HEB uses anti-terrorism scam in latest AMEX pump and dump operation, reports Asensio & Company.

Today, Asensio & Company, Inc. issued three equity research reports regarding Hemispherx Biopharma, Inc.’s (AMEX Symbol: HEB) (Price: $4.99) recent large questionable stock sales and the flurry of releases that followed days later. The reports are titled “Even Carter’s co-conspirator objects to latest smallpox claims,” “Hemispherx grossly misrepresents AHRQ report,” and “AMEX failed to close down Hemispherx’s warrant fraud.” The reports are available at Asensio & Company’s web site located at www.asensio.com.

According to documents filed with the Securities and Exchange Commission (“SEC”), Hemispherx created and sold $5.7 million of its stock at less than $4 per share through the exercise of warrants that expired on November 21, 2001. We believe that Hemispherx’s recent promotion that Ampligen may have potential in addressing the recent threat of bio-terrorism, and its recent promotional claims that the U.S. Agency for Healthcare Research and Quality (“AHRQ”) had confirmed Ampligen’s potential efficacy could be viewed as an attempt to cause an increase in the stock price that would allow the resale by insiders of the recently purchased “cheap” Hemispherx stock. In fact, the SEC’s Enforcement Division Director recently stated “Investment scams that attempt to prey on fears of terrorism are abhorrent. We will be vigilant about rooting out and prosecuting those who seek to exploit recent events to defraud investors.”

Hemispherx claimed in a press release dated November 20, 2001 that Ampligen could be used to “potentially address the growing threat of global biohazard secondary to smallpox.” These claims have been strongly questioned in an article in the Philadelphia Business Journal dated November 30, 2001 and Wired News dated November 19, 2001. In response to inquiries on Hemispherx’s bio-terrorism and smallpox claims, Hemispherx issued a second press release dated December 6, 2001 titled “United States Military Sponsored Research on Hemispherx Biopharma’s Immune-Based Approach to Bioterrorism — Smallpox — Shows Promise.” Hemispherx goes on to state that “positive results have already been obtained from independent animal-based research….” We believe these statements can only be described as an attempt to mislead. The independent military sponsored research that Hemispherx refers to was published in 1992. The article stated that three immunomodulators other than Ampligen were “found to be efficacious in significantly inhibiting tail lesions in the vaccinia virus mouse model.” No follow-on trial in humans was made and even Carter, who has promoted Ampligen as a treatment for 6 diseases, never before made smallpox claims.

In addition, Hemispherx has recently claimed in a press release dated December 4, 2001 that a new report issued by the AHRQ on Chronic Fatigue Syndrome (“CFS”) confirmed Ampligen’s potential efficacy. In fact, the AHRQ report merely regurgitates Hemispherx’s own claims with no independent analysis or verification. The report only compiles and summarizes existing literature about CFS from electronic databases. Hemispherx used the fact that the AHRQ found Hemispherx’s own study in its electronic database search and included Hemispherx’s own unadulterated claims, without any independent AHRQ review or analysis, to issue a misleading statement. The language from the report quoted by Hemispherx in its press release is taken out of context and presents a misleading picture of the actual findings presented by AHRQ. In fact, the Food and Drug Administration has repeatedly warned Hemispherx about making unsubstantiated claims about Ampligen’s efficacy.

We believe that Hemispherx’s stock value is based entirely on the public’s misperception of the commercial value of Ampligen resulting from Hemisphex’s relentless and misleading promotion that is based on the use of selected, out of context quotes taken from inconclusive and outdated studies. Review of the full text of the subject studies demonstrates conclusively that Ampligen is not and has never been an effective disease fighting agent; neither has it ever been approved for any commercial use in any form. To the contrary, every effort that has been made by Hemispherx to deliver Ampligen to market in any form, and indeed to finalize testing, has been resoundingly rejected by the appropriate United States and European governmental authorities. Hemispherx failed to disclose that it received an assessment report of Ampligen on April 9, 1999 from a Rapporteur of the European Medical Evaluation Authority. The report stated that “marketing authorization cannot be granted.”

Asensio & Company, Inc. is actively engaged in short selling and advises its clients on securities it believes are overvalued. A complete documented history of Asensio’s published work with short-selling transactions, and the firm’s definition of gross overvaluation, is available on the Internet at www.asensio.com. Short selling involves a risk not associated with the purchase of stock including, but not limited to, unlimited loss and stock borrowing risks. John Wiley & Sons, Inc. has published a book about Asensio & Company’s short selling titled “Sold Short: Uncovering Deception in the Markets.” The book can be ordered on the Internet at www.asensio.com and www.wallstreetbabylon.com, or www.amazon.com. Additional information is available upon request.