Editor's note: This story was originally published Thursday, May 28.

Too many red flags are flying over Hemispherx Biopharma ( HEB) to be confident in the pending U.S. approval of the company's drug for chronic fatigue syndrome.

Retail investors are looking for the next biotech long shot to pay off just like Vanda Pharmaceuticals ( VNDA) did with the surprise approval of its schizophrenia drug. And so they've selected Hemispherx, a micro-cap drug company waiting for the U.S. Food and Drug Administration to render an approval decision on Ampligen for the treatment of patients with chronic fatigue syndrome (CFS).

This speculative mania has done wonders for Hemispherx's stock price. Shares traded for around 50 cents for most of the year, but zoomed to a high of $1.93 on May 18. The stock was up 2.4% to $1.73 in recent Thursday trading.

All these gains will disappear, or should disappear, if the FDA rejects Ampligen. After digging into the drug's history over the past few days, I'm hard-pressed to find any strong rationale for regulators giving Ampligen the green light.

I applaud Hemispherx's efforts to promote Ampligen and extend the suspense of the FDA review, which has allowed the company to raise money twice in the past month and pay out nice bonuses for the company's executives, but I fear that the end is near and it will not be pretty for Ampligen.

Ampligen in its current form has been around since the late 1980s, touted for its antiviral and immune system-boosting properties. At various times, Hemispherx has promoted and tested Ampligen as a treatment for smallpox, HIV, ebola, avian flu and most recently, swine flu, or the H1N1 virus.

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