CAPS Rating: 1 out of 5


Player Avatar zzlangerhans (99.85) Submitted: 1/25/2013 1:09:25 AM : Underperform Start Price: $2.07 CTIX Score: +10.02

There are so many red flags on Cellceutix it looks like a giant slalom course. Prematurely-named Kevetrin is a p53 pathway activator in phase I trials for solid tumors. p53 is a well-characterized tumor suppressing mechanism that seems like an obvious choice for a cancer therapeutic, but several previous attempts have been unsuccessful. Discordantly, the other major pipeline compound is Prurisol for psoriasis. Prurisol is a modification of an FDA approved drug whose identity the company guards closely. A phase II trial of Prurisol in Europe is expected to begin this quarter.

With virtually no cash in the bank, Cellceutix would blend in nicely with countless other micro biopharmas trading on the bulletin boards in the low pennies. And indeed, that's exactly what they were doing until May 2012 when a coordinated pumping campaign began on Seeking Alpha and who knows where else, with a resultant quadrupling of share price in the complete absence of any fundamental change in the company's prospects.

Even for Seeking Alpha, the tactics seem a little extreme. The central figure in the cheering section seems to have arisen from a crack in the earth's crust in December to preach the Cellceutix gospel, and obsessively tracks and responds to every negative comment made on a Cellceutix article. There's no way of knowing if the anonymous name and photo actually correspond in any way to the writer of the articles, but the resemblance to a young Bella Abzug is remarkable. Every pumping article is vigorously applauded in the comments section by numerous sockpuppets who seem to have identities newly created for the purpose of responding.

Meanwhile, some critics have risen to the bait, pointing out that Cellceutix seems to employ only two individuals who have a dubious history of stock promotion and control options that can be converted into enormous amounts of stock, essentially giving them the power to divert whatever value exists in the company into their own pockets at any time.

Cellceutix is now funding their operations via a 10M dilutive financing arrangement with Aspire, but this will only last for a two or three quarters before the dynamic duo seek fresh blood. I can only imagine that the bellows is being applied now to generate enough upward momentum to justify a larger financing. Everyone grab your popcorn, there are still plenty of seats available.

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