As filed with the Securities and Exchange Commission on September 30, 1999
Registration No. 333-81339
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
HEMISPHERX BIOPHARMA, INC.
(Name of Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
(Primary Standard Industrial Classification Code Number)
52-0845822
(I.R.S. Employee Identification No.)
--------------------
1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
(215) 988-0080
(Address and telephone number of principal executive offices and
principal place of business)
--------------------
William A. Carter, M.D., Chief Executive Officer
Hemispherx Biopharma, Inc.
1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
(215) 988-0080
(Name, address and telephone number of agent for service)
Copies of all communications to:
Michael H. Freedman, Esq.
Silverman, Collura, Chernis & Balzano, P.C.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
<PAGE>
Approximate date of proposed sale to the public: From time to time or
at one time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended ("Securities Act"), other than securities
offered only in connection with dividend or reinvestment plans, check the
following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
================================================================================
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered(1) Registered(2) Per Share(3) Offering Price Registration Fee
========================================================================================================
========================================================================================================
<S> <C> <C> <C> <C>
Common Stock(4) 304,165 $7.00 $ 2,129,155 $ 592.00
- --------------------------------------------------------------------------------------------------------
Common Stock(5) 2,125,000 $7.00 $14,875,000 $4,135.25
- --------------------------------------------------------------------------------------------------------
Warrants(6) 2,125,000 $7.00 $14,875,000 $4,135.25
- --------------------------------------------------------------------------------------------------------
TOTAL 4,554,165 $7.00 $31,879,155 $8,862.41(7)
========================================================================================================
</TABLE>
(1) This Registration Statement covers offers, sales and other distributions
of the securities listed in this table from time to time at prices to be
determined, as well as common stock issuable upon the exercise of warrants
so offered or sold.
(2) Pursuant to Rule 416 of the Securities Act of 1933, as amended, there are
also being registered an indeterminate number of additional shares of
common stock as may become issuable upon exercise of warrants to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(3) Common stock price per share calculated in accordance with Rule 457(c) of
the Securities Act using the last sale price for the common stock on June
14, 1999.
(4) Common stock owned by Hemispherx and held in treasury.
(5) Represents 2,125,000 shares of Common stock issuable upon exercise of the
warrants held by the selling stockholders.
(6) Warrants held by selling stockholders.
(7) Previously paid $8,801.69 in registration fees.
The Registrant hereby amends this registration statement on the date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on a date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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DATED September 30, 1999 SUBJECT TO COMPLETION
HEMISPHERX BIOPHARMA, INC.
2,125,000 warrants and the common stock issuable
upon exercise of the warrants
304,165 shares of common stock
--------------------------------
The selling stockholders may sell, from time to time, in one or more
offerings:
o 2,125,000 warrants to purchase shares of our common stock;
o 2,125,000 shares of common stock underlying the warrants; and
We may sell, from time to time, in one or more offerings:
o 304,165 shares of common stock owned by us.
We are also registering 2,125,000 shares of common stock issuable upon
exercise of the warrants held by selling stockholders.
We will receive proceeds from the sale of 304,165 shares of common
stock for their exercise by members of the public.
--------------------------------
Please see the risk factors beginning on page 7 to read about certain
factors you should consider before buying shares of common stock.
--------------------------------
Hemispherx's common stock and class A warrants are listed on the
American Stock Exchange under the symbols HEB and HEB/WS, respectively. The
reported last sale price on the American Stock Exchange on September 29, 1999
was $6.875 and $3.25, respectively.
The mailing address of our principal executive offices is 1617 JFK
Boulevard, Philadelphia, Pennsylvania 19103, and the telephone number is (215)
988-0080.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 1999
<PAGE>
Prospectus Summary
Because this is a summary, it may not contain all information that may
be important to you. You should read this entire prospectus, including the
information incorporated by reference and the financial data and related notes,
before making an investment decision. When used in this prospectus, the terms
"we," "our" and "us" refer to Hemispherx and not to the selling stockholders.
Hemispherx
Hemispherx is a pharmaceutical company that is using genetic
technologies to develop therapeutic products for the treatment of viral diseases
and certain cancers. Ampligen, our lead compound, is in advanced human clinical
development for various therapeutic indications. We have clinically evaluated
Ampligen in over 400 patients for different therapeutic indications. These
clinical studies show that the drug acts as an antiviral agent against a large
number of different viruses, including myalgic encephalomyelitis, also known as
chronic fatigue syndrome, HIV infection and hepatitis B, as well as a treatment
for certain cancers. Clinical trials conducted in the early 1990's indicate that
Ampligen may have potential in the treatment of metastatic renal cell cancer and
malignant melanoma. Ampligen appears to stimulate the immune system and is
generally well tolerated. We are currently conducting Phase III human clinical
trials for the therapeutic treatment of chronic fatigue syndrome. Phase III
trials are the final drug testing phase for approval by the U.S. Food and Drug
Administration.
We will continue our research and clinical efforts for the next several
years. We expect significant benefits as a result of certain revenues expected
from various cost recovery treatment programs, notably in Canada, Belgium and
the United States. Cost recovery treatment programs allow us to charge patients
for the cost of Ampligen even though the drug has yet to be approved by the Food
and Drug Administration. We are also pursuing similar programs in other
countries, especially within the European Union where our resources have been
substantially increased in order to pursue regulatory approvals. Over the years,
we have secured more than 25 issued U.S. patents and over 300 derivative
international filings. Nine additional U.S. patent filings are pending along
with their international counterparts.
