As filed with the Securities and Exchange Commission on February 3, 1999
Registration No. 333-68541
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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.)
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1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
(215) 988-0080
(Address and telephone number of principal executive offices
and principal place of business)
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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 as determined
by the Selling Securityholders.
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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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) Per Share(2) Offering Price Registration Fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(3) 750,000 $6.50 $4,875,000 $1,477.27
- ----------------------------------------------------------------------------------------------
Common Stock(4) 250,000 $6.50 $1,625,000 $492.42
- ----------------------------------------------------------------------------------------------
TOTAL 1,000,000 $6,500,000 $1,969.70
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</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, there are
also being registered such 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.
(2) 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
December 7, 1998.
(3) Common stock held by selling securityholders.
(4) Common stock underlying warrants held by the selling securityholder.
The Registrant hereby amends this registration statement on such 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 such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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DATED FEBRUARY 3, 1999 SUBJECT TO COMPLETION
HEMISPHERX BIOPHARMA, INC.
1,000,000 shares of common stock
---------------------------------
Value Management and Research may sell up to 1,000,000 shares of
Hemispherx Biopharma common stock, as described herein under "Plan of
Distribution."
Hemispherx Biopharma will not receive any proceeds from this offering.
--------------------------------
Please see the Risk Factors beginning on page 8 to read about certain
factors you should consider before buying shares of common stock.
-------------------------------
Hemispherx Biopharma's common stock and class A warrants are listed on the
American Stock Exchange ("AMEX") under the symbols HEB and HEB/WS, respectively.
The reported last sale price on AMEX on February 2, 1999 was $6.125 and $2.4375,
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 February ___, 1999
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere or incorporated by reference elsewhere in this Prospectus,
including information under "Risk Factors."
THE COMPANY
We have developed a large body of knowledge in the development and testing
of therapeutic products based on genetic technologies. Ampligen, our lead
compound, is in advanced human clinical development for various therapeutic
indications. Ampligen has been clinically evaluated in over 350 patients for
different therapeutic indications. The clinical profile that is emerging from
these studies is that the drug acts as an antiviral agent against a large number
of different viruses, it can stimulate the immune system and it is generally
well tolerated.
We are currently conducting Phase III human clinical trials for the
therapeutic treatment of myalgic encephalomyelitis, also known as chronic
fatigue syndrome. Phase III trials are the final drug testing phase for approval
by the U.S. Food and Drug Administration. Ampligen is also being investigated
for the treatment of HIV infection. Other disease indications, including
hepatitis B and certain cancers, are targeted for further investigation.
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. We plan to explore the possibility of partnerships for the further
development in the treatment of these diseases.
We expect to continue our research and clinical efforts for the next
several years with significant benefit accruing 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. We are also pursuing similar programs
in other countries, especially within the European Union where our resources
have been substantially increased with respect to pursuing regulatory approvals.
As part of our research and development activities, we have entered into
various collaborative and sponsored research agreements with researchers,
universities and government agencies. We believe that these agreements provide
us with access to physicians and scientists with expertise in the fields of
clinical medicine, virology, molecular biology, biochemistry, immunology and
cellular biology.
Our policy is to file or license patent applications on a worldwide basis
to protect technology, inventories and improvements that are considered
important to the development of our business. Over the years, we have secured a
significant patent estate consisting of 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. Included is a large set
of
<PAGE>
issued patents and patent applications from Temple University which have been
licensed by us on an exclusive basis.
The development of our products has required and will continue to require
the commitment of 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 form other sources in order to complete
the necessary clinical trials and the regulatory approval processes and begin
commercializing our products.
Product Development
In the second quarter of 1998, we began recruiting clinical investigators
and chronic fatigue syndrome patients to participate in the Phase III clinical
study of Ampligen in the treatment of persons suffering from chronic fatigue
syndrome. We have a target of eventually enrolling 230 patients with the
severely debilitating form of chronic fatigue syndrome. As of January 1999, we
had engaged the services of six clinical investigators to start enrolling
patients in the Phase III chronic fatigue syndrome. We expect to engage the
services of eight to ten investigators in total by the end of March 1999.
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.
Cost Recovery Programs
In the first quarter of 1998, the Food and Drug Administration authorized
expansion of the chronic fatigue syndrome cost recovery treatment program.
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 $7,000 for a 24 week
treatment course.
At the end of October 1998, physicians were also treating patients in
Belgium and Austria pursuant to chronic fatigue syndrome cost recovery treatment
programs. The Belgian program was initiated in 1994. Since inception, we have
treated over 60 patients in the Belgian program, which is similar to the cost
recovery treatment program now in process in the United States. We are currently
reviewing the records of new patients for possible inclusion in the Belgian
program. A chronic fatigue syndrome cost recovery program was initiated in
Austria in September 1998. A similar chronic fatigue syndrome cost recovery
treatment program is ongoing in Canada.
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Manufacturing
In 1994, we entered into an agreement with Bioclones, Ltd., a subsidiary
of South African Breweries, Ltd., with respect to the co-development of various
genetic drugs, including Ampligen ("Bioclones Agreement"). The Bioclones
Agreement provided for the formation of Ribotech, Ltd. Ribotech was formed in
1994 to produce the raw materials for manufacturing Ampligen. Ribotech is
jointly owned by Bioclones (75.1%) and Hemispherx Biopharma (24.9%).
