HEMISPHERX BIOPHARMA INC (Form: 10-Q, Received: 08/12/2015 16:12:34)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2015

Commission File Number: 1-13441

HEMISPHERX BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)



Delaware		52-0845822
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1617 JFK Boulevard, Suite 500, Philadelphia, PA 19103

(Address of principal executive offices) (Zip Code)

(215) 988-0080

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



¨ Large accelerated filer	¨ Accelerated filer
¨ Non-accelerated filer	x Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

246,886,840 shares of common stock were outstanding as of August 1, 2015.

PART I - FINANCIAL INFORMATION

ITEM 1 : Financial Statements

HEMISPHERX BIOPHARMA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except for share and per share amounts)



	June 30, 2015			December 31, 2014
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,842		$	2,156
Marketable securities	13,872			13,952
Inventory-work in process	1,009			—
Prepaid expenses and other current assets	338			399
Total current assets	17,061			16,507

Property and equipment, net	11,720			4,601
Patent and trademark rights, net	951			861
Construction in progress	—			7,337
Other assets	134			134
Total assets	$	29,866		$	29,440

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,598		$	2,081
Accrued expenses	1,497			2,333
Current portion of capital lease	7			22
Total current liabilities	3,102			4,436

Commitments and contingencies (Note 6)

Stockholders’ equity:
Preferred stock, par value $0.01 per share, authorized 5,000,000; issued and outstanding; none	—			—
Common stock, par value $0.001 per share, authorized 350,000,000 shares; issued and outstanding 245,483,480 and 204,004,818, respectively	245			204
Additional paid-in capital	312,764			302,729
Accumulated other comprehensive loss	(186		)	(160		)
Accumulated deficit	(286,059		)	(277,769		)

Total stockholders’ equity	26,764			25,004
Total liabilities and stockholders’ equity	$	29,866		$	29,440

See accompanying notes to consolidated financial statements.

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HEMISPHERX BIOPHARMA, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)



	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenues:
Clinical treatment programs	$	47		$	36		$	83		$	112

Total revenues	47			36			83			112

Costs and expenses:
Production costs	507			294			879			617
Research and development	2,439			2,330			5,113			4,656
General and administrative	2,002			2,497			3,915			5,036

Total costs and expenses	4,948			5,121			9,907			10,309

Operating loss	(4,901		)	(5,085		)	(9,824		)	(10,197		)

Interest expense	—			(3		)	(2		)	(6		)
Interest and other income/expense	56			131			162			284
Redeemable warrants valuation adjustment	—			1			—			1
Gain from sale of income tax net operating losses	—			—			1,374			1,126

Net loss	(4,845		)	(4,956		)	(8,290		)	(8,792		)

Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(137		)	147			(26		)	168
Net comprehensive loss	$	(4,982	)	$	(4,809	)	$	(8,316	)	$	(8,624	)

Basic and diluted loss per share	$	(0.02	)	$	(0.03	)	$	(0.04	)	$	(0.05	)

Weighted average shares outstanding, basic and diluted	236,149,999			185,749,722			224,954,200			181,265,253

See accompanying notes to consolidated financial statements.

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HEMISPHERX BIOPHARMA, INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders' Equity

For the Six Months Ended June 30, 2015

(in thousands except share data)

(Unaudited)



	Common Stock Shares	Common Stock $0.001 Par Value		Additional Paid-In Capital		Accumulated Other Compre- hensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2014	204,004,818	$	204	$	302,729	$	(160	)	$	(277,769	)	$	25,004
Shares to settle accounts payable	2,558,779	2		670								672
Equity-based compensation	—	—		111		—			—			111
Shares sold at the market	38,919,883	39		9,254		—			—			9,293
Net comprehensive loss	—	—		—		(26		)	(8,290		)	(8,316		)

Balance at June 30, 2015	245,483,480	$	245	$	312,764	$	(186	)	$	(286,059	)	$	26,764

See accompanying notes to consolidated financial statements.

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HEMISPHERX BIOPHARMA, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2015 and 2014

(in thousands)

(Unaudited)



	2015			2014
Cash flows from operating activities:
Net loss	$	(8,290	)	$	(8,792	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	458			332
Amortization and abandonment of patent and trademark rights	79			276
Redeemable warrants valuation adjustment	—			(1		)
Equity-based compensation	111			198

Change in assets and liabilities:
Inventories	(1,009		)	—
Prepaid expenses and other current assets	61			112
Accounts payable	189			238
Accrued expenses	(836		)	1,431
Net cash used in operating activities	(9,237		)	(6,206		)

Cash flows from investing activities:
Purchase of property, equipment and construction in progress	(240		)	(266		)
Additions to patent and trademark rights	(169		)	(120		)
Deposits on capital leases refunded	—			2
Sales and maturities of short-term and long-term marketable securities	54			(36		)
Net cash used in investing activities	(355		)	(420		)

