Gilford Securities: Star Scientific - A Disruptive Science?
The report is 13 pages long and very positive from an investment banker that intends to provide services for Star.
In the normal course of business, Gilford Securities seeks to perform investment banking and other services for various companies and to receive compensation in connection with such services. As such, Gilford Securities intends to seek compensation for investment banking services from the subject company in the next three months.
The analyst and family members own shares of the subject company.
INVESTMENT SUMMARY Star Scientific was a controversial story for many years primarily because of litigation against Reynolds Tobacco (now Reynolds American – RAI – 46.27). Star was hopeful of winning significant litigation damage awards but that process is fraught with delays. Star now appears within weeks or months of enormously positive accomplishments in as many as four major arenas.
1) Explosive growth of Star’s Anti-Inflammatory Dietary Supplement Anatabloc, 2) Worldwide tobacco industry licensing revenue streams, 3) A potential settlement from Reynolds, and 4) Pharmaceutical industry partnerships A fifth possibility, potentially most important of all but not likely until the spring of 2013, will be results of clinical treatment for Alzheimer’s disease.
Each one of the five above has the potential to produce hundreds of millions of dollars of revenue and significant profit over the next several years – beginning later this year. Instead of being a mere single litigation speculation, Star’s Anatabine technology and its potential capability for controlling inflammation could become a truly “disruptive science”, possibly with dramatic impact upon several inflammation-related autoimmune diseases. (See sections “The Anatabine” and “Inflammation” on pages 3 & 4.)
One example of Star’s near-term potential: We believe it possible that a release of a Johns Hopkins University School of Medicine report describing positive test results from humans for treatment of thyroid diseases using Star’s Anatabine technology could cause sales of Star’s Anatabloc anti-inflammatory tablet (now on the market over-the-counter) to skyrocket from virtually nothing today to an annual run-rate over $400 million (with profit of $200 million or $1.00 per share) in 2013. (See “2013 Estimates” page 6.) Test results from Hopkins are expected to be released this third (September) quarter. We hope August.