Ribotech has already produced raw materials that we have accepted for use
in the manufacture of Ampligen. Ribotech presently has the capacity to produce
the materials required to treat approximately 2,000 patients per year. Plans for
a new production plant are being developed. The planned 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 have
completed six (6) months of accelerated and long term stability studies on the
liquid formulation product. These stability studies on liquid formulated product
are required by the Food and Drug Administration. In addition, we submitted a
report demonstrating the equivalence of the freeze-dried product to the liquid
product. This report was based on extensive testing of the liquid product. We
can manufacture the liquid product more efficiently and the process allows for
greater production volumes of the product. We will continue to produce the
freeze-dried product for further clinical development.
Ribotech currently produces the majority of the biochemicals used for our
drug substances and has initiated a program to produce liquid dose product.
Ribotech announced the completion of their first pilot run of liquid product in
the third quarter. Product produced by this run is currently undergoing
extensive testing. In addition to the liquid product, five lots of Ampligen were
produced in the third quarter. We used these five lots to produce nearly 1,000
doses of freeze-dried product and approximately 3,000 doses of liquid product.
These doses are to be used in the chronic fatigue syndrome cost recovery
clinical treatment programs in the U.S., Canada, Belgium and Austria, as well as
in the U.S.
Pharmacia Biotech, formerly a division of Upjohn Co., has provided us with
raw materials for the production of Ampligen, which was tested and released for
use. Pharmacia Biotech has been a long time supplier of raw material used in the
production of Ampligen. Pharmacia Biotech's production capacity compliments the
existing capacity at Ribotech. Pharmacia Biotech has a small equity position in
Hemispherx Biopharma.
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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.
Distribution/Marketing
In February 1998, we entered into an agreement with Kimberly Home Health
Care, Inc. which operates its business under the name Olsten Health Services.
This agreement appoints Olsten Health Services as a distributor of our products
to U.S. patients enrolled in the chronic fatigue syndrome cost recovery program.
Olsten Health Services will maintain an Ampligen inventory for use in treating
these patients. In addition, Olsten Health Services agreed to provide initially
up to $500,000 of support for other clinical program efforts including
identification of the potential medical and economic benefits to patients
receiving Ampligen. We agreed to compensate Olsten Health Services for certain
services in connection with conducting certain aspects of the clinical programs.
Olsten Health Services has the capability 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. Olsten Health Services will also provide various patient education
and clinical support services to assist chronic fatigue patients in dealing more
effectively with this disease. We feel that Olsten Health Services'
participation completes the product delivery process and uniquely meets the
needs of chronic fatigue patients.
We are presently exploring the possibility of distribution and marketing
relationships for the Western European market. Negotiations are under way with a
French multinational pharmaceutical firm.
A wholly owned subsidiary named Hemispherx Biopharma Europe NV/S.A has
been formed in Europe. This European 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.
Recent Developments
Subsidiary Spin-Off
We have authorized the distribution of at least 80% of the issued and
outstanding shares of common stock of Core Biotech Corp., our wholly-owned
subsidiary, to our shareholders in a tax-free transaction. Core Biotech was
incorporated in the State of Delaware in 1994.
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Core Biotech intends to use genetic technologies to develop therapeutic
products for the treatment of viral hepatitis diseases. Genetic compounds
represent a new class of pharmaceutical products that are designed to act at the
molecular level for the treatment of human disease. We will license or
sublicense to Core Biotech the technology for the products that will be used by
Core Biotech.
The planned Spin-Off contemplates one share of Core Biotech common stock
for every six shares of our common stock.
In connection with the planned Spin-Off, we will enter into certain
agreements with Core Biotech, including, but not limited to, (i) a separation
and distribution agreement, providing for, among other things, the planned
Spin-Off and the division between us and Core Biotech of certain assets and
liabilities; (ii) a tax allocation agreement, pursuant to which Core Biotech and
us will agree to allocate tax liabilities that relate to the planned Spin-Off
and to periods prior to the Spin-Off date; (iii) a services agreement, providing
for certain allocations of responsibilities with respect to various services to
be provided by us to Core Biotech; (iv) an employee benefits agreement; (v) a
technology license agreement; and (vi) a reseach and development agreement.
These agreements are in the early stages of development and no final
determination as to structure has been made. Further, no determination has been
made with respect to capitalization, pro forma financial information, management
and intercompany transactions. The timetable for the planned Spin-Off is as soon
as practicable based on financing and certain market conditions.
Litigation
On September 14, 1998, VMW, Inc. filed a complaint against us in the
United States District Court, Southern District of New York. The complaint
alleges that we failed to fulfill our financial obligations to VMW, Inc. with
respect to a certain letter agreement pertaining to marketing services rendered.
VMW, Inc. claims damages of less than $100,000. We have counter-claimed alleging
breach of contract by VMW and have demanded damages of approximately $25,000.
This case is currently in the discovery phase. We do not believe that the
complaint will have a material effect on our results of operations or our
financial position.
Ell and Co., and the Northern Trust Company, as Trustee of the AT&T Master
Pension Trust filed a complaint against us in the Court of Chancery of the State
of Delaware in and for New Castle County on September 23, 1998. This complaint
alleges that we breached our contractual obligations as set forth in our
Certificate of Powers, Designations, Preferences and Rights of the Series E
Convertible Stock. The plaintiff seeks to enforce its rights to convert 1,500
shares of Series E Preferred Stock into 750,000 shares of freely traded common
stock
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and to recover damages for its inability to convert the preferred stock when it
requested to do so. We do not believe that the complaint will have a material
effect on our results of operations or our financial position.