Cash flows from financing activities:
Payments on capital leases	(15		)	(18		)
Proceeds from sale of stock, net of issuance costs	9,293			8,458
Net cash provided by financing activities	9,278			8,440

Net (decrease) increase in cash and cash equivalents	(314		)	1,814

Cash and cash equivalents at beginning of period	2,156			803

Cash and cash equivalents at end of period	$	1,842		$	2,617

Supplemental disclosures of non-cash investing and financing cash flow information:
Issuance of common stock for accounts payable	$	672		$	38
Unrealized (loss) gain on marketable securities	$	(26	)	$	168
Supplemental disclosure of cash flow information:
Cash paid for interest expense	$	(2	)	$	(9	)

See accompanying notes to consolidated financial statements.

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HEMISPHERX BIOPHARMA, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Basis Of Presentation

The consolidated financial statements include the financial statements of Hemispherx Biopharma, Inc. and its wholly-owned subsidiaries (collectively, “Hemispherx”, “Company”, “we or “us”). The Company has three domestic subsidiaries: BioPro Corp., BioAegean Corp. and Core Biotech Corp., all of which are incorporated in Delaware and are dormant. The Company also has a foreign subsidiary, Hemispherx Biopharma Europe N.V./S.A., which was established in Belgium in 1998. All significant intercompany balances and transactions have been eliminated in consolidation.

In the opinion of Management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included. Such adjustments consist of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission (“SEC”), and do not contain certain information which will be included in the Company’s annual consolidated financial statements and notes thereto.

These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2014 and 2013, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Note 2: Net Loss Per Share

Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Equivalent common shares, consisting of stock options and warrants which amounted to 17,228,280 and 23,730,334 shares for the six months ended June 30, 2015 and 2014, respectively, are excluded from the calculation of diluted net loss per share since their effect is anti-dilutive.

Note 3: Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. There were 800,000 and 855,000 options or equity warrants granted in the six months ended June 30, 2015 and 2014, respectively.

Stock option for employees' activity during the six months ended June 30, 2015 is as follows:

Stock option activity for employees:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	11,287,888		$	1.64	4.61	$	—
Granted	800,000		0.25		—	—
Forfeited	(565,000	)	1.75		—	—
Outstanding June 30, 2015	11,522,888		$	1.54	4.71	$	—
Vested and expected to vest June 30, 2015	11,522,888		$	1.54	4.71	$	—
Exercisable June 30, 2015	10,639,853		$	1.60	4.17	$	—

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Unvested stock option activity for employees:



	Number of Options		Weighted Average Exercise Price		Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	710,594		$	1.38	8.76	$	—
Granted	800,000		0.25		—	—
Vested	(627,559	)	0.97		—	—
Forfeited	—		—		—	—
Outstanding June 30, 2015	883,035		$	0.65	8.97	$	—

Stock option activity for non-employees:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	3,800,000		$	1.36	4.75	$	—
Granted	—		—		—	—
Exercised	—		—		—	—
Forfeited	(327,000	)	1.75		—	—
Outstanding June 30, 2015	3,473,000		$	1.32	4.65	$	—
Vested and expected to vest June 30, 2015	3,473,000		$	1.32	4.65	$	—
Exercisable June 30, 2015	3,464,667		$	1.56	4.29	$	—

Unvested stock option activity for non-employees during the year:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	33,333		$	2.60	9.08	$	—
Options granted	—		—		—	—
Options vested	(25,000	)	2.60			—
Options forfeited	—		—		—	—
Outstanding June 30, 2015	8,333		$	2.60	8.42	$	—

The impact on the Company’s results of operations of recording equity-based compensation for the six months ended June 30, 2015 and 2014 was to increase general and administrative expenses by approximately $ 111,000 and $198,000 , respectively, which had no impact on earnings per share.

As of June 30, 2015 and 2014, respectively, there was $269,000 and $348,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan. Generally, the Company's stock options will become recognizable within a 12 month period.

Note 4: Inventories

The Company uses the lower of first-in, first-out (“FIFO”) cost or market method of accounting for inventory.

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Inventories consist of the following:	(in thousands)
	June 30,			December 31,
	2015			2014
Inventory work-in-process, January 1	$	—		$	—
Production ⁽¹⁾	1,126			—
Spoilage	(117		)	—
Inventory work-in-process, end of period	$	1,009		$	—

(1) Commercial sales of Alferon® will not resume until new batches of commercial filled and finished product are produced and released by the FDA. We are continuing the validation of Alferon® production and production of new Alferon® API inventory commenced in February 2015. While the facility is approved by the FDA under the Biological License Application (“BLA”) for Alferon®, this status will need to be reaffirmed by an FDA pre-approval inspection. The Company will also need the FDA’s approval to release commercial product once it has submitted satisfactory stability and quality release data.

