Hemispherx Biopharma Inc. (AMEX: $HEB)

Hemispherx Biopharma Inc. (AMEX: $HEB)

Hemispherx Biopharma Inc. (HEB) is a biopharmaceutical company engaged in the clinical development, manufacture, marketing and distribution of new drug therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders. The Company’s products include Ampligen and Alferon N Injection. Ampligen is an experimental drug undergoing clinical development for the treatment of Chronic Fatigue Syndrome (CFS) and as a vaccine enhancer (adjuvant) for both therapeutic and preventative vaccine development. Alferon N is an indicator for refractory or recurring genital warts. Alferon LDO (Low Dose Oral) is an application under early stage development targeting influenza and viral diseases.

Hemispherx Biopharma Inc. was founded in 1990 and is headquartered in Philadelphia, Pennsylvania.

Share Statistics (14-April-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	HEB	Revenue, $Mn	1.06M	0.26M	75.5%	0.03M	0.04M	33.3%
Current price	$0.79	Gross marg.	12.2%	-201.1%	1748%	-433%	-300%	30.7%
52wk Range:	$4.54-0.44	Oper. Margin	-1820%	-4834%	165.4%	-9925%	-9933%	0.0%
Avg Vol (3m):	2,006,270	Net margin	-1711%	-4700%	174.6%	-10125%	-9466%	6.5%
Market Cap.	106.14M
Dil. Shares Outst.	132.8M	EPS, $	-0.25	-0.16	36.0%	-0.04	-0.03	25.0%

Source: Reuters.com, SEC Filings.

Financial Summary

HEB announced its financial results for the fiscal year ended December 31, 2009. The net loss for the year (including non-cash charges) was approximately $13,438,000 or $0.12 per share as compared to a net loss of $12,219,000 or $0.16 per share in 2008. This $1,219,000 increase in loss was primarily due to increased research and development expenses associated with preparing the New Brunswick, New Jersey, manufacturing plant for increased production plus efforts employed in supporting the New Drug Application (“NDA”) and employee compensation awards.

Cash and cash equivalents were $58,072,000 as of December 31, 2009, reflecting an increase of $51,953,000 since year end 2008 due primarily to equity financing during 2009. Cash used in operating activities for the year ended December 31, 2009, was $9,297,000 compared to $9,358,000 for the same period in 2008, a reduction of $61,000.

Progress was made in preparing the Company’s production facilities, including the Company’s contract manufacturer, for various FDA inspections and additional preclinical studies were conducted assessing the potential use of Ampligen®, an experimental therapeutic, and Alferon NTM (FDA approved for a category of sexually transmitted diseases) against influenza and certain other disease conditions. Alferon NTM production is expected to be resumed based on an approximate $4.4 million investment in various facility improvements in our approximate 43,000 square foot New Jersey manufacturing facility. A Complete Response Letter received on November 25, 2009, from the Food and Drug Administration (“FDA”) regarding the pending NDA has prompted a broad internal and external program to design and implement a confirmatory clinical trial in chronic fatigue syndrome (“CFS”) and to conduct certain additional preclinical tests.

Financial Strength (14-Apr-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	22.33	2.42	2.63	0.80
Current Ratio (MRQ)	22.33	3.03	3.13	0.96
Long-Term Debt to Equity (MRQ)	0.00	24.05	25.72	142.37
Total Debt to Equity (MRQ)	0.00	28.22	33.04	204.54

Source: Reuters.com, SEC Filings.

Analyst Consensus

No chart available.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=HEB

Investment Highlights

HEB is an advanced specialty pharmaceutical company engaged in the clinical development of new drug entities for treatment of seriously debilitating disorders, and Max Neeman International is one of the leading and largest clinical research organizations (“CROs”) in India. The companies recently jointly announced a collaborative clinical research effort for one of HEB’s flagship products, Alferon N Injection® (interferon Alfa-n3).

HEB and Max Neeman International said in a joint statement that their new partnership will provide a clinical research platform designed to improve the quality of care for treatment of seriously ill patients hospitalized with either seasonal influenza or pandemic influenza. The CRO is targeting clinical sites so as to enroll subjects beginning the upcoming monsoon season, June 2010. According to various expert epidemiological sources, strains of influenza are becoming progressively resistant to currently available commercial antiviral drugs and death rates are expected to increase globally.

Alferon N Injection® is an FDA-approved product presently for a category of sexually transmitted diseases. Should the forthcoming clinical trials be successful, HEB will examine the application to expand the existing commercial authorization to allow Alferon N Injection® as an approved drug for treatment of hospitalized flu patients.

ALFERON N Injection® [Interferon alfa-n3 (human leukocyte derived)] is the Company’s registered trademark for its injectable formulation of Natural Alpha Interferon, approved by the U.S. Food and Drug Administration (FDA) for the intralesional treatment of refractory or recurring external condylomata acuminata in patients 18 years of age or older.

ALFERON N Injection® is the only highly purified, natural-source, multispecies alpha interferon product currently sold in the U.S. and is also approved for sale in Mexico, Germany, Singapore and Hong Kong.

Clinically Effective:

• All warts disappeared in 54% of patients.
• No recurrence in 76% of complete responders at follow-up.
• Completely cleared 73% of all treated warts.
• No human antibodies to interferon alfa-n3 detected in clinical trails.
• Provides a spectrum of multiple alpha interferon subtypes.

Well-tolerated

• No surgery or caustics and resultant ulceration or scarring.
• No specific post-treatment care necessary.
• The most common adverse effects (mild to moderate, transient flu-like symptoms) were comparable to placebo after 304 weeks of therapy.
• The majority of patients considered Alferon N Injection preferable to conventional therapy.

Source: http://www.hemispherx.net/

Technical Analysis

Source: http://stockcharts.com

HEB is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

HEB has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, HEB is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for HEB currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Apr-14-2010	symbol	Share, $	$ Mn	2009	2010	2009	2010
Javelin Pharmaceuticals Inc.	JAV	2.17	139.68M	n/a	n/a	22.58	n/a
Enzon Pharmaceuticals Inc.	ENZN	10.39	617.75M	n/a	n/a	3.38	n/a
Trimeris Inc.	TRMS	2.41	53.86M	4.37	n/a	3.43	n/a
Drug Manufacturers Median			270.43M	n/a	n/a	9.79	n/a
Hemispherx BioPharma Inc.	HEB	0.79	106.14M	n/a	n/a	898.17	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	47,377	5
Sales	n/a	0
Net Shares Purchased (Sold)	47,377	5
Total Insider Shares Held	8.66M	n/a
% Net Shares Purchased (Sold)	0.6%	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	303,078
% Change in Institutional Shares Held	1.6%

Source: Yahoo Finance

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