4. Shooting Star Scientific
Make way, Manti Te'o. You have company -- and it's very much real.
Like the Notre Dame linebacker who lied about his fictional girlfriend, Star Scientific (STSI) misled investors about the involvement of Johns Hopkins University in the clinical testing of the company's retail nutritional supplement anatabine. TheStreet's own biotech ax Adam Feuerstein snared the company this Wednesday for fabricating a link between the well-respected school and anatabine, which accounted for a disappointing $1.7 million of Star's sales last quarter.
Star reported initial interim results from a clinical study of anatabine as a potential treatment for thyroid disease on Jan. 7. The company claims the study succeeded, but Feuerstein points out that it failed to disclose any real data. Star's press release included a promotional quote about anatabine from Dr. Paul Ladenson, described as a "senior endocrinological consultant" for the study."Ladeneson's real job is director of the Division of Endocrinology and Metabolism at Johns Hopkins School of Medicine. He's a thyroid disease expert," says Feuerstein. "Why did Star Scientific omit Ladenson's academic affiliation from its Jan. 7 press release? Likely because, as Desmon made clear, Ladenson's role in Star Scientific's anatabine thyroid disease study had nothing to do with Johns Hopkins." So who is the "Desmon" to whom Feuerstein is referring? Is that another imaginary figure? Not in the least. That person is very real, indeed. In fact, she's the person putting the kibosh on Star's silly hype. "The Antabloc Supplementation Autoimmune Prevention [ASAP] clinical study was not conducted at or approved by Johns Hopkins," said Johns Hopkins' spokesperson Stephanie Desmon. "We do have guidelines about such things and he [Ladenson] is in violation here." She added that Johns Hopkins has started an inquiry into the matter. Shares of Star Scientific sank over 10% Wednesday on the heels of Feuerstein's report even as the broader market spiked. Yep, it doesn't get much realer than that.
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