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Cellceutix -- >>> With new president and focus on big investors, Cellceutix aims for the Nasdaq



Aug 17, 2016

Don Seiffert

Boston Business Journal



http://www.bizjournals.com/boston/blog/bioflash/2016/08/with-new-president-and-focus-on-big-investors.html?ana=yahoo




A year after a scathing attack by an anonymous short seller thwarted plans to jump to the Nasdaq, Beverly biotech Cellceutix is hoping a new president with a big pharma background will jumpstart its transformation from a company that’s been mostly ignored by big investors.

Arthur Bertolino has been named chief medical officer at Cellceutix as the company aims at finding partners for its drugs and attracting institutional investors.

In June, Cellceutix (OTC: CTIX), which employs 14 people, named Arthur Bertolino as its first president and chief medical officer. In an interview last week at the company’s headquarters, CEO Leo Ehrlich called Bertolino — a former Novartis (NYSE: NVS) and Pfizer (NYSE: PFE) executive — “the new face of the company,” saying he’ll head up efforts to forge partnerships on its drugs.

For his part, Bertolino said he was impressed that Cellceutix has “three major assets that are all going in the right direction,” as opposed to just one at many biotech firms of a similar size.

Those three drugs make Cellceutix a rarity among small biotechs (the company spent just $9.5 million in the nine months that ended in March 2015). And Ehrlich is planning to pitch that fact this week with a road show aimed at attracting the 9-year-old company’s first-ever institutional investors. His goal is to bring the company’s stock price above $2 a share for the first time in a year, allowing it the make the leap from being traded over the counter to the Nasdaq exchange.

That was also the plan a year ago, but a blog by a short-seller writing looking to drive down the company's share price delayed it. Biotechs that are traded over-the-counter are particularly susceptible to such attacks, and the blog — written under the name Mako Research and posted on investor website Seeking Alpha — appeared to convince some investors that not only are Cellceutix’s drugs worthless, but that the whole company is a sham. Many of the claims were shown to be false, and Cellceutix fought back against a lawsuit that appeared to be based entirely on that blog post (it was filed a few hours after the blog appeared). A judge ruled in the company’s favor in June.

The company is pursuing sanctions against that New York firm, Rosen Law Firm, which did not respond to a request for comment for this article. Ehrlich contends that his company’s countersuit against Rosen has dampened such short-seller attacks in the industry.

“The frivolousness of the lawsuits that were starting to happen — I think we may have brought things back into center... I’m hoping things have changed for the better,” he said.

But the company still faces an uphill battle. The fact that it’s traded over the counter makes it immediately suspect in the minds of many investors, and its frequent press releases announcing milestones that most biotechs wouldn’t bother to mention probably don’t help.

Its drugs, however appear promising. The include:

?A cancer drug called Kevetrin, which just finished Phase 1 trials. Bertolino said he’s hoping to start a Phase 2a study this fall. Right now, he’s not looking for a clinical effect, only to further study how the drug acts on a protein that plays a role in tumors known as p53. Kevetrin will eventually be tested against ovarian cancer, but the current formulation has too short a half-life to show a clinical effect.

?An antibacterial and anti-inflammatory drug called Brilacidin, licensed from the University of Pennsylvania after a bankruptcy for $5 million. The drug has shown effectiveness against acute bacterial skin and skin structure infections, and is now being tested in ulcerative proctitis. The company is planning to discuss details of a possible Phase 3 trial with the Food and Drug Administration this fall.

?Prurisol, a pill for the treatment of psoriasis. Bertolino says is could be a complement to infusion-only drugs, and would compete with a pill called Otezla, sold by Celgene Corp. (Nasdaq: CELG). Prurisol is now in Phase 2b trials, the goal of which is to determine the best endpoints for a Phase 3 study.


Ehrlich is confident that the promise he sees for the company’s ability to attract high-profile partnerships will be reflected in the stock price in coming months.

“If you compare it to other companies, I think we’re undervalued,” he said. “The fact is, we have not missed the primary endpoint of any trial that we’ve done to date.”

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