March 11, 2016
By Alex Keown, BioSpace.com Breaking News Staff
PHILADELPHIA – To appease investors, Thomas K. Equels, Hemispherx BioPharma’s new chief executive officer, will defer 100 percent of his salary for two months. He will only receive that 60 day payment if company stock turns around, the Philadelphia Business Journal reported this morning.
Hemispherx stock is currently trading at 16 cents per share, 3 cents off its three-month high of 19 cents per share.
Equels was elevated to the company top-spot following the termination of former CEO William Carter. Prior to his being named CEO, Equels has served as the president of Hemispherx since August 2015. When he was tapped for that role after serving as company chief financial officer, Equels was tasked with creating “greater operational efficiencies” through efforts to achieve “significant operational savings.” He was also given a mandate to create an environment for greater stockholder value.
In addition to Equels elevation to CEO, Hemispherx also promoted David R. Strayer to the position of chief science officer, a position that Carter also held while he served as CEO. Chief Accounting Officer Adam Pascale was also promoted to chief financial officer, the company said in a Feb. 22 statement.
“In recent months, the company has been reexamining its fundamental priorities in terms of direction, corporate culture, and its ability to fund operations. We are taking significant action, including the termination of Dr. Carter, to have unified commitment to the goals set by the Board and to preserve capital so the Company can better achieve those goals. This requires a strong financial austerity plan combined with a skilled approach to bringing Ampligen and Alferon to their full potential,” Equels said in a statement.
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 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. 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.
In a February filing announcing Carter’s termination, the company said 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.
