Hemispherx Biopharma Faces FDA Scandal with Misleading Press Release

Strategic Insights -

Hemispherx Biopharma, Inc., a pharmaceutical company, has found itself at the center of a controversy after issuing a press release on October 23, 1998, which failed to disclose critical information about a U.S. Food and Drug Administration (FDA) investigation. The press release, which announced the company's compliance with an FDA request, omitted the fact that the FDA had determined that Hemispherx's safety and efficacy claims for its Ampligen product violated federal regulations. Furthermore, the press release did not disclose that the FDA had instructed the company to discontinue making claims about Ampligen's safety and efficacy.

Key Takeaways:

  • Hemispherx Biopharma's October 23, 1998, press release failed to disclose critical information about an FDA investigation, including the fact that the FDA had found its safety and efficacy claims for Ampligen to be in violation of federal regulations.
  • The press release also omitted that the FDA had instructed the company to immediately discontinue the dissemination of materials making claims about Ampligen's safety and efficacy.
  • Hemispherx's CEO, Dr. William A. Carter, made statements during an investor conference call, which further contributed to the regulatory issues surrounding Ampligen.
  • Asensio & Company, an investment bank, has issued a Strong Sell recommendation on Hemispherx shares, citing the company's willingness to issue false statements and defraud investors.
  • The Notice of Infraction from the FDA was dated October 15, 1998, and transmitted via facsimile, but Hemispherx did not disclose this information until after the close of business on Friday, October 23rd.

Statistics:

  • 1: The number of critical pieces of information omitted from Hemispherx's October 23, 1998, press release concerning the FDA investigation.
  • 15: The day of the month of the FDA's Notice of Infraction, which was transmitted via facsimile on October 22, 1998.
  • 22: The day of the month on which the FDA transmitted the Notice of Infraction to Hemispherx via facsimile.
  • 23: The day of the month on which Hemispherx issued its defective infraction press release.
  • 1 day: The duration of time between the receipt of the Notice of Infraction by Hemispherx and the issuance of the press release, which was deliberately delayed until after the close of business on Friday.

Sources:

  • Hemispherx Biopharma's October 23, 1998, press release, "Hemispherx Complying with FDA Request."
  • The U.S. Food and Drug Administration (FDA) Notice of Infraction, dated October 15, 1998.
  • Asensio & Company's Strong Sell recommendation on Hemispherx shares, dated October 27, 1998.