Note 5: Marketable Securities

Marketable securities consist of mutual funds. For the three months ended June 30, 2015, it was determined that some of the Marketable Securities had other than temporary impairments of approximately $ 54,000 . There were no other than temporary impairments of Marketable Securities for the six months ended June 30, 2014. At June 30, 2015 and December 31, 2014, all securities were classified as available for sale investments and were measured as Level 1 instruments of the fair value measurements standard (see "Note 12: Fair Value").

Securities classified as available for sale consisted of:

June 30, 2015

(in thousands)



Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Short-Term Investments		Long Term Investments
Mutual Funds	$	14,058	$	—	$	(186	)	$	13,872	$	13,872	$	—

Totals	$	14,058	$	—	$	(186	)	$	13,872	$	13,872	$	—

December 31, 2014

(in thousands)



Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Short-Term Investments		Long Term Investments
Mutual Funds	$	14,112	$	—	$	(160	)	$	13,952	$	13,952	$	—

Totals	$	14,112	$	—	$	(160	)	$	13,952	$	13,952	$	—

Unrealized losses on investments

Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows:

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June 30, 2015

(in thousands)



		Less Than 12 Months					12 Months or Greater					Totals
Securities	Total number in loss position	Fair Values		Unrealized Losses			Fair Values		Unrealized Losses			Total Fair Value		Total Unrealized Losses
Mutual Funds	2	$	5,884	$	(150	)	$	7,988	$	(36	)	$	13,872	$	(186	)

Totals	2	$	5,884	$	(150	)	$	7,988	$	(36	)	$	13,872	$	(186	)

December 31, 2014

(in thousands)



		Less Than 12 Months					12 Months or Greater					Totals
Securities	Total number in loss position	Fair Values		Unrealized Losses			Fair Values		Unrealized Losses			Total Fair Value		Total Unrealized Losses
Mutual Funds	2	$	5,928	$	(106	)	$	8,024	$	(54	)	$	13,952	$	(160	)

Totals	2	$	5,928	$	(106	)	$	8,024	$	(54	)	$	13,952	$	(160	)

Note 6: Accrued Expenses

Accrued expenses consist of the following:



	(in thousands)
	June 30, 2015		December 31, 2014
Compensation	$	934	$	1,806
Professional fees	266		404
Other expenses	271		123
Other liabilities	26		—
	$	1,497	$	2,333

The Company maintained a balance of legal fees from a law firm of $587,000 which the Company agreed to pay with the issuance of 2,105,982 shares of the Company's common stock. The Company agreed to use the Company's share price of $0.27 as of May 6, 2015 to settled the balance due; however, the Company agreed to pay the difference if the law firm receives less from the sale of the Company's common stock than the balance due within sixty days after the sale of shares is completed. The Company's share price was $0.20 as of June 30, 2015. As a result of the drop in share price, the Company accrued an additional $147,000 which has been included within the accrual for professional fees above.

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Note 7: Property and Equipment



	(in thousands)
	June 30, 2015			December 31, 2014
Land, buildings and improvements	$	11,566		$	4,209
Furniture, fixtures, and equipment	5,527			5,307
Leasehold improvements	85			85

Total property and equipment	17,178			9,601
Less: accumulated depreciation and amortization	(5,458		)	(5,000		)

Property and equipment, net	$	11,720		$	4,601

Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, ranging from five to thirty-nine years.

As of February 28, 2015, the Company had completed and put into service the construction and installation of property and equipment within its New Brunswick, NJ facility. All amounts within construction in progress were reclassed to property and equipment during the current period. As of December 31, 2014, construction in progress was $7,337,000 .

Note 8: Stockholders’ Equity

The Equity Incentive Plan of 2009, effective June 24, 2009 , authorizes the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and other stock awards. A maximum of 15,000,000 shares of common stock is reserved for potential issuance pursuant to awards under the Equity Incentive Plan of 2009. Unless sooner terminated, the Equity Incentive Plan of 2009 will continue in effect for a period of 10 years from its effective date. For the six months ended June 30, 2015 and 2014, there were 800,000 and 855,000 options granted by the Company, respectively.