We require substantial resources to conduct the time-consuming
research, preclinical development, and clinical trials necessary to bring
pharmaceutical products to market and establish commercial production and
marketing capabilities. Accordingly, we may need to raise additional funds
through additional equity or debt financing, collaborative arrangements with
corporate partners, off balance sheet financing or from other sources in order
to complete the necessary clinical trials and the regulatory approval processes
and begin commercializing our products.
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Manufacturing
In 1994, we entered into an agreement with Bioclones, Ltd., a
subsidiary of South African Breweries, Ltd., to co-develop various genetic
drugs, including Ampligen. The Bioclones agreement provided for the formation of
Ribotech, Ltd. Ribotech was formed in 1994 to produce the raw materials for
manufacturing Ampligen. Hemispherx and Bioclones jointly own Ribotech. Ribotech
presently has the capacity to produce the materials required to treat
approximately 2,000 patients per year. We are planning to develop a new
production plant. This new facility will have the capacity to produce the
materials needed to treat up to 50,000 patients.
In the third quarter of 1998, we informed the Food and Drug
Administration of our intention to switch certain patients from the labor
intensive freeze-dried dosage form of Ampligen to the more convenient
ready-to-infuse liquid formulation for the treatment of patients in clinical
trials. We manufacture the liquid product more efficiently and the process
allows greater production volumes, although we will continue to produce the
freeze-dried product for further clinical development. We have initiated efforts
to identify and locate additional liquid formulation capacity in the U.S. and
Europe. We anticipate that additional production capacity will be needed in the
future.
Product Development
In the second quarter of 1998, we commenced a Phase III clinical study
of Ampligen for the treatment of chronic fatigue syndrome. We plan to enroll up
to 230 patients with severely debilitating chronic fatigue syndrome. Chronic
fatigue syndrome patients who are not eligible for the Phase III trial in the
United States may seek treatment under the chronic fatigue syndrome cost
recovery treatment program now authorized by the Food and Drug Administration.
Treatment with cost recovery has been ongoing since mid-1997 under the auspices
of the Food and Drug Administration. Under this protocol, the enrolled patients
pay for the Ampligen administered, which totals about $7,400 for a 24 week
treatment course. Patients are also treated for chronic fatigue syndrome in
Belgium, Austria and Canada under similar chronic fatigue cost recovery
treatment programs.
Distribution/Marketing
In February 1998, we entered into an agreement with Kimberly Home
Health Care, Inc. which operates under the name Olsten Health Services. Olsten
Health Services will serve as a distributor of our products to U.S. patients
enrolled in the chronic fatigue syndrome cost recovery program and will maintain
an Ampligen inventory for use in treating these patients. In addition, Olsten
Health Services will initially provide up to $500,000 of support for other
clinical program efforts including identification of the potential medical and
economic benefits
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<PAGE>
to patients receiving Ampligen. Olsten Health Services is able to deliver
treatment and services to chronic disease patients including infusion services,
home nursing and other medical services through a national network of more than
500 locations.
We formed a wholly owned subsidiary in Europe, Hemispherx Biopharma
Europe NV/SA. This subsidiary is presently based in Antwerp and is pursuing
chronic fatigue clinical tests, related clinical treatments and new drug
marketing approval in Belgium and other European countries. In December 1998, we
filed final drug marketing approval documents for the European Union, consisting
of 15 countries, for Ampligen's use for treatment of patients with chronic
fatigue syndrome. In January 1999, we were notified that the filing was complete
and the review process had started. The review process by the European Medical
Evaluation Agency has produced ongoing discussions. At this time we have no
specific indication as to the timing or outcome of their review process.
Subsidiary Spin-Off
We are considering distributing to our shareholders at least 80% of the
issued and outstanding shares of common stock of Core Biotech Corp. We would
distribute the Core Biotech shares to each of the holders of our common stock as
of a record date set by us. The timetable for this potential spin-off has not
been determined.
After the proposed spin-off, Core Biotech would use genetic
technologies, including Ampligen and other products, to develop therapeutic
products for the treatment of viral hepatitis diseases. We would license or
sublicense to Core Biotech the technology for the products that will be used by
Core Biotech.
In connection with the proposed spin-off, we would enter into several
agreements with Core Biotech, including, but not limited to,
(a) a separation and distribution agreement which will separate
our hepatitis technology from us, including some assets and
liabilities, and distribute Core Biotech common stock to our
shareholders;
(b) a tax allocation agreement allocating tax liabilities that
relate to the planned spin-off and to periods prior to the
spin-off date;
(c) a services agreement providing for allocation of
responsibilities with respect to various services to be
provided by us to Core Biotech;
(d) an employee benefits agreement;
(e) a technology license agreement; and
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(f) a research and development agreement.
These agreements are in the early stages of development and no final
determination as to structure has been made. Accordingly, we have not determined
Core Biotech's capitalization, pro forma financial information, management or
inter-company transactions. We believe that, except for the initial
capitalization of Core Biotech, the transfer of any other assets and liabilities
would have no significant affect on our financial position. The initial
capitalization could be up to $5,000,000 and could negatively effect the amount
of cash we have at the time of the spin-off. The results of operations for Core
Biotech were not significant for the year ended December 31, 1998.
