U.S. Markets close in 2 hrs 47 mins

Edited Transcript of HEB earnings conference call or presentation 7-Apr-17 3:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 Hemispherx Biopharma Inc Earnings Call

Philadelphia Apr 21, 2017 (Thomson StreetEvents) -- Edited Transcript of Hemispherx Biopharma Inc earnings conference call or presentation Friday, April 7, 2017 at 3:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Thomas K. Equels

Hemispherx Biopharma, Inc. - Executive Vice Chairman, CEO, President, Secretary and Director

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, everyone, and thank you for joining us today to review Hemispherx's 2016 fiscal year-end conference call. Representing the company today is Mr. Thomas Equels, Chief Executive Officer.

We are obligated by law to provide certain legal and binding disclaimers before we begin. Words such as intends, plans, potential, believe, potentially, possible and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as representation by Hemispherx that its plans will be achieved. These forward-looking statements are neither promises nor guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond Hemispherx's control, which could cause actual results to differ materially from these contemplated in these forward-looking statements.

For example, because numerous risks and uncertainties exist, despite our efforts and beliefs regarding approvals, we cannot assure Ampligen will ever be commercially approved for any treatment or that Alferon N Injection will ever be commercially approved for potential new treatment indications or for the new manufacturing procedures underway. Examples of such risks and uncertainties include the risks described in Hemispherx's filings with the Securities and Exchange Commission, including the most recent reports on Forms 10-K, 10-Q and 8-K.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and Hemispherx undertakes no obligation to update or revise the information discussed on this conference call, whether as a result of new information, future events or circumstances, or otherwise revise or update this release to reflect events or circumstances after the date hereof.

With that covered, it is now my pleasure to turn the floor over to your host, Mr. Thomas Equels, President and Chief Executive Officer of Hemispherx Biopharma. Sir, the floor is yours.

--------------------------------------------------------------------------------

Thomas K. Equels, Hemispherx Biopharma, Inc. - Executive Vice Chairman, CEO, President, Secretary and Director [2]

--------------------------------------------------------------------------------

Good morning, everyone. Welcome to Hemispherx's 2016 Year-End Conference Call. We have made a great deal of significant progress on a number of our initiatives since our last conference call. The new Hemispherx management team continues to lay the groundwork for long-term success.

Today, I will start by summarizing Hemispherx's accomplishments since our last conference call and review a number of our corporate and business highlights. Finally, I will give a financial overview for the fourth quarter and 2016 fiscal year end. I have incorporated a number of the topics and questions received into my discussion.

Of particular importance since our call last -- Hemispherx entered into a term sheet on March 29 with a funding company to obtain a 2-year funding line of up to $4 million secured by our New Brunswick, New Jersey, facility. Subject to lender approval, we'll be able to get an initial $3 million and have access to an additional $1 million based on certain criteria. The line allows for prepayment without penalty after 6 months. Now we have not closed on this, but we do have a signed term sheet by both parties. And there can be no assurance that we will close, but there were no impediments to closing. This credit line's purpose is to provide funding for the production and sales of our products, specifically Ampligen. We're trying to increase the level of production for sale of Ampligen.

On our last call, I discussed how we were aggressively moving our Early Access Program, or EAP for short, forward with our European partner, myTomorrows. There have been many positive developments on this front.

In January, we announced that the EAP contract with myTomorrows, originally designed only to accommodate Ampligen for ME/CFS patients, was amended and extended to include pancreatic cancer patients in Holland. Authorities in the Netherlands have approved up to 50 patients for treatment in the Early Access Program for pancreatic cancer, including a funding mechanism to remunerate us for the use of Ampligen in that program. myTomorrows, our exclusive provider in Europe and Turkey, will be managing all of our EAP activities related to the extension of this program into pancreatic cancer and to our additional and existing activities regarding ME/CFS patients in Europe.

