Radient's Poker Face Is Actually Quite Telling Print E-mail
By M.E.Garza   
Tuesday, 15 March 2011 06:53

Like it or hate it, when the Radient Pharmaceuticals (AMEX:RPC) story began to play out, many placed their bets that this could be shaping up as an intriguing biotech comeback story.  A few weeks later it has become a poker game, complete with huge stakes, winners, losers, and diabolical bluffs.


Big stake bets are all-in, yet someone isn’t holding all the cards they say they are. They are bluffing and the know it.

There are other players sitting at this table. Every investor in the play, long or short, has stakes in the game and people have gotten down-right paranoid. Looking for any clue they can to see who is telling the truth. There are millions of eyeballs on this stock and its story. Even the most casual observer has been sucked in by the drama.

Oh, the drama! Apparently Adam and I are both getting death threats. How sad is that?

Some have already folded and gotten hurt. Under pressure and uncertainty, they’ve cashed their shares and they’re out- at a loss.  I feel genuinely bad for all those people. If they had just held on a little longer, if they had actually done their diligence, things might be different.

Last week, an article authored by TheStreet.com’s Adam Feuerstein hit the newswires and caused a panic sell-off in the stock so massive it shaved $26 million off the company’s market cap within minutes. Officials at the NYSE Amex stepped in to halt shares from trading any further after they discovered that the article titled “Mayo Clinic Denies Link to Radient Pharma,” was self-contradictory, at best, and an attempt to manipulate the market, at worst.

Behind the scenes, officials at the Mayo Clinic contacted TheStreet and voiced their displeasure with the hit piece. They posted their own, immediate response to the story on-line, stating that “Mayo Clinic does have a collaboration agreement with Radient” and asked that Feuerstein and his editors change the title immediately. We’ll explore that further later.

Hours later, after the market had closed and investigations continued behind the scenes, Feuerstein and his editors removed traces of the original title from their feed to Yahoo Finance and replaced it with a less inflammatory, yet no-less incorrect title: “"Mayo Clinic Denies Test Link to Radient Pharma."

Given the fact that we had been one of the more vocal opinion leaders recommending the stock play we were monitoring the situation very closely and had been tweeting updates throughout the day.
We tried our best to calm investor nerves and update them with information as we could get it. Still, we knew from the moment we read it that the story was only the latest in a series of articles published by Feuerstein designed to discredit the company, their efforts and their technology.

There were several “facts” mentioned in the article that we took issue with and we weren’t the only ones.

Officials at Radient and clinicians involved in the important validation study collaboration at Mayo and their subsidiary, Mayo Validation Services did too. It wasn’t long before Radient issued a press-release to that effect; promising investors that they were taking proactive steps to address the article and announcing that they intended to issue a public statement providing existing and prospective shareholders with information correcting certain inaccuracies set forth. In fact, many investors feel that Radient has done a poor job of taking those steps in-full and that certain inaccuracies have not yet been corrected. 

As a result, shares have been under pressure and many- including Feuerstein- have taken that as a tell in the poker game. A sign that Radient is definitely bluffing.  I’m here to tell you that nothing could be further from the truth. In fact, given the growing number of attorneys getting involved behind the scenes, I’d venture to say that Radient has actually yet to reveal their cards and that their poker faced silence is not coincidental. If nothing else, I predict we will hear more from them some time after they read and digest this report.

Getting back to the events during the stock-halt, I can tell you that when we saw the title change, we immediately alerted our readers and followers via my Seeking Alpha’s Stock Talk and Twitter. Some staffers felt that if we didn’t let people know what had just occurred, that it might go unnoticed, especially given the fact that the original, time stamped title link, had already disappeared from Yahoo Finance.

Then we noticed something else. Suddenly, all of Feuerstein’s Stock Twit tweets about $RPC had vanished.  We knew that Feuerstein had been sarcastically slamming not only the company but our coverage of their story relentlessly for some time via his postings at Stock Twits. In fact, we wondered why the platform had allowed this to go on as long as it had. After all, as we saw with the Aflac news story yesterday, people can lose nice jobs after posting personal tweets.

