to the assembled scientists and doctors: "Gentlemen, this is no humbug!"

    So in a way it was providential that Star Scientific Inc, found its way to the Harvard Club to bring interested parties up to date on the fast-developing, multi-sided story of people, research, patents, and snowballing progress. The awesome setting of the meeting, in which there were approximately 125 participants, is worthy of a little ballyhoo itself, as it is somehow a propos of where Star generally finds itself at this juncture.

    The Harvard Club website says this about their Harvard Hall: "Many architectural observers consider Harvard Hall to be the finest clubroom in the Western Hemisphere, if not the world." The atmosphere is thick with regency, power and prestige, and the crowd at the meeting looked the part. Food and bar were commensurate with the setting. Did I mention the string trio? I've been in a few of the world's fine rooms, but this place spun my head around, to put it mildly.

    To introduce the day's agenda, Star's new Vice President for Communications, Ms. Talhia Tuck, led off with opening remarks and introduced the speakers that would follow. Of note: Ms. Tuck received her Bachelor of Arts cum laude from Harvard University and graduated from Harvard Law School. While at Harvard she was a member of the Editorial Staff of the Harvard Law and Policy Review. Ms. Tuck has also worked in the financial sector at Goldman Sachs as a financial analyst and in higher education administration as an admissions officer for Harvard University. For Ms. Tucks complete and exceptional bio link here.

    The first speaker was Jonnie Williams, Star's Chief Executive Officer, who gave a bit about the company's development, its history, and its tobacco roots. Mr. Williams mentioned that Harvard had done research on Anatabine for two years before the Anatabloc™ product was released. He spoke briefly about the re-emergence of Star's "ambassador," pro golfer great Fred Couples, in the highly competitive PGA tour and mentioned that Fred's C-reactive protein [CRP] has dropped from 6.5 to 0.5. He noted that Anatabloc is now sold in 26 foreign countries and the company gets international orders daily. Williams went on to say how pleased he was with the sales response from General Nutrition centers (NYSE:GNC) and that it won't be long before the product is carried in many more of its stores. GNC has over 7,600 locations in 53 countries.

    Mr. Williams spoke briefly about the Star vs. Reynolds Tobacco (NYSE:RAI) lawsuit and mentioned the petition to be heard by the US Supreme Court is in motion and will be responded to by Star by May 29, 2012 and be ruled on by the court sometime in June or after the courts summer recess. (Specifically, The US Supreme Court decision will not impact the mediation / settlement process that is ongoing in the Federal District Court in Maryland.)

    Williams went on the say that Mr. Paul Perito, Chairman of the Board, President and Chief Operating Officer of Star Scientific, Inc. is acting as "gatekeeper" to all things related to the lawsuit. (Mr. Perito is the new president of the Harvard Law Alumni Association; he was Secretary of the Harvard Law School Association [HLSA] for the past 14 years, until 2010, when he was named First Vice President of the HLSA.) Mr. Williams said that the day's main focus would be on Anatabloc and the recent work at the Roskamp Institute on the beneficial effects of nutritional supplementation with anatabine in an animal model of Multiple Sclerosis [MS] that was announced by the company on Tuesday. Link here for the press release.

    The next speaker was Michael Mullan M.D., Director of Roskamp Institute. His degrees include LMSSA (Medicine), MRCP (Psychiatry), and Ph.D. (Molecular Genetics) from the University of London, England.

    Dr. Mullan and the Roskamp Institute have conducted research relating to the company's anatabine compound for a number of years. To set the stage for his comments, here is the summary from the patent claim (International Publication Number - WO 2011/119722 A2):

    "A pharmaceutical composition comprising a therapeutically effective dose of an isolated form of anatabine or a pharmaceutically acceptable salt thereof can be administered to an individual to reduce a symptom of a disorder comprising an NF-kB mediated inflammatory component or to reduce the risk of developing such a disorder." (A Google search of NF-kB brought up 3,350,000 results.)

