Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
Star Scientific Inc. (CIGX) Nasdaq
It's Going to Happen... IMHO
I've led an interesting life and it gets more interesting each day, especially surrounding the Star Scientific story.
Here's a bit of color regarding my interest in stocks; way back, when I was a curious graduate student at Georgetown, I read in Scientific American about a discovery that ovulation could be altered by a new drug. By this time I already had three kids so I registered that striking and remarkable information. Some months later after graduation one of my good stockbroker friends told me about a company called Syntex that was about to market the first birth control pill. Knowing a bit about the science of ovulation and what controlling it could mean to the marketplace I bought some stock. The short version is; the stock was one of the all-time great winners; and the price increased from a split adjusted low in 1962 of 11 to a high in 1964 of 190. Lots have been written about Syntex, notably by William O'Neil (founder of Investor's Business Daily) in his book How Two Make Money in Stocks. At the time Mr. O'Neil was a broker at Hayden Stone. The play out was that I've been smitten with stocks ever since by the entire Syntex scenario. Of course, the birth control pill is still the world's most popular contraceptive method for women. Also, my broker was at Hayden Stone a couple of desks away from O'Neil.
This brings me once again to the Star Scientific story - one that reminds me of Syntex. Over the last few days there's been some unusual and highly volatile trading where huge bulges of buys and sells have suddenly moved the (CIGX) market around, both to the up and the downside dramatically and fast. Where I'm going with all of this is that I am apparently a repository of information regarding (CIGX) in that I have written about it for well over a year and indeed have done a lot of work on reading the patents and keeping up with this unusual story. I have had scores of contacts re this recent price volatility. Now straightaway - I have no idea what was going on with the volatile trading. That said, let me give you a little idea about the contacts I receive regarding Star and the interest that the story is generating. I am able to track in detail four articles I've written about Star over the last year or so. From just those four articles, and I've written several more, I've had over 55,000 "distinct openings" of those reports. And I receive questions about (CIGX) from all over the world. Numerous countries in Asia, all over Europe, Australia, South America, Africa, the Middle East, Russia and even Mongolia, plus others. I can't believe it... this Star Scientific / Anatabloc story is going nuts. I wish I was getting paid for all this Star focused work, but actually it's a pleasure and there's a certain satisfaction because Anatabloc has so helped me and my wife plus countless friends and I see the product as an incredible boon for mankind. What I have seen and heard personally is that this compound appears to have extraordinary effects on numerous bodily afflictions that we all experience, especially in ageing.
For me Anatabloc really works and dramatically improves my benign prostate hypertrophy condition* and also my thyroid. In addition my wife's arthritic swelling and pain are much improved and astonishingly she's done away with her inhaler for her allergies after 10 years of using one.
I know that this story is well covered by other commentators and there is a lot of testimonials and information on the Facebook, Amazon, GNC and the Anatabloc sites, but I get showered with not only questions daily, but quite amazing information comes my way about the product and company from the many savvy people who are interested in the science, the patents, the company and their products.
A bit more history; I bought some Star Scientific stock when it was about $1.00 back in 2010 and at that time the short position was about 14 million shares. The short position is now over 20 million shares. So the short position has increased 6 million shares over the last couple of years. Importantly, back in early 2010 all (CIGX) had going for them was the lawsuit against Reynolds Tobacco, the old RJR, now (NYSE:RAI). At the present the Star story is hugely and dramatically improved on so many fronts that it's simply a wonder to me why the shorts are there? Obviously, this is a company in development and there is little on the balance sheet to make this worth anything like the market-cap and revenue is just starting to develop, but much like Syntex this story has truly a whopper potential that wasn't there in 2010. Of note, Syntex morphed along the way into Swiss-based Roche Bioscience.
