Replies to post #78911 on Biotech Values

[wallstarb]

HEB History (from 2003/2004 Article)

Hemispherx is a 34-year-old alleged drug company that has never filed a New Drug Application ("NDA") with the FDA or completed a Phase III trial, despite claiming potential efficacy based on pre-clinical and Phase II testing in many different diseases including CFS, hepatitis, cancer and HIV. Simultaneously with failing to file an NDA, Hemispherx has used irregular and non-reproducible medical studies, authored by individuals with ties to Hemispherx, to perpetuate the fraudulent promotion of a 30-year-old drug it calls Ampligen. Ampligen is a 1970s substance once studied, along with many other failed dRNAs, as a potential interferon inducer before interferon itself became available as a prescription drug.

http://www.asensio.com/Reports/WarStoriesHemispherx.aspx

Hemispherx was a defunct company before it was brought public in 1995 by Stratton Oakmont, Inc. Hemispherx was one of Stratton’s last fraudulent initial public offerings ("IPO") 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 using HEB’s IPO to defraud the public. Since its fraudulent IPO, Hemispherx paid U.S. and international stock promoters to create investor demand for its AMEX-listed shares. As of June 30, 2000, Hemispherx’s insiders and stock promoters had bought at least 15,721,560 shares directly from Hemispherx at below market prices, which were then sold to the public at inflated prices. After concluding a preliminary investigation, the U.S. Securities and Exchange Commission commenced a formal securities fraud investigation of Hemispherx’s Ampligen-based stock promotion. The investigation is on going.

A recurring part of Hemispherx’s fraud is the unauthorized use of the names and, by extension, the images of various not-for-profit health advocacy organizations in its press releases. In fact, these groups have specifically objected to being mentioned by HEB as part of its stock promotion. On September 21, 1998, Hemispherx issued a release stating that the CFIDS Network, Inc., a CFIDS patients’ organization, supported Ampligen and considered it a safe drug. However, CFIDS Network President Ronald G. Smith wrote a letter to Dr. William A. Carter, Chairman and Chief Executive Officer of Hemispherx denying any CFIDS Network involvement in the release and accusing Hemispherx of slander. The CFIDS Network then issued a press release stating, "…In our experience, no PWC [person with CFIDS] has received lasting benefits from this medication [Ampligen]. Many suffer from a myriad of side effects." Nevertheless, Hemispherx issued a second press release restating their initial press release and knowingly reiterating their false information.

Hemispherx also announced in press releases that it presented HIV test findings at a conference sponsored by Search For A Cure, ("SFAC") an AIDS not-for-profit organization. SFAC sent a letter to Dr. Carter stating that "Hemispherx did not make a presentation at the conference and its many requests to make a presentation were turned down by SFAC." The SFAC letter further states that "your misstatements are a misuse of the SFAC name and appear to imply an endorsement or legitimacy by association with SFAC, which is untrue." The letter served as a demand for a prominent correction and to cease and desist from further misuse of the SFAC name. Again, Hemispherx ignored the letter and issued another press release making the same false claims.

On May 17, 1999, a group calling itself the AIDS Treatment Technical Assistance Council ("ATTAC") issued a press release over the PR Newswire stating that Ampligen was a clinically promising therapy for HIV. David Miller was named as the Executive Director of ATTAC. We found no record of a non-profit group registered or incorporated under the name ATTAC. The ATTAC press release was paid for by Mitchell Abrahams. Mitch Abrahams is disclosed in a 1999 Hemispherx SEC filing as a recipient of 20,000 privately issued shares of Hemispherx stock.

Ampligen has never received FDA marketing approval. In July 2000, in addition to the October 1998 FDA letter, Hemispherx received two "warning letters" from the FDA. The FDA detailed specific press releases and disclosures made by Hemispherx that constituted promotion of Ampligen as safe and effective in violation of FDA regulations. The FDA stated "your promotional materials are false and misleading in that they fail to disclose facts that are material in light of representations made about Ampligen." In particular, Hemispherx failed to disclose risk information associated with the use of Ampligen. The FDA stated "toxicities that have been reported in dose-escalating studies of Ampligen in HIV-infected patients include, but are not limited to, flushing, chills, fever, chest tightness, nausea, malaise, shortness of breath, flu-like symptoms, leukopenia, neutropenia, and leukocytosis." William A. Carter has also been accused of irregularities and fired from medical research positions at Roswell Park Memorial Institute and even from Hemispherx itself.

