Innovation Pharmaceuticals Inc (IPIX)

[MinnieM]

Valid, but, surprising questions. Most retail investors can't short penny stocks without going to great expense. The risk reward isn't worth it. And, then, there is the problem of finding the shares to short. I have an Interactive Brokers (IB) account and fully understand that game.

What surprises me is that you haven't done your own DD if you have an account large enough to be able to short a penny stock? Lack of time perhaps?

Anyway, I'll make a rough attempt at answering since I'm dealing with a lack of time at the moment. But, feel free to ask away if you have other questions. I'm sure someone will answer. ;) That's what the board is for. Discussion both pro and con. It's the way we learn. ;)

Your questions are in italics.

Questions.

I am primarily a short seller and CTIX is hitting some of my scans. It looks fishy, but I haven't done enough work to have any firm conclusions. So I hope the board can jumpstart my research by addressing some of the red flags I see:

1. How can they actually develop drugs with only $124k of cash (in last 10Q). Most biotechs in early stages have millions to fund their research programs and trials.

It’s obvious that CTIX can’t fund this on their own. There must be some deep pockets involved here. That in itself is a reason to go long. The current trial is being done at Harvard’s Dana Farber. Harvard itself has endowments. Pfizer is well aware of Kevetrin™ and some think they may be funding the trials. Based on a pr in May, Beth Israel Deaconess Hospital is covering the costs of their research on Kevetrin™ in combination studies with Pfizer drugs on an upcoming trial. Another clue that Pfizer may be involved with some of the funding on this one. All we know for sure is that CTIX isn’t putting much up for the trials, which indicates some deep pockets are stepping in to help. Following deep pockets usually pays off.

2. How can they actually develop these drugs when they spent only $185k of R&D in last reported quarter. Most biotechs spend millions per quarter.

See answer to #1

3. Why is there no analyst coverage? They presented at Rodman. They need money. If their drugs have any real potential why are analyst not fighting with each other to put on the strongest "Buy" rating possible?

It’s still an OTC stock under $5 without the first trial completed. After $5 you’ll see analysts and news articles like crazy since it won’t get there unless these drugs work on humans. Plus, some are short sighted and wait for PDUFA dates.

4. Why have they named their drugs even though they aren't past phase I? Normally companies don't name drugs until Phase III or even FDA approval as such a small percentage progress that far.

The naming may fall hand in hand with the patent creation. They also feel very strongly that the drug will work.

5. Why are they putting out interim updates on Phase I studies? Phase I is just safety. Positive Phase I results aren't that big of a deal. It will be good if the drug doesn't kill anyone, but the sample size is far to small to produce any kind of statistically significant results on efficacy. So what is the point of putting out PRs for small steps in a study Phase that isn't even that big a deal when it is done?

Most chemotherapy drugs show toxic effects during phase I. A PR confirming human tolerability and lack of toxicity at starting dose is wonderful. As a shareholder, I’m delighted the company keeps us up to date.

Plus, in this case they are looking for secondary findings.

Following are some links and information to help you in your DD:
http://cellceutix.com/
Company Address:
100 Cumming Center, Suite 151-B
Beverly, MA 01915
978.236.8717 Phone
978.921.6564 Fax
E-mail: [e-mail]

CIK: 0001355250

SEC filings: http://www.sec.gov/cgi-bin/browse-edgar?company=Cellceutix+Corp&match=&CIK=ctix&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany

OTCQB: http://www.otcmarkets.com/stock/ctix/quote
Recent News: http://finance.yahoo.com/q/h?s=CTIX+Headlines
Clinical trials: http://clinicaltrials.gov/ct2/show/nct01664000?term=kevetrin+rank=1
Management: http://cellceutix.com/team/
Product Pipeline: http://cellceutix.com/pipeline

From the CEO’s Desk: The Best Is Yet To Come
http://cellceutix.com/best-yet-to-come/