Hemispherx Biopharma

(HEB)

was again slapped by the

Food and Drug Administration

over what it called "false and misleading" claims for Ampligen, a drug under testing for chronic fatigue syndrome, HIV and other diseases.

The FDA told the Philadelphia-based drug-development company in a letter disclosed July 17 to stop making claims that Ampligen is "safe and effective." In fact, the drug has been associated with side effects including flushing, chills, fever, nausea and others, the FDA said. Furthermore, the agency said, the drug hasn't been proved effective.

The letter marks the second time in two years that the FDA has ordered the company to stop making unproved claims about Ampligen, its flagship drug and one that the company touts as a potential treatment for hard-to-treat diseases like HIV, hepatitis B and C, chronic fatigue syndrome, and others. In 1998, the company agreed to discontinue the practice, according to the FDA.

Diane Will, a Hemispherx spokeswoman, said she hadn't seen the letter and had no immediate comment.

For the past two years, Hemispherx and

Asensio & Co.

, a New York short-seller, have been involved in a highly publicized legal spat over what Asensio said was illegal promotion of Ampligen. Those claims led to a

Securities and Exchange Commission

investigation into Hemispherx.

Hemispherx sued Asensio in 1998, claiming Asensio's principal, Manuel Asensio, defamed the company and manipulated its stock. Asensio subsequently countersued, alleging that Hemispherx defamed Asensio, among other claims.

Hemispherx disclosed in its most recent filings that the SEC was investigating claims of misrepresentations about its clinical research, patent position, and Ampligen's safety and efficacy. Hemispherx said it is cooperating with the SEC investigation.

Hemispherx shares were up 1/4 at midday Tuesday at 7 3/4, well below their early March high of 19, reached when most biotech and drug development stocks were peaking.