Although we maintain that the 1,500 shares of Series E Preferred Stock had
been properly redeemed and, therefore, the plaintiff was not contractually able
to effect a proper conversion into common shares, we agreed, in December 1998,
to convert the plaintiff's preferred stock into common stock. Currently, the
claim is still in 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 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. In the meantime, all discovery is suspended pending the disposition of
the dismissal motions.
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RISK FACTORS
1. Dependence on Ampligen.
Our principal development efforts are currently focused on Ampligen, which
has not been approved by the U.S. Food and Drug Administration for commercial
use in the U.S. We plan on conducting additional trials and testing. No
assurance can be given that the drug will ultimately be demonstrated to be safe
or efficacious. In addition, while Ampligen has been authorized for use in
clinical trials in the United States and other countries, no assurance can be
given that additional clinical trials approvals will be authorized in the United
States or in other countries, in a time fashion or at all or that such clinical
trials will be completed by the Company. Further, no assurance can be given that
commercialization of Ampligen in any countries where Ampligen may be approved
will prove successful.
2. No Assurance of Regulatory Approval.
The research, preclinical development, clinical trials, and the
manufacturing and marketing of our products 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. None of our products have been approved for full commercial sale by
these regulatory agencies, or any other foreign regulatory authority, and we do
not expect to achieve profitable operations unless Ampligen receives final
regulatory approval and is commercialized successfully. 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. The process of obtaining required regulatory approvals is
rigorous and lengthy and has required and will continue to require the
expenditure of substantial resources. There can be no assurance we will be able
to obtain the necessary regulatory approvals. Unsatisfactory clinical trial
results, clinical trials not conducted in accordance with applicable protocol
requirements and/or delays in obtaining regulatory approvals would prevent the
marketing of products developed by us, and pending the receipt of such
approvals, we will not receive product revenues or royalties.
3. Additional Financing Requirements.
The development of our products has required and will continue to require
the commitment of substantial resources. In addition, the spin-off of our
wholly-owned subsidiary, Core Biotech Corp, to existing shareholders will
require substantial funding. Based on our current operating plan, we anticipate
that projected cash flow from operations
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and currently available financing will be sufficient to meet our capital
requirements for approximately 16 months from the date of this prospectus. Our
current cash may not be should be sufficient to enable us to complete the
necessary clinical trials or regulatory approval process for Ampligen for any
indication or, if any such approval were obtained, to begin manufacturing or
marketing Ampligen on a commercial basis. If not, we may need to raise
substantial 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. If
adequate funds are not available from operations and other sources, and if we
are not able to raise additional financing on acceptable terms, our business
could be materially adversely affected.
4. Uncertainty Regarding Patents and Proprietary Rights.
Our success will depend, in large part, on our ability to obtain patent
protection for our products and to obtain and preserve proprietary information
and trade secrets. Consequently, our ability to obtain exclusive rights for the
commercial sale of Ampligen is subject to our acquiring enforceable patents
covering the use of the drug for a particular disease. 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 a patent
on the use of Ampligen 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. To date, we have not been issued any patents in the U.S. for the use
of Ampligen as a sole treatment for hepatitis B or for any of the cancers which
we have sought to target. Our applications for U.S. patents for the use of
Ampligen as a sole treatment for chronic hepatitis B and in the treatment of
renal cell carcinoma and lung cancer are currently pending, and no assurances
can be given that any of such applications will be approved. No assurances can
be given that 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 us. No assurance can be given that our patent
protection will be adequate to prevent the entry into the market of competitors
for all of our treatment indications.
5. History of Losses; Future Profitability Uncertain.
We began operations in 1966 and last reported net profit from 1985 through
1987. Since 1987, we have incurred substantial operating losses and as of
September 30, 1998, our accumulated deficit was approximately $59,150,000. We
have not yet generated significant revenues from our products and could incur
substantial and increased losses in the future. There can be no assurance that
we will ever achieve significant revenues from product sales or become
profitable. Our ability to achieve profitable operations is dependent, in large
part, on
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successfully developing products, obtaining regulatory approvals on a timely
basis, and making the transition from a research and development firm to an
organization producing commercial products or entering into joint ventures or
other licensing arrangements. No assurance can be given that our product
development efforts will be successfully completed, required regulatory
approvals will be obtained, any products will be manufactured and marketed
successfully, or profitability will be achieved.
6. Lack of Manufacturing Experience and Capacity.
Ampligen is currently produced only for use in clinical trials. To be
successful, our products must be manufactured in commercial quantities in
compliance with regulatory requirements and at acceptable costs. We have entered
into an agreement with Bioclones, a biopharmaceutical company which is
associated with South African Breweries, Ltd. The agreement with Bioclones
provides for the construction of a new commercial manufacturing facility by
Ribotech, Ltd., a company of which we own 24.9%. No assurance can be given as to
the timing of such construction, and therefore we may continue to be dependent
on third parties for a portion of the manufacturing and production process. 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 no assurance can be given with
respect to when, and if, construction will be initiated or completed. We intend
to utilize third-party facilities if and when the need arises or, if we are
unable to do so, to build or acquire commercial-scale manufacturing facilities.
