Rock Creek Pharmaceuticals, Inc. (NASDAQ:RCPI)

CAPS Rating: 1 out of 5

The Company is engaged in developing, implementing and licensing scientific technology for the curing of tobacco and also manufactures, markets and develops very low-nitrosamine smokeless tobacco products and selling of discount cigarettes.

Recs

7
Player Avatar zzlangerhans (99.76) Submitted: 3/11/2011 11:06:54 AM : Underperform Start Price: $2.39 RCPI Score: +9.64

I'm red-thumbing Star for the third time, an opportunity created by possibly the worst article ever written about a biotech/pharma stock. Or possibly the worst article ever written about a stock. Or possibly the worst article ever written. You can find the article here: http://seekingalpha.com/article/255616-star-scientific-just-announced-they-cured-alzheimer-s-disease-and-nobody-cares?source=yahoo.

I can't really get too deeply into the substance of this article, or lack thereof. It's a shameless, smarmy, sniggering pump of a garbage stock in which the author freely admits having a long position. The author touts a test in a Petri dish as conclusive proof of a cure for Alzheimer's, and probably any other disease that involves inflammation. This guy has been around for a while and I can't remember ever reading anything particularly intelligent that he had to say, but this drops him down below Garza and the fat man in the hammock in my estimation.

In short, this company has been floundering around trying to sell some supposedly low-carcinogen tobacco substitutes which no one is buying. In the year I've been watching them their cost of sales has been more than double their miniscule revenues every quarter. A steady burn has brought the cash position down to 6M as of September 2010, with depressing full year numbers for 2010 soon to be released. In short, this company needs cash very badly and there's only one place they're going to get it - the capital markets.

A strategy of deriving revenue from nuisance lawsuits against big tobacco companies seems to have failed, so the company has dredged up a tobacco alkaloid called anatabine as a potential cure for Alzheimer's. Presto, the tobacco candy pusher has become a drug developer. A proposed clinical trial, far from demonstrating a cure for Alzheimer's, is only designed to show a reduction in levels of an inflammation marker called CRP in test subjects who don't even have Alzheimer's. Even if the study is a resounding success, the clinical implications are dubious at best. And of course, moving into clinical trials costs a lot of money.

Sadly, there's no rule that forces the Seeking Alpha author to hold his Star shares until his promised cure for Alzheimer's is announced. Fortunately, it looks like the results of his current pumping efforts won't be much more successful than those of the past, as the Sword of Dilutioncles rapidly plunges.

Report this Post 19 Replies
Member Avatar goldminingXpert (29.40) Submitted: 3/11/2011 11:45:27 AM
Recs: 2

"This guy has been around for a while and I can't remember ever reading anything particularly intelligent that he had to say, but this drops him down below Garza and the fat man in the hammock in my estimation."

One of your single best quotable moments yet!

Member Avatar jaltucher (< 20) Submitted: 3/11/2011 1:07:37 PM
Recs: 3

Altucher is a total loser. I know because I'm him. I was just kissing my wife and she even pushed me away and told me to take a shower. I couldn't even remember the last time I took one (although that made her laugh so I scored some points).

But, that said, it seems like you're way down on my recent stock pick. Good luck with your other investments. I wish you the best. I'm sorry you felt the need to take my article in a very personal way in the way you just tried to trash me. Feel better next time.
-James Altucher
http://jamesaltucher.com

Member Avatar joaquingrech (98.60) Submitted: 3/11/2011 4:15:12 PM
Recs: 0

I was burned on this one too today. Aside from that, I think James had a point on his reply. No need to be disrespectful in that way, whether you agree or disagree.

Member Avatar joaquingrech (98.60) Submitted: 3/12/2011 4:40:07 AM
Recs: 0

btw, although I was short in this stock in caps and I have no way to close it until pass 7 days (i had the brilliant idea to thumb-down-it the day before it jumped 24%), i'm going long with real $ at $2.93. I hope James is right on this one! Although I don't understand half the terminology on it so I'm selling some protective calls just in case with the 10% premium on the expiring options next week.

I asked a couple of doctors and they are very skepticals of the news release saying that I might just be pure marketing, that's why i'm not sure on what to do about this one.

James, did you consult any expert? Any insights?

Member Avatar zzlangerhans (99.76) Submitted: 3/14/2011 4:24:08 AM
Recs: 3

There's nothing personal about pointing out that your article gives horribly inaccurate and misleading information on a stock in which you have already taken a position. Perhaps you've become so cynical that you think it's simply part of the game to coax suckers into bad investments. I do feel much better after providing a counterpoint to your misrepresentations. Regardless, I'm not very impressed by your lame attempt to take a moral high ground. I think we'll see which way this one goes in the next few months.