Recent Developments
Chronic Fatigue Syndrome was given official recognition by the U.S.
social Security Administration rendering affected patients eligible for
disability benefits. In July 1999, the U.S. Centers for Disease Control
reconfirmed its research commitment to Chronic Fatigue following an audit by the
U.S. Government Accounting Office. Moreover, a competitor of ours, Shire
Pharmaceuticals announced that its drug galartamine failed a Phase II test in
the treatment of Chronic Fatigue.
Litigation
We filed a complaint against Manual P. Asensio, Asensio and Company,
Inc. and others in the United States District Court for the Eastern District of
Pennsylvania on September
5
<PAGE>
30, 1998. We allege the unlawful manipulation and short selling by defendants of
our common stock on the American Stock Exchange on or about September 15, 1998
through the present. We allege, among other things, that the defendants
distributed materially false information concerning us to the public, thereby
damaging us and our shareholder equity.
Certain of the defendants have entered motions to dismiss all or part
of the case. On March 12, 1999, the Court issued a memorandum decision
dismissing four of the six counts on jurisdictional grounds. Currently, the case
is in the discovery phase.
The Offering
Selling Stockholder Agreement
Certain selling stockholders have entered into an agreement with us
whereby, for a period of one year from the date of this prospectus, we, or an
agent designated by us, may purchase and sell that selling stockholder's
warrants and the shares of common stock underlying their warrants on a "best
efforts" basis at prices set by that selling stockholder. The purchase price set
by each selling stockholder shall be discounted 10%, representing the commission
to the agent so designated by us. We will not receive any commission on any
sales by us of the selling stockholders' securities.
After the expiration of the one year period, the selling stockholders
may sell their securities from time to time in one or more transactions on the
American Stock Exchange, in foreign markets, special offerings, exchange
distributions, secondary distributions, negotiated transactions, or a
combination of these transactions.
We will not receive any of the proceeds from the sale by any selling
stockholder of the warrants or the underlying common stock.
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Use of Proceeds
We will not receive proceeds from the sale of selling stockholders'
securities. We will receive proceeds from the sale of the 304,165 shares of
common stock we own and we will receive approximately $6,900,000 when the
warrants are exercised, assuming all of the warrants are exercised. We intend to
use these proceeds for general corporate purposes. Pending use of the proceeds,
they will be invested in short term, interest bearing securities or money market
funds.
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<PAGE>
Risk Factors
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of common
stock. This prospectus contains forward-looking statements which can be
identified by the use of words such as "intend," "anticipate," "believe,"
"estimate," "project," or "expect" or other similar statements. These statements
discuss future expectations, contain projections of results of operations or of
financial condition, or state other "forward-looking" information. When
considering these statements, you should keep in mind the risk factors described
below and other cautionary statements in this prospectus. The risk factors
described below and other factors noted throughout this prospectus, including
certain risks and uncertainties, could cause our actual results to differ
materially from those contained in any forward-looking statement.
1. We may continue to incur substantial losses and our future
profitability is uncertain.
We began operations in 1966 and last reported net profit from 1985
through 1987. Since 1987, we have incurred substantial operating losses. As of
June 30, 1999 our accumulated deficit was approximately $67,170,352. We have not
yet generated significant revenues from our products and may incur substantial
and increased losses in the future. We cannot assure you that we will ever
achieve significant revenues from product sales or become profitable. We require
and will continue to require the commitment of substantial resources to develop
our products. In addition, substantial funding may require us to spin-off
Core Biotech Corp. We cannot assure you that our product development efforts
will be successfully completed or that required regulatory approvals will be
obtained or that any products will be manufactured and marketed successfully, or
profitability.
2. We do not expect to be profitable unless we receive final regulatory
approval for Ampligen and it is successfully commercialized.
Our principal development efforts are currently focused on Ampligen
which has not been approved for commercial use in the U.S. or elsewhere. We do
not expect to be profitable unless we receive final regulatory approval and can
successfully commercialize Ampligen or one of our other products. Our products,
including Ampligen, are subject to extensive regulation by numerous governmental
authorities in the U.S. and other countries, including, but not limited to, the
Food and Drug Administration in the U.S., the Health Protection Branch of
Canada's Department of Health and Welfare, a federal regulatory agency in
Canada, and the European Medical Evaluation Agency in Europe. Obtaining
regulatory approvals is a rigorous and lengthy process and requires the
expenditure of substantial resources. In order to obtain final regulatory
approval of a new drug, we must demonstrate to the satisfaction of the
regulatory agency that the product is safe and effective for its intended uses
and that we are capable of manufacturing the product to the applicable
regulatory standards. We require
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regulatory approvals in order to market our products and receive product
revenues or royalties. No regulatory agency has approved the full commercial
sale of any of our products. We cannot assure you that the drug will ultimately
be demonstrated to be safe or efficacious. In addition, while Ampligen is
authorized for use in clinical trials in the United States and other countries,
we cannot assure you that additional clinical trials approvals will be
authorized in the United States or in other countries, in a timely fashion or at
all, or that we will complete these clinical trials. Moreover, we cannot assure
you that Ampligen will be commercially successful in any country that may
approve its use. If Ampligen or one of our other products does not receive
regulatory approval in the U.S. or elsewhere, our operations will be
significantly affected.
3. We may not be profitable unless we can protect our patents and/or
receive approval for additional pending patents.