A bit of a recap of what I see rolling forward, much all of which I've written about before. Pretty much front and center is Anatabloc (now a product line) as yesterday the company formally introduced an unflavored product. I've also been sent pictures of a jar that looks like it's an Anatabloc cream. I've heard there are several iterations of the formulations of Anatabloc for different conditions in different stages of development. Check out the trademarks that Star has compiled and you will get an idea of the numerous applications for its use that are likely on the way. I've even heard that people are grinding Anatabloc up and making their own creams for all kinds of dermatological uses. I'm not advocating that at all, by the way. There are also stories out there of major cosmetic companies that are looking to incorporate "it" into their products. Again note; that Star has revealed that they are working with McColl Partners LLC "structuring a controlled auction for bidding by pharmaceutical companies for licensing and/or co-venturing relationships." This will happen. IMHO
I have this sudden feeling that this report is to go on a while... but let me bore on.
I think I should mention that Stars management has been exceptionally studied, careful and have used utmost restraint in dealing with the numerous themes that are part of the story that is, in my opinion, about to break loose on a truly world stage.
Another recent and immensely newsworthy story is regarding the Reynolds Tobacco lawsuit, patents, US Supreme Court petitions and settlement hearings etc. and whether some 'other' tobacco company will jump in with a licensing agreement before Reynolds does to acquire / license Stars subject method technology that removes the cancer-causing agents to below detectable levels [BDL].
Each year $80 billion of tobacco products are sold in the USA and $250 billion are sold globally. So the USA sales are less than a third of the world sales and they are declining. No one knows how or when the Reynolds lawsuit will eventually play out, but somebody "out there" is going to come in with a substantive down payment plus a licensing or royalty deal but I think it's going to be sooner rather than later. Readers know that I've mentioned this before, but this aspect of the story is coming together pretty fast and I think something will pop here soon. Once again I believe it's going to happen relatively shortly.
Also, I have mentioned that somewhere along the line that there will be some kind of a deal to separate Star into two or more entities. Star has already undertaken name changes in their corporate structure, example; Rock Creek Pharmaceuticals that obviously has nothing to do with their tobacco interests. It would be simple to split the company up one way or another, pay a stock dividend, or some other kind of corporate undertaking along those lines. Of course this would incinerate the short position if Star undertook this stratagem. Something along these lines is going to happen.
Also notable is that the "product" has been very favorably peer-reviewed and their 225 page patent has been made available. (I've read the patent and have written a two-part report on the international patent and if you want copies of those reports or the report following the peer-review please send me an e-mail request to Dr.Faessel@onthemar.com)... but I digress.
What about all the trials in Pisa, Italy and in Flint Michigan and elsewhere? If you're keeping track you had seen the number of trials expand dramatically. You may know that to expand a trial you need to have some "positive" results in the proverbial can - so think about it. We'll know about some of these results certainly by early or mid summer. Let's also remember that Johns Hopkins is the major player here. Can you imagine Johns Hopkins spending all this time, energy and money not to mention jeopardizing their pristine reputation chasing some sham? Anecdotal stories about striking reductions in C-reactive protein [CRP] levels and thyroid improvements continue to come in. Let's remember that the distinguished Johns Hopkins professor Dr. Paul Ladenson** has stated "aside from RCP-006 (now Anatabloc) there is no known compound that stops thyroiditis." Twenty (20) million Americans suffer from thyroiditis. Impact on the shares of Star will be great when this thyroid research is published.
In my opinion the results of these important trials will demonstrate positive results and that will kick off a rush of the pharmacological companies into the licensing fray; it's going to happen.
Part B to follow soon.
** Dr. Ladenson is Professor of Endocrinology and Director of the Division of Endocrinology and Metabolism at Johns Hopkins University, where he is also Professor of Medicine, Pathology, Oncology, Radiology, and International Health.
* Symptoms of an enlarged prostate (benign prostatic hyperplasia or BPH) include difficulty urinating (hesitation, dribbling, weak stream, and incomplete bladder emptying), painful urination, and urinary frequency and urgency.
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 (CIGX) themes-or wish to receive my Best Ideas for 2011, send a request to: Dr.Faessel@onthemar.com