Ampligen’s Advisory Committee Date Prompts HEB Rally Too Far in Advance

The FDA has scheduled an advisory committee meeting for Ampligen, a product developed by Hemispherx Biopharma (AMEX:HEB) for the treatment of Chronic Fatigue Syndrome (CFS), sending shares up by 5% on Monday morning. The meeting will be held on December 20, followed by a previously-announced February 2, 2013 PDUFA date. In Monday’s related press release from HEB, the company also pointed to an article from “The Pink Sheet” Daily that discusses the FDA’s new statutory provisions for expedited approval of some disease areas, including CFS.  Ampligen is currently in trials for a variety of immune diseases, including HIV, CFS, and Avian Flu, and the stock has been seeing increased trading volume in the last few months as news of Ampligen’s development process is resurrected by the media.

The compound, however, has a long history in development; a New Drug Application for the product was filed back in October of 2007, nearly five years ago, for the same indication that it is now being reviewed. What happened? The FDA rejected the NDA, saying it was incomplete and cited fourteen deficiencies in the application. It took a half year for the FDA to accept the resubmitted application, after which the agency issued a Complete Response Letter and requested additional clinical trials. Finally in August of this year, after long negotiations and extensions to the NDA, the FDA agreed to accept the application with new analysis of the existing trial data. Bulls cite the FDA’s renewed interest in CFS as a reason to buy into Ampligen, although its poor development history begs to differ. There are currently no approved products for the treatment of CFS, so a positive vote at the end of the year could create upside potential on the chance that Ampligen is approved next year. That potential, however, is far from realized. Today’s gains are premature based on the announcement alone, and we expect the stock to pull back in the near-term before a possible run-up into the committee meeting if high volume trading continues.