We need to acquire enforceable patents covering the use of Ampligen for
a particular disease in order to obtain exclusive rights for the commercial sale
of Ampligen. Our success depends, in large part, on our ability to obtain patent
protection for our products and to obtain and preserve our trade secrets and
knowhow. We have been issued certain patents on the use of Ampligen alone and
Ampligen in combination with certain other drugs for the treatment of HIV. We
have also been issued patents on the use of Ampligen alone and in combination
with certain other drugs for the treatment of chronic hepatitis B virus, chronic
hepatitis C virus, and a patent which affords protection on the use of Ampligen
in patients with chronic fatigue syndrome. We have not been issued any patents
in the U.S. for the use of Ampligen as a sole treatment for any of the cancers
which we have sought to target. Our applications for U.S. patents for the use of
Ampligen in the treatment of renal cell carcinoma and lung cancer are currently
pending. We cannot assure you that any of these applications will be approved or
that our competitors will not seek and obtain patents regarding the use of
Ampligen in combination with various other agents, including AZT, for a
particular target indication prior to us. If we cannot protect our patents
covering the use of Ampligen for a particular disease, or obtain additional
pending patents, we may not be able to successfully market Ampligen.
4. We may not be profitable unless we can produce Ampligen in commercial
quantities at costs acceptable to us.
We have never produced Ampligen or any other products in large
commercial quantities. Ampligen is currently produced only for use in clinical
trials. We must manufacture our products in compliance with regulatory
requirements at commercial quantities and at acceptable costs in order for us to
be profitable. We intend to utilize third-party manufacturers and/or facilities
if and when the need arises or, if we are unable to do so, to build or acquire
commercial-scale manufacturing facilities. We have entered into an agreement
with Bioclones, Ltd., a biopharmaceutical company which is associated with South
African
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Breweries, Ltd. The Bioclones agreement provides for the construction of a new
commercial manufacturing facility by Ribotech, Ltd., a company of which we own
24.9 percent. We have not commenced constructing this facility. A pilot facility
in South Africa is being expanded to provide an increased supply of Ampligen raw
material. The construction of the commercial facility is dependent upon the
regulatory status of Ampligen, or other products covered by our patents in
various global markets, and we cannot give assurances with respect to when, and
if, construction will be initiated or completed. If we cannot manufacture
commercial quantities of Ampligen or enter into third party agreements for its
manufacture at costs acceptable to us, our operations will be significantly
affected.
5. If our distributors do not market our product successfully, we may not
generate significant revenues or become profitable.
We have limited marketing and sales capability. We need to enter into
marketing agreements and third party distribution agreements for our products in
order to generate significant revenues and become profitable. To the extent that
we enter into co-marketing or other licensing arrangements, any revenues
received by us will be dependent on the efforts of third parties, and there is
no assurance that these efforts will be successful. Our agreement with Olsten
Health Services offers the potential to provide significant marketing and
distribution capacity in the United States while Bioclones, Ltd. will be
responsible for fielding an adequate sales force in South America, Africa,
United Kingdom, Australia and New Zealand. Olsten Health Services is able to
deliver treatment and services to chronic disease patients including infusion
services, home nursing and other medical services through a national network of
more than 500 locations.
We cannot assure you that Olsten Health Services or Bioclones will be able
to successfully distribute our products, or that we will be able to establish
future marketing or third party distribution agreements on terms acceptable to
us, or that the cost of establishing these arrangements will not exceed any
product revenues. If we cannot enter into future marketing and distribution
agreements at terms acceptable to us, or if these distributors cannot
effectively market and distribute our products, our operations will be
negatively affected.
6. We may be subject to product liability claims from the use of Ampligen
or other of our products which could negatively affect our future
operations.
We face an inherent business risk of exposure to product liability
claims in the event that the use of Ampligen or other of our products results in
adverse effects. This liability might result from claims made directly by
patients, hospitals, clinics or other consumers, or by pharmaceutical companies
or others manufacturing these products on our behalf. Our future operations may
be negatively effected from the litigation costs, settlement expenses and lost
product sales inherent to these claims. While we will continue to attempt to
take appropriate precautions, we cannot assure you that we will avoid
significant product liability exposure.
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Although we currently maintain worldwide product liability insurance coverage in
the amount of $1,000,000, there can be no assurance that this insurance will
provide adequate coverage against product liability claims. While no product
liability claims are pending or threatened against us to date, a successful
product liability claim against us in excess of our insurance coverage could
have a negative effect on our business and financial condition.
7. Members of our Scientific Advisory Board have conflicting interests and
may disclose data and technical knowhow to our competitors.
All of our Scientific Advisory Board members are employed by other
entities, which may include our competitors. Although we require each of our
Scientific Advisory Board members to sign a non-disclosure and non-competition
agreement with respect to the data and information that he or she receives from
us, we cannot assure you that members will abide by them. If a member were to
reveal this information to outside sources, accidentally or otherwise, our
operations could be negatively effected. Since our business depends in large
part on our ability to keep our knowhow confidential, any revelation of this
information to a competitor or other source could have an adverse effect on our
operations.
8. The loss of Dr. Carter's services could hurt our chances for success.
Our success is dependent on the continued efforts of Dr. William A.
Carter. The loss of Dr. Carter's services could have a material adverse effect
on our operations. While we have an employment agreement with Dr. William A.
Carter, and have secured key man life insurance in the amount of $2 million on
the life of Dr. Carter, the loss of Dr. Carter or other key personnel, such as
Dr. David Strayer or Dr. Carol Smith, or the failure to recruit additional
personnel as needed could have a materially adverse effect on our ability to
achieve our objectives.