We need to comply with the regulatory requirements of the United States, Canada
and Europe for such facilities. There can be no assurance that such facilities
can be used, built, or acquired on commercially acceptable terms, that such
facilities, if used, built, or acquired, will be adequate for our long-term
needs. Moreover, there is no assurance that successful manufacture of a drug on
a limited scale basis for investigational use will lead to a successful
transition to commercial, large-scale production. Small changes in methods of
manufacture may affect the chemical structure of Ampligen and similar types of
drugs, as well as their safety and efficacy. Changes in methods of manufacture,
including commercial scale-up, can, among other things, require new clinical
studies and affect the market exclusivity rights, if any, under the orphan drug
tax credit. We have obtained the designation of Ampligen as an orphan drug which
meets the requirements of "rare disease condition" under the federal income tax
regulations.
7. Lack of Marketing Experience and Capacity.
We have limited marketing or sales capability. If we are unable to enter
into marketing agreements or third party distribution agreements for our
products, significant additional resources would be required to develop a sales
and distribution organization. Our agreement with Olsten Health Services offers
the potential to provide significant marketing and
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distribution capacity in the United States. Pursuant to the Bioclones Agreement,
Bioclones, Ltd. will be responsible for fielding an adequate sales force in
South America, Africa, United Kingdom, Australia and New Zealand. Nevertheless,
there can be no assurance that we will be able to establish such arrangements,
under the Bioclones Agreement or otherwise, on terms acceptable to us, or that
the cost of establishing such arrangements will not exceed any product revenues,
or that such arrangements will be successful. 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 can be no assurance that
such efforts will be successful.
8. Rapid Technological Change and Substantial Competition.
The pharmaceutical industry, and the genetic drug industry in particular,
is subject to rapid and substantial technological change. Technological
competition from pharmaceutical and biotechnology companies, universities,
governmental entities and others diversifying into the field is intense and is
expected to increase. Most of these entities have significantly greater research
and development capabilities, as well as substantial marketing, financial and
managerial resources, and represent significant competition. There can be no
assurance that developments by others will not render our products or
technologies obsolete or noncompetitive or that we will be able to keep pace
with technological developments. Competitors have developed or are in the
process of developing technologies that are, or in the future may be, the basis
for competitive products. Some of these products may have an entirely different
approach or means of accomplishing similar therapeutic effects to products being
developed by us. These competing products may be more effective and less costly
than our products. In addition, conventional drug therapy, surgery and other
more familiar treatments will offer competition to our products. Furthermore,
many of our competitors have significantly greater experience than us in
pre-clinical testing and human clinical trials of pharmaceutical products and in
obtaining regulatory approvals of products. Accordingly, our competitors may
succeed in obtaining product approvals more rapidly than we can. If any of our
products receive regulatory approvals for any indication and we commence
commercial sales, we will also be competing with respect to manufacturing
efficiency and marketing capabilities, areas in which we have limited
experience. Our competitors may possess or obtain patent protection or other
intellectual property rights that prevent, limit or otherwise adversely affect
our ability to develop or exploit our products.
9. Dependence upon Qualified and Key Personnel.
Because of the specialized nature of our business, our success depends,
among other things, on our ability to attract and retain qualified management
and scientific personnel. Competition for such personnel is intense. There can
be no assurance that we will be able to continue to attract or retain such
persons. We currently depend upon the services of Dr. William A. Carter,
President, Chief Executive Officer and Chairman of the Board, Robert E.
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Peterson, Chief Financial Officer and Dr. Carol A. Smith, Director of
Manufacturing and Process Development. Certain key individuals upon whom we
currently depend, including but not limited to our Medical Director, Dr. David
Strayer, are not our employees. In addition, we have not entered into an written
employment agreement with Dr. Smith. The continued availability of the services
of these individuals is subject to the policies of the institution which employs
them; any change in such policies may have an adverse effect upon the continued
retention of their services. 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
or of the services of such employees of collaborators or the failure to recruit
additional personnel as needed could have a materially adverse effect on our
ability to achieve our objectives.
10. Product Liability Exposure.
We face an inherent business risk of exposure to product liability claims
in the event that the use of Ampligen results in adverse effects. Such liability
might result from claims made directly by patients, hospitals, clinics or other
consumers, or by pharmaceutical companies or others manufacturing such products
on our behalf. While we will continue to attempt to take appropriate
precautions, there can be no assurance that we will avoid significant product
liability exposure. We currently maintain worldwide product liability insurance
coverage.
11. Shares Eligible for Future Sale; Registration Rights.
A substantial amount of our outstanding common stock is subject to Rule
144. The sale, or availability for sale, of substantial amounts of our
securities in the public market subsequent to this prospectus, including the
securities issued pursuant to Rule 144, Rule 701 or otherwise, 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.
Under Rule 144, shares of common stock may only be sold in accordance with the
terms and conditions of Rule 144. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person who has owned shares of
common stock for at least one year is entitled to sell, within any three month
period, the greater of (i) the number of shares equal to 1% of the total number
of outstanding shares of the common stock; (ii) the average weekly trading
volume during the four calendar weeks preceding the sale. A person who presently
is not and who has not been affiliated with us for at least three months
immediately preceding the sale and who has owned the shares of common stock for
at least two years is entitled to sell such shares under Rule 144(k), without
regard to any of the volume limitations described above. In addition, we have
issued warrants to purchase 2,750,000 shares of common stock in reliance upon
the provisions of Rule 701 of the Securities Act. The availability of Rule 144
and Rule 701 to the holders of
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common stock would be conditioned on, among other factors, the availability of
certain public information relating to us.
