Everyone agrees that Oliver Stone’s Wall Street is a film classic, and who can forget Martin Sheen‘s performance? He played Carl Fox, the hardscrabble mechanics union leader who railed against the greed of Michael Douglas‘ Gordon Gekko and even that of his own son, Bud, played by Charlie Sheen.
One of Martin’s most memorable scenes in the film was an exchange between his character and Gordon Gekko:
Carl: “There came into Egypt a Pharaoh who did not know.”
Gekko: I beg your pardon, is that a proverb?
Carl: No, a prophecy. The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn’t allow unions. I know what this guy is all about, greed. He don’t give a damn about Bluestar or the unions. He’s in and out for the buck and he don’t take prisoners.
Imagine our surprise to see a curious press release from from pump and dump penny stock fraud World Moto (FARE) that was issued after the close of trading yesterday (a day on which FARE shares almost doubled):
FARE US: Shortlisted To Appear On Martin Sheen’s “In Focus”
2013-01-23 21:25:51.983 GMTWorld Moto, Inc. (“World Moto” or the “Company”) is pleased to announce that “In Focus” has contacted the management of World Moto. The Company has been selected as the potential participant in an upcoming documentary on Business Technology hosted by Martin Sheen for CNN and various public access channels. The documentary will be aired in 43 different countries and in 14 different languages.
“In Focus” is an award-winning series that benefits from strategic partnerships with Public Television and a variety of nationally recognized content providers. These relationships, coupled with their commitment to production excellence, have placed “In Focus” in a unique position in the educational television industry. The “In Focus” series is hosted by television and feature film icon, Martin Sheen.
What this press release fails to mention is that In Focus is essentially an infomercial. Neither CNN nor PBS are involved in the production. Only thanks to the embarrassing presence of Martin Sheen is it even marginally classier than Donald A. Baillargeon’s MoneyTV. Baillargeon’s previous stock touting TV show, the Emerging Stock Report, was sanctioned by the SEC in 1998. The FARE release continues:
World Moto’s CEO Paul Giles stated, “We are honored that In Focus has given World Moto the opportunity to participate.”
This should be translated as “We sent in a check, and if it does not bounce, we’ll actually get an ad for our junk stock on the air.”
And as for Martin Sheen, associating himself with such an outfit, one can only suppose the paycheck is making it worthwhile. Your author wonders, though, what would Carl Fox say about it? What would Sheen’s character, President Jed Bartlet, from the sanctimonious Aaron Sorkin‘s West Wing, think?
Back in October 2007, when the mania for all things speculative fraudulent and Chinese was at its peak, the investment banking powerhouses of Merriman Curhan, and Ford, along with (now jailed) Obama and Clinton fundraiser Hassan Nemazee’s Brean Murray, Carret & Co., brought an obscure Chinese jewelry company public. That company, Fuqi International (FUQI) unlike many disgraced Chinese stocks, still trades today.
Perhaps even more astounding is that the shares of Fuqi have risen from 61c at the start of the year, to around $1.50 earlier this week.
The question is why? FUQI has not filed a 10K for 2009, nor have they filed a 10K for 2010, nor 2011, nor (as of yet) 2012. Investors have no accurate public information. Well, almost none. Although the company cannot provide a set of reliable accounts, they did manage to disclose one small little item….
FUQI has received a nastygram from the SEC. According to an 8k filing on January 10th of this year:
On December 21, 2012, Fuqi International, Inc. (the “Company”) reported that the Company had received a “Wells Notice” from the Staff of the Securities and Exchange Commission (the “SEC”) indicating its intent to recommend to the SEC that it institute a public administrative proceeding against the Company pursuant to Section 12(j) of the Securities Exchange Act of 1934, as amended. The Company also reported that the Staff of the SEC has offered the Company an opportunity to provide a written response to this proposed action by 5:00 pm EST on January 10, 2013. Pursuant to the Company’s request, the Staff of the SEC has extended the response date to February 1, 2013.
As a quick aside, FUQI filed an 8K about the Wells Notice a full 20 days after receiving it….a bit tardy for an 8k, which should have been filed on December 23rd. By the time FUQI got around to disclosing the Wells Notice, on the 10th, they had already received their first extension. Timeliness was never a FUQI strong point.
And after missing that extended deadline the SEC granted the company even more time, until March 1st. Of course, the company did not answer, and the SEC still did nothing. Nothing except for granting another extension to March 15:
(T)he Staff of the SEC has offered the Company an opportunity to provide a written response to this proposed action by 5:00 pm EST on January 10, 2013, which response date was extended by the Staff of the SEC to February 1, 2013 and subsequently to March 1, 2013. Pursuant to the Company’s recent request, the Staff of the SEC has extended the response date to March 15, 2013.
As you can guess, March 15th came and went, and FUQI got yet another extension, this time to April 15, 2013.
Pursuant to the Company’s recent request, the Staff of the SEC has extended the response date to April 15, 2013.
While this has been going on, FUQI stock continues to trade. Instead of going ahead with a long overdue too-little-too-late enforcement action, the SEC is giving this sham company extra time on top of extra time on top of more extra time, while doing absolutely nothing to protect investors by halting the stock…even though they are about to bring an action against the company!
So one must ask, what purpose is served by letting these shares continue to trade? Whom are the regulators really protecting? Investors or the corrupt management of Chinese frauds?
