VIA FACSIMILE ONLY (301) 827-5562
September 30, 1998
David T. Read
Acting Director of Regulatory Policy Staff
Center for Drug Evaluation and Research
U.S. Food and Drug Administration (HFD-7)
5600 Fisher Lane
Rockville, MD 20857
Re: Hemispherx Biopharma, Inc.’s (“Hemispherx”) violation of FDA regulations
Dear Director Read:
Asensio & Company, Inc. (“Asensio”) is an investment bank and securities dealer registered with the Securities and Exchange Commission and the National Association of Securities Dealers. Asensio has conducted extensive due diligence, fundamental research and technical analysis of Hemispherx. Based on this review we issued a strong sell recommendation on shares of Hemispherx’s common stock. Further, due to its excessive market valuation and overwhelming evidence of fraudulent activities, we also recommend that Hemispherx shares be sold short. Enclosed is a copy of our Hemispherx research report dated September 22, 1998.
On September 23, 1998, Dr. William A. Carter, Chairman of Hemispherx, hosted a conference call. This call was recorded and is available for playback 24 hours a day for up to 30 days at (800) 475-6701 under the code 408590. This call contains Hemispherx’s fraudulent FDA approval and filing status representations. We believe that the FDA should review this tele-conference call in its entirety. In addition, Hemispherx issued a press release on September 30, 1998, that focused specifically on Ampligen’s FDA status. In this release Hemispherx is apparently claiming that it has FDA approval to treat Chronic Fatigue Syndrome (“CFS”) and has filed a New Drug Application (“NDA”) for an Ampligen CFS treatment. Hemispherx has also issued a “Summary Outline to Investor Conference Call of September 22, 1998.” The title contains an error. This is a summary of the call on the 23rd not the 22nd. These documents contain some of the gross misrepresentations of its fraudulent FDA representations referred to below.
Ampligen is Hemispherx’s Investigational New Drug (“IND”). Ampligen is a 25-year-old, off patent, interferon inducing drug that decades ago was extensively tested and found ineffective in treating disease. It has never received FDA approval for treatment of any disease, and there is no NDA pending for an Ampligen CFS treatment or for any other disease. Hemispherx is currently claiming that Ampligen is an effective and safe treatment for CFS. In fact, Ampligen’s Phase III clinical trials are still in enrollment. Yet Hemispherx, as Dr. Carter stated in recent press releases and the conference call, claims that Ampligen is in advanced testing and it is allowed to sell Ampligen. We believe that this is a false and fraudulent representation of Ampligen’s actual clinical trial results and FDA filing status. The following are excerpts from Dr. Carter’s comments during the conference call, which we believe are purposely misleading and false.
We believe that Dr. Carter has misrepresented Ampligen’s very limited IND cost recovery status in an attempt to cause investors to believe that the FDA has reviewed its clinical trials and has approved Ampligen’s efficacy and safety in treating CFS. Dr. Carter insinuated during the call that the federal government has been involved in the development of this drug. Dr. Carter stated that “tens of millions of dollars of NIH money” has gone toward the funding of “this technology” for studying “significant opportunity into certain disease categories for which there was no treatment.” In addition, Dr. Carter stated during the call, “Probably between 100 to 150 federal scientists have examined this data over time and have all found the data to be promising and worthy of investment, worthy of treatment status and worthy of being sold to United States consumers at a price of $7200 for a six month treatment.”
Dr. Carter also asserts in the call that “it [Hemispherx] is allowed under the law to sell its drug.” Dr. Carter further promoted its alleged federal approval by saying, “This is not a decision which Hemispherx can unilaterally make. Drug approval is a highly regulated process. And when the federal government decides that it is appropriate to charge patients for treatment, they’re doing this on a basis of substantial due diligence.” Dr. Carter’s pre-approval promotion includes the following statements made during the call. “It is absolutely true. The drug is in advanced testing. It is at the Phase III level. It has been given in fact the cost recovery treatment designation by the Food and Drug Administration.” Later in the call he said, “there are only approximately sixty to seventy in the entire universe of new drugs under development which have been given this designation by the Food and Drug Administration since 1990. The history of this designation has been one that thus far in the sixty to seventy times that this regulatory use has been employed by the FDA, the drugs have gone on to full approval. That is the history of this designation.” We believe that Dr. Carter is purposefully making his listener believe that FDA approval is pending (when no application exists) and that the drug is assured of approval.
During the call Dr. Carter claimed that Ampligen is now approved for use in the United States. Dr. Carter stated, “Hemispherx has been allowed to expand its clinical trials very dramatically. There are now hundreds of people in the United States that are either on the drug or about to go on the drug and comparable numbers in Europe.” In reference to our ten page research report, Dr. Carter declared that “He [Mr. Asensio] never tells you that the drug [Ampligen] has been authorized to be sold to American consumers.”
I hope you find this information useful. Please feel free to contact me if you need my assistance.
ASENSIO & COMPANY, INC.
Manuel P. Asensio
Chairman, President and
Chief Executive Officer
cc: Margaret Tart
Special Assistant to Director of Compliance
Center for Drug Evaluation and Research
United States Food and Drug Administration
Fax # (301) 594-2114
American Stock Exchange
Fax # (212) 306-1448
Securities and Exchange Commission
Fax # (202) 942-9637