12. Conflicts of Interest.
All of the members of our Scientific Advisory Board are employed by other
entities and may have commitments to or consulting or advisory contracts with
other entities (which may include our competitors) that may limit their
availability. While each member of our Scientific Advisory Board executes a
non-disclosure and non-competition agreement with respect to proprietary data
that he or she receives from us, there can be no assurance that these agreements
will absolutely protect us from the results of such data being revealed,
accidentally or otherwise, by a member of our Scientific Advisory Board.
13. The Year 2000.
State of Readiness
We are dependent upon computers to operate our business and therefore are
exposed to Year 2000 ("Y2K") problems. In the spring of 1998, we initiated a Y2K
compliance program with the following objectives: (i) updating and/or replacing
aging hardware; (ii) establishing a new platform for data bases; and (iii)
assuring company-wide Y2K compliance.
With the assistance of outside consultants, we have identified that the
computer systems used for clinical and manufacturing purposes are not Y2K
compliant. In order to make these systems compliant, we elected to replace the
computer systems. The new computers have been ordered and we expect to receive
them by mid-February 1999. Upgraded software for the clinical computers is to be
installed and tested by the end of February 1999. The computers systems for
manufacturing is to be developed and installed by April 30, 1999. We expect to
have all computers and systems Y2K compliant by May 15, 1999.
Cost
The total costs for achieving Y2K compliance are estimated to be between
$150,000 and $200,000. Most of the cost is due to the acquisition of Y2K
compliant software.
Risks
The failure to correct a material Y2K problem could result in an
interruption in, or failure of, certain normal business activities or
operations. Such failures could materially and adversely affect our results of
operations, liquidity and financial condition. Due to the general uncertainty
inherent in the Y2K problem, resulting in part from the uncertainty of the Y2K
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readiness of third-party suppliers and customers, we are unable to determine at
this time whether the consequences of Y2K failures will have a material impact
on our results of operations, liquidity and financial condition. 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.
In a worst case scenario, we would experience delays in accessing data on
patients enrolled in clinical trials. Such 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.
Contingency Plan
Our contingency plans are not complete at this time. We are confident that
our new computers and software will be online by May 15, 1999. Some thought is
being given to outsourcing the computer tasks as a contingency plan. We are
looking into suppliers that could provide this service. This approach, if
necessary, would be expensive.
15. Risks Associated with Forward Looking Statements.
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 similar statements. The statements in
"Risk Factors" are cautionary statements. They identify important factors, with
respect to forward-looking statements, that could cause actual results to differ
materially from those forecasted in such statements. All forward-looking
statements in this prospectus are expressly qualified in their entirety by the
cautionary statements in this paragraph.
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Available Information
Hemispherx Biopharma is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith, files reports,
proxy statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information can be
inspected and copied at the Securities and Exchange Commission, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Room 1204, Everett McKinley Dirksen Building,
219 South Dearborn Street, Chicago, Illinois 60604; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the Securities
and Exchange Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Information on the operation of the Public Reference
Room can be obtained by calling the Commission at 1-800-SEC-0330. Such reports
and other information may also be inspected without charge at a website
maintained by the Commission. The address of the website is http://www.sec.gov.
This prospectus does not contain all of the information set forth in the
registration statement of which this prospectus is a part and which Hemispherx
Biopharma has filed with the Securities and Exchange Commission. For further
information with respect to Hemispherx Biopharma and the common stock offered
hereby, reference is made to the registration statement, including the exhibits
filed as a part thereof, copies of which can be inspected at, or obtained at
prescribed rates from the Public Reference Section of the Commission at the
address set forth above. Additional updating information with respect to
Hemispherx Biopharma may be provided in the future by means of appendices or
supplements to the prospectus.
Hemispherx Biopharma hereby undertakes to provide without charge to each
person to whom a copy of this prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
or may be incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed to Hemispherx Biopharma, Inc., 1617
JFK Boulevard, Philadelphia, Pennsylvania 19103 (215) 988-0080.
Incorporation of Certain Documents by Reference
We hereby refer to the following documents previously filed by Hemispherx
Biopharma with the Securities and Exchange Commission, and incorporate these
documents in this Prospectus:
(a) Annual Report on Form 10-K for its fiscal year ended December 31, 1997
(File No. 1-13442);
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(b) Quarterly Reports on Form 10-Q for the periods ended March 31, 1998,
June 30, 1998 and September 30, 1998 (File Nos. 1-13441);
(c) Registration Statement on Form S-3, File No. 333-45677, which was
declared effective by the Commission on February 18, 1998;
(d) The portions of Hemipherx Biopharma's Proxy Statement for the Annual
Meeting of Stockholders held on July 15, 1998 (File No. 1-13441) that have been
incorporated by reference in Hemispherx Biopharma's Annual Report on Form 10-K;
(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 such description filed subsequent to the date of this
prospectus and prior to the termination of the offering described herein; and
(e) All other reports filed by Hemispherx Biopharma pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering described herein, which documents shall
be deemed a part hereof from the date of filing thereof.
Any statement contained in a document referenced herein shall be deemed to
be modified or superseded for purposes of this prospectus, to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Use of Proceeds
Hemispherx Biopharma will not receive proceeds from any resale of Value
Management and Research's common stock. The proceeds to be received by
Hemispherx Biopharma from the exercise of the warrants (assuming all of the
warrants are exercised), will be $1,600,000. Hemispherx Biopharma intends to use
such 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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Resales By Selling Securityholders
This prospectus relates to the proposed resale by Value Management and
Research of 1,000,000 shares of common stock. The following table sets forth as
of January 31, 1999 certain information with respect to Value Management and
Research. Value Management and Research has no material relationship with or has
held any position or office with Hemispherx Biopharma the past three years.
