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This Small-Cap Biotech Is Tapping A $200 Billion Market

|Includes: Hemispherx Biopharma, Inc (HEB)

The market for immunotherapies - the difficult science to boost the body's defenses by using substances made in the body, or even a petri dish - is projected to grow to $200 billion plus.

A small and debt-free company you probably have never heard of is gearing up to tap this burgeoning market.

Philadelphia's drug finding firm Hemispherx Biopharma (NYSE: HEB) - with flagship product Alferon N Injection and the experimental therapeutic drug Ampligen (rintatolimod) - is testament to how a small company with $20-million market value can leverage R&D strengths to amplify and modulate the human immune system for treatment of seriously unbearable disorders.

With a team comprising lawyers, accountants, and professors, Hemispherx Biopharma is poised to carve out a billion-dollar market for itself. It has tweaked its management team, cut costs, and sharpened focus on finding co-development partners to achieve commercial success.

This penny stock is one to watch out for.

This company is close to achieving something very big. Hemispherx is poised to enter a confirmatory Phase III U.S. trial with its drug called Ampligen (also called Rintamod) that could become the only FDA-stamped treatment for chronic fatigue syndrome or myalgic encephalomyelitis (CFS/ME).

The disease affects millions of people worldwide, but has no cure so far. Ampligen, approved in Argentina and available in Europe, has the scope to become an immuno-oncology hot-shot drug just as Bristol Myers Squibb's (NYSE: BMY) Opdivo and Merck's (NYSE: MRK) Keytruda. This is because Ampligen can also potentially treat cancers, and even Ebola.

The other weapon in Hemispherx Biopharma's stockpile is also unique.

Interferons are substances produced by the body's white cells to fight infections, cancer, hepatitis C, etc.

The company's Alferon N Injection, already approved in the US and Argentina, treats genital warts (HPV) in adults, may also have use in treating HIV, multiple sclerosis, and even Middle East Respiratory Syndrome (MERS).

In another three years, just the global HPV therapeutics market piece will be worth over $2 billion, indicating the solid fortunes of Hemispherx. There is scientific data to show that Alferon can be 10 to 100 times more effective than recombinant interferons.

It also has fewer side effects than Merck's Intron A (can treat genital warts). Popular interferon-based treatments are Rebif (from EMD Serono - the biopharma business of Merck KGaA) and Betaseron, owned by Bayer (OTC: OTCPK:BAYRY), but these are for multiple sclerosis.

Risks of a financing crunch, threats of drugs failing in trial, and competitors getting ahead are relevant not only for Hemispherx but every other drug finding firm out there.

Its small size does limit financial resources. This is why partnering with deep-pocketed biggies or pharma giants is a smart move. Forming partnerships will generate consistent milestone-linked cash flows while not unduly pressurizing finances or dilutive equity raises.

In 2016, when Hemispherx shares have dipped 15%, the company has brought in new leadership including CEO Tom Equels to bring drugs to market. With about $8 million in cash, and plans to raise about $15 million to ramp up manufacturing for Alferon, we believe the company will be in a position to conduct the Phase III trials for Ampligen. It's talking to potential co-development partners about the valuable opportunity in the $60k-70k CFS/ME treatment cost once Ampligen is widely commercialized.

The author is an independent contributor who at the time of publication owned none of the stocks mentioned.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.