Hemispherx Biopharma HEB Stock News

Hemispherx Biopharma (NYSEAMERICAN: HEB) is having a rough day in the mrket today, down more than 25% early in the trading session. However, the move is shocking to many. After all, late yesterday, the company reported a positive clinical update. Here’s what’s going on:

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HEB Stock Falls After Reporting Positive Update

In a press release issued late in the session yesterday, Hemispherx Biopharma announced positive clinical data. After digging through the release personally, I can definitively say that the declines are not clinical study related. Here’s what the company announced in Wednesday’s release:

In the press release, HEB said that the first patient has been treated in its Phase 2 recurrent ovarian cancer program. The treatment took place at the University of Pittsburgh Medical Center. The announcement is in line with the company’s transparency promise. In fact, the company said that it would issue updates for investors on the following schedule:

  • When a clinical study is authorized by the FDA.
  • When a clinical study begins enrollment.
  • When the first patient in a clinical trial is treated.
  • When material interim reports become available.
  • When final results become available.

In the Phase 2 study, HEB is evaluating its lead drug candidate, Ampligen, in combination with pembrolizumab and cisplatin. Through the study, it is expected that 45 patients will be treated under the leadership of principal investigator, Robert Edwards, MD.

The Phase 2 study follows a Phase 1 / 2 study of Ampligen that started about 3 years ago and is now nearing completion. This study is also taking place under the leadership of Dr. Edwards, who had the following to offer in a statement:

Our initial study indicates that Ampligen is generally well-tolerated via intraperitoneal administration, thus paving the way for this new Phase 2 study combining Ampligen and pembrolizumab.

Ampligen has the potential to be clinically significant because a robust killer T-cell population in the tumor microenvironment without attracting Treg cells is important to help optimize checkpoint blockade induced tumor shrinkage.

Dr. Edwards’ statement was followed up by Thomas K. Equels, CEO at HEB. Here’s what he had to offer:

This year, world-wide, ovarian cancer is projected to kill 152,000 women. With this new large-scale study funded by an industry grant, Hemispherx and the team at Magee-Women’s Hospital of the University of Pittsburgh School of Medicine are focused on developing a potentially life-saving therapy to meet this critical and unmet medical need.

Why HEB Is Falling

So, if the declines aren’t data related, what’s happening? In my opinion, the drop in value has to do with a recent reverse stock split. The split was authorized by shareholders on May 31, 2019 and took place just two trading sessions ago.

While stock splits and reverse stock splits have no bearing on the actual value of the stock. However, reverese splits are generally looked at in a negative light for investors. Nonetheless, for Hemispherx Biopharma, the reverse split was a necessary evil.

The split took place in order to provide a remedy to NYSE listing requirement issues. Moreover, the reverse stock split may help the company’s investor appeal in the long run. After all, many on Wall Street tend to stay away from stocks with a price of $1 or less. In a statement following shareholder approval for the split, Mr. Equels said it best:

The favorable vote by stockholders and subsequent reverse split serve two important purposes. First, we ensure that Hemispherx can continue to meet the stock price listing standards of the NYSE American. Second, strengthening our stock price this way is potentially a strong driver for stockholder value, as most major investors on Wall Street have prohibitions on investing in stocks under $1, and in some cases even under $5.

Ampligen Comes With Incredible Potential

Should Ampligen continue to produce positive clinical data and work its way to FDA approval, the treatment could prove to be the goose that lays the golden eggs.

The ovarian cancer market is expected to grow to be worth around four and a half billion dollars per year by the year. Not only is that market value compelling, the rate of growth is incredible. In fact, the market is expected to grow at a compound annual growth rate of more than 23%.

Today, HEB trades with a market cap of around $480 million. So, should Ampligen be approved for this indication, access to the $4.5 billion market would lead to significant revenue and meaningful value growth for investors.

Moreover, due to the declines in the value of Hemispherx Biopharma seen today, those that see strong value in the long run also see a great discount at the moment.

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What Do You Think?

Where do you think HEB is headed moving forward? Join the discussion in the comments below!

CNA Finance, parent company to Alpha Stock News, has a monetary relationship with Hemispherx Biopharma. Click here to learn more.

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