Hemispherx Biopharma will not receive any of the proceeds from the sale of the
common stock.
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered Herein After Offering
-------------- -------------- --------------
Name of Selling Common
Securityholder Stock Warrants Common Stock Amount %
- -------------- ----- -------- ------------ ------ -
Value Management and 750,000 250,000 1,000,000(2) 0 0
Research AG
(1) For purposes of this table, Value Management and Research is deemed to own
shares of common stock if it has the right to acquire the common stock
within 60 days of January 31, 1999. For purposes of computing the
percentage of outstanding shares of common stock held by it, any security
which it has the right to acquire within such date is deemed to be
outstanding. Hemispherx Biophparma believes, based on information supplied
by Value Management and Research, that they have sole voting and
investment power with respect to the shares of common stock.
(2) Includes (i) 200,000 shares of common stock underlying warrants
exercisable during the five year period commencing April 30, 1998, at
exercise prices ranging from $4.00 to $10.00 per share; and (ii) 50,000
shares of common stock underlying warrants exercisable during the five
year period commencing July 10, 1998 at an exercise price of $4.00.
Plan of Distribution
The selling securityholder may offer and sell the shares of common stock
from time to time in the discretion of the selling securityholder on the
American Stock Exchange, or otherwise, at prices and at terms then prevailing or
at prices related to the then current market price, or at negotiated prices. The
distribution of the shares of common stock may be effected from time to time in
one or more transactions including, without limitation: (a) a block trade in
which the broker-dealer so engaged will attempt to sell the common stock as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases
17
<PAGE>
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face or
other direct transactions between the selling securityholder and purchasers
without a broker-dealer or other intermediary. In effecting sales,
broker-dealers or agents engaged by the selling securityholder may arrange for
other broker-dealers or agents to participate. From time to time, the selling
securityholder may pledge, hypothecate or grant a security interest in some or
all of the common stock owned by it, and the pledgees, secured parties or
persons to whom such securities have been hypothecated shall, upon foreclosure
in the event of default, be deemed to be selling securityholders hereunder. In
addition, the selling securityholder may from time to time sell short the common
stock, and in such instances, this prospectus may be delivered in connection
with such short sale and the common stock offered hereby may be used to cover
such short sale.
Sales of the common stock may also be made pursuant to Rule 144 under the
Securities Act of 1933, as amended, where applicable. The selling
securityholder's shares may also be offered in one or more underwritten
offerings, on a firm commitment or best efforts basis. Hemispherx Biopharma will
not receive proceeds from the sale of the selling securityholder's common stock.
To the extent required under the Securities Act, the aggregate amount of
selling securityholder's common stock being offered and the terms of the
offering, the names of any such agents, brokers, dealers or underwriters and any
applicable commission with respect to a particular offer will be set forth in an
accompanying Prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the common stock may receive compensation
in the form of underwriting discounts, concessions, commissions or fees from the
selling securityholder and/or purchasers of selling securityholder's shares, for
whom they may act. In addition, the selling securityholder's may be deemed to be
underwriters under the Securities Act and any profits on the sale of selling
securityholder's shares by them may be deemed to be discounts or commissions
under the Securities Act. Selling securityholders may have other business
relationships with Hemispherx Biopharma in the ordinary course of business.
From time to time the selling securityholder may transfer, pledge, donate
or assign its common stock to lenders, family members and others and each of
such persons will be deemed to be a "Selling Securityholder" for purposes of
this prospectus. The plan of distribution for Selling Securityholder's shares of
common stock sold hereunder will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be selling
securityholders hereunder.
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Including, and without limiting the foregoing, in connection with
distributions of the common stock, the selling securityholder may enter into
hedging transactions with broker-dealers and the broker-dealers may engage in
short sales of the cosmmon stock in the course of hedging the positions it
assumes. The selling securityholder may also enter into option or other
transactions with broker-dealers that involve the delivery of the common stock
to the broker-dealers, who may then resell or otherwise transfer such common
stock. The selling securityholder may also loan or pledge the common stock to a
broker-dealer and the broker-dealer may sell the common stock so loaned or upon
default may sell or otherwise transfer the pledged common stock.
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 during a period which commences one business day (5
business days, if Hemispherx Biopharma's public float is less than $25 million
or its average daily trading volume is less than $100,000) prior to such
person's participation in the distribution, subject to exceptions for certain
passive market making activities. In addition and without limiting the
foregoing, the selling securityholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M which provisions may limit the timing of purchases and
sales of shares of the common stock by the selling securityholder.
Hemispherx Biopharma is 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 securityholders). Any commissions, discounts or
other fees payable to broker-dealers in connection with any sale of the shares
of common stock will be borne by the selling securityholder.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock and warrants of
Hemispherx Biopharma is Continental Stock Transfer and Trust Co., 2 Broadway,
New York, New York 10004.
Legal Matters
The legality of the shares offered hereby has been passed upon for
Hemispherx Biopharma by Silverman, Collura, Chernis & Balzano, P.C., 381 Park
Avenue South, Suite 1601, New York, New York 10016.
