Science Fiction? How CellCyte Shares Soared
5 CommentsBy Ed Silverman // December 10th, 2007 // 3:27 pm
This is the sort of tale that gives biotech a bad rap, in our view.
For years, the founders of CellCyte Genetics relied on infusions from angel investors to keep their tiny startup afloat. But after the Seattle biotech combined with a moribund public company, its shares rocketed this fall in the loosely regulated over-the-counter (OTC) market and on Germany’s Frankfurt Stock Exchange, writes Angel Gonzalez in The Seattle Times.
A wave of glossy brochures and spam faxes, touting CellCyte with lofty claims, has helped propel its total market value to more than $440 million, which is greater than many biotechs in the Seattle area that are far more advanced in developing therapies, the paper writes. Suddenly, the two founders each have a stake worth about $137 million, the paper notes. Last March, the stock traded at $4.75 and today trades around $7.36.
The barrage of hype has been bankrolled, to the tune of hundreds of thousands of dollars, by an outside stockholder - a man whom Canadian securities regulators have barred from their industry for 15 years. Gary Reys, CellCyte’s ceo (see photo), says he is not concerned about that history, and insists he has no role in the promotional push. He says the skyrocketing trading volume is simply an “amazing” show of investor confidence in his company’s technology for manipulating stem cells, which is still a year away from its first early-stage clinical trials, according to the Times.
CellCyte bought an inactive British Columbia mining company whose stock trades in the OTC market in the US, and completed a private placement that let a well-known Canadian promoter of penny stocks acquire millions of shares, the Times writes. A few months later, the spamming began.
As Reys says, amazing.
You can read the rest here
Rami Grunbaum
Ed - I’m glad you found the Seattle Times story on CellCyte worthwhile reading, but you don’t have the right to post in its entirety something it took our reporter two weeks to put together. Please respect his work, and put up a short reference with a link to the rest of the story.
Rami Grunbaum
Deputy Business Editor
The Seattle Times
Ed Silverman
Hi Rami,
Let’s try to clear up the confusion. I posted the story with a link at the top and the bottom, clearly noting this story is according to The Seattle Times. And throughout the piece, I referenced the paper with phrases such as, “…according to the paper,” “…tells the Times,” or “…tells the paper.” What I didn’t do initially, but have added, is the ‘block quote’ function, which does a better job of making clear this is entirely from the paper. I’ve also added the reporter’s name, so the world knows he was the one who wrote the story for your paper.
I didn’t hold this out as my own work, though. This site is set up so that posts have my byline, but that shouldn’t be confused with any story that has proper links and credit to other media. Quite often, by the way, complete stories are posted on sites of all sorts. There’s no reason that a ‘blog’ site should be constrained to a particular format. What should be clear are the links and citations so the original source is clear and readers/viewers can visit those sites. In deference to your note, I’ve tried to make this post as clear as possible.
I hope this helps,
ed at Pharmalot
YoYo
Ed,
What are you talking about? Let me understand this…you are commenting on an article that was prepared by a non-Seattleite who’s previous experience is primarily evaluating foreign stocks for Latin American countries. Yup, he also failed to his primary source for the piece, Dr. Tracy Deisher PhD…the ex-CellCyte, ex-Amgen, ex-Zymo scientist…. Ask why she was asked to leave Amgen and Zymo? Ask why she left CellCyte: answer…stinging from her virtual demotion…because she belittled her team and wouldn’t perform the experiments outlined in CellCyte’s publix guidances. Tracy then, essentially became unstable, and quit.
How about her attempt to sue the company for $1M in exchange for not providing the inside infor fed to Angel…?
It’s a shame that the Times editor would allow an otherwise fine paper to enter into a disgruntled ex-employee’s plan to discredit the company that paid her for her work. It’s sounds like a vindictive tirade.
She called no less than 21 local reporters before Mr. Gonzales was sucked into her tractor beam.
Contrary to your assertation that this is the type of company that gives biotech a bad name, CellCyte is not a pump-and-dump virtual company with a CEO and accountant, CellCyte is a brick and morter company that employs 17 persons including 9 scientist…who are working, full-time, on a technology licensed from the VA that will hopefully deliver stem cells to the organ of the healer’s choice. Was the stock flying a bit high…probably. Will the papers all say “I told you so?”, you bet….
Brian Cook
I honestly believe the real story here is why the times took such an interest in this company that actually had as its founding investor, a man who knows more about biotech and stem cells then likely anyone alive? A man who certianly knows more about stem cells and public companies than anyone at the Seattle times!! Dr. George Rathmann founded Amgen and ICOS, which both grew to be multi-billion dollar companies that he built. At the time he invested in CellCyte Genetics it was not public yet, but doesn’t that lend serious credibility to the technology? I think this entire story is related to short sellers shorting CCYG stock trying to decrease the share price. I wonder how many other CEO’s out there have exagerated on their resume? This focus from the Seattle Times has brought the share price down and harmed investors more then any other thing involved with the company. The technology is real and has great merit! I would greatly like to hear from Dr. George Rathmann about the technology prospects more then the Seattle Times writer voicing the opinions of illegal short sellers!
A concerned investor!
NoNo
YoYo:
I found several typographical errors in your comment. You seem to have problems with homonyms. Perhaps Angel knows how to use GOOG(le). It’s not that hard to come up with other G. Brent Pierce p&d scams to include GeneMax.
Concerned investor, be grateful you didn’t get fleeced on the other G. Brent Pierce scams. The haircut you got on CellCyte was quite mild relatively speaking.