9. Restricted shares eligible for sale may depress the market price of our
common stock.
A significant number of our outstanding shares of common stock are
"restricted," as that term is defined under Rule 144 of the Securities Act. In
addition, we have issued warrants to purchase 2,080,000 shares of common stock
in reliance upon the provisions of Rule 701 of the Securities Act. All of these
Rule 701 shares are currently eligible for sale, although the holder of
1,400,000 of these rule 701 shares, Dr. William Carter, our president, has
agreed to not sell any of these shares in 1999. Under Rule 144, in general, a
person may sell stock if the stock has been owned for at least one year. Rule
144 sales must be made under certain conditions, including, limitations as to
the amount of shares that may be sold in any three-month period. Rule 144 also
permits a sale, without any quantity limitation, by a person who is not an
affiliate of the issuer and who has satisfied a two-year holding period. We
cannot predict the effect that sales made under Rule 144 or Rule 701, sales made
in reliance on other
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exemptions under the securities laws or under registration statements may have
on any then prevailing market price. The sale, or availability for sale, of
these securities in the public market subsequent to this prospectus, could
affect the market price of the common stock and could impair our ability to
raise additional capital through the sale of our equity securities or debt
financing.
10. We are dependent on our systems to operate our business, and failure to
adequately address the Year 2000 problem could hurt our profitability.
We are dependent upon computers to operate our business and therefore
are exposed to Year 2000 problems. In the spring of 1998, we initiated a Y2K
compliance program with the following objectives:
(a) updating and/or replacing aging hardware;
(b) establishing a new platform for data bases; and
(c) assuring company-wide Y2K compliance.
With the assistance of outside consultants, we replaced all computers
deemed non-Y2K compliant with computers that are compliant. Also, we replaced
all processing software packages to provide a uniform platform which is
compliant. The research group is in the process of converting their databases to
the new software. One major database used by manufacturing is being custom
written to be Y2K compliant. The first module of the customized software is
being tested. The second module should be completed by the end of September
1999. The cost for this compliance will be between $150,000 and $200,000.
In a worst case scenario, we would experience delays in accessing data
on patients enrolled in clinical trials. These delays could slow down regulatory
compliance and commercial approval of Ampligen by the Food and Drug
Administration. Our management of Ampligen production and inventories would be
slow and time consuming, which could delay shipments of Ampligen for clinical
trials. Our Y2K program is expected to significantly reduce our level of
uncertainty about the Y2K problem and, in particular, about the Y2K compliance
and readiness of our material external agents. We believe that, with the
implementation of new business systems and completion of our Y2K program as
scheduled, the possibility of significant interruptions or normal operations
should be reduced.
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Where you can find more information about Hemispherx
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site http://www.hemispherx.com or at the SEC's web site
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supercede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 14, or 15(d) of the Securities Exchange Act
of 1934 until Value Management and Research sells all the shares. This
prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-68541).
(a) Annual Report on Form 10-K/A for our fiscal year ended December 31,
1998 (File No. 1-13441 and filing date of April 1, 1999);
(b) Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1999 (File No. 1-13441 and filing date of August 13, 1999);
(c) Quarterly Report on Form 10Q for the quarterly period ended March 31,
1999 (File No. 1-13441 and filing date of May 14, 1999);
(d) Proxy Statement on Schedule 14A for the 1999 Annual Meeting (File No.
1-13441 and filing date of May 25, 1999); and
(e) The description of common stock contained in the Registration Statement
on Form S-1, File No. 33-93314, and any amendment or report filed for
the purpose of updating this description filed subsequent to the date
of this prospectus and prior to the termination of this offering.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Hemispherx Biopharma, Inc., 1617 JFK
Boulevard, Philadelphia, Pennsylvania 19103, telephone number (215) 988-0080.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We and the selling stockholders
will not make offers of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of those
documents.
13
<PAGE>
Description of Securities
Warrants
We have issued the warrants to the selling stockholder at various times
and over a period of years in private unregistered transactions. The warrants
are similar in form, terms and conditions. Generally, the warrants materially
differ from each other only in the exercise price, duration of the exercise
period, and commencement and expiration dates.
The applicable prospectus supplement will describe, where applicable,
the terms of each warrant in respect of which this prospectus is being
delivered.
Selling Stockholders
This prospectus relates to the proposed sale by us, agent or agents
designated by us, or certain stockholders of:
o 2,125,000 warrants owned by the selling stockholders
o 2,125,000 shares of common stock underlying the selling
stockholders' warrants
Although not set forth in this part of the prospectus, this prospectus
also relates to the registration of 304,165 shares of common stock in our
treasury and 2,125,000 shares of common stock issuable upon exercise of the
warrants held by selling securityholders.
The following table sets forth as of August 25, 1999 certain
information with respect to the selling stockholders. The selling stockholders
have no material relationship with us and have not held any position or office
with us during the past three years, except where noted. We will not receive any
of the proceeds from the sale of the warrants or the shares of common stock
underlying warrants. We believe, based on information supplied by the selling
stockholders, that each of them has sole voting and investment power with
respect to the warrants and shares of common stock underlying warrants.