On July 23, 2012, the Company entered into a Equity Distribution Agreement (the “EDA”) with Maxim Group LLC ("Maxim") pursuant to which the Company may sell up to $75,000,000 worth of its shares of Common Stock from time to time through Maxim, as sales agent. Under the EDA, Maxim is entitled to a fixed commission rate of 4.0% of the gross sales price of Shares sold under the EDA, up to aggregate gross proceeds of $10,000,000 , and thereafter, at a fixed commission rate of 3.0% of the gross sales price of shares sold under the EDA. Sales of the shares, if any, may be made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers' transactions, including on the NYSE MKT, at market prices or as otherwise agreed with Maxim. The Company has no obligation to sell any of the Shares and may at any time suspend offers under the EDA or terminate the EDA. Up until August 4, 2015, the shares were sold pursuant to the Company's Universal Shelf Registration Statement on Form S-3, declared effective by the Securities and Exchange Commission on July 2, 2012. Since August 4, 2015, the shares are being sold pursuant to the Company's Universal Shelf Registration Statement on Form S-3, declared effective by the Securities and Exchange Commission on August 4, 2015 (the “2015 Universal Shelf”). On September 14, 2012, the Company filed a Prospectus Supplement with the SEC increasing the number of shares covered by the Prospectus from 12,000,000 to 20,000,000 shares under the EDA. On October 5, 2012, the Company filed an updated Prospectus Supplement increasing the number of shares covered by the Prospectus to 40,000,000 shares to be allocated for public sale under the Prospectus Supplement pursuant to the EDA. On December 23, 2013, the Company filed an updated Prospectus Supplement with the Securities and Exchange Commission to revise the EDA for an aggregate of 90,000,000 shares to be allocated for public sale under the Prospectus Supplement pursuant to the EDA. On March 6, 2015, the Company filed an updated Prospectus Supplement increasing the number of shares covered by the Prospectus to 117,600,000 shares. On August 5, 2015, the Company filed an updated Prospectus Supplement to reflect that sales under the EDA are now being conducted pursuant to the 2015 Universal Shelf.

For the six months ended June 30, 2015, the Company had sold 38,919,883 shares of the EDA that resulted in net cash proceeds of approximately $9,293,000 after direct expenses along with commissions paid to Maxim for approximately $287,000 .

The Company plans to allocate the net proceeds from the offering towards research and development, operations and general and administrative purposes related to the commercialization of Ampligen® and Alferon® related products, including, but not limited to, the following: (1) Costs to finalize the upgrade of the Alferon N Injection® manufacturing facility and to prepare

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for the FDA pre-approval inspections of the Ampligen® facility, (2) Manufacture of commercial product, (3) Potential new preclinical and/or clinical studies in order to gain commercial approval for Ampligen® and broader approvals for Alferon® and Alferon LDO®, (4) Working capital to build and maintain sufficient inventory by procuring raw materials, supplies and other items for the New Brunswick manufacturing facility, as well as to remunerate outside contractors for necessary services, such as, final filling and finishing operations in order to meet any anticipated demand from normal operations as well as through the possible pursuit of other disease areas and/or geographic regions that may present themselves, (5) Pursuit of potential partnering opportunities for Ampligen®, (6) Potential establishment of sales and marketing capabilities, as well as consideration towards the expansion of our manufacturing capacity, and (7) working capital for general and administrative expenses.

Note 9 : Cash And Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Note 10: Recent Accounting Pronouncements

In 2015, the FASB issued Accounting Standards Updates (“ASU”) 2015-01 through 2015-12. These updates did not have a significant impact on the financial statements.

Note 11: Funds Received From Sale Of Income Tax Net Operating Losses

As of December 31, 2014, the Company had approximately $151,000,000 of federal net operating loss carryforwards (expiring in the years 2018 through 2034 ) available to off-set future federal taxable income. The Company also had approximately $36,000,000 of Pennsylvania state net operating loss carryforwards (expiring in the years 2018 through 2034 ) and approximately $28,000,000 of New Jersey state net operating loss carryforwards (expiring in the years 2033 through 2034 ) available to off-set future state taxable income.

In January 2015, the Company effectively sold $14,291,000 of its approximately $28,000,000 of New Jersey state net operating loss carryforwards (for the year 2013) for approximately $1,374,000 . The utilization of certain state net operating loss carry-forwards may be subject to annual limitations. With no tax due for the foreseeable future, the Company has determined that the accounting for interest or penalties related to the payment of tax is not necessary at this time.

Note 12: Fair Value

The Company is required under U.S. Generally Accepted Accounting Principles (“GAAP”) to disclose information about the fair value of all the Company’s financial instruments, whether or not these instruments are measured at fair value on the Company’s Consolidated Balance Sheets.

FASB ASC 820-10-35-37 (formerly SFAS No. 157) establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability. Classification is based on the lowest level of inputs that is significant to the fair value measurement. The valuation hierarchy contains three levels:


•	Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes debt and equity securities that are traded in an active market.


•	Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.

•

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The Company estimates that the fair values of cash and cash equivalents, other assets, accounts payable and accrued expenses approximate their carrying values due to the short-term maturities of these items.