Going back our most recent short squeeze play recommendation, the stock had run from under $.30 to $1.67- all during the slowest week of the year on Wall Street. Here was a stock that had been trading on appointment; it was undergoing a major facelift thanks to debtors and shareholders who had all agreed to exchange their notes into investments using a considerably ambitious debt-to-equity restructuring plan.  Like it or not, this was a comeback story that captured the attention of the biotech sector and their tale had gone viral. Millions of shares began trading every day and they continue to do so even now.

It was shortly after that initial stock run, that Johnson and Johnson announced that they were investing $30 million into a blood examination test for cancer that could improve early diagnosis Feuerstein happily predicted that J&J’s news meant “the end of Radient Pharmaceuticals. “ Instead, the news caused more interest in RPC’s own- already FDA approved- testing technology, and the interest wasn’t coming from investors alone.  Other publicly trading companies with much higher valuations took notice as well.

Was Feuerstein foolish enough to believe that a test that wasn’t even in clinical development yet would spell the end of Radient?  Or was it just another employer endorsed attempt to derail investor confidence in the stock?

While everyone knew that earlier detection could become one of the biggest benefits provided by Johnson and Johnson’s proposed cancer blood test. Radient already had the technology in play today. Their version was already FDA approved and ready to market in several countries where the company also had approvals beyond the limited indication currently allowed in the U.S.

Small-cap investors knew why Johnson and Johnson was willing to spend big dollars and years developing it and they also sensed that Radient’s test might result in more effective treatments by not only capturing cancer sooner, but also by helping physicians monitor whether the cancer had been defeated. Why wait five years for a more expensive test when a major validation study was underway to prove that it could be done today?

Feuerstein, apparently either didn’t like or buy the fairy tale. When his personal tweets had become a joke, he decided to his use TheStreet’s powerful tabloid platform to make sure his bias was perfectly known.  

Perhaps I’m wrong. Perhaps Adam has been around long enough to know that on Wall Street the lying stops when the CEO stops moving his lips? I was willing to give him the benefit of a doubt.

Although he refuses to answer my questions about his feelings about Radient directly, a series of rapid-fire articles made it perfectly clear to investors that he believes the company, its test, and its efforts to help screen mostly under-privileged farmers  in India are little more than a farce. Feuerstein, like Timothy Sykes before him, are warning investors that each of the distinguished members of Radient’s board, including Dr. Robert Beart Jr., MD- who himself served as the head of a department at the Mayo Clinic from 1976 through 1992- are all part of huge pump-and-dump scheme. Sketchy guys all of them.

On Monday, my inbox was flooded with messages asking if I had really asked Adam Feuerstein some questions which he, in-turn, answered and posted on his blog here:  http://adamfeuerstein.tumblr.com/

Yes. It was me. And all except the question asking him to give me his supervisor/editor’s contact information was posted- for whatever reason he left that part out.

If you read the questions and notice that they are quite direct and seemingly loaded, you’re right. If it appears that I know something when asking some of them, I do. And while I would love nothing more than to get into every single topic in this column, that would require far more time than I have to write and probably even more than you have to read, so I’m only going to get into a couple of the issues today. To use Adam’s own words: “Any further comment will come in future stories and columns, if/when I choose to publish.”

For now, let’s dive into a couple of the most debated issues at hand:

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Me: Do you have any proof that the India orders are not real or is that simply your belief?

Adam: Radient has issued press releases and its CEO has made statements quoted by BioMedReports claiming that the company is involved in a cancer-screening project in India which includes the sale of Onko-Sure. I have tried to verify these statements independently without success. Again, this is called reporting.

Me: Do you have any proof that the company is not working with the Indian officials to expand their programs there or is that simply your belief?

Adam: As reported in my story, a spokesperson for the India Ministry of Health and Family Welfare could find no records of Gaur Diagno, the Indian company which Radient claims is running the Onko-Sure program. I have also had no luck corroborating Radient’s statements about Jaiva Technologies, the parent company of Gaur Diagno.

