HEMISPHERx BIOPHARMA, INC.: Summary Outline to Investor Conference call of September 22, 1998.
Mr. Asensio's Unorthodox Research Approach
Mr. Asensio never once visited this Company. He never once spoke to a member of Management of this Company. He never once spoke or visited any of the numerous principal clinical investigators who were involved in the clinical development of this drug. These principal investigators, all of whom are at arm's length and independent from this Company, as is required by Federal Law, are numerous and spread throughout the United States. Certainly there were people in New York City, itself, where I understand he resides, where he could have made a phone call to a principal investigator and gotten firsthand information concerning this drug. He chose not to do that. He further never bothered to call any of the strategic partners of this Company. Many of which are available and would have been available for any analyst seeking detailed and up-to-date information. He never spoke to a single person, a single doctor, a single scientist, a single business partner who was involved in the development of this compound, or any of the ancillary technology.
Now, what method did Mr. Asensio use to design his interpretation that the Company "has no medical or economic value"? The method that he appears to have used includes a consistent use of very dated materials in which he introduces allegations but never bothers to fast forward the allegation into the present time. He never mentions how the issue was resolved. And the reason he never mentions how the issue was resolved, we believe, is that it does not support his program. We believe that Mr. Asensio is engaged in a program of criminal negligence and criminal misrepresentation. That is our belief.
Hemispherx has not overestimated the CFS market size
In his summary Asensio asserts three major problems. #1, that "Hemispherx has overestimated the probable size of the market". In support of this he takes a dated study from the Centers For Disease Control which was long ago thrown out by the Centers For Disease Control. The fact that he does not acknowledge nor does he acknowledge that the Centers For Disease Control thereafter published data saying that they were "probably wrong". Nor does he acknowledge the recent study from Harvard University School of Medicine led by the distinguished Professor at Harvard, Dr. Anthony Komaroff, who as recently as August of 1995 stated explicitly that there were between 500,000 and 2,000,000 Americans suffering with this disease. These are all facts which Mr. Assensio conveniently forgets to mention.
He forgets to mention that in 1994 and 1995 the Centers For Disease Control was brought before the United States Congress. And under oath the leading researcher on this subject testified "that we had probably been wrong". And he acknowledged in his Congressional testimony that the disease was much more prevalent than the original study of the Centers For Disease Control had thought. And he further acknowledged in his testimony that he believed that the ongoing work from Harvard Medical School was the accurate work on the incidence of the disease.
Now, I should tell you that Harvard Medical School is an independent institution, arguably the most distinguished medical institution in the World. And there is no question that Dr. Anthony Komaroff is a Distinguished Professor of Medicine at the Harvard Medical School. These are unarguable facts.
So the notion that Hemispherx has overestimated the probable size is not only wrong on its face, Mr. Asensio had available to him, reports from the Centers For Disease Control which were subsequent to the report that he cited. He knew that that report was dated and wrong, or he should have known. He also knew that there was a Harvard Medical School Publication which he chose not to acknowledge. It is this type of approach, as you will see, that he has consistently used throughout his so-called research report.
Hemispherx has not misrepresented Ampligen'g FDA Filing Status
Asensio's second major allegation is "Hemispherx has misrepresented Ampligen's Food & Drug Administration filing status". He stated that Hemispherx has "consistently stated that Ampligen is in advanced clinical testing for this CFS indication". And he, of course, suggested that this is absolutely untrue. The reality, of course, is exactly the opposite. It is absolutely true. The drug is in advanced testing. It is at the Phase III level. It has been given, in fact, the cost recovery treatment designation by the Food & Drug Administration.
And as I have mentioned to a number of you in previous conversations on this very subject, there are only approximately 60 to 70 such drugs in the entire universe of new drugs under development which have been given this type of designation by the Food & Drug Administration since 1990. For many different diseases, Alzheimer's disease, metastatic breast Cancer, HIV disease, etc., etc. All dreaded diseases. And Hemispherx is the only drug that has been given this designation for Chronic Fatigue Syndrome.
The history of this designation has been one that thus far in the 60 to 70 times that this Regulatory use has been imploited by the FDA, the drugs have gone on to full approval. That is the history of this designation.
So, Mr. Assensio is simply dead and completely wrong on this subject. He doesn't even read the FDA's own papers on this subject. If he had even a casual interest in this research topic, he would read what the FDA is saying about this topic. The most comprehensive statement on this subject was made in May, 1998 in a white paper by the FDA. I believe the date is April 19, 1998. In which they declared to a Committee, the Statutory Committee based in U.S. Law, called the Chronic Fatigue Research Committee consisting of the National Institutes of Health, the Centers For Disease Control, the Health & Human Services, The Social Security Disability Administration, and of course the FDA. The five or six major enforcement agencies in the United States with respect to diseases. They stated categorically in this report, #1, the Chronic Fatigue Syndrome was a serious and life threatening disease for which they were moving quickly to try to improve diagnostics and therapeutics. And that #2, at this time the only drug in advanced testing and the only drug which had been given treatment cost recovery status was Ampligen.
Apparently this type of material escapes Mr. Assensio's perview. He also apparently did not bother to call the Food & Drug Administration which stated as recently as 48 hours ago that the FDA does not allow clinical tests to occur and to continue if a drug is not reasonably safe at the dosage being used. The FDA went on to say that if there was an issue of product safety the drug is put on "clinical hold" until the scientific issues are resolved.
