Uphill Battle for Cellceutix Corp (OTCMKTS:CTIX) Stock

Uphill Battle for Cellceutix Corp (OTCMKTS:CTIX) Stock

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Cellceutix Corp (OTCMKTS:CTIX) is an interesting story, where basically a short seller wrote a damaging article on Seeking Alpha, who had zero credibility, and then CTIX tanked. The information was totally false, but shares took a long time to recover and get footing as investors were spooked and exited like the wind.

Logically the company fought back against the fraudulent news from the short seller and went after the law firm who backed the false information. Unfortunately the judge did not level any sanctions against the law firm. A New York federal judge declined to impose sanctions against the Manhattan based Rosen Law firm after they pursued a failed fraud case against Beverly-based Cellceutix based in part on negative blog posts written by an anonymous short-seller. The complaint was filed in September 2015, about one month after the investor website Seeking Alpha published an article about Cellceutix by a short seller using the pseudonym Mako Research. The article questioned the scientific basis of Cellceutix’s drugs and said that it appeared to be a “shell company” run out an empty office building.

Cellceutix Corp (OTCMKTS:CTIX) is clinical stage biopharma who develop therapies with dermatology, oncology, anti-inflammatory and antibiotic applications. They recently talked about the development plan for Brilacidin. Brilacidin is the Company’s flagship defensin-mimetic compound that has successfully completed a Phase 2b trial for Acute Bacterial Skin and Skin Structure Infections and is currently in two separate Phase 2 trials, for Oral Mucositis and Inflammatory Bowel Disease.

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CTIX has in recent weeks provided interim results from both studies showing safety and preliminary indications of clinical benefits that have exceeded the Company’s expectations.  Upon acquiring Brilacidin in 2014, Cellceutix followed the same course as the prior owners of the compound by focusing development on its antibiotic properties, ultimately successfully completing a Phase 2b study demonstrating similar efficacy and safety of Brilacidin (0.6mg/kg IV; single dose) to the blockbuster antibiotic daptomycin in treating ABSSSI.

Lab research concurrent to antibiotic trials provided equally impressive data on the anti-inflammatory and immunomodulatory properties of Brilacidin. These data underscored broadening the scope of research to build the franchise, developing formulations and initiating mid-stage trials aimed at the indications of preventing radiation-induced OM in Head and Neck cancer patients and inducing remission in UP/UPS.

Cellceutix is encouraged by the interim data from the OM trial (a double blind, placebo controlled study), given the fact that there are no FDA-approved drugs for the prevention of OM in the study population.  According to the preliminary interim results from the trial, only 2 of 9 patients (22.2%) on Brilacidin-OM therapy developed severe OM, defined as Grade 3 or Grade 4 on the World Health Organization (WHO) OM Grading Scale.  Patients in the placebo-treated control arm developed severe OM at a much higher rate, with 7 of 10 patients (70%) progressing to that condition.  There are now an additional 11 patients active in the trial and more are added weekly.

In recent months, the number of study sites in the OM trial has been increased and enrollment is accelerating. Cellceutix has moved through this trial methodically, waiting to increase trial sites to conserve capital until research provided additional support to the potential of the anti-inflammatory and immunomodulatory properties of the drug candidate.  As we saw signs of patient benefits in our open label UP/UPS trial, we started increasing the number of sites in the OM trial to hasten progression. Now that supportive data have been collected, efforts to expedite enrollment even faster are being implemented. In 2015, Cellceutix’s Brilacidin was granted FDA Fast-Track designation for the OM indication. Should the study conclude with similar results to those of the preliminary interim, we intend to seek FDA Breakthrough Therapy designation. Cellceutix expects the OM trial to be completed in 2017.

The Phase 2 UP/UPS trial continues to progress quickly and produce outstanding data, but the most important part of the story is that CITX is back in the business of conducting useful trials. It important to remember that the wasted focus short-sellers attach to these small stocks can be damaging.

It is important to do more than surface research on these story stocks, there are so many haters out there who can damage companies doing great work and solving real problems.

These short seller frauds are only looking for profits, and will go to any length to fatten their wallets. Even lazy judges don’t seem to want to help good companies, but the best thing to do is do some research, call the company and learn as much as you can about these stocks from writers and journalists without agenda, and you can always find that here. For continuing coverage on shares of $CTIX stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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