Cellceutix Comes Out Swinging After Anonymous Seeking Alpha Blog Post

August 10, 2015
By Alex Keown, BioSpace.com Breaking News Staff

Beverly, Mass.-based Cellceutix called an anonymous article posted on the financial website Seeking Alpha that challenged the credibility of the company as “ludicrous, rambling and totally inaccurate.”

Responding to the article on Seeking Alpha, which allows posters to remain anonymous, Cellceutix said “the egregious article is so fraught with inaccuracies about our drug candidates and biotechnology in general veiled under the pretense that some anonymous so-called expert consulted in review, that it is our responsibility to respond at length to the publisher seeking to have the defamatory article removed.”

Additionally, Cellceutix refuted the article posted on Seeking Alpha point by point, particularly refuting the scientific evidence the Seeking Alpha writer claimed about Brilacidin and also showing their own evidence that their offices are manned.

In a scathing report posted last week, the anonymous analyst known only as Mako Research, alleged Cellceutix is a shell corporation that exists as a ponzi scheme and challenged the company’s drug pipeline. Cellceutix is a biopharmaceutical company developing therapies for oncology and dermatology. In his posting on Seeking Alpha the writer added that Cellceutix is “the worst public company he has ever seen.”

Following the publishing of that article on Seeking Alpha, the company’s stock dropped about 40 percent, but have somewhat recovered, the Boston Business Journal reported. Additionally the Journal noted the author of the piece is a stock shorter, or one who profit when a company’s stock declines in value.

“It is disheartening to me that some shareholders may have sold their shares based on this article,” Cellceutix said in a statement responding to the article, which it described as a hit piece.

In the Seeking Alpha post, the anonymous writer alleged the Cellceutix offices were not manned during the business day and that one of the company’s drugs, Brilacidin, an antibiotic candidate, was “without merit.”

Following the report on Seeking Alpha, the Rosen Law Firm said it was investigating potential securities claims on behalf of shareholders. The firm said it was preparing a class action lawsuit against the pharmaceutical company for investors who purchased the stock prior to Aug. 6.

In better news for Cellceutix, the company said it found its lead product Kevetrin is being well tolerated in human trials. The company added some patients have reported tumor stabilization during the safety trial.

“Regarding the Kevetrin cancer trial, it is an important trial with one patient now entering the eleventh month of therapy. We are planning to finish this study and issue an update as soon as possible. The recent grant of an Orphan Drug status for treatment of ovarian carcinoma gives me the opportunity and pleasure to address shareholders as to why the FDA granting an Orphan Drug designation for Kevetrin may have been a relatively easy decision,” Cellceutix said.