VIENNA, Va. ( TheStreet) -- Cel-Sci ( CVM) is trying to generate some retail investor buzz over a preclinical study of the company's experimental LEAPS-H1N1 flu drug being conducted at Johns Hopkins University School of Medicine.

Cel-Sci has done this before -- many times. The company heralds the start of a new project involving its LEAPS immunotherapy technology, which purports to use a patient's own immune system to fight off a disease. Typically, the new project includes a prestigious partner -- an academic institution or a government agency -- to lend some clout.

But months or years pass and these LEAPS drug developments fizzle out or fade away, never to be mentioned again. Sometimes, early "results" are announced, and, of course, they're always positive and promising, but there's never any follow-up, excluding the inevitable follow-on stock offering to raise more cash.

I put together a list of Cel-Sci's drug development projects and partnerships involving its LEAPS vaccine technology, going back to 1996. Notice that Johns Hopkins has worked with Cel-Sci in the past on a vaccine approach to treating heart disease. The Hopkins researcher on that long-stalled or otherwise shelved project, Dr. Neal Rose, was quoted Tuesday in an article on LEAPS-H1N1 posted to the Web site of MIT Technology Review.

So, was researcher and frequent Cel-Sci collaborator Ken Rosenthal of Northeastern Ohio Universities College of Medicine. Unfortunately, none of Rosenthal's LEAPS projects seem to go anywhere.

If Cel-Sci sticks with the same playbook, don't be surprised to see a press release in the coming months announcing promising, positive results from the LEAPS-H1N1 study. Cel-Sci will claim that FDA officials are excited and want to fast-track the drug into human clinical studies. Retail investors will respond like lemmings and push Cel-Sci's share price higher. The company will take advantage by selling stock from its recently filed, $40 million shelf registration statement. The LEAPS-H1N1 vaccine will then slowly fade away as Cel-Sci executives move on to trumpet the next big thing.

This is the Cel-Sci way, as the list of aborted or disappeared LEAPS drug projects below attests:

  • August 1996: Cel-Sci signs agreement with U.S. Navy on a malaria vaccine collaboration.
  • October 1996: Cel-Sci and Northeastern Ohio Universities College of Medicine sign an agreement to develop a herpes virus vaccine.
  • January 1997: Cel-Sci receives a Maryland state grant to develop a test for tuberculosis.
  • July 1997: Cel-Sci announces development of a potential AIDS vaccine for worldwide use.
  • September 1997: Cel-Sci signs agreement with the National Cancer Institute to test a cancer immunotherapy for prostate and breast cancer.
  • October 1997: Cel-Sci says LEAPS vaccine technology effective against multi-drug resistant tuberculosis.
  • April 1998: Cel-Sci introduces LEAPS vaccine technology at a scientific conference.
  • May 1998: Cel-Sci receives government grant for vaccine against herpes virus.
  • July 1998: Cel-Sci receives more State of Maryland grant money for tuberculosis test.
  • October 1998: Cel-Sci and University of Nebraska collaborate on HIV vaccine.
  • Jan. 1999: State of Maryland funds Cel-Sci effort to develop tuberculosis vaccine.
  • September 1999: Cel-Sci creates a separate company, MaxPharma, to develop the LEAPS. vaccine technology.
  • November 1999: Cel-Sci collaborates with John Hopkins University on a vaccine for heart disease (myocarditis.)
  • June 2000: Cel-Sci and the National Cancer Institute form collaboration to develop HIV vaccine.
  • October 2001: Cel-Sci and BioMedex partner to develop rapid screening test for anthrax.
  • December 2002: Cel-Sci signs agreement with University of Arkansas Medical Center to evaluate Cel-1000 against genital chlamydia.
  • January 2003: Cel-Sci says Cel-1000 has potential as a broad bioterrorism vaccine.
  • April 2003: Cel-Sci and Northeastern Ohio Universities College of Medicine receive grant to develop Cel-1000 against viral encephalitis.
  • April 2003: Cel-Sci receives grant from National Institutes of Health to develop vaccine treatment against heart disease.
  • April 2003: Cel-Sci says Cel-1000 effective against virus that causes Severe Acute Respiratory Syndrome (SARS).
  • June 2003: Cel-Sci says Cel-100 has potential as vaccine adjuvant.
  • June 2003: Cel-Sci signs agreement with the U.S. Army and the National Institutes of Health to develop a vaccine against SARS, Smallpox, Vaccinia and West Nile Virus.
  • April 2005: Cel-Sci says Cel-1000 effective against viral encephalitis.
  • December 2005: Cel-Sci signs agreement with National Institute of Allergy and Infectious Disease to test Cel-1000 against avian flu virus.
  • September 2008: Cel-Sci says new vaccine, Cel-2000, active against rheumatoid arthritis.
  • April 2009: Cel-Sci says LEAPS vaccine technology shows potential as a treatment for H1N1 virus.
  • November 2009: Cel-Sci and Johns Hopkins University School of Medicine collaborate to test LEAPS -H1N1 vaccine as treatment against H1N1 flu.

