Star Scientific - continue incurring losses on its smokeless-tobacco products..

March 18, 2010 - Star Scientific again has turned to investors with deep pockets for money, raising $13.8 million through a half-dozen private sales of stock and warrants this month. The Henrico County-based company also disclosed that it plans to begin test-marketing a food product to help ex-smokers and quitters maintain balanced metabolism. The company provided few details but said the food product won't contain nicotine.

Star expects to continue incurring losses on its smokeless-tobacco products for the foreseeable future, it disclosed yesterday in a filing with the U.S. Securities and Exchange Commission.

The company said its private stock sales this month should support its operations through the first quarter of next year.

Star lost $22.8 million, or 22 cents a share, on sales of $708,000 in 2009, the SEC filing showed. That compares with a net loss of $18.3 million, or 20 cents a share, on revenue of $451,000 in 2008.

During 2009, Star got $25 million from selling stock and the exercise of warrants and options to buy stock. In 2008, it raised $16.5 million that way.

The company disclosed that it cut and restructured its sales force because of slower-than-expected sales of its dissolvable nicotine products.

As part of that effort, Star said, it limited day-to-day activity of its sales force and is focusing on marketing to individual stores and consumers in Virginia and adjoining states.

The company boosted its research and development spending last year to $1.8 million from $300,000, including $1.4 million for the food product it plans to test-market this year. It said its ability to continue research work will depend on whether it can obtain funding, as well as on the outcome of its patent-infringement lawsuit against R.J. Reynolds Tobacco Co.

Last year, a federal district court jury ruled that Reynolds had not infringed on any of Star's patents, but Star is appealing. Meanwhile, Reynolds is demanding Star pay $35 million to cover lawyers' fees. (Star Scientifiic denied new trial in patent infringement - files appeal..)

Reference: Private stock sales boost tobacco company Star Scientific by David Ress, Richmond Times-Dispatch, 3/18/2010.

Some related Star Scientific news briefs:
Star Scientific asks FDA to certify lozenge less harmful..;
Star Scientific denied new trial in patent infringement - files appeal..;
Star Scientific - NASDAQ trading symbol changed to CIGX..;
Star Scientific - new product (in 2010) to help adult smokers maintain a nicotine-free metabolism..;
Star Scientific - will use its low-nitrosamine tobacco curing process to formulate smokeless tobacco dissolvable smokeless products..
Star Scientific - q2 2009 report..;
Star Scientific - Filing patent for zero-nitrosamine tobacco curing process..;
Star Scientific - 2008 annual report/Stonewall vs other OTC NRTs..;
Star Scientific Corporate Study Stonewall Lozenge in NRT..;
Star Scientific Files Third Quarter Financial Report..;
Star Scientific wants to augment sales of their tobacco lozenges..;
Star Scientific , second quarter 2008, sales down 23.6%..;
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