Hemispherx BioPharma Inc (NYSEMKT:HEB): Can The Run Continue?

It's been three months since we last looked at Hemispherx BioPharma, Inc (NYSEMKT:HEB). At that time, the company had just announced a registered direct offering (RDO) that would see it raise $1 million, and had taken a hit on the back of the announcement to the tune of more than 30%.We hypothesized that this announcement-driven spike to the downside would be just that – a spike – and that we'd see a recovery as the company progressed into the second quarter of the year. At that time, Hemispherx traded for $0.43 a share.Turns out we picked the bottom.The company has traded steadily upwards for the last twelve weeks and hit highs of $0.72 on April 25 – a close to 70% appreciation. It's since corrected to current levels of $0.61, and we're going to make the same prediction; that current levels are at or near the low end of a correction and that there's a continuation of the overarching upside momentum on the cards from Hemispherx.Here's why.The company, in our eyes, has one key asset, and it's called Ampligen. There are a couple of other portfolio products but they don't make any real money and (in our opinion) they aren’t going to account for any substantial degree of value going forward.Ampligen is an experimental drug currently undergoing clinical development for the treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). These are conditions that basically have no treatment available for sufferers right now, and they are incredibly debilitating. There's also evidence that it might have clinical benefit when used as an oncology asset, and Hemispherx is pushing for an approval as a pancreatic cancer therapy as an initial target indication.The argument that many will make against Ampligen is that the evidence that supports its clinical benefit in the two lead indications isn’t that strong. It's basically been around for 40 years, and across this period Hemispherx has repeatedly suffered regulatory knockbacks, leading many to suggest it's never going to get approved. Also across this period, however, it's picked up various designations – Orphan Drug Product Designation (FDA), Treatment protocol with Cost Recovery Authorization (FDA) and promising clinical outcome recognition based on the evaluation of certain summary clinical reports (AHRQ).There's promise here, and there's also a large base of patient-derived evidence that suggests efficacy. ME/CFS sufferers want this drug approved, if only to give them an option where no option currently exists.And this year, we've finally seen some progress.The company is pushing the drug as part of a compassionate use program in Europe, and for the first time, generated sales revenue on the product in the first quarter of 2017. That's a major milestone. The $1 million we saw it raise at the start of the year, which we wrongly predicted was to produce Ampligen for clinical study use, was, in fact, to produce Ampligen for sale. A recent credit agreement (which isn’t closed yet, as per the latest management conference call, but is at signed terms stage) will see the company pick up $3 million in capital with the potential for another $1 million, again with the use of proceeds from this loan to go towards Ampligen production.What we're saying here is that things are starting to move forward, and that's something that's not happened for a long time with this company and its lead asset (or at least, it's not seemed as though much has been happening). Management is trying to tidy up assets (selling some unused buildings) and streamline operations. Sure, we're likely going to see a future raise, especially if the company can agree on a protocol with the FDA to get a trial kicked off in the US for Ampligen in the ME/CFS target indication, but even with some dilution, there's a fair amount of run room on current price as progress picks up pace.We will be updating our subscribers as soon as we know more. For the latest updates on HEB, sign up below!Disclosure: We have no position in HEB and have not been compensated for this article.