Can Hemispherx Find Success In The Chronic Fatigue Market?

| About: Hemispherx Biopharma, (HEB)

In my experience with chronic fatigue syndrome, it's like a person is sleeping much of their life away, similar to Rip Van Winkle. It's like a person has no life at all. --Batknight2, posting on

It's easy to give up on Hemispherx Biopharma (NYSEMKT:HEB) and its flagship drug Ampligen. The Street's Adam Feuerstein has done a good job trashing the company and the drug. Initially, I wasn't very impressed either, but then I read many accounts of patients who took the drug and raved about how Ampligen greatly changed their quality of life.

Ampligen (rintatolimod) (poly C12u), is an experimental immunomodulatory double stranded RNA drug developed by Hemispherx Biopharma of Philadelphia, Pennsylvania. Ampligen is a toll-like receptor 3 (TLR3) antagonist based on synthetic double stranded RNA (dsRNA). Although chronic fatigue syndrome/myalgic encephalomyelitis (CFS/ME) is the main indication for this drug, Ampligen is also in early clinical trials as a vaccine adjuvant for breast and ovarian cancers and influenza.

There is a real need to find a drug that treats CFS/ME. According to the Centers for Disease Control and Prevention (NASDAQ:CDC), more than one million Americans have CFS/ME. Others estimate that the CFS population is closer to four million adults in the United States, a number that is 10 times larger than that of multiple sclerosis (400,000), a condition with similar functional impairment, also of unknown etiology, but with nine FDA approved disease modifying agents. CFS/ME strikes more people in the United States than multiple sclerosis, lupus, and many forms of cancer.

Some research has estimated that 14.3% of CFS/ME sufferers have severe disease. Such patients are house-ridden, bed-ridden and when ambulatory may need to be in a wheelchair. CDC studies have shown that CFS can be as debilitating as multiple sclerosis, lupus, rheumatoid arthritis, heart disease, end-stage renal disease, chronic obstructive pulmonary disease (COPD) and similar chronic conditions. The more severely ill patients die prematurely, often from organ failure, cancer and heart disease or suicide. Recently, the CDC and Harvard School of Public Health published an analysis based on a group of patients in Georgia. They calculated the economic burden for a CFS/ME sufferer both in terms of additional healthcare expenditures and lost earnings that they estimated at $11,780 per year per person. If it is assumed that the CFS patient population that is currently under care was one million, then the annual cost to society would be $11.8 billion. The full cost assuming four million CFS sufferers would be $47.1 billion per year.

HEB has two major drug platforms: Alferon N and Ampligen. Both drugs were designed to modulate the immune system and have pluripotent activities that target large disease areas, such as infectious disease, immune dysfunction, and cancer.

Alferon N injection and Alferon Low Dose Oral (LDO). Alferon N are natural alpha-interferon derived from human leukocytes. Alferon N injection was approved by the Food and Drug Administration (FDA) in 1979 to treat refractory or recurring condyloma acuminata, also known as human papilloma virus (HPV) or genital warts. Alferon N is the only FDA approved natural interferon available in the United States.

Ampligen is getting all the attention now since the FDA has tentatively scheduled an Advisory Committee meeting to discuss the Ampligen New Drug Application for Chronic Fatigue Syndrome on December 20, 2012 and the Prescription Drug User Fee Act (PDUFA) review goal for the FDA to complete its review on February 2, 2013.

Ampligen has been down a very long and rocky regulatory road. It started in the mid-1970s, when HEB's CEO and CoB William A. Carter, who was then a doctoral researcher at Johns Hopkins University, modified the dsRNA molecule by adding uridylic acid molecules at specific interval along the RNA chain. The new compound, called Ampligen (for AMPLIfied GENetic activity) stimulated interferon production like poly I:C, but was less toxic.

Many believe the hope that an FDA-approved CFS/ME drug coming to the market soon was dashed on November 25, 2009. The FDA told HEB that it would not approve Ampligen's use in CFS/ME until the company provided credible evidence of Ampligen's efficacy using expanded studies that were at least six months in duration, demonstrated that Ampligen was safe, that patients on more than a one dose regimen were studied, that the studies incorporate at least 300 patients on doses intended for the market, that rodent studies be done to examine carcinogenicity, that additional quality control data is provided, and that HEB make changes at one of their manufacturing facilities to meet FDA quality standards.

What the FDA wanted would cost millions and take years to accomplish. HEB stock gradually plummeted to a 52 week low of 17 cents. Many thought HEB's days were numbered or that the company's only marketed drug would be forever be Alferon N, an FDA-approved injection to treat refractory or recurring genital warts.