The Company also had certain warrants with a cash settlement feature in the unlikely occurrence of a Fundamental Transaction which are measured at fair value. The fair value recalculation of the Liability resulting from the issuance of the Warrants ("Call") and existence of the Fundamental Transaction ("Put") related to the May 2009 issuance, are calculated using a Monte

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Carlo Simulation. While the Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it to be industry accepted and fairly presented the Fair Value of the Warrants. As an additional factor to determine the Fair Value of the Put's Liability, the occurrence probability of a Fundamental Transaction event was factored into the valuation. The Company recomputed the fair value of the Warrants at the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different. The redeemable warrants expired in May and November 2014. The balance of the redeemable warrants was $0 as of June 30, 2015 and December 31, 2014.

Fair value at June 30, 2014, was estimated using the following assumptions:



Underlying price per share	$0.19 - $0.27
Exercise price per share	$1.31 - $1.65
Risk-free interest rate	0.06% - 0.23%
Expected holding period	0.38 - 1.64 yrs.
Expected volatility	69.74% - 113.56%
Expected dividend yield	None

While the assumptions remain consistent from period to period (e.g., utilizing historical stock prices), the numbers input may change from period to period (e.g., the actual historical prices input for the relevant period).

As of June 30, 2014, the Company has classified the Warrants with cash settlement features as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these Warrants.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as of June 30, 2015:



	(in thousands)
	Total		Level 1		Level 2		Level 3
Assets:
Marketable Securities-unrestricted	$	13,872	$	13,872	$	—	$	—

The changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows:



	Fair Value of Redeemable Warrants
	(in thousands)
	2015		2014
Balance at January 1	$	—	$	14
Fair value adjustment at March 31	—		—
Balance at March 31	$	—	$	14
Fair value adjustment at June 30	—		$	(1	)
Balance at June 30	$	—	$	13

Note 13: Subsequent Events

The Company evaluated subsequent events through the date on which these financial statements were issued and determined that no subsequent event constituted a matter that required adjustment to the financial statements for the six months ended June 30, 2015.

On August 4, 2015, the Company and Maxim Group LLC amended their July 23, 2012 EDA solely for the purpose of adding the registrant’s new registration statement on Form 3 (File No 333-205228) to the definition of “registration statement” as the old registration statement expired.

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On August 7, 2015, William A. Carter, M.D. resigned his position as President of the Company. The Company's Board of Directors appointed Thomas K. Equels as President of the Company, effective immediately.

ITEM 2 : Management's Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

Certain statements in this Report, including statements under “Item 1. Legal Proceedings” and “Item 1A. Risk Factors” in Part II, contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks, uncertainties and other important factors. We discuss many of these risks, uncertainties and other important factors in greater detail under “Item 1A. Risk Factors” in Part II in this Report. Because the risk factors referred to above and in our Annual Report on Form 10-K for our most recent fiscal year filed with the Securities and Exchange Commission could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements.

Further, these forward-looking statements represent our estimates and assumptions only as of the date such forward-looking statements are made. You should carefully read this Report completely and with the understanding that our actual future results may be materially different from what we expect. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our business, results of operations and financial condition. Any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. We cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Any statements in this Report about our expectations, beliefs, plans, objectives, assumptions or future events or performance that are not historical facts are forward-looking statements. You can identify these forward-looking statements by the use of words or phrases such as “believe”, “may”, “could”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “seek”, “plan”, “expect”, “should”, or “would,” and similar expressions intended to identify forward-looking statements.

Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties inherent in our business including, without limitation: the potential therapeutic effect of our products, the possibility of obtaining regulatory approval, our ability to manufacture and sell any products, our ability to enter into arrangements with third party vendors, market acceptance of our products, our ability to earn a profit from sales or licenses of any drugs, our ability to discover new drugs in the future, changing market conditions, changes in laws and regulations affecting our industry, and issues related to the improvements and construction of our New Brunswick, New Jersey facility. We have disclosed that in February 2013, we received a Complete Response from the FDA declining to approve our Ampligen® New Drug Application (“NDA”) for Chronic Fatigue Syndrome Treatment ("CFS") stating that we should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analyses. Accordingly, the remaining steps to potentially gain FDA approval of the Ampligen® NDA, the final results of these and other ongoing activities could vary materially from our expectations and could adversely affect the chances for approval of the Ampligen® NDA. These activities and the ultimate outcomes are subject to a variety of risks and uncertainties, including but not limited to risks that (i) the FDA may ask for additional data, information or studies to be completed or provided; and (ii) the FDA may require additional work related to the commercial manufacturing process to be completed or may, in the course of the inspection of manufacturing facilities, identify issues to be resolved. With regard to our NDA for Ampligen® to treat CFS, we note that there are additional steps which the FDA has advised Hemispherx to take in our seeking approval. The final results of these and other ongoing activities, and of the FDA review, could vary materially from Hemispherx' expectations and could adversely affect the chances for approval of the Ampligen® NDA. Any failure to satisfy the FDA’s requirements could significantly delay, or preclude outright, approval of our drugs for commercial sale.