Member Avatar jaltucher (< 20) Submitted: 3/14/2011 9:28:24 AM
Recs: 0

A) you haven't pointed a single fact in my article that was incorrect
B) more importantly, you're angry. And you want to take your anger out on someone. So I become a convenient choice for you.

I get it. The past few years have been hard. And maybe many people in your life, from childhood on, have been angry. And so now you have an outlet for that anger. Its been a tough few years since 2008. Even this whole decade. If you want to chat or talk let me know. I'm not trying any attempts but I'm being sincere. Try to sleep 8 hours a day. Try get exercise. Eat well. Don't let negative people bring you down.

In terms of CIGX, if you had some facts against me i'd understand. But you don't. Of course we'll see how this goes in the next few months. Or the next few days or weeks. We also saw how it went since I wrote the article when it was at 1.80.

Stocks are stocks. they don't need to make us angry or sad.

I really wish you good luck in your investments. Try not to be so angry when you are anonymous. or even when everyone knows who you are. Sometimes thats even worse.

Best of luck,
James Altucher

Member Avatar zzlangerhans (99.76) Submitted: 3/14/2011 3:39:59 PM
Recs: 2

I'm amazed you can take time out of your busy schedule to engage in a pizzing contest with an angry nobody such as myself. There are hundreds of low-float micro-cap stocks out there that you could be turning into short-term winners with self-fulfilling prophecy pumps. Here's some more biotechs out there that have already proven they have cures for all human illness - Hemispheryx, Agenus, Opexa, Cel-Sci, Introgen ... wait, sorry, that one already went bankrupt. No charge for the tips.

You make a better pumper than a psychologist. I'd recommend keeping your day job. And before you take all the credit for doubling the share price, most of that is due to a favorable ruling in a patent case. That ruling pertains to Star's other main line of business, nuisance lawsuits against big tobacco, which you were most likely unaware of when you wrote your article.

I've got nothing to be angry about here, although I concede you're irritating. I've never held any position in Star, I only sympathize for the muttonheads at the bottom of the Star stock pyramid who are going end up holding your bag. All my real positions are documented here on the day I buy and the day I sell, in actual share counts and prices. This is only a game, and I'll be thrilled if this turrd floats higher. The only thing stopping me from shorting it now is uncertainty about where this patent process will lead. With regards to anatabine I have the utmost confidence that it is destined for the dustbin.

Member Avatar zymok (< 20) Submitted: 3/14/2011 11:07:29 PM
Recs: 0

Wow. After reading such a passionate post from zzlangerhans, I plowed through who knows how many postings, papers, and what-not on this amazing cure. I have to say that anyone expecting to profit from CIGX's cure for Alzheimer's or any inflammatory disease based on RCP-006 is in for a long wait. Like probably forever. They're not anywhere close to having a cure. They're not even close to showing that they have a more-than-slight chance of ever having a cure. The press releases don't lie, but they make it easy for people to believe that things are much farther along than they really are. Good PR, but the science isn't likely to ever back it up.

Member Avatar goldminingXpert (29.40) Submitted: 3/15/2011 12:36:06 AM
Recs: 0

The comments on my article that quote you are getting to be fairly hilarious: http://seekingalpha.com/article/258218-star-scientific-s-shares-set-for-a-major-pullback

Member Avatar Shankapotamus (36.32) Submitted: 3/15/2011 2:19:31 AM
Recs: 0

I couldn't agree more. There are some ridiculous articles all over the net now. Check out the misspelled words on this one: http://www.investorplace.com/32191/star-scientific-tobacco-alzheimers-cure-treatment-anatabine-cigrx/

This was a good trade for those that bought calls a few weeks ago. Sold my calls and traded them for puts this afternoon.

Member Avatar PDTBiotech (92.31) Submitted: 3/15/2011 12:19:17 PM
Recs: 6

Glad I stumbled onto this. I don't know jack about this company, but from a scientific perspective the article is brutal. My guess is that some of the issues below can probably be attributed to the fact that the author genuinely didn’t understand what he was looking at when he read the press release and looked at the data.

1) Title - Star did not announce they cured Alzheimer’s Disease at any point in their press release, either directly or indirectly.

