Ken, re. HEB:
The filings are not extremely clear on the exact date the lockout expires. There was a term sheet dated Sept. 3 1997, and the terms included a 12-mo lockup, but it doesn't say whether the lockup began on the date of the term sheet. Most likely it would begin on the date the deal closed, but this date isn't specified anywhere I can find it. The co. failed to file 8-k's to report the financing in 1997, so that doesn't help.
Could you post the link for the .pdf file for the VMR report you mentioned? I can no longer find it on the Value Management Research website.
Below I list a couple of curious factors for the stock. They don't necessarily mean the stock will go down, but they are interesting:
(1) The co. IPO'd in 1995, with units of common stock + warrants sold for a mere $3.50. The underwriter, Stratton Oakmont, was ousted by the NASD the next year. The NASD said that S.O. was one of the worst cases of persistent fraud ever.
(2) The CEO claims in the audio recording on the co. web site
hemispherx.com
that the co. has invested 'close to $150 M' in its drug, Ampligen. But if you look at the SEC filings, you see that the co. hasn't spent very much money on R&D:
Here are the data beginning 1994:
year / R&D expenditures
1994 / $1.6 M
1995 / $1.0 M
1996 / $1.9 M
1997 / $3.2 M
average $1.9 M
The date that the co. began doing research is "early 1980's"according to the filings. If you multiply 17 years X $1.9 M, you get $32 M, as an upper limit on cumulative R&D expenses.
So how I wonder did they 'invest' $150 M? No such figure is given in any SEC filings I can find. Just in promotional statements from the CEO and from analysts who repeat the figure.
You can find 'independent analyst reports' on the company's website,
hemispherx.com
and these often refer to a $100+ M figure as justifying a high market cap. That's because biotech's are often valued as a multiple of cumulative R&D.
(3) R&D expenses are signfificantly less than SG&A expenses. This is never a good sign for an R&D co.
(4) The co.'s website mentions www.Westergaard.com, as a source of investment information. Westergaard publishes company-paid analysis, according to www.stockdetective.com. It's not clear to me, though, whether the co. presently uses Westergaard. Westergaard has a record of threatening shortsellers; there's a whole SI thread devoted to this, in fact: Subject 16571
(5) Apparently there is some dispute in the medical community about whether the disease HEB's drug is supposed to treat is, in fact, really a disease. It used to be derided as 'yuppie flu'. The Center for Disease Control does now classify 'Chronic Fatigue Syndrome',
cdc.gov
but its cause is unknown and there is no diagnositic test for it. It's diagnosed the way psychiatric illnesses are diagnosed. So there is no way to say for sure who has the disease or even any way for HEB to measure the disease, in the course of doing its Phase III clinical trials. I suppose, though, they can still get useful results from their trials, in the same way that results come out of drug tests for psychiatric illnesses. |