While reading the series of stories in the Washington Post about the bribery scandal currently engulfing various Virginia politicians and shady Star Scientific (STSI), a documentary about a curious insect was playing on the television.
The North American cicada, Magicicada cassini, is famous for its distinctive chirp, and its life cycle, returning every 17 years. And so it is with some con men residing in the lower rungs of the stock market, reappearing every so often, and promoting their worthless shares with the same siren songs.
In January 1988 an article appeared in JAMA discussing Retin-A, a derivative of vitamin A, as a treatment for wrinkles. It set off an explosion in the use of Retin-A and a flurry of hype around some other, less well studied, products. The frenzy was so great that then-FDA commissioner Frank Young issued a warning to the public. An article in the LA Times, available here, explains:
Young said some unethical pharmacists, dermatologists and manufacturers were promoting and selling mixtures called Retin-A that actually contain different amounts of the active ingredient, retinoic acid.
Some manufacturers, he also said, are making bogus creams sold as Retin-A or as look-alike products that contain no retinoic acid…The FDA said it was “actively investigating a number of firms” promoting and selling wrinkle creams
Imagine the reaction at a small struggling firm in Massachusetts, called Spectra Pharmaceuticals (SPTPQ) when the JAMA article hit. For years Spectra, its Chairman and CEO, Dr. Al Maumanee of Johns Hopkins’ Wilmer Eye Institute, along with another scientist, Dr. Scheffer Tseng, had been studying their very own vitamin A derivative as an eye ointment first at Hopkins, and later at the Harvard-affiliated Massachusetts Eye and Ear Infirmary. But the studies were quite controversial.
According to a New York Times article, available here:
Dr. Scheffer Tseng, tested an experimental vitamin A ointment on hundreds of patients from 1984 though 1986 at the Massachusetts Eye and Ear Infirmary. The ointment, tested as a remedy for chronically dry eyes, apparently worked for only a few patients.
Subsequent investigation by the school and the hospital found that the researcher made unauthorized modifications to his study, varying the approved doses and enrolling more patients than approved, and that he minimized negative findings while he sold his rights to the formula and sold his stock in the company he had helped form to market the product.
According to an article in the Boston Globe, available here, Tseng‘s supervisor at Harvard, Kenneth R. Kenyon was forced out of his administrative positions at the hospital because of the scandal.
If that was not enough, according to interview transcripts with Dr. Maumanee, available here, there were problems with the original Maumanee and Tseng work at Johns Hopkins as well. They failed to obtain both the necessary Investigational New Drug (IND) approval from the FDA, and permission from the JCCI (Joint Commission on Clinical Investigation) at Hopkins to perform the study.
The Spectra affair became a political matter.. Maumanee stated that:
(W)e were investigated by the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce, the Maryland Medical Society Committee on Ethics, the U.S. Securities and Exchange Commission, the Massachusetts Securities Exchange, the National Institutes of Health, the Harvard committee on ethics, and the Johns Hopkins Medical School Committee on Misconduct.
The House Committee hearings were led by Rep. Ted Weiss. According to this article from the December 1989 edition of the Multinational Monitor:
Weiss’s hearings focused attention on several previously reported conflicts of interest. At a Harvard-affiliated hospital, for example, a researcher, Scheffer Tseng, distorted the results of experiments he conducted for a company, Spectra Pharmaceutical Services, Inc., established to market an eye ointment he had developed. Declaring the ointment a success by virtue of his fraudulent data, Tseng was able to jack up the price of Spectra stock. He then sold his Spectra holdings at a reported profit of $1 million. The faculty overseer who should have enforced Harvard’s conflict of interest guidelines failed to do so, apparently because he owned stock in Spectra and profited from Tseng’s deceit.
What is a disgraced company with a failed Retin-A-like product of its own to do? The answer was simple. Hype the eye ointment, Lacramore, as an anti-aging wrinkle fighter.
The scheme, according to the SEC, was simple. In May of 1988, a stock promoter, who had actually helped form the company, now working out of the offices of a bucket shop in Florida, deposited 600,000 shares of Spectra into a brokerage account.
During the next two months the promoter had some fake research reports written up and gave them to the bucket shop for distribution to thousands of potential investors victims. The reports made outlandish claims of future revenue and earnings, along with comparisons to Retin-A. According to an article, available here, in the Richmond Times-Dispatch:
The federal complaint argued that the reports led investors to believe that a product called Lacramore could make wrinkles disappear, though it proved to be ineffective. The suit accused [The Promoter] of purchasing Spectra stock at below-market rates, then selling it while promoting the company to other investors.
According to a Boston Globe article, available here:
[The Promoter] paid Florida financial newsletter publisher Robert E. Baker at least $5,000 to produce a glowing report about Spectra, which was then mailed to thousands of doctors by a company owned by O’Donnell and [Promoter].Among other things, the report claims that a new market had been discovered for Spectra’s eye drug: as a substitute for a popular skin cream. And it touts the company’s university connections, especially through Maumenee. “Other drug companies have research arms,” it declares “Dr. Maumenee has friends and former students in key positions in almost every university ophthalmic research institute in the world.
As the bogus research reports circulated, the promoter sold 350,000 of his shares, while failing to properly report the sales.
In late 1993 the SEC finally came down on Spectra, along with various officers, shareholders, promoters, fake analysts, brokers, and the sleazy bucket shop behind the pump and dump, but by then it was far too late for the public shareholders. The company had already collapsed.
