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Biotech Stock Mailbag: Star Scientific

BOSTON ( TheStreet) -- Star Scientific (CIGX) and claims about a cure for Alzheimer's disease lead off this week's Biotech Stock Mailbag.

Via Twitter, @superduty03 asks, "Why no comment on $CIGX and their compound RCP-006 that has the potential to treat Alzheimer's?"

Star Scientific hasn't revealed much about RCP-006 and published research is scarce. "Compound" is an appropriate way to describe RCP-006 because it is not a drug. Star refers to RCP-006 as a "nutritional supplement." RCP-006, also known as anatabine, is a naturally occurring compound isolated from nicotine.

Best I can tell, most of the excitement around anatabine comes from a Seeking Alpha column written by James Altucher in which he claims that anatabine is a cure for Alzheimer's. Altucher is a smart guy so I think he was being a bit cheeky; he knows full well there is no scientific evidence yet to back up a claim that anatabine cures Alzheimer's. His column, despite the enticing headline, doesn't offer any proof, either. Instead, Altucher says a recent Star Scientific press release announcing the start of a small human trial of anatabine is actually a coded message to investors: Anatabine is an Alzheimer's cure! Altucher is long Star Scientific.

Full disclosure: Altucher and I are former colleagues at TheStreet. During his tenure at TheStreet, we agreed on some biotech stocks, and disagreed on others. Were he still working here, we'd be disagreeing about Star Scientific. Anything is possible, so sure, anatabine might one day be a cure for Alzheimer's, but it's very premature to make such a claim since this nutritional supplement (not even a drug) has not yet been tested in humans, let alone humans with Alzheimer's.

Nicotine is known to increase alertness and concentration in smokers by activating certain receptors or "volume knobs" in the brain that turn up levels of key neuro-transmitters. Anatabine, as a compound found in nicotine, may play a role in this neuro-stimulatory process.

Whether or not a drug that activates neuronal nicotinic receptors, also known as nicotinic acetylcholinase receptors, can have a beneficial effect on diseases like Alzheimer's, depression, Parkinson's, inflammation and others is not known, but research is ongoing. Any investor truly interested in this area of drug research should take a look at Targacept (TRGT), which is developing a very promising late-stage drug against depression in partnership with AstraZeneca (AZN). Targacept's pipeline also includes an Alzheimer's drug.

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