Why Did Hemispherx Crash Yesterday?
Hemispherx Biopharma (HEB – $0.32) lost more than 38% of its market value yesterady because it announced that its PDUFA date would be extended by three months.
A small recap. In July of 2008 the U.S. Food and Drug Administration (FDA) accepted for review the Company’s New Drug Application (NDA) for Ampligen to treat Chronic Fatigue Syndrome (CFS). Hemispherx is seeking marketing approval for the first-ever treatment for CFS. The date by which the FDA had to make a ruling, the so-called PDUFA date*, was February 25th, 2009.
* PDUFA Date or Action Date – This is the date by which the FDA will decide upon a filing for approval. It may be 6 months (Priority Review) from the date of NDA filing or 10 months from the date of the filing.
What Happened?
Hemispherx submitted additional data/information to the FDA within 90 days of its PDUFA date. When this happens, the FDA automatically extends the PDUFA date by 3 months to give themselves the necessary time to review the new data.
Is This A Surprise?
It shouldn’t be. We know that after Hemispherx filed its NDA in October of 2007, the FDA asked additional questions. Additional research had to be conducted by HEB and additional data had to be submitted.
Is This Unusual?
Absolutely not. A recent study by Natixis Bleichroeder Inc., a New York investment bank, found that in 2008 the FDA missed its PDUFA date 20 times and extended the PDUFA date 8 times.
New Data
In other news, Hemispherx also announced it would present new data on Ampligen at the upcoming International Association of Chronic Fatigue Syndrome (IACFS/ME) in Reno, Nevada on March 13, 2009.
The press release says: “Individuals suffering with CFS are known to be at greater risk than age-matched healthy populations with respect to certain catastrophic events including cancer, sudden cardio-vascular death and suicidal ideation. The new data will evaluate the potential of Ampligen, an experimental therapeutic, to mitigate certain of these events.”
When the Company announces data at an important meeting, I have a feeling the results will be positive.
Conclusion
To be honest, I was shocked to see the stock sink that much, simply because its PDUFA date was extended for 3 months. This shouldn’t have been a surprise for anyone. I for one, haven’t changed my opinion about the Company and continue to believe in a positive outcome.
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