The name of the stock promoter? Jonnie Williams the CEO of Star Scientific (STSI), here is a pic. The bucket shop where he had an office? Florida-based Kashner Davidson. His defense attorney in the SEC case? A man named Paul L. Perito.
Much like the cicada, the Spectra cycle repeats with Star.
1. A purported breakthrough anti-aging product? Star’s got that with anatabine.
2. A troubled research relationship with doctors at Johns Hopkins? Star’s got that. Read Adam Feuerstein’s piece on that issue here.
3. A series of fake research reports by penny stock touts with outlandish claims? Star’s got that. Read about Patrick Cox right here.
4. A Federal Government investigation? Star’s got that too. Subpoenas have been served. Read more here.
5. A bucket shop pushing the stock? Star’s got one. Gilford Securities, home of “analyst” Otis Bradley.(Otis B. also pumps ECTE)
6. A lawyer named Paul L. Perito? Surprise! He’s the Chairman and President of STSI.
One must ask how far away is a collapse, a Q at the end of the ticker and a delisting?
Recently, The Street.com ran an excellent piece exploring the relationship between bio-dreck Galena Biopharma Inc. (GALE) and a sleazy stock tout shop that goes under many names (DreamTeam Group, MissionIR, Quality Stocks, etc.), you can read it here.
We first ran into this crew during the SEFE promotion in the springtime of 2012. And back then an enterprising reader sent in pictures of the vacant SEFE offices. Read that piece here.
The DTG stock touting swine have removed the disclaimer about GALE from their website, but a captured image was posted on Twitter (see here) and copied below:
Captured Disclaimer on GALE
A BuyersStrike! reader, @FranklinForward made a great suggestion to visit DTG HQ. And so we decided to take a field trip. But to where, exactly?
On the bottom of a press release, was a poorly worded address block:
Contact: Senior Editor DreamTeamGroup (DTG) Communications 7399 North Shadeland Avenue Indianapolis, IN Phone: 317-623-3050
On the bottom of their website was this address block:
© Copyright . DTG 7399 North Shadeland Avenue Suite 123 Indianapolis, IN 46256 317.623.3050
Now a CEO as astonishingly brilliant and competent as Galena’s Mark Ahn surely would have gone to visit this top-flight firm at their headquarters in Indianapolis. He probably would have brought Galena IR head Ms. Remy Bernarda along as well for a little sitdown and perhaps a coffee.
If that is where the GALE execs would have gone to do some routine due diligence on their new IR partner, that is where, together, we will go. And so, dear readers, we are off to Indiana.
N. Shadeland runs through a somewhat dilapidated neighborhood in Indy, more comfortably a home for check cashing outfits and “We Buy Gold” shops than for a legitimate PR firm. Presented below are pictures from the two possible storefronts that match the 7399 N. Shadeland address.
The first is a vacant storefront:
What goes on in here?
This impressive piece of real estate lies between “L-Stylish” at 7409 N. Shadeland, and a health food store at 7391 N. Shadeland. There is a Dollar Tree located two storefronts over to the right at 7373 N. Shadeland.
L-Stylish!
See the Health Food shop to the left of Dollar Tree.
Alternatively, it is possible that DTG is being run out of this UPS Store branch.
Either way, it is both extremely suspect and not a surprise.
And in another non-surprise, DreamTeam has in the past worked closely with a Boca Raton, FL based bucket shop, Noble Financial, which (naturally) has been a big fan of GALE. Noble has been putting out “research” on what is a really stock promotion plaything.
DreamTeamGroup (DTG) to Provide Social Media Coverage of Noble Financial Capital Markets Ninth Annual Equity Conference
Indianapolis, United States (IBwire.com – January 22, 2013) DreamTeamGroup, a consortium of unique marketing brands that utilizes one dynamic approach to connect publicly traded companies with a variety of investors, will provide the investment community with ongoing social media coverage of Noble Financial Capital Markets’ Ninth Annual Equity Conference. The conference is being held this week at the Hard Rock Hotel in Hollywood, Florida.
Bucket shop brokers in Boca and sleazy stock touts working out of a stripmall storefront. Now that is truly a Dream Team.
Today’s story begins with an aging office park, 500 arthritic Phase III subjects and a freezer that eats dreams. Welcome, dear readers, to the world of Ampio Pharmaceuticals (AMPE), the filthy reverse merger put together by Las-Vegas-based stock promoter Jens Dalsgaard, charming the market this week with tales from Freezergate ’14 (read more about Freezergate here).
Sell-side shill Raghuram Selvaraju, of Aegis Capital, brushed off Freezergate as an innocent distribution error in his report of 21 August 2014 (emphasis mine):
This morning, Ampio Pharmaceuticals announced a delay in the data analysis of the STEP study due to the fact that the study drug (both AmpionTM and the placebo) were exposed to lower temperatures than permitted by the drug specifications during shipment to the clinical sites….During the review of all documentation following the unblinding of the study, the company’s independent Clinical Research Organization discovered that the drug product received at the clinical sites had been below the temperature requirement of 15 degrees Celsius and may have been frozen for some period of time.