We are also very pleased to announce that the progress in that program thus far has been good. Pancreatic cancer patients generally have a very poor prognosis and very few therapeutic options. This cancer is commonly diagnosed at an advanced stage, with a 5-year survival rate of roughly only 7% for all pancreatic cancer patients. We are expanding our Early Access Program to a patient population that has devastating malignancy, where there is such a clearly unmet medical need, in hopes that Ampligen can become a real lifeline for those in desperate straits with pancreatic cancer.

Also, in January, we announced that an order of newly manufactured Ampligen for sale under the EAP program in Europe was shipped to myTomorrows, and the product was received in good order on January 26. And this new line of Ampligen enabled our Early Access Program to move forward in Europe. The shipment of the new product was released for use in the EAP, and it makes our drug available in Europe for both ME/CFS and pancreatic type cancer patients. And in fact, we achieved a major milestone in that we consummated our first sales, money actually being received for the very first shipment of recently manufactured Ampligen in our international programs.

Now Hemispherx has also reinitiated its U.S.-based cost recovery program at a price increase recently approved by the FDA. The accelerated production plan for Ampligen is critical to maintaining the existing cost recovery program as well as expanding our accelerated and multiple indication programs in the European Union.

In the last quarter of 2016, we manufactured new lots of Ampligen. As I mentioned at our last stockholders' call, we anticipated generating sales from those lots of Ampligen, and we have done so. We will continue to aggressively pursue this path while we seek FDA approval of the Ampligen in the United States for the treatment of ME/CFS. We expect to continue our discussions with the FDA in the United States to identify a path forward for commercial approval of Ampligen in ME/CFS.

Although the results of those discussions are difficult to predict, we are working very aggressively to finalize a protocol based on the FDA's interest in new therapeutic options for ME/CFS. We hope we can complete these discussions with a plan for the final steps to move our New Drug Application forward based upon an agreed-upon protocol. There can be no guarantee because of the nature of governmental relations that we will be able to reach such a protocol. However, we're going to do our very best to do so, and we have every expectation that we'll be able to achieve that goal.

And another of my initiatives when I became CEO last year was to monetize underutilized assets. We have a lot and building, not the manufacturing facility, but it was a storage facility that was adjacent to our manufacturing facility. We are moving forward and making great progress on the sale of that lot and building and are waiting on certain environmental inspections that are obtained with this type of sale of a commercial property of this nature.

Now I'd like to review our financials for the fiscal year 2016 ended December 31, 2016. In the first quarter, when we announced changes in the management team, we committed to preserve capital so that we can better achieve our corporate goals. Our income statement reflects these initiatives as evidenced by the significant reduction in expenses compared to a year ago. The net loss for fiscal year 2016 was $7,502,000, a 51% decrease from the same period in fiscal year 2015. This expense control is also reflected in our much-reduced use of cash. Cash, cash equivalents and market securities were approximately $5,868,000 as of December 31, 2016, as compared to $8,910,000 as of December 31, 2015.

Now let me summarize our key initiatives and accomplishments from last year and going forward. We have generated our first sales of Ampligen through our Early Access Programs in Europe. We are continuing our discussions with the U.S. Food and Drug Administration so that we can develop a path forward for approval of Ampligen for ME/CFS. We are continuing in our efforts to secure out-licensing opportunities and/or senior co-development partnerships for our products. We are monetizing, through sale and loans, underutilized assets, and we're continuing to adhere to our plan of fiscal responsibility.

I would like to conclude by saying that we continue to focus our company and believe the approval of Ampligen in Argentina and Ampligen as being used in the Early Access Programs, along with our manufacturing progress, capital raises, all help to position this company for success in the future.

Again, I want to emphasize to our stockholders, we are focused on building Hemispherx into a successful biopharmaceutical company. On one side, we are working to try and leverage our existing clinical and Early Access Programs to facilitate future growth. On the other, we're working aggressively, both internally and externally, with partners and regulators to move our programs forward. We look forward to updating you on our next quarterly call.

Thank you very much for joining us today.

--------------------------------------------------------------------------------

Operator [3]

--------------------------------------------------------------------------------

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.