Biotech Stock Mailbag: Hemispherx Biopharma

BOSTON (TheStreet) -- Thanks for coming back for another installment of the Biotech Stock Mailbag. This week's edition kicks off with email about Hemispherx Biopharma(HEB) and the rejection of its chronic fatigue syndrome drug Ampligen by the U.S. Food and Drug Administration.

Andrew writes, "Hey Adam, I have been following your coverage of Hemispherx and you have been spot on. Do you have any information as to when exactly Hemispherx received the complete response letter from the FDA? I would like to hope the company is transparent in their dealings with the FDA, but I have my doubts."

I asked the FDA for the exact date on the Ampligen complete response letter, but a spokeswoman said the agency is barred from commenting publicly on any dealings with drug sponsors.

The FDA gag order that prevents the agency from confirming or even commenting on claims made by companies like Hemispherx is hugely frustrating. And yes, companies like Hemispherx could use these restrictions to mislead investors because they know the FDA can't say or do anything about it.

Clearly, the FDA rejection letter is a material event for the company and as such, must be disclosed immediately to investors, if not within a few days, per Securities and Exchange Commission rules. Did Hemispherx really get the Ampligen rejection letter weeks or months ago but kept it a secret from investors? I don't know and I don't have any proof. Would it surprise me if that happened? Absolutely not.

Unfortunately, I received too many emails like this one from Eric M. "You were right about Hemispherx. I wish I had listened to you."

Sorry, Eric. I don't like when readers and investors get hoodwinked. Better luck, next time.