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July 27, 2010
How Sleazy It Can Get
I've written several times about pharma/biotech companies whose stock promotion strategies seem suspect. But there are always more layers below. A reader sends along this headache-inducing promotion for a company called A5 Laboratories (no link from me to their website). They have, you'll all be interested to hear, a wonderful new method to produce "natural" interferon, which is going to turn them into a multi-billion dollar behemoth.
Sure it is. If you look through that come-on, you notice that it starts diverging from consensus reality very quickly, and never looks back. It's clearly written for people who know no biology, no medicine - in fact, for people who know as little as possible save that they want to get rich. Rich fast. And who believe, for some reason, that breathlessly touted penny stocks are the way to do it. Alas, these sorts of advertisements are generally paid for by some of the existing shareholders of such companies, in order to recruit a fresh generation of investors to take a few truckloads of stock off everyone's hands. This is the bottom of the pond, folks.
Need I note that the CRO assets that the company excitedly announces purchasing were controlled by A5's sole director and officer? And that both companies have the same address in Quebec? Or that A5 Laboratories itself was formerly known as El Palenque Vivero, incorporated in 2006 to run a plant nursery in Cuernavaca, Mexico? Could I make such stuff up myself? No, I could not. My imagination is vivid, but it has limits. Shameless avarice, on the other hand, has none.
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