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commenced in February 2015. While the facility is approved by the FDA under the Biological License Application (“BLA”) for Alferon®, this status will need to be reaffirmed by an FDA pre-approval inspection. We will also need the FDA’s approval to release commercial product once we have submitted satisfactory stability and quality release data. We had anticipated that it would take approximately until at least the 2nd half of 2015 before we would have Alferon® approved for commercial sales; however, during the final stage of the manufacturing process we encountered issues regarding a change in both the contract supplier of leukocytes and regarding a reagent used in the formulation of Alferon®. We are currently resolving these issues and hope consequent delays will only extend our estimated time line by at least six months. If we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon® inventory, our operations most likely will be materially and/or adversely affected. In light of these contingencies, there can be no assurances that the approved Alferon N Injection® product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

Our overall objectives include plans to continue seeking approval for commercialization of Ampligen® in the United States and abroad as well as to widen existing commercial therapeutic indications of Alferon N Injection® presently approved in the United States and Argentina. In addition, we have formed collaborations with multiple research laboratories around the world to examine Ampligen®, an experimental therapeutic, and Alferon N, an FDA-approved commercial product (for refractory venereal warts (HPV)) as potential preventatives for, and treatments of, Ebola Virus Disease (EVD). Our ability to commercialize our products, widen commercial therapeutic indications of Alferon N Injection® and/or capitalize on our collaborations with research laboratories to examine our products as potential preventatives for, and treatments of, EVD are subject to a number of significant risks and uncertainties including, but not limited to our ability to enter into more definitive agreements with some of the research laboratories and others that we are collaborating with, to fund and conduct additional testing and studies, whether or not such testing is successful or requires additional testing and meets the requirements of the FDA and comparable foreign regulatory agencies. We do not know when, if ever, our products will be generally available for commercial sale for any indication.

We outsource certain components of our manufacturing, quality control, marketing and distribution while maintaining control over the entire process through our quality assurance and regulatory groups. We cannot provide any guarantee that the facility or our contract manufacturer will necessarily pass an FDA pre-approval inspection for Alferon® manufacture.

We do not undertake and specifically decline any obligation to publicly release the results of any revisions which may be made to any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Overview

General

Hemispherx Biopharma, Inc. and its subsidiaries (collectively, “Hemispherx”, “Company”, “we" or “us”) are a specialty pharmaceutical company headquartered in Philadelphia, Pennsylvania and engaged in the clinical development of new drug therapies based on natural immune system enhancing technologies for the treatment of viral and immune based disorders. We were founded in the early 1970s doing contract research for the National Institutes of Health. Since that time, we have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of natural interferon and nucleic acids to enhance the natural antiviral defense system of the human body and to aid the development of therapeutic products for the treatment of certain chronic diseases. We have three domestic subsidiaries BioPro Corp., BioAegean Corp., and Core BioTech Corp., all of which are incorporated in Delaware and are dormant. Our foreign subsidiary is Hemispherx Biopharma Europe N.V./S.A. which was established in Belgium in 1998. All significant intercompany balances and transactions have been eliminated in consolidation.

Our flagship products include Alferon N Injection® and the experimental therapeutic Ampligen®. Alferon N Injection® is approved for a category of STD infection, and Ampligen® represents an experimental RNA being developed for globally important viral diseases and disorders of the immune system. Hemispherx' platform technology includes components for potential treatment of various severely debilitating and life threatening diseases. Alferon® LDO (Low Dose Oral) is a formulation under development targeting influenza.

In September 2014, we initiated a series of collaborations designed to determine the potential effectiveness of Alferon® N and Ampligen® as potential preventative and/or therapeutic treatments for Ebola related disorders. Our two platform drugs Alferon® N and Ampligen®, have certain unique structural attributes and developmental histories which suggest potential incremental value with respect to inclusion in various Ebola therapeutic cocktails under development. Ampligen®, an experimental therapeutic, is a new class of specifically-configured ribonucleic acid (RNA) compounds targeted as a potential treatment of diseases with immunologic defects and/or viral causation. Ebola virus specifically inhibits the dsRNA within cells via a sequestration process. Such RNA would otherwise cause a robust antiviral response to be mounted. Ampligen may be able to overcome this deficiency in host response. Positive results against Ebola in vitro have been reported to the Company by the United States Army

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Medical Research Institute of Infectious Diseases (USAMRIID) and other research/academic institutions. Clinical trial data will be necessary to establish human efficacy of Ampligen® for Ebola viruses. Please see the discussion in "Ebola" below for more detail.

We own and operate a 43,000 sq. ft. FDA approved facility in New Brunswick, NJ to produce Alferon® and Ampligen®, and recently completed our $8 million facility enhancement project which should provide for a higher capacity, more cost effective manufacturing process for the production of Alferon N Injection®. Please see ”Manufacturing” section below for more information on the recommencement of commercial sales of Alferon®.