On September 21, 1998 Hemispherx announced that it had agreed to invest in California Institute of Molecular Medicine, Inc. ("CIMM"). CIMM was one-year-old. In 1990, Zaki Salahuddin, one of CIMM’s two founders, was indicted by the United States Attorney’s Baltimore office. He pled guilty to felony charges that included funneling contracts to a company partly owned by his wife while he was on staff at the National Cancer Institute. In announcing the partnership Hemispherx stated that it admired Salahuddin’s outstanding achievements but made no mention of his indictment or guilty plea. On February 17, 2000, Hemispherx refers to positive medical findings at CIMM, now an affiliated company, as an alleged reason to claim Ampligen has potential as a treatment for HIV.

A U.S. House of Representatives Subcommittee investigated Carter and his associates for scientific fraud. Carter also 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 charged Carter and his colleagues in a lawsuit with scientific fraud.

Another part of Hemispherx’s fraud is the use of legal proceedings to fight opponents. Hemispherx and Dr. Carter have a history of making irregular medical claims and taking legal action against parties that question their claims. Hemispherx repeatedly have filed lawsuits claiming themselves as victims of a series of conspiracies.

[rkrw]

HEB. $150,000 cash for a micro money losing bio is criminal.

The outside directors. An 82 year old from France; a 74 year old scientist (at least relevant), and you can't make this stuff up the former "Mayor and Governor of Yasoi, Capital of Boyerahmand, Iran" but now working on a worldwide "immunology network" whatever that means.

RICHARD C. PIANI, 82, has been a Director since 1995. Mr. Piani was employed as a principal delegate for Industry to the City of Science and Industry, Paris, France, a scientific and educational complex from 1985 to 2000. Mr. Piani provided consulting to us in 1993, with respect to general business strategies for our European operations and markets. Mr. Piani served as Chairman of Industrielle du Batiment-Morin, a building materials corporation, from 1986 to 1993. Previously Mr. Piani was a Professor of International Strategy at Paris Dauphine University from 1984 to 1993. From 1979 to 1985, Mr. Piani served as Group Director in Charge of International and Commercial Affairs for Rhone-Poulenc and from 1973 to 1979 he was Chairman and Chief Executive Officer of Societe "La Cellophane", the French company which invented cellophane and several other worldwide products. Mr. Piani has a Law degree from Faculte de Droit, Paris Sorbonne and a Business Administration degree from Ecole des Hautes Etudes Commerciales, Paris.

IRAJ-EQHBAL KIANI, M.B.A., Ph.D., 62, was appointed to the Board of Directors on May 1, 2002. Dr. Kiani is a citizen of the United States and England that resides in Newport, California. Dr. Kiani served in various local government positions including the Mayor and Governor of Yasoi, Capital of Boyerahmand, Iran. In 1980, Dr. Kiani moved to England, where he established and managed several trading companies over a period of some 20 years. Dr. Kiani is a planning and logistic specialist who is now applying his knowledge and experience to build a worldwide immunology network, which will use our proprietary technology. Dr. Kiani received his Ph.D. degree from the University of Ferdosi in Iran, ND from American University.



WILLIAM M. MITCHELL, M.D., Ph.D., 74, has been a Director since July 1998. Dr. Mitchell is a Professor of Pathology at Vanderbilt University School of Medicine. Dr. Mitchell earned a M.D. from Vanderbilt and a Ph.D. from Johns Hopkins University, where he served as an Intern in Internal Medicine, followed by a Fellowship at its School of Medicine. Dr. Mitchell has published over 200 papers, reviews and abstracts dealing with viruses, anti-viral drugs and immune responses to HIV infection. Dr. Mitchell has worked for and with many professional societies, including the International Society for Antiviral Research, the American Society of Biochemistry and Molecular Biology, the American Society of Microbiology and government review committees, among them the National Institutes of Health, AIDS and Related Research Review Group. Dr. Mitchell previously served as one of our directors from 1987 to 1989.