Hemispherx Biopharma, Inc. (AMEX: HEB) (Price: $13.625) announced in press releases on December 16, 1999 and February 22, 2000 that it presented HIV test findings at a conference sponsored by Search For A Cure, a Boston based AIDS non-profit organization. A letter dated March 16, 2000 by David Scondras, Founder and Chairman of Search For A Cure, to William Carter, Chairman and CEO of Hemispherx, states that “Hemispherx did not make a presentation at the conference and its many requests to make a presentation were turned down by Search For A Cure.”
The Search For A Cure letter further states that “your misstatements are a misuse of the Search For A Cure name and appear to imply an endorsement or legitimacy by association with Search For A Cure, which is untrue.” The letter served as a demand for a prominent correction and to “cease and desist from further misuse of the Search For A Cure name in association with your company or products.”
Hemispherx also claims it sponsored HIV testing through research grants at the University of California at Irvine (“UCI”). A separate letter dated March 6, 2000 by Frederic Y. M. Wan, Vice Chancellor for Research at UCI, states that “UCI has received no grant or contract support from Hemispherx Biopharma.”
Hemispherx is a 34-year-old alleged drug company that has never filed a New Drug Application with the FDA or completed a Phase III trial, despite claiming successful completion of Phase II testing. It has used irregular and non-reproducible medical studies, authored by individuals with ties to Hemispherx, to promote a 30-year-old drug it calls Ampligen as a potentially effective treatment for at least five different diseases. Ampligen is a 1970s substance once studied, along with many other dRNAs, as a potential interferon inducer before interferon itself became available as a prescription drug.
Ampligen has never received FDA marketing approval. In October 1998 the FDA issued an infraction notice charging Hemispherx with illegally promoting Ampligen as a safe and effective drug. Carter has been accused of irregularities and fired from medical research positions at Roswell Park Memorial Institute and Hemispherx itself. Carter has been charged with personally defrauding $1 million from an AIDS patient who sought admission to an Ampligen AIDS trial, which resoundingly failed and was halted. E.I. Du Pont de Nemours and Company (NYSE: DD), which sponsored the failed AIDS trial more than 10 years ago, charged Carter and his colleagues with scientific fraud.
Hemispherx went public in 1995 through an underwriting led by Stratton Oakmont, Inc. shortly before Stratton was shut down for fraudulent sales and trading practices. In fact, Stratton’s principals pled guilty in September 1999 to a number of charges, including defrauding the public with HEB’s stock. Since the IPO, Hemispherx has used a series of false and deceptive press releases and made payments to well-known U.S. and international stock promoters to create investor demand for its AMEX-listed shares. As of September 30, 1999, Hemispherx’s insiders and paid-for promoters had bought at least 10,956,259 shares directly from Hemispherx at below market prices, which were then sold to the public at inflated prices. Hemispherx stock continues to trade on the American Stock Exchange under the stock-trading symbol “HEB”.
Asensio & Company, Inc. is a New York-based investment bank. In October 1998, Hemispherx commenced a civil action against Asensio & Company, Inc. and its Chairman, President and Chief Executive Officer Manuel P. Asensio, alleging, among other things, securities violations, fraud and RICO. All of Hemispherx’s RICO, securities and fraud claims were dismissed. Only its defamation related claims remain, which are being vigorously defended. Asensio’s defense is based on the complete correctness and truth of the research reports and freedom of speech. Hemispherx has failed to show a single Asensio statement that was or is misleading or incorrect. Asensio & Company, Inc. has counter-claimed, and continues to investigate and issue accurate and complete research reports on the Hemispherx stock fraud. Asensio’s HEB reports are available on the Internet at www.asensio.com
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