Hemispherx Biopharma Is Worth The Risk

The pharmaceutical industry is a competitive one dominated by some huge players, but a small company like Hemispherx Biopharma (HEB) can come along with an important drug and add some lift to your portfolio. These smaller companies are always a bit of a risk given their competition, high R&D costs, and the risks of dealing with FDA approval. But HEB is on the verge of releasing a drug that could really send its stock price soaring.

HEB focuses on viral and immune-based acute and chronic disorders; its drugs treat patients with multiple sclerosis and West Nile Virus, along with AIDS, genital warts, hepatitis C, and acute respiratory syndrome. Its newest drug, Ampligen, will treat Chronic Fatigue Syndrome, and has recently completed Phase III studies and will soon file for FDA approval. Given the lack of treatments for this condition, and the CDC's recent emphasis on the need to treat it, the upside of this drug's approval could be enormous. While the long term outlook is uncertain given likely competition and the eventual expiration of the drug patent, this stock could grow by as much as ten times over the next few years.

The risk, of course, is approval. HEB's revenues have been flat the past few years, it's operating at a loss, and R&D costs have been climbing -- so there's not much to recommend this stock without Ampligen. But if you're willing to take a risk, this one could really pay off.

Type of stock: A small biopharmaceutical company on the verge of a potentially lucrative breakout.

Price target: This stock is all about upside, so if you believe, there's no reason not to buy now, while it's trading a little above $2. You can also wait for approval, but you'll need to act quickly and you may miss your chance.

Disclosure: Author holds a position in HEB.

HEB 1-yr chart

Comments

[TerryC:]

Philadelphia Inquirer 2002

Ampligen is a clear liquid in a small glass bottle that might be good for a lot of things. It might be good for AIDS. It might be good for chronic fatigue syndrome. It might be good for kidney cancer. And liver cancer. And hepatitis. Ampligen might even be good for the war on terror if a smallpox epidemic were let loose on America. Then again, Ampligen might not be good for anything.

The drug has been pacing the sidelines for 30 [NOW 35] years hoping to jump into action against some high-profile disease, but in all that time the Food and Drug Administration never once has seen fit to put it in play. In Philadelphia, Ampligen's inventor, an intense and guarded man named William A. Carter, pursues a marathon quest to bring his wonder drug to market. Investors have poured more than $145 million into Carter's Ampligen research. But not many of them have put up money lately. They tend to shut their doors when they see Carter coming. Everywhere he goes, Carter is preceded by the clamor and bombast of a vociferous New York securities trader named Manuel P. Asensio, who for four years has been trumpeting to the world that Ampligen is a big fraud and that Carter is engaged in "one of the darkest medical stock scams in modern U.S. capital market history."

2006 Dec 20 06:54 AM

[sestrip:]

Hilary calls Ampligen a new drug,does she know that it has been around (30-35) years???? She must be joking,calling Ampligen a new drug,please..some one tell her to check this out,TIA.

2007 Jan 05 11:56 PM

[Geert Vande...:]

Clinical efficacy and safety data (both phase 2 and 3) of Ampligen for CFS are compelling.
Since going public, this stock has been bashed, first by Asensio, later on all the available message boards. They seem to have succeeded, as this is a highly misunderstood and undervalued stock. I'm sure the market is wrong here. Compare for instance its fundmamentals and pps to MDV's.

2007 Feb 07 06:07 AM