Hemispherx Fires CEO Following Reexamination of Priorities, Implements Ant-Nepotism Policy

Hemispherx Fires CEO Following Reexamination of Priorities, Implements Ant-Nepotism Policy
February 19, 2016
By Alex Keown, BioSpace.com Breaking News Staff

NEW BRUNSWICK, N.J. – Hemispherx Biopharma stock jumped about 13 cents per share, a five percent increase, following the termination of William Carter, the company’s chairman and chief executive officer, Wallstreet.org reported this morning.

The company announced Carter’s Feb. 17 termination in a filing with the U.S. Securities and Exchange Commission. Carter, who also served as the chief science officer for the company, was terminated by a majority board vote, the company said in its filing. He also is no longer a director, the company said. Dr. William Mitchell, chairman of the compensation committee and the corporate governance and nomination committee, was named chairman of the board, the company said.

Carter’s termination was announced only a few weeks after the company said his salary, as well as that of the president and chief financial officer, would be reduced by 50 percent as part of an effort to shore up capital for operational expenses. At the same time, senior management was expected to use up to 20 percent of their salaries to acquire common Hemispherx stock to provide additional financing for operational activities. The stock buy plan was to be an incentive to reach long-term corporate goals, the company said.

In its recent filing, Hemispherx said that in recent months it has been “reexamining its fundamental priorities in terms of direction, corporate culture and its ability to fund operations.” Part of that reexamination includes taking “significant steps” to reserve capital so the company can achieve its clinical goals. That policy includes implementing “a strict anti-nepotism policy,” as well as a potential sell off of “underutilized assets” and the pursuit of international sales of clinical grade materials. Additionally, the company said it planned on implementing a “strong financial austerity plan.”

The company did not specify why there was a need for a strong anti-nepotism policy, but it did say Carter’s departure “will harmonize the management team with the directives and polices of the board and reduce the burn rate both short and long term.” The company added the “substantial savings” his termination will generate becomes a “major part of our overall financial austerity program.”

The long-term company goals include accelerating success in a recently initiated Expanded Access programs for both Ampligen (an experimental therapeutic) and Alferon N, the company’s lead product. Alferon N Injection is an Interferon alfa-n3 (human leukocyte derived) injectable to treat intralesional, refractory or recurring external condylomata acuminate, also called genital warts, in patients 18 years or older. Ampligen is being evaluated for a number of chronic diseases and viral disorders, including Chronic Fatigue Syndrome. The company is also looking at expanding its research for its two candidates into diseases such as MERS, Ebola virus, Equine Encephalitis and the mosquito-borne Zika virus.

Carter’s termination comes only two months after he had to give back an unspecified number of securities to the company. Carter had apparently been provided with more shares than Internal Revenue Service rules allow, which is three million shares of company stock. The company noted the share return in a Dec. 8 filing with the SEC, adding that it would agree to some form of “non-stock compensation” to Carter for the return of the securities. What that compensation may have been was not disclosed.

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