On February 1, 2013, we received a Complete Response Letter (“CRL”) from the FDA declining to approve our NDA for Ampligen® for Chronic Fatigue Syndrome ("CFS"). Please see the discussion in "Our Products - Ampligen®" below for more detail.

Our principal executive office is located at One Penn Center, 1617 JFK Boulevard, Philadelphia, Pennsylvania 19103, and our telephone number is 215-988-0080.

OUR PRODUCTS

Our primary pharmaceutical product platform consists of our experimental compound, Ampligen®, our FDA approved natural interferon product, Alferon N Injection®, and our experimental liquid natural interferon for oral administration, Alferon® LDO (Low Dose Oral).

Ampligen®

Ampligen® is an experimental drug currently undergoing clinical development for the treatment of CFS. As noted above and discussed below, the FDA in its CRL declined to approve our NDA for the treatment of CFS with Ampligen®. Over its developmental history, Ampligen® has received various designations, including Orphan Drug Product Designation (FDA), Treatment IND (e.g., treatment investigational new drugs, or “Emergency” or “Compassionate” use authorization) with Cost Recovery Authorization (FDA) and “promising” clinical outcome recognition based on the evaluation of certain summary clinical reports (“AHRQ” or Agency for Healthcare Research and Quality). Ampligen® represents the first drug in the class of large (macromolecular) RNA (nucleic acid) molecules to apply for NDA review. Based on the results of published, peer reviewed pre-clinical studies and clinical trials, we believe that Ampligen® may have broad-spectrum anti-viral and anti-cancer properties.

We believe that nucleic acid compounds represent a potential new class of pharmaceutical products as they are designed to act at the molecular level for treatment of human diseases. There are two forms of nucleic acids, DNA and RNA. DNA is a group of naturally occurring molecules found in chromosomes, the cell's genetic machinery. RNA is a group of naturally occurring informational molecules which orchestrate a cell's behavior which, in turn, regulates the action of groups of cells, including the cells which compromise the body's immune system. RNA directs the production of proteins and regulates certain cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors. Our drug technology utilizes specifically-configured RNA. Our double-stranded RNA drug product, trademarked Ampligen®, is an experimental, unapproved drug, that would be administered intravenously. Ampligen® has been assigned the generic name rintatolimod by the United States Adopted Names Council (USANC) and has the chemical designation poly(I) poly(C12U).

Clinical trials of Ampligen® already conducted by us include studies of the potential treatment of CFS, Hepatitis B, HIV and cancer patients with renal cell carcinoma and malignant melanoma. All of these potential uses will require additional clinical trials to generate the safety and effectiveness data necessary to support regulatory approval.

In May 1997, the FDA approved an open-label treatment protocol, (“AMP 511”), allowing patient access to Ampligen® for treatment in an open-label safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen® to treat this very serious and chronic condition. The data collected from the AMP 511 protocol through a consortium group with active clinical sites in New York City, NY, Charlotte, NC, Miami, FL, Incline Village, NV and Salt Lake City, UT, provide safety information regarding the use of Ampligen® in patients with CFS. As of June 30, 2015, there were 110 patients participating in this open label treatment protocol with 23 taking treatment, 8 on drug holiday and 79 untreated. We are establishing an enlarged data base of clinical safety information which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen® treatment. We believe that continued efforts to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for Ampligen® and/or the design of future clinical studies.

On February 1, 2013, we received a CRL from the FDA declining to approve our New Drug Application (“NDA”) for Ampligen® for CFS. In its CRL, the FDA communicated that Hemispherx should conduct at least one additional clinical trial,

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complete various nonclinical studies and perform a number of data analyses. The additional clinical study should address, among other things, Ampligen®'s efficacy in treating CFS patients, be of sufficient size and duration to assess the safety of Ampligen® and be sufficient to determine appropriate dosing. The FDA set forth the reasons for this action and provided recommendations to address certain of the outstanding issues. The FDA stated that the submitted data does not provide substantial evidence of efficacy of Ampligen® for the treatment of CFS and that the data does not provide sufficient information to determine whether the product is safe for use in CFS due to the limited size of the safety database and multiple discrepancies within the submitted data. In addition to the safety and effectiveness issues recommended to be addressed in at least one additional clinical trial, the CRL states that Hemispherx should conduct complete rodent carcinogenicity studies in two species prior to approval and also conduct additional animal toxicology studies providing more comprehensive evaluation of Ampligen® fragments and degradation products. The CRL also requests evaluation of variation between lots of Ampligen® tested in the development process and recommends tighter control of the Ampligen® manufacturing process.

In response to the CRL, we continue to plan to avail ourselves of the opportunity for an “end-of-review” meeting with representatives of the Office of Drug Evaluation II which issued the CRL, in order to clarify and seek to narrow the outstanding issues regarding the further development of Ampligen® for the treatment of CFS.

