Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
A 2011 Best Idea from my Top Picks*
Star Scientific Inc. (CIGX) $2.08 Nasdaq
(CIGX) is one of the top (if not "the" top) stock speculations I have ever come across. For starters insiders and 5% holders recently bought an "additional" $14 million worth of shares plus warrants (with a 6-month lock-up too I believe.) The “connect the dots” rational could make this (CIGX) one for the ages. The story goes (and I'm a believer because I have tried the CigRx™ product) - that the company is now marketing CigRx™ an over-the-counter (no Dr. prescription required) Tic-Tac type non-nicotine nutraceutical, made from natural ingredients that temporarily reduces the urge to smoke., Imagine the market. And you can purchase it very simply online; www.cigrx.com Tobacco use will kill 6.5 million people in 2010 from cancer, heart disease, emphysema and other diseases. Gross cigarette sales are $325 billion a year.
That's just a part of the story; There are several other looming, potentially hugely market moving dimensions to (CIGX) that are percolating and ready to pop, like the Roskamp studies related to a potential Alzheimer cure / treatment, plus the mega lawsuit against tobacco giant RJ Reynolds, that is being orchestrated by the powerful law firm Sidley and Austin LLP (a major patent law impresario that has lost just a couple of patent suits over their long history) that alone drove the stock to just below $6 last year. In addition to the newly announced human trials, Roskamp is working with researchers at Johns Hopkins School of Medicine for other medical applications of the compound. I believe that we will hear more on this endeavor soon. If that’s not enough to boggle your mind, there’s even more home run potential; (CIGX) has applied to the FDA for approval to advertise its proprietary BDL (Below Detectable Levels) technology that can lower the nitrosamine (the harmful part of tobacco complex) content to the zero level. Importantly, they are the one and only company that can do that. Imagine if they get FDA approval on that one? “Big Tobacco” will have to license the BDL technology ASAP I believe. Now add in the possibility of a buyout. Big Pharma is always in search of significant new revenue sources and with the fact that smoking issues are so huge worldwide; wouldn't some enterprising Pharma company become involved with either a type of licensing agreement or even a buyout? Perhaps, Big Tobacco will also have an interest I’m sure. Institutional ownership continues to grow.
Currently 78 financial institutions hold about 24% of the shares. And of note, (CIGX) has $6.1 million in cash. Market-cap $241 million. Website: http://www.starscientific.com
To watch the CigRx™ infomercial: http://www.cigrx.com
I own (CIGX) shares.
* For my Best Ideas for 2011 request: Dr.Faessel@onthemar.com
Disclosure: I am long CIGX.