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Biotech Stock Mailbag: Vivus

Moore and I go way back to the early aughts. (Hey Tom, we meet again!) His primary job at Biopure was to (allegedly, per the SEC) make repeated false and misleading statements about Biopure's efforts to gain FDA approval for its human blood substitute Hemopure.

In 2003, FDA informed Biopure that it had rejected the Hemopure approval application. Moore didn't tell investors about the rejection. Instead, he told investors that Hemopure was still on track for approval! Biopure's stock went up and the company raised more money. Later the truth came out about Hemopure and Biopure's stock price plummeted. The SEC launched an investigation, leading to civil charges being filed against Moore. Eventually, SEC reached a settlement with Moore, which is why all the charges that Moore lied and misled investors are still just legal "allegations."

For some reason, the SEC didn't bar Moore from serving as an officer of a publicly traded company, even though what he did to investors was worse, in my opinion, than the crimes committed by Martha Stewart or Sam Waksal.

I take the Moore situation personally, I'll admit, because it was my reporting about Hemopure that largely uncovered all the problems with Hemopure and Moore's alleged role in Biopure's eventual demise.

So to my surprise and horror, Moore is still around running Advaxis, a tiny cancer vaccine company trading on the bulletin boards. I had no idea. I'm not familiar with Advaxis but are there really any reasons to dig further when you know that Advaxis' board thought it wise to hire a guy like Moore as CEO?

More Twitter. @Pelion2001 comments, " Cell Therapeutics (CTIC - Get Report) got the votes -- another rabbit out of the dilution hat."

That's right. Cell Therapeutics won shareholder approval to raise the number of authorized shares to 1.2 billion from 800 million. Congratulations, this means Cell Therapeutics CEO Jim Bianco now has another 400 million shares to sell to hedge funds and stock flippers at less-than-market prices. The coming financings will keep the lights on at Cell Therapeutics for a little longer while existing shareholders get diluted.

What the new shares or cash will probably not do is change the company's lousy fundamentals.

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