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Cellceutix--Bent, Not Broken

|Includes: Innovation Pharmaceuticals Inc. (IPIX)

So, here we are, late 2015, and Cellceutix is hitting lows not seen since the end of 2012.

What happened?

What has changed?

I'll answer the latter question first: Nothing. Nothing has changed. At least, nothing detrimental has happened. Quite the opposite in fact. The company has continued executing along a myriad lines and continues to impress, but before I get into the specifics, let's answer that pesky first question: What happened?

Simply put, Mako research, and Seeking Alpha by proxy, happened.

On August 6th, 2015, a group of short sellers calling themselves Mako Research, wrote an article, which I refuse to link, for Seeking Alpha, which was riddled with inaccuracies, both large and small, as well as sprinkled with outright lies, just for shock value. The article was refuted by Cellceutix management on a point by point basis, proving that very little actual research went into penning it. For unknown reasons, Seeking Alpha has yet to pull the article, despite its glaring lack of facts and clear attempt at stock manipulation. It should be noted here, that Cellceutix has since retained the Ashcroft Law Firm, seeking withdrawal of baseless claims brought against it by notorious ambulance chaser, Rosen Law Firm. Unfortunately, or fortunately, depending on which camp you come down in, the article had Mako Researches intended effect, as CTIX saw its share price drop to those late 2012 prices I mentioned earlier.

So enough about garbage articles and the law firms that base their accusations solely thereon. Let's look at the progression of the Cellceutix pipeline since receiving QIDP designation from the FDA for Brilacidin in the treatment of ABSSSI. The linked PR is from December 8th 2014, and followed a successful phase 2b trial, wherein a single dose of Brilacidin was shown to be as effective as a seven-day dosing regimen of the current gold standard for the treatment of ABSSI, daptomycin. The share price, already amidst a steady climb upwards, jumped from $3.40, to a HOD of $4.64, before going on to touch $4.93 on December 12th. A natural pullback occurred over the next few months, and all the while, positive news continued to flow.

On December 22nd 2014, the FDA agreed that a phase 2 trial of Pruisol for the treatment of Psoriasis could begin. Not surprisingly to anyone that follows CTIX even remotely, the trial commenced on August 7th, 2015, and it was announced on October 2nd, that approximately 50% of patients had been enrolled. This is just a couple of the dozens of examples of the Cellceutix management team making good on their word.

On April 1st, 2015, the 10th cohort of the company's anti-cancer compound, Kevetrin, was completed with no serious adverse events reported. While this phase 1 trial has lasted far longer than some anticipated, the fact that it is being conducted at Harvard's Dana Farber Cancer Institute, as well as Beth Israel Deaconess Medical Center, lends a high degree of credibility to the drug, as well as to Cellceutix as a whole. The Kevetrin phase 1 trial is expected to be complete before year end, and already there are plans for multiple phase 2's for various cancer indications, as well as a recent application for Orphan Drug status for the treatment of pancreatic cancer. Additionally, On July 20th, 2015, Cellceutix announced that Kevetrin had received Orphan Drug Designation from the FDA for the treatment of ovarian cancer. Again, it is important to note that this is Dana Farber and Beth Israel Deaconess, both widely regard as world class cancer research facilities, providing information on Kevetrin to the FDA.

On April 13th, 2015, Cellceutix entered into a $30 million dollar stock purchase agreement with long-time ally, Aspire Capital Fund, LLC, all but ensuring the company has funds in place to advance trials for the coming years. Additionally an S-3 was filed with the SEC to help solidify the company's financial position. The shelf registration is for $75 million dollars and the company is under no obligation to exercise the registration at any point.

On May 25, 2015, A phase 2 clinical trial of Brilacidin-OM began enrollment and was later expanded to additional locations. This trial is moving at lightning speed, and is looking to come in well ahead of the estimated study completion date of December 2016. Keep in mind that the study completion date is generally accepted as when bottom line data for the trial is released. I'm expecting top line data from the trial as early as March 2016.

The reality here, is that I have hit on only some of the major points in the development of Cellceutix, with many others being left for the reader to look into on their own. I can't hold your hand the whole time. Big boy/girl pants are necessary when investing in early stage biotech companies, and Cellceutix is no different. The difference I see, is that Cellceutix continues to execute on all fronts. Advancing clinical trials, keeping dilution to a minimum, and keeping shareholders informed, are a few of the reasons why I believe that Cellceutix has the science, and the management, to become legendary.

Link to Cellceutix ongoing and completed clinical trials at ClinicalTrials.gov

Link to the Cellceutix company website and all company Press Releases.

Disclosure: I am/we are long CTIX.