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Hemispherx Lied To Investors And SEC About Ampligen

Tickers in this article: HEB

PHILADELPHIA ( TheStreet) -- Hemispherx Biopharma (HEB) lied to investors and to the Securities and Exchange Commission by failing to disclose serious concerns raised by the U.S. Food and Drug Administration about its chronic fatigue syndrome drug Ampligen.

An FDA advisory panel convenes Thursday to review Ampligen and vote on whether or not recommend the drug as a new therapy for chronic fatigue syndrome. On Tuesday, FDA made public a sharply critical clinical review of Ampligen in which agency staff raised "multiple concerns" with the efficacy and safety of the drug.

Hemispherx knew as early as this past summer that FDA wasn't likely to approve Ampligen, according to new information released Tuesday by the FDA. Hemispherx withheld this significant information from investors and the SEC.

During a meeting held in June between Hemispherx and FDA officials, the agency noted the following regarding Ampligen:

"You Hemipsherx propose new post-hoc analyses of data from Trial 516 and a post-marketing trial (AMP-520) to support approval. It would be unusual for this type of data to provide adequate evidence of efficacy. However, the adequacy of the data will ultimately be a review issue, and it is reasonable for you to submit a complete response. This complete response needs to address all of the issues defined in the complete response letter dated November 25, 2009. As Ampligen is a new molecular entity, we anticipate that the data submitted in your NDA would be presented at a public Advisory Committee meeting... The standards for approval require the same evidence of efficacy and safety, regardless of approval pathway." Emphasis added.

The bolded sentence is the Hemispherx lie. This important nugget of information from the June meeting with FDA was omitted from the company's press releases and SEC filings.

Here is how Hemispherx describes the same June meeting with FDA in its most recently filed 10-Q:

On June 8, 2012, the Company and its consultants met with the FDA to discuss certain aspects of the CRL Complete Response Letter relating to its NDA for Ampligen for the treatment of severely debilitated patients with CFS. Upon our review of the FDA Minutes from this meeting that we received on July 6, 2012, we believe the key points from the meeting to be undertaken by the Company in conjunction with its complete response include the following:

The FDA agreed to accept, for review, in Hemispherx's complete response new analyses of data from the AMP-516 Trial. Whether these data provide adequate evidence of efficacy will ultimately be a review issue, and there can be no assurance the FDA will conclude the data are adequate to support approval of the Ampligen NDA..."

Hemispherx makes no mention of FDA's warning, which is clearly material information for investors:

"It would be unusual for this type of data to provide adequate evidence of efficacy."