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Experts
The consolidated financial statements of Hemispherx Biopharma and
subsidiaries as of December 31, 1996 and 1997, and for each of the years in the
three year period ended December 31, 1997, have been incorporated by reference
herein in reliance upon the report of KPMG LLP, independent certified public
accountants, also incorporated by reference herein, and upon the authority of
said firm 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 directors, officers, and controlling persons of
Hemispherx Biopharma, Hemispherx Biopharma has been advised that in the opinion
of the 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
Hemispherx Biopharma of expense incurred or paid by a director, officer, or
controlling person of Hemispherx Biopharma in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person of Hemispherx Biopharma in connection with the securities being
registered, Hemispherx Biopharma will, unless in the opinion of its counsel the
matter has been settled by a 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 issues.
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================================================================================
================================================================================
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 the securities offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
Prospectus is current only as of this date
TABLE OF CONTENTS
Page
Prospectus Summary ........................................................ 2
Risk Factors .............................................................. 8
Available Information ..................................................... 15
Incorporation by Reference ................................................ 15
Use of Proceeds ........................................................... 16
Resales by Selling Securityholders ........................................ 17
Plan of Distribution ...................................................... 17
Transfer Agent ............................................................ 19
Legal Matters ............................................................. 19
Experts ................................................................... 20
Disclosure of Commission Position ......................................... 20
================================================================================
================================================================================
1,000,000 SHARES
OF COMMON STOCK
HEMISPHERX BIOPHARMA, INC.
--------------------
PROSPECTUS
--------------------
____________, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee $2,159.09
Printing $ 2,500*
Legal Fees and Expenses $10,000*
Accounting Fees and Expenses $ 2,500*
Miscellaneous Expenses (including travel
and promotional expenses) $ 1,000*
TOTAL $18,159*
*Estimated
The Selling Securityholders 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.
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Item 16. Exhibits and Financial Statement Schedule
(a) The following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
(1)1.1 Form of Underwriting Agreement
(1)1.2 Form of Selected Dealer Agreement
(1)1.3 Form of Agreement Among Underwriters
(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
(1)4.1 Specimen certificate representing Registrant's Common
Stock
(1)4.2 Form of Class A Redeemable Warrant Certificate
(1)4.3 Form of Underwriter's Unit Option Purchase Agreement
(1)4.4 Form of Class A Redeemable Warrant Agreement with
Continental Stock Transfer and Trust Company
5.1 Opinion of Silverman, Collura & Chernis, P.C. with
respect to legality of the securities of the Registrant
being registered
(1)10.1 Registration Rights Agreement, dated as of May 9, 1989
(1)10.2 Subordination Agreement, dated as of September 18, 1992
(1)10.3 Series A1 and Series A2 Preferred Stock Purchase
Agreement, dated as of January 22, 1991
II-2
<PAGE>
(1)10.4 Sixth Amendment Agreement, dates as of March 31, 1994,
amending the Series A1 and Series A2 Preferred Stock
Purchase Agreement
(1)10.5 Seventh Amendment Agreement, dated as of January 1,
1995, amending the Series A1 and Series A2 Preferred
Stock Purchase Agreement
(1)10.6 Form of Series C Preferred Stock Subscription
Agreement, dated as of June 22, 1993
(1)10.7 Form of Series C Debt Subscription Agreement, dates as
of June 30, 1993
(1)10.8 Form of Note issued with respect to Series C Debt
Subscription Agreement, dated as of June 30, 1993
(1)10.9 Form of Warrant issued with respect to Series C Debt
Subscription Agreement, dated as of June 30, 1993
(1)10.10 Cohn Restructuring Agreement, dated as of March 31,
1994
(1)10.11 Form of Warrant issued with respect to Cohn
Restructuring Agreement, dated as of March 31, 1994
(1)10.12 Note issued with respect to Cohn Restructuring
Agreement, dated as of March 31, 1994
(1)10.13 Letter Agreement, dated April 14, 1994 between the
Registrant and Maryann Charlap and Promissory Notes
(1)10.14 Letter Agreement, dated July 13, 1994 between Bridge
Ventures, Inc. and the Registrant
(1)10.15 Letter Agreement dated September 20, 1994 between
Maryann Charlap and Lloyd DeVos
(1)10.16 Letter Agreement, dated November 1, 1994 among the
Registrant, Bridge Ventures, Inc. and Myron Cherry
(1)10.17 Form of Bridge Loan Agreement and Promissory Note
(1)10.18 [Intentionally left blank]
(1)10.19 Form of Registration Rights Agreement issued pursuant
to 1994 Common Stock Financing Subscription Agreement
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<PAGE>
(1)10.20 Form of Proxy issued pursuant to 1994 Common Stock
Financing Subscription Agreement
(1)10.21 Standby Financing Agreement, dated June 2, 1995, as
amended September 20, 1995
(1)10.22 Tisch/Tsai Entities Stock Pledge Agreement, dated
February 28, 1995
(1)10.23 Tisch/Tsai Entities Settlement Agreement, dated
February 28, 1995
(1)10.24 Form of Promissory Note with Tisch/Tsai Entities
(1)10.25 Form of Warrant with Tisch/Tsai Entities
(1)10.26 Letter Agreement, dated May 4, 12995 between the
Registrant and Gerald Brauser
(1)10.27 Brauser Note, dated May 2, 1995
(1)10.28 1990 Stock Option Plan
(1)10.29 1992 Stock Option Plan
(1)10.30 1993 Employee Stock Purchase Plan
(1)10.31 Form of Confidentiality, Invention and Non-Compete
Agreement
(1)10.32 Form of Clinical Research Agreement
(1)10.33 Form of Collaboration Agreement
(1)10.34 Employment Agreement by and between the Registrant and
John R. Rapoza, dated May 18, 1992
(1)10.35 Employment Agreement by and between the Registrant and
James R. Owen, dated September 21, 1992
(1)10.36 Amended and Restated Employment Agreement by and
between the Registrant and Dr. William A. Cater, dated
as of July 1, 1993
(1)10.37 Employment Agreement by and between Registrant and
Harris Freedman, dated August 1, 1994
(1)10.38 Employment Agreement by and between the Registrant and
Sharon Will, dated August 1 1994
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<PAGE>
(1)10.39 License Agreement by and between the Registrant and the
Johns Hopkins University, dated December 31, 1980
(1)10.40 Technology Transfer, Patent License and Supply
Agreement by and between the Registrant, Pharmacia LKB
Biotechnology Inc., Pharmacio P-L Biochemicals Inc. and
E.I. du Pont de Nemours and Company, dated November 24,
1987
(1)10.41 Pharmaceutical Use Agreement, by and between the
Registrant and Temple University, dated August 3, 1988
(1)10.42 Assignment and Research Support Agreement by and
between the Registrant, Hahnemann University and Dr.