14
<PAGE>
<TABLE>
<CAPTION>
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
------------------ ---------------- -----------------
Common
Stock
Name of Selling Common Underlying Common
Stockholder Stock Warrants Warrants Warrants Stock Warrants %
- ----------- ----- -------- -------- -------- ----- -------- -
<S> <C> <C> <C> <C> <C> <C> <C>
Jerome Belson(3) 853,100 691,000 100,000 100,000 853,100 591,000 5.4
Cary Field 0 50,000 50,000 50,000 0 0 0
Sharon Freedman 12,700 50,000 50,000 50,000 12,700 0 **
Mark Palazzo 0 10,000 10,000 10,000 0 0 0
Stanley Zaslow 0 10,000 10,000 10,000 0 0 0
Sage Group 0 390,000 390,000 390,000 0 100,000 **
Olmstead Group 0 240,000 240,000 240,000 0 0 0
Aura (Private), Ltd. 0 540,000 300,000 300,000 0 240,000 **
Paul Michaels 0 50,000 50,000 50,000 0 0 0
Lawrence Zaslow 0 50,000 50,000 50,000 0 0 0
Peter W. Adolph 0 50,000 50,000 50,000 0 0 0
Marc E. Komorsky 0 50,000 50,000 50,000 0 0 0
Herbert Cron 0 30,000 30,000 30,000 0 0 0
Jan McNabb 0 10,000 10,000 10,000 0 0 0
Wellman Consulting 0 12,500 12,500 12,500 0 0 0
Estate of Joseph Niebler 0 15,000 15,000 15,000 0 0 0
Jerry Friedland 0 5,000 5,000 5,000 0 0 0
Gerald Kay 0 525,000 300,000 300,000 0 225,000 **
Michael Freedman 0 25,000 25,000 25,000 0 0 0
Peter W. Rodino III 0 15,000 15,000 15,000 0 0 0
Theresa Bonavita 0 500 500 500 0 0 0
Nick Agriogianis 0 29,850 29,850 29,850 0 0 0
Mark Zaroff 0 29,650 29,650 29,650 0 0 0
Jade Zaroff 0 20,000 20,000 20,000 0 0 0
Mason Zaroff 0 20,000 20,000 20,000 0 0 0
Dakota Management Corp. 0 12,500 12,500 12,500 0 0 0
Mitchell Abrahams 0 20,000 20,000 20,000 0 0 0
David G. Watumull 0 20,000 20,000 20,000 0 0 0
Greg Morrison 0 35,500 35,500 35,500 0 0 0
Donald Hammerle 0 30,000 30,000 30,000 0 0 0
Brent Root 0 500 500 500 0 0 0
R. Robson Trust
James D. Hubbard TTEE 0 4,000 4,000 4,000 0 0 0
National Financial Group 0 20,000 20,000 20,000 0 0 0
Francis Bodkin 0 120,000 120,000 120,000 0 0 0
</TABLE>
- ----------------
** Less than 1%
(1) Does not include securities held in street name.
(2) Assumes the sale of all the securities offered in this prospectus.
(3) Includes 561,000 Class A Warrants, of which (i) 25,000 are owned of record
by Maxine Belson, Mr. Belson's wife; and (ii) 21,000 are owned of record by
Matthew Belson, Mr. Belson's son. Also includes (i) 100,000 warrants to
purchase Common Stock at $3.50 per share; (ii) 30,000 warrants to purchase
Common Stock at $1.75 per share; (iii) 20,000 shares of Common Stock owned
of record by The Jerome Belson Foundation, of which Mr. Belson is a
trustee; (iv) 15,000 shares of Common Stock held by Maxine Belson; and (v)
25,500 shares of Common Stock held by Matthew Belson.
15
<PAGE>
Plan of Distribution
We, or an agent of ours, may sell the securities on behalf of the
selling stockholders for a period of one year from the date of this prospectus:
o through underwriters or dealers;
o directly to a limited number of purchasers or to a single
purchaser; or
o through agents
We have entered into an agreement with certain of selling stockholders
to sell, or arrange for the sale, of the securities on their behalf on a "best
efforts" basis for a period of one year from the date of this prospectus. These
selling stockholders have informed us of the price at which they will sell the
warrants owned by them to us or an agent designated by us. We or an agent
designated by us will purchase the warrants, subject to this agreement, exercise
the warrants and sell the common stock underlying the warrants from time to time
in one or more transactions on the American Stock Exchange, in foreign markets,
special offerings, exchange distributions, secondary distributions, negotiated
transactions, or a combination of these transactions. We or an agent designated
by us may sell the securities at market prices at the time of sale, at prices
related to the market price or at negotiated prices. If an agent designated by
us is used in the sale, that agent will receive a commission of 10 percent,
payable by the applicable selling stockholder. The commission represents 10
percent of the purchase price set by that selling stockholder. We will not
receive commissions on sales made by us.
Pursuant to the Agreement, after one year from the date of this
prospectus, the selling stockholders may sell their securities from time to time
directly to purchasers in one or more transactions on the American Stock
Exchange, in foreign markets, special offerings, exchange distributions,
secondary distributions, negotiated transactions, or a combination of these
transactions.