2) If I understand it correctly they’re recruiting 200 patients with high levels of C-Reactive Protein (CRP), treating them, and seeing if RCP-006 decreases CRP levels. If the trial shows that CRP levels do indeed drop as a result of treatment, that will provide no evidence whatsoever that RCP-006 is an effective treatment for Alzheimer’s. There are already substances known to decrease CRP levels, but scientists are not actively pursuing them as a potential treatment for Alzheimer’s because the link between CRP and Alzheimer’s has not been shown to be causative.

3) While Lipitor has been shown to have some anti-inflammatory activity, that’s not what it’s prescribed for. No doctor would say you needed an anti-inflammatory drug and then hand you a script for Lipitor. The word “inflammation” does not appear in Lipitor’s PI. Picking Lipitor as your control drug in an inflammation study makes about as much sense as picking aspirin as a control in a lipid-lowering study. While the article does state that CIGrX “blows away Lipitor”, it's clear that the author doesn't realize that this means nothing in regards to the active drug's anti-inflammatory potency. This is the company’s fault, not the authors, as a layperson most likely wouldn’t realize that the control was most likely chosen to make the drug being tested look better than it actually performed.

4) Star Scientific’s website clearly says that CIGrX “contains two dietary ingredients: yerba mate (mah-TAY) and anatabine (an-AT-a-been).” http://www.cigrx.com/science.php Therefore, the statement “forget their RCP-OO6 Anatabine terminology. It’s the CIGrX pill made, patented by Star Scientific and distributed by Inventiv” appears to be incorrect. They clearly listed anatabine on the figure showing the results from the LPS study, and recently filed a patent application for the purified S-isomer of anatabine to treat chronic low-level inflammation. http://phx.corporate-ir.net/phoenix.zhtml?c=105863&p=irol-newsArticle&ID=1526998&highlight=

5) “Lipitor reduces inflammation in inflamed human brain tissue by about 30% in the graphic and CIGrx by about 100%.” The assay is measuring the ability of each drug to inhibit the release of IL1-Beta from whole blood which is exposed to LPS. Brain tissue was not used in the assay. The percentage estimates are also horrible based on the graph, but I’m assuming the author doesn’t understand what error bars mean.

Member Avatar zzlangerhans (99.76) Submitted: 3/15/2011 8:57:09 PM
Recs: 2

Thanks for taking the trouble to deal with the "facts" of the article. Being called a biotech expert, especially the Motley Fool's biotech expert makes me squirm because I just write a lot of volume. PDT is a real expert and you can take his analysis to the bank.

Member Avatar portefeuille (99.60) Submitted: 3/16/2011 9:28:12 AM
Recs: 0

Being called a biotech expert, especially the Motley Fool's biotech expert makes me squirm because I just write a lot of volume. PDT is a real expert and you can take his analysis to the bank.
------------
and "in this regard" portefeuille is to zzlangerhans as zzlangerhans is to pdtbiotech ...

Member Avatar joaquingrech (98.60) Submitted: 4/4/2011 12:31:40 PM
Recs: 0

Ok... now this is insane. Or they really find a cure for alzheimer or a $600mm market cap is completely ridiculous.

Member Avatar joaquingrech (98.60) Submitted: 6/2/2011 9:06:51 AM
Recs: 0

aparently they can cure alzheimer and smoking addiction... i wonder whether they can also arrive to mars or find the fountain of youth. $600mm market cap, nice.
seriously, the whole smoking addiction fix is the one pushing the stock higher nowadays, any comments on that one? is it real?

Member Avatar TSIF (99.96) Submitted: 8/26/2011 12:19:10 PM
Recs: 0

That's funny, I thought people were buying into this on for it's alzheimer cure....why did it drop so much (45% so far today) when JR Renolds crushed it in court over the patent suite....did people forget why they were pumping CIGX in the first place?? Must be short term memory loss....

Green for ZZ!

Member Avatar joaquingrech (98.60) Submitted: 8/29/2011 9:42:25 AM
Recs: 0

nah, the whole push up was because of the litigation, if they've won, supposedly there were in for about $800mm so the stock should be worth about $8. That's why the stock had a major run-up from $1 to almost $5.
What I did was buy put/calls at that price since I knew that if they won, it would shoot up way higher, and if they lost, they would crash.

Anyway, right now, this stock is practically dead, unless James Altucher is right they did find a cure for alzheimer.

On my view, i've just entered it as a red thumb on CAPS.

Member Avatar goldminingXpert (29.40) Submitted: 8/31/2011 6:29:30 PM
Recs: 0

This whole CIGX story is incredibly hilarious. Glad we were on the right side of it.

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