I asked Radient’s CEO to explain or elaborate on his statement made to BioMedReports claiming that Radient was in negotiations with the Rajiv Gandhi government to expand the Onko-Sure program in India. As I reported, Gandhi has been dead for 20 years and eight prime ministers have led India since he left office. To date, Radient’s CEO has not commented or provided any clarification of his remarks. I’m continuing to report this story, so stay tuned for further updates.

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Okay, so I called someone a bit higher than the mysterious “spokesperson” at the India Ministry of Health and Family Welfare in New Delhi and not only had they heard of Gaur Diagno, but they were kind enough to send me this: http://biomedreports.com/Download-document/148-Ministry-of-Health-Document-RPC.html

Now, in all fairness I certainly haven’t been covering the healthcare sector as long as Adam nor do I consider myself the (cough) journalist he went to school to become, but that there looks to me like a verifiable import license approved by the Indian Government’s Drugs Controller General and issued to Gaur Diagno. Given who is copied on the document it also looks like one might need something like that in order to import what is described as “Diagnostics Kits” to sell in that country.

We were also able to gather tax id numbers, Indian blind study certificates from the various hospitals mentioned in this article: http://biomedreports.com/2011030364598/onko-sure-a-general-cancer-screening-in-india.html and more.

Is this what is called reporting in the Boston area?

As far as Radient’s CEO not wanting to explain or elaborate statements, I’m told most CEOs on the street know better than to speak to tabloids and that even when they do, the only thing that happens is they get their own words turned around on them. In other cases, when the CEO’s do speak to said tabloids in order to correct erroneous statements, they tell me their corrections are simply ignored.  Frankly, I assume that Adam’s editor checks his facts and asks for unbiased back-up of all his facts, but he hasn’t had a chance to answer my e-mailed questions so I don’t know for sure.

Oh, and did I mention company’s involvement with various hospitals including the Rajiv Gandhi Cancer Hospital? Maybe that Umesh Bhatia, Ph.D. who attempted to clarify Radient’s comments is just a scammer too?

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ME: Were you aware that the Mayo Clinic did have a collaboration agreement with Radient prior to your phone calls to the Mayo clinic?

Adam: Based on my reporting to that point, I was aware that Mayo Clinic sold blood samples to Radient for use in a clinical trial of Onko-Sure. I was also aware that Radient had claimed to be conducting the clinical trial in partnership with Mayo, based on the company’s press releases and public statements. I contacted both Radient and Mayo to confirm and get more details and information. That’s called reporting.

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Thanks for clairying the reporting thing. Again. I think I'm finally catching on.

I find the words “Based on my reporting to that point” interesting. I mean, any early reporting would include a look through SEC filings no? The same SEC filings that Adam is always telling investors to look at include this agreement: http://www.sec.gov/Archives/edgar/data/838879/000112178110000203/ex10_55.htm

By carefully reading it, most folks with an 8th grade education can probably tell that there is more than blood sample sales here. There are some protocols for “MVSS and the designated Mayo physician(s) and or scientist(s)” to perform various “methods and procedures set forth in the Project Description.”

In addition I find it extremely relevant that Adam admits that he was “also aware that Radient had claimed to be conducting the clinical trial in partnership with Mayo, based on the company’s press releases” since we have YET to find ANY official company press releases where Radient claims a partnership with Mayo. Not one. I do some references to a "collaboration" (as clearly documented indicated in the SEC filings), but based on my discussions with various attorneys, investigators and officials who are looking into the validity of Adam’s articles they can’t find any misleading press release where Radient claims a partnership with Mayo either.  Do they exist only in Adam's mind?

Please. Someone help me out here.

Rosen Law Firm?


Anyone?

There is much more to cover here, but we’ll start with those points for now. I will update you further as to my discoveries in regards to the legal differences between the similar words “partnership” and “collaboration” as defined internally by the Mayo Clinic themselves.

I’m also waiting for more answers, information and facts to trickle in.

That’s called reporting... Where I'm from.


Disclosure: Long RPC

(and proud of it, Dammit!)



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