BioCryst Bull Blames Conspiracy for Stock's Fall

(At 6:45 AM ET)

BioCryst Pharmaceuticals' ( BCRX) stock price has been falling for some very obvious reasons: (1) Requests from doctors for its H1N1 flu drug peramivir has been weaker than expected; (2) H1N1 flu activity in the U.S. has been on the wane; (3) foreign governments have not yet purchased large stockpiles of peramivir; and (4) BioCryst pushed through a five million-share, discounted stock offering despite evidence that demand from institutional investors wasn't all that high.

Yet, apparently, none of these reasonable explanations for BioCryst's recent woes satisfies Michael Murphy, the investment newsletter author and outspoken BioCryst bull.

Murphy believes a vast conspiracy of government agencies and Wall Street evildoers have joined forces to destroy BioCryst. Murphy laid out his accusations in a letter he wrote to BioCryst management, a copy of which he posted to his subscribers-only Web site Monday.

"I know that some of what follows probably will seem conspiratorial or paranoid. But as the old joke goes, it isn't paranoia if they really are out to get you," writes Murphy.

So, who's out to get BioCryst, according to Murphy? Short-sellers and hedge funds, naturally, but also certain unnamed officials at the Food and Drug Administration and the Securities and Exchange Commission, who have been "captured" by the hedge funds, Murphy alleges.

Morgan Stanley, BioCryst's investment banker and the lead underwriter of the company's recent offering, employs someone who is "dangerous" to BioCryst because he or she is working from the "short's playbook," claims Murphy.

In his letter, Murphy accuses independent health care analyst Kevin McNamara of BioLogic Research -- a critic of BioCryst with a "sell" rating on the stock --- of being paid to write negative research reports on BioCryst, a practice Murphy describes as "illegal."

Finally, "paid bashers," some of them residing in India, are also using the Yahoo! stock message boards to attack BioCryst, alleges Murphy.

Murphy doesn't provide any evidence in his letter to back up his claims but he concludes by urging BioCryst management to, "quietly complain to the SEC that you seem to be targeted by a RICO conspiracy to drive down your stock and damage the company. Do not put out a press release on this, as that just alerts the bad guys."

In response to Murphy's accusations, BioLogic's McNamara told me via email that, "BioLogic doesn't disclose contracts that don't exist nor does it take marching orders from anyone. In contrast to Murphy's business, which is tethered to the number of subscribers he can shepherd into his personal portfolio of hot stocks and the amount of hype he can generate to support those stocks, our business lives or dies based on the quality of our research."

McNamara added, "Moreover, the only 'conflicts' of interest that BioLogic doesn't disclose are those that arise when our paying clients, who frequently have long positions in stocks that we have sell ratings on, disagree with our opinions."

Murphy is a veteran technology and biotech stock newsletter writer with a long-term track record described as " grim" by Peter Brimelow, a MarketWatch investment newsletter columnist. Brimelow did praise Murphy for having a good 2009.

More recently, Murphy has been trying to attract subscribers to his newsletter with an investment scheme in which traders try to parlay $2,000 into $1 million by October 2010 through a sequence of stocks. Starting with profits made from an investment in Dendreon ( DNDN), Murphy has recommended investors buy BioCryst, Electro-Optical Sciences ( MELA), Paramount Gold & Silver ( PZG) and Arena Pharmaceuticals ( ARNA).

Murphy deserves credit for recommending BioCryst early, before the stock began its recent H1N1-induced upward trajectory. But Murphy also has told his subscribers that BioCryst is worth $30, and with the stock nowhere close to that price, he's going far afield to blame others for its under-performance.

Last September, Murphy accused the FDA of complicity in the deaths of children from H1N1 because the agency had not yet approved an expanded use of BioCryst's flu drug peramivir.

In October, Murphy responded to a post on the Schwitzer Health News Blog by accusing BioCryst's Big Pharma competitors (presumably Roche and GlaxoSmithKline ( GSK), makers of other flu antivirals) of pressuring the FDA to delay peramivir's approval.

-- Reported by Adam Feuerstein in Boston.
Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.