Innocent enough? Hardly. All Ram is doing is regurgitating the company line, spinning what most certainly be failure into platitudes and excuses designed to keep suckers buying paper that likely is only worth the cash on the balance sheet, roughly $1.25 per share. But what really jumped out at us was a creative use of the plural (clinical sites?) and a funny definition of the word “independent”. We were recently in sunny SoCal and investigted this independent CRO, which just happened to share a wall with the study’s sole site and Principal Investigator (“PI”). Coincidence?
If Ram had bothered to perform even the most basic of due dilligence, he would have been tracking the progress of the Ampion trial on the clinicaltrials.gov website. There he could have seen that there was only ONE clinical trial site, the office of Dr. Quang D. Vo in Anaheim, CA 92801. Isn’t that a red flag right there? Only one site and one doctor for a 500 patient Phase III trial should raise many alarms. What reputable journal would publish such drivel? This is not a small pilot study of 5 patients, where a single site is appropriate. This is a large randomized pivotal trial.
Further, Ram could have also discovered the identity of the “independent Clinical Research Organization” that AMPE had hired. That CRO is named, in a delightfully ironic coincidence, Dream Team Clinical Research (remember stock promotion firm Dream Team Group?).
From the comfort of one’s own desk, or laptop, one could visit the website for Dream Team Clinical Research. This would take about ten seconds, and would raise an ENORMOUS red flag. Probably enough of a red flag to warrant a search on what other this wonderful outfit has been involved with, let alone managed. Go ahead, head over to clinicaltrials.gov, do a search on Dream Team Clinical and come on back.
Being horrified at the lack of actual clinical trial management experience, the next step would be to make an in-person trip to the CRO offices and the clinical trial site. After all, that’s just what we did here at BuyersStrike!, a little detour to a Vietnamese neighborhood of strip malls and inexpensive apartments just off the highway in Anaheim, CA.
Here is what we found when we visited the offices of Dream Team Clinical Research at 760 N. Euclid Street in Anaheim, CA:
760 N. Euclid Street, Anaheim, CA. Home of DTC &…..
This is a small office building on the east side of Euclid Street, with outdoor stairwells, next to McDonald’s to the south and an apartment building of similar construction to the north. Let’s see the tenant list:
Notice Suite 104 is missing.
OK, off to Suite 105 then.
Suite 105 Front Door
Can you make out the text on the bottom half of the door?
If door is locked…
As we were there on a weekend, the door was locked. So we walked next door to Suite 104. Any guesses what we found?
How very convenient!
Look at that. It’s the offices of Dr. Quang D. Vo, principal investigator of the AMPE study, and the only listed trial site. Right next door to the clearly world-class CRO hand picked by talented, reputable, AMPE management. Just how independent is this CRO? Clearly not independent of the only trial doc and trial site. What possible problems could there have been moving the drug from Suite 105 to Suite 104?
And yet company management, and their sell-side shills like Raghuram Selvaraju want you to believe there were multiple sites, an independent CRO, etc. Do you still believe? Or is it more likely a pathetic ruse?
Sell-side firms like Aegis would clearly rather shill for scummy reverse merger banking clients like Ampio than spend 10 minutes online to do basic research. Ram’s i-banking masters would rather pay for glitzy conferences to sucker dumb institutional money than pay for a ticket to LA and a rental car to visit the trial mill where the sausage is being made. Sad.
Sadder still, that legitimate publications and news services like Bloomberg, and cable stations like CNBC, often quote sleazy operators like this as “experts”, as if they have opinions with any worth at all whatsoever.
Speaking of institutional money, how is it that firms like Knoll Capital (the largest institutional investor in AMPE owning ~5.7% of the company), are even in business managing other people’s money given their clear incompetence? How could so-called professionals fail to perform such basic research. Certainly Fred or his daughter Karina Knoll know how to use a search engine, how to book a plane ticket and how to drive to Anaheim from LAX. If not, there is always GPS.
If you have been following @buyersstrike on Twitter, you might see the occasional tweet about Neuralstem (CUR). Over here at BuyersStrike! HQ we find Neuralstem to be absolutely incredible. It takes a lot to stand above the crowd in the current world of bio-dreck mania. So, what makes this 2006 direct to the OTC-BB company so fascinating?
Well, the thing that makes this company so incredibly amazing (if they can successfully patent and commercialize) could make the company worth more than Apple, Tesla, Google, combined! Yes, more than all of them. Intrigued? Read on….
CUR is a plaything of Bedminster, NJ based bucket shop T.R. Winston. Read the FINRA Broker Check report on T.R. Winston here. But being associated with a schlock shop is not what makes Neuralstem so incredible.
CUR is loved by Brean Capital‘s wretched Jonathan Aschoff. But Jonathan Aschoff likes lots of penny stock garbage dressed in bio-tech bubble clothes. He shamelessly touts Joe Podoloski’s RPRX, the stock promoting goons at INO, the reborn penny scam OHRP, CTSO, and many more. So having a sell side whore like Asshoff strap on his kneepads for the company is not what makes Neuralstem so incredible.
CUR‘s CEO, Richard Garr, is no stranger to controversy. A little over a year ago, in January 2014, while raising money through the above named bucket shop, TR Winston, Garr, in an (at best) ethically dubious move, tweeted about a patient in the Neuralstem ALS clinical trial. Crain’s NY writer Aaron Elstein, in an excellent piece available here, investigated the tweet activity and the TR Winston – Neuralstem connection. Yet this is still not what makes Neuralstem so incredible.
