Why Star Scientific Shares Jumped

 Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Star Scientific (NASDAQ: RCPI  ) were flying out of the gate this morning, jumping as much as 15% after promising results were released on a study of its Anatabloc medication.

So what: The preliminary report on the anti-inflammatory supplement showed "a clear and statistically significant difference in the treated group as compared to the placebo group." The full report has not been completed yet, but a doctor working on said it was "remarkable" that a dietary supplement like Anatabloc could lower thyroid antibody activity.

Now what: Anatabloc, introduced in 2011, is one of Star Scientific's two major products along with CigRx, a dietary supplement designed to help quit smoking, so any additional proof of Anatabloc's effectiveness could be a major driver of future sales. If the full report confirms the initial results, the stock should move higher, but I'm still a bit wary. Based on the stock history and the current valuation, the company operates and behaves like a development-stage pharmaceutical company, and the share price has dropped off a cliff several times. Clearing the preliminary hurdle is definitely good news, but I'd feel more confident about the stock once the full report is in. You can keep track of Star Scientific by adding the company to your Watchlist here.


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