    Star believes-and is willing to state in the patent application and make claims (54 claims made) to the effect-that NF-kB's are inhibited / reduced / mediated / moderated in hundreds of conditions referred to as embodiments in the patent. Striking is that page 11 of the patent application mentions 130 different types of cancer that may be addressed with anatabine.

    Dr. Mullan first spoke to and thoroughly reprised with the supporting graphs the research that the Roskamp Institute has performed, essentially what he presented last June at a Roskamp Institute meeting. Mullan again played the videos that showed standard 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 after the administration of anatabine. That's impossible for a "demented" mouse. A split screen video depicted for comparison a mouse fully impaired with the disease. He went on to say that CRP* levels also fell 50% in these test animals, indicating less inflammation. Dr. Mullan called the research "profound."

    Dr. Mullan then went into the new research that Roskamp released on Tuesday (May 8, 2012). Roskamp used a standard mouse model of MS (multiple sclerosis), and the news was that the Institute had completed a successful animal study of nutritional supplementation with Star's / Rock Creek's specially formulated anatabine. The mice used in this testing were vaccinated to induce a severe inflammatory process in the brain, which has the effect of destroying neurons and causing progressive paralysis. The disease model looks very similar to that which occurs in human multiple sclerosis. Profound is that the anatabine dietary supplementation resulted in a dramatic reduction in the rate of paralysis of hind limbs. In addition to the better motor performance of the mice, there was evidence of suppression of the normal inflammatory response that accompanies neuronal destruction in this model.

    Seeing the graphs and hearing Dr. Mullan present on the treatment with anatabine etc. is one thing, but watching the videos of the mice-with and without anatabine on board-was quite eye-opening, to say the least. Prominently, in the last part of the presentation Mullan showed a video of mice with paralyzed hind quarters that were in fact nearly immobile. The second part of the video showed anatabine-treated mice startlingly having a huge degree of mobility and demonstrated that the mice were able to move in what appeared to be an almost normal manner except that their tails were still quite flaccid.

    If you would like to see two videos taken from my iPhone, send an email request to Dr.Faessel@onthemar.com. I will send the videos in two segments due to their size.

    The videos are rather rudimentary, shot from the audience seating, however, you can see those anatabine-treated mice scoot around in Technicolor. Amazing...

    *** Mullan's summary: Anatabine reduces the incidence of hind limb paralysis in the standard mice model of Multiple Sclerosis by about 66% and reduces the levels of peripheral cytokines associated with the model maintaining them at normal levels. These data are consistent with the reduction of NFK-B regulated inflammation seen in the Alzheimer mouse model and suggests the overall mechanism is one of reduced cytokine production secondary to reduced NFK-B activity.

    The complete Roskamp report is available on the Institute's website at http://www.rfdn.org/ms_anatabine.html.

    Dale A. Wilson MD was the next speaker. Dr. Wilson practices obstetrics & gynecology in Flint, Michigan and is one of the principal investigators in the clinical trials being conducted in the Flint area (and now elsewhere in the state). Participants in the study need to have elevated CRP levels in order to take part. Dr. Wilson explained that the process is a single blind study involving simply drawing blood and sending it to Roskamp for an analysis tracking high-sensitivity C-reactive protein [hs-CRP] levels. He went on to state that while he knows of no definitive or official results, he has heard numerous anecdotal stories from the clinic relating to the results of taking Anatabloc, which he characterizes as "very, very, very encouraging." It should be noted that Dr. Wilson has had a serious lung cancer (a Stage 3 adenocarcinoma), and in the talk he mentioned that he is now cancer free after taking Anatabloc. It is thought that results of the Flint Study will be released this summer.

    Star Scientific and the Roskamp Institute had obtained institutional review board approval for the multi-site human clinical trial referred to as the above-mentioned "Flint" study related to treatment of neurological conditions as well as conditions associated with elevated blood levels of C-reactive protein [CRP], a marker of disease due to inflammation. My cardiologist tells me that a high CRP is actually predictive of a heart attack. The New England Journal of Medicine says that, "C-reactive protein is an inflammatory marker believed to be of value in the prediction of coronary events." The American Heart Association website says that, "individuals with elevated levels of CRP have a risk about 2 to 3 times higher than the risk of those with low levels. Over a dozen major studies demonstrate that baseline levels of CRP in apparently healthy men and women are highly predictive of future risk of heart attack, stroke, sudden cardiac death, and the development of peripheral arterial disease." A Google search of C-reactive protein [CRP] brought up 5,520,000 results.