Now that is not the situation with Hemispherx. Hemispherx has been allowed to expand its clinical trials very dramatically. There are now hundreds of people in the United States who are either on the drug or about to go on the drug and comparable numbers in Europe. If any of the Regulatory Agencies had concerns about the safety of this drug, I can assure you they would not expose the American population to the drug. They have legal remedies which can be introduced at a moment's notice. The Company has no letters from the FDA evidencing any concern for toxicity at this time. And, indeed, the FDA is allowing further expansion of a variety of trials that the Company is conducting with respect to Chronic Fatigue Syndrome. The Company has not misrepresented the filing status, and it is a matter of public record. It is a matter of public record.
Hemispherx has not misrepresnted the results of its Phase II trials
The third and final major allegation is that "the Company has misrepresented the results of its Phase II trials and the efficacy of Ampligen as a drug for the treatment of Chronic Fatigue Syndrome". Now, here Mr. Assensio uses another tool. He engages in what we would have to call a pseudo scientific approach in which he recites the study designs and says "however, there were no cures looked for and no cures found, and therefore the results are not valid".
Now, to the best of our knowledge, Mr. Assensio has no scientific background. But I don't think he would need a scientific or medical background to understand that the cure is not the definition of efficacy. Cure is not the definition of efficacy, and in fact, it is difficult at this time to define a long-term cure because you are not quite sure exactly of what you are looking for in Chronic Fatigue Syndrome. We are studying people over long periods of time and have very encouraging information.
But what we are stating principally is statistical improvement in physical performance, mental skills, etc. And in the constellation of activities which we call medically the quality of life. All of our studies have shown significance at these levels, and these are all published in peer review journals. It is not necessary that Mr. Assensio, if he were interested in a cure, he wouldn't have to sit at a weegie board. He would only have to get down to the New York University Public Library and open the books. And if he couldn't understand what is in there he could perhaps afford to photocopy the articles and take it to a doctor. He doesn't have to wonder what the outcome is, he only has to be able to read, or if he can't read science which is understandable, he needs someone else to assist him.
The notion that one has to demonstrate cure in order to have an approvable drug is, of course, ridiculous on its face. I think one of the best examples of how silly this approach is is that it would be for example to look at Prozac which is obviously a multi billion dollar drug sold for the treatment of depression. Depression, ladies and gentlemen, is made on a diagnosis made on clinical grounds. There is not etiologic agent. We don't know where the problem comes from. Certainly no one believes and the manufacturer does not represent that Prozac ever cured anybody of depression. And, in fact, the studies of Prozac lasted about five to six weeks. And many of the patients reported using what is called a questionnaire that their symptoms were relieved. But on the basis of this information, this drug was platformed to become a multi-billion dollar drug.
Clarification of DuPont Allegation
Mr. Assensio has created a smoke screen of misinformation, and a part of this is the use of a type of pseudo science engaged to panic investors that the Company and it consultants, and especially the distinguished clinical investigators from around the United States and the World do not know what they are doing.
Now, in addition to the outright falsification of information which is replete in his document, he also consistently utilizes misleading information in which he may introduce an allegation that was at one point interesting maybe ten years ago. But he does not fast forward the allegation to the conclusion, even though the conclusion is a matter of public record.
Examples of this include the so-called DuPont information. Arguably a very difficult chapter at the history of DuPont and Dr. Carter. He lays out all the allegations but never bothers to mention to the reader that there was an out-of-court settlement in which Hemispherx and Dr. Carter were given approximately $8 million by DuPont. They were forced to disengorge their stock in Hemispherx and return it. He omits the fact that Dr. Carter was freed of all charges of any impropriety, and never paid a penny to any investor. He simply introduces the allegations from DuPont, but doesn't mention how the lawsuit was settled totally in Hemispherx favor.
He doesn't mention that the National Institutes of Health issued a report which blamed DuPont for all of the scientific errors that were made with the drug in terms of its packaging. They blamed DuPont. They did not blame DuPont and Hemispherx. They said DuPont made a significant error in drug packaging. This is a matter of a 15-page NIH report which has been widely disseminated into the public domain.
He states that the drug's worth has never had any activity and any disease, which of course is categorically wrong. There are more than 200 papers which indicate promising activity along a range of immunological diseases. He never comments on the fact that tens of millions of dollars of NIH money based on peer review process involving dozens and dozens of distinguished scientists from around the Country have consistently funded this technology over the years because of their belief that it represented a significant opportunity into certain disease categories for which there was no treatment. Obviously very significant investments by the Federal Government, measuring in the tens of millions of dollars. And this was based on peer review, due diligence, probably between 100 and 150 Federal scientists have examined this data over time. And have all found the data to be promising and worthy of investment, and worthy of treatment status, and worthy of being sold to United States consumers at a price of $7,200 for a six-month treatment.
This is not a decision which Hemispherx can unilaterally make. Drug development is a highly regulated process. And when the Federal Government decides that it is appropriate to charge patients for treatment, they are doing this on a basis of substantial due diligence. Having to do with a potential for drug benefit, and examining the issue of drug side effects. |
