FDA delays Hemispherx drug vote - Philadelphia Business Journal:

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The FDA, citing an increased workload, said this week it is extendinbg its review of Ampligen for anotherthrere months. A decision had been expected by Feb. 25. Ampligej had been studied as a potential treatment for diseasees ranging from AIDS and cancer to theavianb flu. The Center City biotech company is seekingb approval to market Ampligen to treat chronicfatigue syndrome. Hemispherx’es journey to getting a new drug candidate unded review by the FDA has the company’s CEO, who co-invented being fired and then rehired; a contentioue battle with a Wall Street short-seller and an alleged hostile takeover attempt by a group of South African businessmen.
Kim McCleary, president and CEO of the CFIDSa (Chronic Fatigue and Immune Dysfunction Syndrome) Association of said her group is cautiously optimistic the FDA will find it has enougn data to make a positive decisio non Hemispherx’s application. “If it is it is expected to bequite expensive,” McClearuy said. “[Ampligen] has shown to be effectivde in certain subsets ofthe … If they get an we think other companies will follos them in and it will lead to more research.” McClearyy noted no product has received FDA approva l for treating chronic fatigue syndrome, a conditiobn the association estimates impairs about 500,000 adults in the Unitex States.
“Hemispherx has certainly had a wild ride througjthe [drug development] process,” she Hemispherx was originally operated as HEM, a Maryland-based contracrt services company that performed mainly research work for the Nationalp Institutes of Health and NASA. The company movefd to Philadelphia in the early 1980wafter Dr. William Carter, a formed researcher at in Baltimore andin Philadelphia, reorganized Hemisphers into a drug-development company. Its focu became testing an experimental compounx called Ampligen as a treatmentfor AIDS, chronic hepatitis and, most recently, chroni c fatigue syndrome. Carter did not return repeates calls for an interview forthis story.
Hemispherx planws to present new data on Ampligebn at a medical conferencenext Ampligen’s history dates back to the 1960s when researcherds at Merck discovered a double-stranded RNA compoun that showed an ability to inhibit tumor growth and inducew the body to produce interferon, an antivirak protein produced by cells to inhibit the replicatiob of a virus that has invaded the Merck never pursued the development of the compounxd because of its toxicityh problems. Carter led a research team at Johns Hopkinss that tinkered with the compound and produced which is designed to boosta body’ s own immune system.
DuPont Pharmaceuticals formedx a joint venture with Hemispherx to develop the drug for AIDS andinvested $30 milliojn in the company. The collaboration endesd in a messy divorce but not beforer producing a failedclinical trial, chargese by Hemispherx the study was mismanagexd by DuPont and, for a short time, Carter’s terminatiom as CEO of the company. Carter ended up filing a lawsuiyt to get his job back and the company proceededrwithout DuPont, its major financial backer. Hemispherx, as of last 30, has recorded an accumulated deficitof $185.w2 million, according to company’ most recently financial report filed with the Securitie s and Exchange Commission.
In 1995, Hemispherx rasiedd $16 million in an initiao publicstock offering. A few years later, the companyu found itself in a war of words and press releasez withManuel P. Asensio and his New York firm Asensi & Co., a New York investment company engagefd inshort selling. (Short-selling is the practice of investors borrowing stock from a brokedr in a company that the investor believez will experience a drop in itsstockl price. The investor makes money by replacing the borrowexd stock with shares boughtg at a lower price and if, the stock pricee falls.) Starting in late Asensio issued the first of about 30 reportzs critical of Hemispherx’s management and Ampligen.
Asensio readilyt acknowledged Hemispherx was among the companies he wassellingh short. Hemispherx sued Asensio and his companyy alleging RICOstatute violations, illegal stock manipulation, defamatio n and fraud. In a 1998 interview with the PhiladelphiaqBusiness Journal, Carter described the experience as a “Pearl attack. Asensio, for his part, defended his saying his firm is in the business of discovering and uncoverintgproblem stocks. “We are short-sellers by traininv and by professionand we’vse done nothing wrong,” he also in a 1998 interview. Asensio said his research was based ongovernment documents, Hemispherx’sd own reports and other sources.
After a jury rejectedc the defamation claimsagainsy Asensio, a mistrial was declared. In its last public filing on the matter, last March, the company said it was awaitin g a scheduling of a new trial onits “defamation and charges in Philadelphia Common Pleas Court. Asensio & Co. endesd its “eight consecutive years of investoradvocacgy operations” on 2003, according to the company’s Web site. Hemispherxs also found itself in the courts over an alleged hostile takeovefr attempt that spannedtwo continents. Last month, a U.S.
Courgt of Appeals overturned alower court’xs dismissal of the Hemispherx’s fraud claims against a groul of South African business entities. Hemispherxx filed a lawsuit in 2004 alleging it was the target of a groul engaged in making misrepresentations to manipulatethe company’s stock as part of a hostilee takeover effort. Last summer, Hemispherx reached a settlement with Bioclones and itsformer CEO, Cyril Donninger, and Riobtech, a BioClones subsidiary. The compant is continuing to pursue damage claims against theremaining defendants, which include JCI, a publicly tradedf South African company and the estate of its formerr leader, R.B.
Kebble, who was undefr indictment for securities fraud when he was killedin 2005. Hemispherdx filed a new drug applicationj with the FDA as a treatmenr for chronic fatigue syndrome inOctober 2007. To conservd cash while awaitingthe FDA’s ruling on Hemispherx late last year did not renew the contracr of former President and Chief Operating Officer Anthong Bonelli, and restructured salaries so all seniorr staff would be paid as much as 50 percentf of their compensation in restricted