    Dr. Wilson mentioned that conditions that raise CRP such as coronary artery disease, cancers, autoimmune diseases allergies, thyroiditis, arthritis, asthma, macular degeneration, Crones, ulcerative disease of the bowel, fibromyalgia, lupus, ulcers, neurodegenerative disease such as Alzheimer's disease, multiple sclerosis and Parkinson's disease, and many other medical conditions are candidates for treatment with anatabine.

    In January Star announced that it had completed a successful human clinical trial showing that Anatabloc lowers CRP levels in subjects' blood.

    In a video Dr. Wilson states that, "Anatabloc turns chronic low grade inflammation off." The video link: http://www.youtube.com/watch?v=StVre96Vzr88

    After Wilson's talk Jonnie Williams held a "question and answer" session in which he and Dr. Mullan fielded a variety of questions. Williams obviously didn't want to talk about the "Anatabloc™ skin cream," but he mentioned that Johns Hopkins Medicine has nine studies now underway testing Anatabloc and said that several of the ongoing studies would finish up this summer. He likened Anatabloc to a ferry boat, as opposed to a cruise ship, meaning that the cruise ship will be the eventual prescription drug that is derived from the isomer of anatabine while the ferry boat represents the Anatabloc product now already available. "So why wait for the cruise ship that's in construction?" he suggested. Other questions related to thyroid and the multiple Johns Hopkins studies. Williams talked about how his wife is cured of thyroid disease; let us recall that the distinguished Johns Hopkins professor, Dr. Paul Ladenson, has stated that, "aside from RCP-006 (now Anatabloc) there is no known compound that stops thyroiditis."

    Over twenty (20) million Americans suffer from thyroiditis. I believe media impact will be great when the thyroid research is published.

    If there was any "new" news mentioned it was probably during the Q&A, when CEO Jonnie Williams mentioned that he expected a global entity would be the first to license the company's technology to produce tobacco below detectable levels of nitrosamines (i.e., the cancer causing agents in tobacco) "this summer." Underscore global-in other words, not necessarily US Big Tobacco. As I said in my last report on Star: "somebody 'out there' is going to come in with a substantive down payment plus a licensing or royalty deal, and I think it's going to be sooner rather than later. It's going to happen."

    One more observation before I close. Throughout the Harvard Club evening it was especially captivating to hear the assembled interested parties speak to their own, their families', and their friends' experiences using Anatabloc. Williams and Wilson both said that their families are taking Anatabloc, including some young kids, even grand kids. It seemed to be a major theme in nearly every conversation. The anecdotal stories of improvements in such a large quantity of varied health conditions were really quite remarkable.

    All in all it was a heck of an evening.

    To close, a factoid that's more than notable; Harvard numbers 17 Medal of Honor recipients among its alumni. The quote below captures the essence of the sacrifice of the Harvard warriors:

    So nigh is grandeur to our dust
    So near to God is man
    When duty whispers low, thou must.
    The youth replies I can

    -- Ralph Waldo Emerson - Harvard College (1821)

    ** The Mayo Clinic and the Cleveland Clinic study was published in the December 8, 2011, issue of the New England Journal of Medicine by co-lead authors Drs. Lucchinetti and Ransohoff. Their findings support the understanding that MS is primarily a disease of inflammation, not neurodegeneration as some studies have recently suggested. Indeed, the authors conclude that it is "overwhelmingly likely" that MS is fundamentally an inflammatory disease.

    To view the new Anatabloc™ website that includes a link to buy the product online or by phone: http://anatabloc.com/

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

    If you missed my previous reports-more specific in detail and scope on each of the Star Scientific (CIGX) themes-or wish to receive my Best Ideas for 2012, send a request to: Dr.Faessel@onthemar.com

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