Deciphering Hemispherx (AMEX:HEB) Print E-mail
By Peter DePalma   
Wednesday, 10 June 2009 01:12

The end of the trading day came on Tuesday.  There was still no news of approval or denial from the FDA. Hemispherx Biopharma's (AMEX:HEB) Ampligen for Chronic Fatigue Syndrome spends yet another day in limbo.

By now, surely some of the company's investors are starting to feel like some of  CEO, Dr. William Carter's patients.

Tired... Exhausted, even.

In the words of one blog, "Ampligen for Chronic Fatigue Syndrome: Another Deadline Come & Gone."

 

Adrienne Dellwo, about.com's resident expert on Fibromyalgia & CFS Guide wrote:

"First, a decision was due February 25. The FDA said it needed 3 more months to review data. The decision was then due on May 25, but on May 26 word came out that "staff scheduling changes" had delayed the final report. 1-2 more weeks, the FDA said. The 2 weeks were up yesterday, and still we have no word on whether Ampligen will become the first drug ever approved for chronic fatigue syndrome."

Some shareholders decided simply that they were "done waiting around" even as others urged them to "hold at least through the end of after hours trading" incase news of an approval came then. After all, we could now at least take comfort and confirm that the Phase III clinical trials for Ampligen's treatment of Chronic Fatigue Syndrome and Myalgic Encephalomyelitis were indeed over. News from the FDA had to be coming, any minute... No?

HEB shares had been trading at the $3 level for most of the day, but by the time 5 p.m. rolled around interest had... Well... Fatigued.

Now trading around the $2.80 mark, the faithful few who were still holding vigil got hit with a headline they weren't expecting at 5:29 p.m.:  "Hemispherx (HEB) Sets Up for Another Offering."

"Wait. What?!"

Investors had seen this type of headline before and it wasn't the news they were waiting for.

"More dillution coming now?!"

As filed with the Securties and Exchange Commission on June 9th, Form S-3 from Hemispherx Biopharma, Inc. let the world be known that they were looking for a $150 million mixed securities shelf and that the offering would include common as well as preferred stock, warrants and

debt securities.

Shares immediately started to tick down. Flatline basically. Investors in HEB had seen this before. Twice, in fact, during May.

"Crap! Not again. She's gonna drop like a rock, now."

But saavy investors started to quickly reconsider the value or importance of  the filing.

We know that under a mixed securities shelf registration, a company may sell securities in one or more separate offerings with the size, price and

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terms to be determined at the time of sale. They may sell common and
preferred stock as well as debt securities. But what did this all mean?

"Why now?"

As far as opinions go, HEB and it's backers have certaintly heard their fair (and unfair) share these past few weeks.

It has been just weeks, hasn't it?

What better time to take the pulse of the die-hards.. The do or die backers?

It's not like longs have anything better to do, right?

Here writes one such soul who goes by the name "my2ylws":

"The obvious is they need to raise alot of capital and fast and get Ampligen patented and to the marketplace as quickly as possible.
The SEC filing clearly states that they currently need partnerships:

"We have limited marketing and sales capability. We are dependent upon existing and, possibly future, marketing agreements and third party distribution agreements for our products in order to generate significant revenues and become profitable. As a result, any revenues received by us will be dependent in large part on the efforts of third parties, and there is no assurance that these efforts will be successful.

"Our commercialization strategy for Ampligen®-CFS may include licensing/co-marketing agreements utilizing the resources and capacities of a strategic partner(s). We are currently seeking worldwide marketing partner(s), with the goal of having a relationship in place before approval is obtained. In parallel to partnering discussions, appropriate pre-marketing activities will be undertaken. We intend to control manufacturing of Ampligen on a world-wide basis."

I think we will be hearing some "news" very soon.

Yeah. That's what they keep telling us.

Hey, speaking of news did you hear that there have actually already been some human trials for Ampligen as Vaccine Adjuvant?
Oh and did you know that the FDA and regulatory agencies worldwide have guidelines for accelerated approval of influenza vaccines and adjuvants?
I'm just sayin'... Oh look... After hours shares are starting to tick back up. They're headed back towards three dollars. That's a good thing, right?

Another long who goes by "hrtitech" opines the following:

"First, this is a preliminary step in advising as to an offering in the future and a legally necessary one that must be done in advance. It is also old news as the company previously alluded to increasing the float several days ago. I do not think the company will get the votes  it needs to pass this offering unless the company has either been approved for CFS or Ampligen has been ordered as an adjuvant/booster.

"The company understands it will not be authorized without the support of sharelholders and they must know something positive is imminent. I think enough people agree with me to have traded a million shares after market and go from 2.56 to 2.96. The company is getting all their ducks in a row to be able to accomodate millions of needy patients. They simply do not have the infrastructure to accomodate them as we speak. I am sure countries and government agencies are insisting the company be able to meet the demand. There is something in law called a condition subsequent that may be met after the agreement has been executed. It allows for the parties to the contract to move forward with sufficient assurances there is a contract in hand.

"I think the answer is in the timing. Why did Carter wait until this afternoon to do his SEC dilution filing when the extensive documentation involved must have been prepared well in advance? My feeling is that by filing around the time when the market closes he is limiting his exposure to any adverse reactions. Following this  reasoning leads me to believe that he feels the FDA will announce in the morning negating any adverse reaction from the dilution. Now whether or not the announcement is positive or negative is left to be seen. However, I believe that Carter feels it will be approved or else this timing strategy would not be necessary"

Oh look. After hours trading is over.

Loos like we'll have to wait until tomorrow...

Or the next day...

Or perhaps even next week to see what happens next.

Disclosure: No positions




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