CUR announced today highly misleading results of that very same, incredibly poorly designed, ALS clinical trial. Read their spin-laden bullshit press release here. While Neuralstem tries valiantly to obfuscate the real results by offering a bizarre post-hoc grouping of patients, TheStreet.com’s Adam Feuerstein sees through CUR’s bullshit in an article available here. Lots of companies put out bullshit press releases, so that is not what makes Neuralstem so incredible.
But hidden in that press release is the gem that makes CUR so incredible. Here is a direct quote, emphasis ours:
GERMANTOWN, Md., March 12, 2015 /PRNewswire/…
The average ALSFRS score for responders at 9 months after treatment was 37. Non-responders scored an average of 14. These scores represent 93%, versus 35%, of the baseline score retained, respectively, by the responders versus non-responders at 9 months, which is a statistically significant difference.
Keen observers of Neuralstem, or just anyone who can use Yahoo! Finance, probably recall that in August of last year, CUR announced that the final patient in the Phase 2 ALS trial was treated. The relevant section is quoted below, emphasis ours:
GERMANTOWN, Md., Aug. 4, 2014 /PRNewswire/ — Neuralstem, Inc. (NYSE MKT: CUR) announced that the final patient was treated in its Phase II trial using NSI-566 spinal cord-derived neural stem cells in the treatment of amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease).
Using a little advanced math, lets count 9 months forward from August 4th. September, October, November, December, January, February, March, April, and May. How can the company report 9 month trial results in early March 2015 if the last patient was only treated in early August 2014? The 9 month results cannot possibly have been compiled yet.
Neuralstem might not have cured ALS, but they just may have solved the mystery of time travel! Imagine the possibilities. And that, dear readers, is what makes CUR truly incredible!
UPDATE: Read Adam S. Gottbetter’s plea agreement:
Delusional, self-important, penny stock lawyer Adam S. Gottbetter is having a really bad day. He was first exposed in Barron’s in a great piece by Bill Alpert in 2009. Read it here. Today, 6 years later, in an amazingly rare action against a lawyer, the SEC charged Gottbetter with a litany of offenses.
The SEC alleges that Adam S. Gottbetter orchestrated promotional campaigns that touted the prospects of microcap companies and enticed investors to buy their stock at inflated prices so he and his cohorts could sell shares they controlled and reap massive profits. Gottbetter enlisted Mitchell G. Adam and K. David Stevenson to help him in the last of three schemes he conducted in a six-year period. They repeatedly cautioned each other about the dangers of missteps that might draw law enforcement attention to the scheme, such as failing to keep secret the identities of Adam and Stevenson. The three rehearsed stories they would tell if ever questioned by law enforcement. During one meeting in New York City, Gottbetter complained about the difficulties of stock manipulation but conceded that robbing a bank was the only other way to make so much money so quickly.
Read the full release here.
And if that was not enough, Adam’s Tuesday got even worse.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Gottbetter, Adam, and Stevenson.
Gottbetter has been responsible for tons of filthy reverse merger deals, here is a small list:
Cur Media (CURM)
Ekso Bionics (EKSO)
Neurotrope (NTRP)
Symbid (SBID)
China TMK Battery (DFEL)
Rackwise (RACK)
Li3 Energy (LIEG)
among many more.
Amazingly enough, the Feds managed to stop the Gottbetter group in the middle of preparations for a new con, one which brings penny stock shenanigans into the new age of algorithmic trading:
They schemed to drive up the stock price for purported oil and gas exploration company HBP Energy Corp. (HBPE) through fraudulent trades generated by a trading algorithm. They then planned to launch an extensive promotional campaign featuring multiple call centers, roadshows, and a listing on the Frankfurt Stock Exchange. After creating the false appearance of liquidity and investor interest, they planned to dump their shares of the stock on unsuspecting investors around the world. While Stevenson and Adam managed to do some small coordinated trades, the scheme was thwarted before the planned manipulation and promotion could be launched when Stevenson was arrested by the FBI.
The only question left is how long will it take the regulators to halt and delist all of his filthy scams?
Recently, dreadful, scandal-plagued, bio-dreck Galena Biopharma (GALE) released results (here) from their Phase 2 study of GALE-401 aka Anagrelide CR. This is a new “Controlled Release” formulation of an existing generic drug, Anagrelide. Anagrelide is used to lower a patient’s platelet count. And just like Galena itself, there is less to Anagrelide CR than meets the eye.
Galena, at the time run by (now-disgraced) Mark Ahn, picked up the rights to the product in January 2014, through the acquisition of Mills Pharma, a paper entity with one asset, Anagrelide CR. Mills was owned by a firm called Aceras Biomedical. Aceras was funded by now defunct bucket shop Rodman & Renshaw, and run by a ragtag group of refugees from Steve Rouhandeh’s stock touting SCO entities and Lindsay Rosenwald’s bio-dreck factory Paramount. [Read more about stock promoter Steve Rouhandeh and SCO in a Wall Street Journal article by Aaron Elstein, here.]
Interestingly enough, Mark Ahn still serves on the board of Steve Rouhandeh’s recently re-awakened Plasmatech Bio (PTBI) stock promotion, where SCO is one of the largest holders, and several current and former SCO employees are on the Board of Directors.
