I'd gladly pay you Tuesday for an AIDS cure today.

Hollis-Eden

(HEPH)

shot up last Thursday after a media report came out that a South African researcher named, of all things, Wimpie du Plooy hailed a compound related to one of its own drugs. He was quoted as saying: "We may have found a cure for AIDS." Day traders, looking at a site called

Dayinvestor.com

, which published the dispatch, spurred the stock to close at 20, adding more than 15%. Hollis-Eden, distancing itself from the comments, says it doesn't know du Plooy and has no control over the study he discussed.

Another surprising development in recent weeks has also given the stock some mo'. Rick Beleson, the respected health-care investor from

Capital Research and Management

, led a $13 million private placement in Hollis-Eden. Company supporters hail this as the first major endorsement from a credible Wall Street source with expertise in health care. Beleson declined to comment, citing his firm's policy.

Continuing to run Monday, up 11/16 to 21 7/16, the little shop from not-so-Edenic San Diego now has a market capitalization of about $225 million.

Alas, there are reasons for caution. Hollis-Eden sports drugs that conform to the hoary class of "cure story": immune-system modulators. It's a tale that stokes the imagination of investors. The wonderful thing about an immune-system booster is that it can appear to have utility and promise in any disease; the problem is that cures for everything often are cures for nothing.

One doctor who works for a New York hedge fund that is short Hollis-Eden says: "I've been speaking to the company, and they've been very closemouthed about whether they have any evidence" that its drugs work. The doctor is unimpressed with the scientific explanations of the company's work furnished in its investor materials: "You can see the pseudoscientific language this is couched in. It's gibberish, gobbledygook."

James Frincke, the company's vice president of research and development, says, "I enjoy this story. It's kept people away from this area of study. It's given us the room we've needed. Our story is about to be released. The bear story has been a good story."

Hollis-Eden's lead candidate goes by the name of

HE2000

. It's a cousin of DHEA, the over-the-counter remedy once hailed as a cure for anything and everything under the sun. "It's a mistake to relate the two" different compounds, Frincke says. DHEA is a steroid that regulates similar hormones, but it has a different structure, he says. "We've redesigned it, remodified it to make it much more potent," says Richard Hollis, chairman and CEO.

The hedge fund doctor says it's widely known that many different steroids can boost the white-blood cell count, which could give the perception of effectiveness. But the doctor says, "I don't know of any evidence that

the compound can impair viral replication or increase CD4 counts," the specific type of white-blood cells that help fight off HIV.

And in fact there isn't -- at least not yet. There have been publications on the class of compounds, but there have been no published papers in peer-reviewed journals on HE2000. There have been no presentations at scientific meetings to date. There have been no completed human studies of the drug. The company says that no established players are working in this area of antiviral work.

Wait two weeks, says the company. Then, a study in macaques will be presented at the

International Conference on Antiviral Research

, a major infectious diseases meeting in Jerusalem March 24. The company, citing the conference's embargo policy, declined to furnish a copy of the abstract or to comment on the data. But it will make public the details of the compound then.

One area of worry is that research hasn't moved too quickly on the compounds. The progenitors of the HE2000 compound were synthesized in the early 1980s by an Irish scientist named Patrick Prendergast. Prendergast, unaffiliated with any university or major research outfit, founded two Irish companies. Hollis-Eden licensed the compounds from Prendergast's companies.

The

Food and Drug Administration

just this year OK'd HE2000 for human testing. The company is about to start a study with 48 patients.

Also worrisome for the longs is the financial pedigree of the company, which makes short-sellers' eyes bulge. Hollis-Eden went public in March 1997 through a reverse merger, rolled up into a shell company called

Initial Acquisition

. The firm at first was traded as an over-the-counter bulletin board stock but moved to the

Nasdaq SmallCap Market

late last year. A reverse merger with a bulletin board stock requires far less rigorous

Securities and Exchange Commission

disclosure than an initial public offering on a major exchange. "In a precarious IPO market, it was a sure way of getting funded. I'm not the biggest proponent of these, but it was the right thing for us to do," says Hollis.

He adds, "If you take our scientific team, our business team, our legal team, what our molecules are about to show, our strong balance sheet, our minimal dilution, people will look backward and think how smart this will have looked. We have visionary leaders on the business side and innovative science on the scientific side."