David Strayer, Dr. Isadore Brodsky and Dr. David
Gillespie, dated June 30, 1989
(1)10.43 Lease Agreement between the Registrant and Red Gate III
Limited Partnership, dated November 1, 1989, relating
to the Registrant's Rockville, Maryland facility
(1)10.44 Fee Agreement between the Registrant and Choate, Hall &
Stewart, dated January 27, 1993
(1)10.45 Settlement and Release Agreement between the Registrant
and Lloyd DeVos, dated August 18, 1994
(1)10.46 Agreement between the Registrant and Bioclones
(Proprietary) Limited
(1)10.47 Licensing Agreement with Core BioTech Corp.
(1)10.48 Licensing Agreement with BioPro Corp.
(1)10.49 Licensing Agreement with BioAegean Corp.
(1)10.50 Letter Agreement, dated may 12, 1992, between the
Registrant and Dr. Werner E.G. Muller
(1)10.51 Amendment, dated August 3, 1995, to Agreement between
the Registrant and Bioclones (Proprietary) Limited
(contained in Exhibit 10.46)
(1)10.52 Agreement, dated July 16, 1995, between the Registrant,
Vernacular Communications, Inc. Gerald Souham, Mitchell
L. Reisman, Craig S. O'Keefe and Robert C. Conaboy
(1)10.53 Agreement, dated June 27, 1995, between the Registrant
and The Sage Group
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(1)10.54 Form of Indemnification Agreement
(1)10.55 Agreement, dated September 13, 1995, between the
Registrant and River Pharma Inc.
(2)10.56 Series D Preferred Stock Subscription Agreement, dated
June 28, 1996
(2)10.57 Series D Preferred Stock Registration Rights Agreement,
dated June 28, 1996
(2)10.58 GFL Advantage Fund Limited Common Stock Purchase
Warrant, dated June 28, 1996
(3)10.59 Series E Preferred Stock Registration Rights Agreement
10.60 Value Management & Research, AG Subscription Agreement
dated July 20, 1998
(1)11 Calculation of Earnings Per Share
(1)14.1 Material Foreign Patents
(1)21 Subsidiaries of the Registrant
23.1 Consent of Silverman, Collura, Chernis & Balzano, P.C.
(included in Exhibit 5.1)
23.2 Consent of KMPG Peat Marwick 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.
b. Financial Statement Schedules.
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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-7
<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-8
<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 Amendment No. 1 to Form S-3 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Philadelphia, State of Pennsylvania, on February 2, 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.
Signature Title Date
--------- ----- ----
/s/ William A. Carter
- ------------------------ Principal Executive Officer February 1, 1999
William A. Carter, M.D. and Chairman of the Board
and as Power of Attorney
for Members of the Board
/s/ Robert E. Peterson
- ------------------------ Principal Financial Officer and February 1, 1999
Robert E. Peterson Principal Accounting Officer
/s/ Richard C. Piani
- ------------------------ Director February 1, 1999
Richard C. Piani
/s/ Ransom W. Etheridge
- ------------------------ Director February 1, 1999
Ransom W. Etheridge
/s/ William Mitchell
- ------------------------ Director February 1, 1999
William Mitchell
[Letterhead of Silverman, Collura, Chernis & Balzano, P.C.]
February 2, 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. ("Company"), a
Delaware corporation, pursuant to Registration Statement on Form S-3, as filed
with the Securities and Exchange Commission on December 8, 1998 ("Registration
Statement"), covering (i) 750,000 shares of the Company's common stock, $.001
par value ("Common Stock"); and (ii) 250,000 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:
1. The Company has authority to issue the Common Stock in the manner
and under the terms set forth in the Registration Statement.
<PAGE>
Hemispherx Biopharma, Inc.
February 2, 1999
Page 2
2. The Common Stock has been duly authorized and is validly issued,
fully paid and non-assessable. The Common Stock underlying the warrants have
been duly authorized and when issued, delivered and paid for in accordance with
the warrants' terms 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.
Very truly yours,
SILVERMAN, COLLURA, CHERNIS
& BALZANO, P.C.
/s/ Silverman, Collura, Chernis & Balzano, 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 heading "Experts" in the prospectus.
/s/ KPMG LLP
Philadelphia, Pennsylvania
February 2, 1999