Given the nature of the players involved, if the sharks at Aceras really had a winner, they would have tried to take it public during the greatest bull market in biotech history, or at the very least stuffed it into reverse merger with a shell they controlled. Instead they sold Anagrelide CR to pathetic, desperate, Galena. As typical for Galena, even the purchase price for Mills was obfuscated. Here is the relevant language from the press release:
Under the terms of the agreement, Galena paid an up-front payment to Mills Pharmaceuticals’ owners. Additionally, Mills Pharmaceuticals owners are eligible to receive one-time payments of up to 4,000,000 shares with the achievement of specified regulatory milestones. The owners of Mills Pharmaceuticals are also eligible to receive $3 million upon FDA approval of a new drug application in respect to GALE-401.
However in the corresponding 8-k filing, available here, Galena details the actual purchase price of Mills:
While Galena management, and the sell side shills hype GALE-401 incessantly, the truth is that the drug is doomed to failure both clinically and commercially.
Here is what Galena said about GALE-401 at the time of the acquisition:
GALE-401 is expected to greatly decrease the adverse event rate relative to the approved product…Existing data strongly suggest reducing the Cmax while maintaining the overall exposure to the drug, or AUC (area under the curve), reduces the rate of adverse events without compromising efficacy. GALE-401 significantly decreases the Cmax by up to 70% while preserving nearly 100% of the AUC.
We can compare the recent GALE-401 study, with an older study of generic Anagrelide of comparable size. Back in 1992, a study of regular anagrelide was conducted on 19 evaluable patients. Further information on this study is available here.
So how did Galena do? Were they able to reduce adverse events versus normal, generic, Anagrelide? Were they able to match generic Anagrelide’s efficacy? What about dosing convenience with the new controlled release formulation?
First lets examine safety. According to Galena:
The Phase 2 study demonstrated that GALE-401 was well tolerated with primarily Grade 1 and 2 toxicities in 16 of the 18 subjects
16 out of 18 subjects (89%) reported “toxicities” aka adverse events, aka side-effects.
In the 1992 study, only 8 out of 19 patients (42%) reported adverse events. The regular formulation causes fewer than half as many adverse events as Galena’s supposedly improved version. GALE-401 fails on safety.
OK, Galena bulls ask, maybe there is a difference in efficacy, favoring GALE-401? Let’s see.
In Galena’s recent study of 18 patients, results showed:
Complete Responses in 7 out of 18 patients, a CR rate of 39%. Partial responses in 7 out of 18 patients, a PR rate of 39%, leading to a combined ORR (Overall Response Rate) of 78% (14/18).
How does this compare to generic Anagrelide? The study from 1992 showed complete responses in 13 out of 19 patients, for a CR rate of 68%. Partial responses in 3 out of 19 patients, a PR rate of 16%, leading to a combined ORR of 84%.
While the ORRs are close, generic Anagrelide is still superior. And comparing CRs, which is obviously the most important measure, generic Anagrelide outperforms GALE-401 by an astounding 174%. Cheap, generic, Anagrelide provides nearly double the rate of complete responses as Galena’s lame CR formulation.
Well, even if it is not as safe, and not as effective, maybe Galena’s Anagrelide CR will be more convenient for patients and improve compliance?
In the Galena study GALE-401 was taken by patients twice a day. In the generic Anagrelide study, surprise, the regular formulation was also taken twice a day.
Results are summarized in the table below.
Summary of Clinical Trial Results for Anagrelide and Anagrelide CR
Controlled release formulations are supposed to have a gentler side-effect profile, be equally if not more effective, and be more convenient for patients with less frequent dosing. Galena’s Anagrelide CR failed in every possible way. GALE-401 is a clinical joke.
Commercially, Galena’s track record is so poor it would be better if they had no record. Their first attempt, the re-launch of a me-too fentanyl product called Abstral, was both controversial and mind-bogglingly underwhelming. See a chart of recent drug (re)launches, including Galena’s Abstral, here.
Galena has touted GALE-401 as having a $200mm market opportunity (TAM). Back in January 2014 the company said:
GALE-401 has an estimated peak market size of approximately $200 million in the U.S.
But this is bullshit. The entire American market for Anagrelide in 2014 was barely $100mm. A prescription for generic Anagrelide can be purchased for about $25.00/month.
Prices for a One Month Supply of Anagrelide
The competitive landscape is fierce. Take a look at the current providers of Anagrelide in the US:
List of Current Manufacturers of Anagrelide Selling in the USA
Galena can hardly sell a highly addictive pain killer, how are they going to compete against a cheap generic, that works better, has a lower rate of side effects and is equally convenient with twice a day dosing?
Not that it matters, as Anagrelide CR is clinically irrelevant, but Galena has no IP protection in the US for GALE-401. From the most recent Galena 10K:
Anagrelide hydrochloride, the sole active pharmaceutical ingredient, or “API,” in GALE-401, has been approved for many years and, thus, it is not possible to obtain composition of matter patents that cover anagrelide hydrochloride. As a result, competitors who obtain the requisite regulatory approval can offer products with the same API as GALE-401, so long as the competitors do not infringe any formulation patents that we may have or may obtain or license, if any. The only patent protection that we have or are likely to obtain covering GALE-401 are patents relating to very specific formulations, methods using these formulations, and methods of manufacturing and packaging. We have two granted patents in the United Kingdom that expire in 2019 and we are prosecuting pending patent applications in other territories including but not limited to the U.S. and Europe, which may not issue prior to any potential commercialization of GALE-401.
GALE-401, just more lies from Galena management and their sell side shills, whoring themselves out for banking business.