Prospects may be looking better now for HEB. On July 11, 2012, HEB executives met with FDA officials. At that meeting, FDA officials agreed to accept, for review, new analyses of data from Hemispherx's AMP-516 Phase III Clinical Trial (AMP-516 Trial) in support of its New Drug Application (NDA) for Ampligen.

If the FDA finds sufficient evidence to support approving Ampligen, these new analyses would be in lieu of the additional confirmatory Phase III study that was called for in the Agency's November 25, 2009 Complete Response Letter. The FDA has advised that whether the new analyses provide adequate evidence of Ampligen's efficacy in treating CFS/ME will ultimately be a review issue.

In March 2012, a peer reviewed analysis of data from the AMP-516 Trial found that the proportions of Ampligen patients with exercise improvements of at least 25% and at least 50% were, respectively, 1.7 and 1.9-fold greater than those patients on placebo. A continuous responder analysis, which examined response improvements from 25% to 50% in 5% increments, showed a greater improvement in exercise tolerance for patients receiving Ampligen versus placebo at every 5% increment above 25%. The study found Ampligen improved exercise tolerance and other CFS/ME symptoms and decreased the use of other medications.

The 40-week, double-blind, placebo-controlled trial was conducted at 12 clinical sites and included 234 people with severe, long-term ME/CFS. Along with exercise tolerance, researchers looked for improvements in several markers of activity and vitality.

The study found that 99% of the patients taking Ampligen and 97% of the patients on a placebo reported experiencing a side effect. Flu-like symptoms, chills, dilation of blood vessels (which lowers blood pressure), and difficulty breathing were the most common side effects of those taking the drug. Ampligen is given by injection. The study found no statistical difference in injection-site reactions between the drug and placebo groups.

This study was initiated on December 17, 1998 and concluded on August 16, 2004. Although only 234 patients were enrolled in this study, HEB claims over 1,000 patients have received Ampligen and 90,000 have been doses administered. Some patients have been on Ampligen treatment for over five years.

THE HEB funded study was co-authored by HEB scientists, as well as some of the most respected names in CFS/ME research: Lucinda Bateman, MD, Derek Enlander, MD, Nancy Klimas, MD, Charles Lapp, MD, and Daniel Peterson, MD.

HEB hopes that the FDA's recently expanded statutory authority under the FDA Safety and Innovation Act ("FDASIA") may be relevant to the potential approval of Ampligen. Although there can be no assurance how the FDA will implement the new FDASIA provisions, HEB cites a September 13, 2012 teleconference wherein Sandra L. Kweder, M.D., Deputy Director, CDER Office of New Drugs stated that the FDA considers CFS/ME to be a "serious and life threatening condition" and that the FDA is "committed to making promising drugs available to individuals with serious diseases as quickly as possible for the rapid development and review of these types of therapy."

Section 901 of the FDASIA Act stresses the importance of 'expedited review' and the need to target subpopulations:

…the FDA should be encouraged to implement more broadly effective processes for the expedited development and review of innovative new medicines intended to address unmet medical needs for serious or life threatening diseases or conditions… This may result in fewer, smaller, or shorter clinical trials for the intended patient population or targeted subpopulation…

…Patients benefit from expedited access to safe and effective innovative therapies to treat unmet medical needs for serious or life-threatening diseases or conditions.

Those who are optimistic about Ampligen receiving FDA approval point to Benlysta (belimumab), the lupus drug developed by Human Genome Sciences (HGSI) and GlaxoSmithKline (NYSE:GSK). Benlysta went through two clinical trials. The FDA approved the drug after finding that 11 patients must be treated for one patient to benefit from the drug and that African Americans, who have a higher incidence of lupus than Caucasians, did not appear to respond to Benlysta.

All the Ampligen speculation has caused a 190% 52 week change in the price of HEB stock which has soared from a 52 week of 17 cents on November 28 low to a high of $1.10 on September 24. At the Rodman and Renshaw conference (September 9-11, 2012), HEB reported having a market capitalization of $115 million, about $20 million in cash, no debt, and a burn rate of $10 million per year.

There will be two audiences closely monitoring news from the FDA on December 20 and February 2. Speculators who want Ampligen to win FDA approval so they can make a lot of money, and those who want the drug available because it may substantially improve their quality of life. I am not trying to pump HEB. I am recommending that you do a simple internet search of "Ampligen, Chronic Fatigue Syndrome" as part of your due diligence. You may be surprised to read the support the drug has in the CFS/ME community, which after all, is the market for the drug.

Disclosure: I am long HEB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.