A prospectus supplement with respect to the securities being offered
subject to the above described agreement will set forth the terms of the
offering of the offered securities, including the name or names of any
underwriters or agents, the purchase price of the offered securities, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
16
<PAGE>
If underwriters are used in the sale, the offered securities subject to
the agreement described above will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The offered securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more underwriters. The
underwriter or underwriters with respect to a particular underwritten offering
of securities, or, if an underwriting syndicate is used, the managing
underwriter or underwriters, will be set forth on the cover of the applicable
prospectus supplement. Unless otherwise set forth in the prospectus supplement
relating thereto, the obligations of the underwriters to purchase the offered
securities will be subject to conditions precedent and the underwriters will be
obligated to purchase all of the offered securities if any are purchased.
If dealers are utilized in the sale of the offered securities subject
to the agreement described above in respect of which this prospectus is
delivered, and if so specified in the applicable prospectus supplement, we will
sell such offered securities to the dealers as principals. The dealers may then
resell the offered securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers will be set
forth in a prospectus supplement.
The offered securities subject to the agreement described above may be
sold directly by us or through agents designated by us from time to time. Any
agent involved in the offer or sale of the offered securities in respect to
which this prospectus is delivered will be named, and any commissions payable to
the agent, will be set forth in a prospectus supplement.
The warrants held by certain selling stockholders in the table above
are not subject to the terms of the above described agreement. Certain warrant
holders may sell their warrants and common stock underlying their warrants from
time to time in one or more transactions on the American Stock Exchange, in
foreign markets, special offering exchange distributions, secondary
distributions, negotiated transactions, or a combination of these transactions.
The selling stockholders and broker-dealers, if any, acting in
connection with these sales might be deemed to be "underwriters" within the
meaning of section 2(11) of the Securities Act. Any commission they receive and
any profit upon the resale of the securities might be deemed to be underwriting
discounts and commissions under the Securities Act.
Sales of the common stock may also be made under Rule 144 of the
Securities Act of 1933, where applicable. The selling stockholders' shares may
also be offered in one or more underwritten offerings, on a firm commitment or
best efforts basis. We will not receive proceeds from the sale of the selling
stockholders' securities.
From time to time each of the selling stockholders may transfer,
pledge, donate or assign their securities to lenders, family members and others.
Each of such persons will be deemed to be selling stockholders for the purposes
of this prospectus. The number of selling stockholders securities beneficially
owned by those selling stockholders who so transfer, pledge, donate or assign
selling stockholder securities will decrease as and when they take this action.
The plan of distribution for the selling stockholders securities sold hereunder
will otherwise remain unchanged, except that the transferees, pledgees, donees
or other successors will be selling stockholders hereunder.
Under applicable rule and regulations under the Exchange Act, any
person engaged in the distribution of the common stock may not bid for or
purchase shares of common stock
17
<PAGE>
during a period which commences one business day, or 5 business days if our
public float is less than $25 million or our average daily trading volume is
less than $100,000, prior to the person's participation in the distribution,
subject to exceptions for certain passive market making activities. In addition
and without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M which may limit the
timing of purchases and sales of common stock by selling stockholders.
We are bearing all costs relating to the registration of the shares of
common stock, other than fees and expenses, if any, of counsel or other advisors
to the selling stockholders. Any commissions, discounts or other fees payable to
our designated agent in connection with any sale of the securities will be borne
by the selling stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock and class A
warrants is Continental Stock Transfer and Trust Co., 2 Broadway, New York, New
York 10004.
Legal Matters
The legality of the common stock offered in this prospectus has been
passed upon for us by Silverman, Collura & Chernis, P.C., 381 Park Avenue South,
Suite 1601, New York, New York 10016.
Experts
The consolidated financial statements of Hemispherx as of December 31,
1998 and 1997, and for each of the years in the three year period ended December
31, 1998, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference in this prospectus,
and upon the authority of KPMG LLP as experts in accounting and auditing.
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers, and controlling persons, we
have been advised that in the
18
<PAGE>
opinion of the Commission this indemnification is against public policy as
expressed in the Securities Act and is, therefore unenforceable. In the event
that a claim for indemnification against these liabilities, other than our
payment of expense incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding,
is asserted by that director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of our counsel
the matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question whether this indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of these issues.
19
<PAGE>
================================================================================
No dealer, salesman or any other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell these securities and it is not a solicitation of an offer to
buy these securities in any state where the offer or sale is not permitted. The
information contained in this Prospectus is current only as of this date
TABLE OF CONTENTS
Page
Summary........................................................................2
Offering.......................................................................6
Use of Proceeds................................................................7
Risk Factors...................................................................8
Where you can find more
information about Hemispherx.................................................13
Description of Securities.....................................................14
Resales by Selling Stockholders...............................................14
Plan of Distribution..........................................................16
Transfer Agent................................................................18
Legal Matters.................................................................18
Experts.......................................................................18
Disclosure of Commission Position.............................................18
--------------------
================================================================================
================================================================================
2,125,000 WARRANTS,
2,125,000 SHARES OF
COMMON STOCK UNDERLYING THE
WARRANTS
304,165 SHARES OF COMMON STOCK
HEMISPHERX BIOPHARMA, INC.
_______________
PROSPECTUS
_______________
____________, 1999
================================================================================
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee $ 8,862.41
Printing $ 2,500*
Legal Fees and Expenses $20,000*
Accounting Fees and Expenses $ 2,500*
Miscellaneous Expenses (including travel
and promotional expenses) $ 1,000*
TOTAL $34,862.41*
*Estimated
The Selling Stockholders will not pay any portion of the foregoing
expenses of issuance and distribution.
Item 15. Indemnification of Directors and Officers.