If you haven’t been following the saga of sister companies Nanoviricides (NNVC), Cellceutix (CTIX) and Nanoantibiotics (NNAB) you have missed a fun few weeks. (Some background on Nanoviricides is here, read Duff McDonald‘s great piece in the New York Observer here and a fun blurb on NNAB at Barrons here).
Last week Mako Research published a devastating expose of Cellceutix on Seeking Alpha, read it here. Then, on Friday of last week the company issued a bizarre attempt at a rebuttal, aping the language of retail bagholders referring to Mako as a “Shorter”. Here is the full text of CTIX’s bizarre rant. Then on Monday of this week, the company issued yet more insane ramblings, here.
One of the many valid criticisms of CTIX is that the company historically claimed founder and President Krishna Menon received his PhD at Harvard. There are even signed financial statements submitted to the SEC containing such claims. Of course, to those who bothered to do simple background checks it was obvious this claim was a lie.
Scamceutix however, in Monday’s missive tries to explain it away as a mere “administrative error”. Says the company:
There was an administrative error stating that Dr. Menon earned his PhD from Harvard, when the fact is that Dr. Menon worked as a research scientist at Dana-Farber Cancer Institute. This error was corrected years ago.
Then how does the company explain away the fact that sister scam, Nanoviricides, claims Menon, their Chief Regulatory Officer, also got his PhD from Harvard?
“Administrative” Error Or Pattern Of Fraud?
And although CTIX claims the supposed error was “corrected” that is another lie. The company has not issued amended filings to correct the “administrative error”.
Extra credit assignment: Read this piece revealing the many lies of CTIX founder and President, and NNVC Chief Regulatory Officer Krishna Menon, here.
As part of our ongoing Institutional Memory series, here is another great piece by Christopher Byron, originally appearing on Bloomberg in August 2000. Abe Salaman makes an appearance, as does Yiddy Bloom.
Millionaire.com Is No Blue-Blood Company: Christopher Byron
8/16/00 (New York)(Commentary. Christopher Byron is a columnist for Bloomberg
News. The opinions expressed are his own.)Weston, Connecticut, Aug. 16 (Bloomberg) — Everyone knows
it’s great to be a millionaire. But forget about Regis Philbin
for a minute and just think instead about how much greater your
life would be if you could celebrate your seven-digit financial
status by owning a magazine devoted exclusively to the greatness
of millionaire-dom itself.
Impossible? Well, a mere $5.26 million looks to be the
current going price for exactly that opportunity — to see your
name at the top of the masthead, as owner, editor, publisher, or
whatever you might want to call yourself, of what else but
Millionaire magazine.
Does that sound like a deal to you? Since Millionaire
magazine happens to be owned by a company calling itself
Millionaire.com, whose 8.76 million shares outstanding are
currently selling for 60 cents each on Nasdaq’s OTC Bulletin
Board market, the prize would appear to be within the grasp of
the lowliest wretch clinging to the bottom rung of the
millionaire ladder.
Think of it. A mere $5.26 million and you’ll not only get
100 percent ownership of a magazine that features Bo Derek on its
current cover and is speckled with ads for all the stuff
presumably to be found in your typical millionaire’s toy box, but
you’ll also get a functioning Web site bearing the name of
what else but Millionaire.com. There’s even an actual bona fide
auction “venue” in South Carolina in the deal. This is where
millionaires presumably can come from far and wide to auction off
the diamond encrusted Patek Philippe watches they no longer want.`Get Me Ivana’
In short, you could be the person who fills the shoes left
empty by the departure of the late, great Malcolm Forbes, and
lift high the media world torch for rich folks seeking life’s
true meaning in a Streetrod golf cart with a tilt steering wheel
and a Kenwood CD/cassette stereo rig in the dash.
You could be the publishing world reincarnation of Robin
Leach. You’ll get to pick up the phone and say, “Get me Wayne
Huizenga …” or “Get me Ivana Trump …” and then get
yourself invited to lunch to discuss cover possibilities. You’ll
get to approve layouts, say witty things, hire a secretary named
Tiffany who doesn’t wear underpants. You’ll get to “take a
lunch,” schedule an “investigative piece” on Bohemian Grove,
talk about your friends at Allen & Co. You’ll get to claim to be
pals with Tina Brown. It’ll be champagne kisses and caviar dreams
24/7 (or was it the other way around?). Whatever. It’ll be great.
First, however, there are a few things you should know. As
is the case with many penny stocks, this one is connected to
people you most definitely won’t be wanting to put on the cover
of Millionaire magazine, and once you step in what these folks
leave behind them, you’ll never get the stink off your shoe.
We’re speaking in this case of one Abraham Salaman of
Philadelphia.Yiddy Bloom’s Friend
If the name Abraham Salaman rings the faintest of bells
with you it is perhaps because of a story I did on the old goat
back in December of 1997 when the market was really beginning to
boil and penny stocks everywhere were making new highs.
For anyone too young to remember the infamous Magic Marker
Corp. stock swindle that shook Wall Street a quarter century ago,
Abe was one of the men behind it. Back in those days Abe headed a
Philadelphia brokerage company called Delphi Capital Corp. His
buddies included Harry Blumenfeld (a k a “Yiddy Bloom”), a top-
ranked money man for the mob in Miami, who in turn was a friend
and business associate of the Mafia’s ultimate Mister Moneybags
himself, Meyer Lansky.
With these resources, Abe helped to set up and run a price-
rigging conspiracy that eventually involved over 20 individuals
who artfully — and illegally — manipulated the price of Magic
Marker’s shares from $6.50 to $30 over a 10-month period
beginning in 1971.Nolo Contendere
In time, the conspiracy collapsed and Abe wound up pleading
nolo contendere to a 31-count criminal indictment brought by
prosecutors for an organized crime strike force in Philadelphia.
He was charged with conspiracy, mail fraud and other related
charges. His nolo plea got him three years’ probation, a $5,000
fine and a three-year ban from involvement as a broker-dealer in
the securities industry.
Since then, of course, Abe has returned to the securities
business, and has been one way or another linked to a number of
penny stocks that have soared to nosebleed heights, then abruptly
crashed. He hasn’t been charged with anything, and is doubtless
as pure as new-fallen snow. Yet he just keeps turning up in these
curious deals.
There’s been an outfit called Neurocorp Ltd., which soared
from $1.13 to $20 in 1995-96 on plans to open a chain of memory
loss treatment centers. As soon as it hit $20, the stock keeled
over and collapsed, and is today selling for roughly $2.50 a
share. Abe was a big investor in the stock.American Interactive Media
In addition to his investment in Neurocorp, there’s been his
involvement in American Interactive Media Inc., which yo-yo’d
between $1 and $10 throughout the mid-1990s on plans to “allow
consumers to access the Internet over their television sets.”
Shares in the New York based company have since collapsed and are
now selling for 14 cents apiece. The company was founded by Mr.
Salaman’s son, Michael, and Abe himself hired a Florida stock
promoter to pump up the shares.
There’s likewise been World Wireless Communications Inc.,
which rose from $2 to $12 in 1997 on a telecommunications story,
then crashed and is now selling for $3. Abe held a big chunk of
that one too, as he did with others that erupted out of nowhere,
spurted into orbit, then crashed.
Now, it turns out, Abe was instrumental in putting together
Millionaire.com as a public company, helping to arrange for the
magazine, headed by one Robert White (the original creator of
Robb Report magazine), to be merged into an OTC Bulletin Board
company bearing the name Charter Investor Relations of North
America Inc. The deal was announced in December of 1998 and the
company’s stock soared almost instantly thereafter from $4 to
almost $26 per share. Then just as abruptly, it crashed, and 20
months later is now selling for 60 cents a share.`Fully Reporting’
Abe and a man who has turned up in various other Salaman
deals — one Lynn Dixon — were investors in the deal … all of
which we may know thanks to the company’s filing of a so-called
10-SB form with the Securities and Exchange Commission last
December. Through the filing, Millionaire.com, based in Hilton
Head, South Carolina, is requesting to become a so-called “fully
reporting” company, which is to say, to avoid being thrown off
even the OTC Bulletin Board and get dumped into the so-called
“pink sheets” where the most dubious investments on all of Wall
Street are to be found.
But whether the SEC will grant them full-filing status is
not yet certain. Subsequent to the December filing,
Millionaire.com has filed three separate amendments to the
document, the most recent of which is dated July 20, suggesting
that the SEC keeps raising questions about what it is being told
by the company.SEC Investigation
There’s good reason to do so, too, since even a casual
canter through the latest document reveals activities about which
investors in these shares might want to know more. It turns out,
for example, that Millionaire.com is currently the focus of an
SEC investigation. Company documents have been subpoenaed and
testimony from employees has been taken. Investors might want to
know what that’s all about, but the 10-SB filings give no further
details.
For what it is worth, my own hunch is that the SEC probe has
to do with the bizarre run-up — and equally sudden collapse —
in Millionaire.com’s shares between December of 1998 and March of
1999. At around that time, the Wall Street Journal reported that
Millionaire.com had been using the services of a Florida-based
stock promoter named Steven Samblis to handle its investor and
public relations, and noted that Mr. Samblis had earlier been
sued by the SEC for allegedly saying he was an independent stock-
picker when he was in fact getting paid by companies.
What the Journal did not report — doubtless because it
didn’t know of it — was an apparent link between Mr. Samblis and
our old friend Abe Salaman. The evidence? An autumn of 1997
newsletter published by Samblis that contained a glowing write-up
on Abe’s son’s company (the above-mentioned American Interactive
Media), suggesting that it could be “the next Microsoft.”
Thereafter, American Interactive began a rise that carried it
from around $3 to almost $9 a share, before crashing.The Financial Numbers
As revealed in the 10-SB, Millionaire.com’s financials are
exactly what you’d expect from a company with a total market
value of barely $5.26 million. The company has $578,000 of cash,
roughly $600,000 of negative working capital, and no net worth at
all. In the year ended December 1999, it collected net revenue of
less than $3.4 million and 20 percent of it went straight into
the pockets of the top four men as cash compensation and bonuses.
In the process, the company racked up operating losses of $6.2
million as $3.8 million of operating cash flew out the window.
So it comes down to this: For $5.26 million you can become a
pint-sized Malcolm Forbes and run around celebrating the triumph
of seven-digit wealth. And for a whole lot less than that you can
piggyback aboard the efforts of Mr. Robert White and his
fascinating backers to do precisely the same thing. Just
remember, you’ll be buying into more than you’re ever likely to
read about in the pages of Millionaire magazine — a lot more.