The Restated Certificate of Incorporation of the Company provides as
follows:
No person who is or was a director of this Corporation shall
be personally liable to the Corporation or its stockholders for
monetary damages for the breach of any fiduciary duty as a director,
unless, and only to the extent that, such director is liable (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholder, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction form which the director derived
an improper personal benefit.
Section 145 of the Delaware General Corporation Law gives Delaware
corporations the power to indemnify each of the Company's present and former
officers and directors under certain circumstances, if such person acted in good
faith and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the corporation. The Company's Restated Certificate of
Incorporation generally requires the Company to indemnify directors and officers
to the fullest extent permissible under Delaware law.
The Company has entered into indemnification agreements with its
current directors and certain of its executive officers. These agreements have
the practical effect in certain cases of eliminating the ability of stockholders
to collect monetary damages from such individuals.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedule
(a) The following exhibits are filed herewith:
Exhibit No. Description
(1)3.1 Amended and Restated Certificate of Incorporation of
Registrant, as amended, along with Certificates of
Designations, Rights and Preferences of Series A1, A2, B and C
Preferred Stock, as amended
(1)3.2 By-laws of Registrant, as amended
(2)3.3 Certificate of Designations of Series D Preferred Stock
(2)3.4 Certificate of Correction to Certificate of Designations of
Series D Preferred Stock
(3)3.5 Certificate of Designations of Series E Preferred Stock
(4)10.1 Form of Agreement between Hemispherx and the selling
warrantholders.
(5)5.1 Opinion of Silverman, Collura & Chernis, P.C. with respect to
legality of the securities of the Registrant being registered
(5)23.1 Consent of Silverman, Collura &Chernis, P.C. (included in
Exhibit 5.1)
(5)23.2 Consent of KMPG LLP
(1) Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 33-93314) declared effective by the
Securities and Exchange Commission on November 2, 1995.
(2) Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 333-8941) declared effective by the
Securities and Exchange Commission on September 16, 1996.
(3) Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 333-24983) declared effective by the
Securities and Exchange Commission on April 18, 1997.
(4) Previously filed with Amendment No. 1.
(5) Filed with this Amendment No. 2.
b. Financial Statement Schedules.
II-2
<PAGE>
All schedules are omitted from this Registration Statement because they
are not required or the required information is included in the Consolidated
Financial Statement or the Notes thereto.
Item 17. Undertakings.
(a) Rule 415 Offerings.
The undersigned issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
Registration Statement; and
(iii) Includes any additional or changed material
information on the plan of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) Request for acceleration of effective date.
(1) Insofar as indemnification for liabilities arising under
the Securities Act, may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the issuer of expenses incurred or paid by a director, officer or controlling
person of the issuer in the successful defense of any action, suit or
II-3
<PAGE>
proceedings) is asserted by such director, officer or controlling person in
connection with the securities being registered, the issuer will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such court.
(2) For determining any liability under the Securities Act,
treat each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing this Form S-3 Amendment No. 2, and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Philadelphia, State of Pennsylvania, on September 29, 1999.
HEMISPHERX BIOPHARMA, INC.
By: s/ William A. Carter
---------------------------------------
William A. Carter, President and CEO
In accordance with the requirements of the Securities Act, this
Registration statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Principal Executive Officer
and Chairman of the Board
and as Power of Attorney
s/ William A. Carter for Members of the Board September 29, 1999
- -----------------------------
William A. Carter, M.D.
Principal Financial Officer and
s/ Robert E. Peterson Principal Accounting Officer September 29, 1999
- -----------------------------
Robert E. Peterson
s/ Richard Piani Director September 29, 1999
- -----------------------------
Richard C. Piani
s/ Ransom W. Etheridge Director September 29, 1999
- -----------------------------
Ransom W. Etheridge
Director
- -----------------------------
William Mitchell
</TABLE>
II-5
September 27, 1999
Hemispherx Biopharma, Inc.
1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to Hemispherx Biopharma, Inc. (the "Company"), a
Delaware corporation, pursuant to Registration Statement on Form S-3, as filed
with the Securities and Exchange Commission on September 30, 1999 (the
"Registration Statement"), covering (i) 3,908,334 shares of Common Stock; and
(ii) 1,729,227 shares of Common Stock underlying warrants.
In acting as counsel for the Company and arriving at the opinions as
expressed below, we have examined and relied upon originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
In connection with our examination we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of natural persons and the conformity to original documents of
all documents submitted to us as certified or photostated copies.
Based on the foregoing, and subject to the qualifications and limitations
set forth herein, it is our opinion that:
<PAGE>
1. The Company has authority to issue the Common Stock in the manner
and under the terms set forth in the Registration Statement.
2. The Common Stock has been duly authorized and when issued,
delivered and paid for in accordance with their respective terms, will be
validly issued, fully paid and non-assessable.
We express no opinion with respect to the laws other than those of the
State of New York and Federal Laws of the United States of America, and we
assume no responsibility as to the applicability thereto, or the effect thereon,
of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement. It is not to be used, circulated,
quoted or otherwise referred to for any other purpose. Other than the Company,
no one is entitled to rely on this opinion.
Very truly yours,
SILVERMAN, COLLURA & CHERNIS, P.C.
Consent of Independent Accountants
The Board of Directors
Hemispherx Biopharma, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the headings "Experts" in the prospectus.
KPMG LLP
Philadelphia, Pennsylvania
September 29, 1999