FDA regulations provide a formal dispute resolution process to obtain review of any FDA decision, including a decision not to approve an NDA, by raising the matter with the supervisor of the FDA office that made the decision. The formal dispute resolution process exists to encourage open, prompt discussion of scientific (including medical) disputes and procedural (including administrative) disputes that arise during the drug development, new drug review, and post-marketing oversight processes of the FDA. Depending on the outcome of a number of initiatives in the CFS community, including the FDA’s Patient Focused Drug Development Initiatives, forthcoming drug guidance and other scientific initiatives by the Institute of Medicine, Center for Disease Control and National Institute of Health, we will continue to examine the opportunity for an “end-of-review” meeting. Depending on the results of these initiatives, we may request an "end-of-review" conference with the FDA as a precursor to a possible submission of a formal appeal to the Office of New Drugs within the FDA's Center for Drug Evaluation and Research regarding the FDA's decision. Please see “Risks Associated With Our Business” in Part II. Item 1A. Risk Factors below.

Until we undertake the end-of-review conference(s) with the FDA, we are unable to reasonably estimate the nature, costs, necessary efforts to obtain FDA clearance or anticipated completion dates of any additional clinical study or studies. Utilizing the industry norms for undertaking a Phase III clinical study, we estimate upon acceptance of the study's design that it would take approximately 18 months to three years to complete a new well-controlled Ampligen® clinical study for resubmission to the FDA. Industry norms suggest that it will require three to six months to initiate the study, one to two years to accrue and test patients, three to six months to close-out the study and file the necessary documents with the FDA. The actual duration to complete the clinical study may be different based on the length of time it takes to design the study and obtain FDA's acceptance of the design, the final design of an acceptable Phase III clinical study, availability of suitable participants and clinical sites along with other factors that could impact the implementation of the study, analysis of results or requirements of the FDA and/or other governmental organizations. We anticipate that the time and cost to undertake clinical trial(s), studies and data analysis are beyond our current financial resources without gaining access to additional funding. Please see "Part II; Item 1A, Risk Factors: "We may require additional financing which may not be available. The limitation on the number of shares of common stock available for financing without prior stockholder approval eventually may hinder our ability to raise additional funding".

On July 12, 2012, we filed a new drug application for Ampligen® with the ANMAT (Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica), the agency responsible for the national regulation of drugs, foods and medical technology in Argentina, under the ANMAT’s Orphan Drug regulations. We believe that the approval of Ampligen® as an Orphan Drug may allow reimbursement by the Health Services Authority (SSS), the central health authority in Argentina for patients seeking treatment for CFS.

In January 2015, we reported that we have conducted new in vitro studies of natural killer (NK) cells obtained from CFS patients in conjunction with a comprehensive review of the medical literature to determine the relative incidence of NK cell functional deficiencies in CFS disease. This review indicates that low NK cell cytotoxicity (NKCC) has been consistently reported in CFS patients compared to normal controls. In the new laboratory studies, Ampligen® was found to increase in vitro NK activity utilizing cells from CFS patient donors. The authors of the new report are all affiliated with Hemispherx.

See "Manufacturing" and "Marketing/Distribution" sections below for more details on the manufacture and marketing/distribution of Ampligen®.

Alferon N Injection®

Alferon N Injection® is the registered trademark for our injectable formulation of natural alpha interferon, which was approved by the FDA in 1989 for the treatment of certain categories of genital warts. Alferon® is the only natural-source, multi-species alpha interferon currently approved for sale in the U.S. for the intralesional (within lesions) treatment of refractory (resistant to other treatment) or recurring external genital warts in patients 18 years of age or older. Certain types of human papilloma viruses

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(“HPV”) cause genital warts, a sexually transmitted disease (“STD”). The U.S. Centers for Disease Control and Prevention (“CDC”) estimates that “approximately twenty million Americans are currently infected with HPV with another six million becoming newly infected each year. HPV is so common that at least 50% of sexually active men and women get it at some point in their lives.” Although they do not usually result in death, genital warts commonly recur, causing significant morbidity and entail substantial health care costs.

Interferons are a group of proteins produced and secreted by cells to combat diseases. Researchers have identified four major classes of human interferon: alpha, beta, gamma and omega. Alferon N Injection® contains a multi-species form of alpha interferon. The world-wide market for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products are approved for many major medical uses worldwide. Alpha interferons are manufactured commercially in three ways: by genetic engineering, by cell culture, and from human white blood cells. All three of these types of alpha interferon are or were approved for commercial sale in the U.S. Our natural alpha interferon is produced from human white blood cells.

The potential advantages of natural alpha interferon over recombinant (synthetic) interferon produced and marketed by other pharmaceutical firms may be based upon their respective molecular compositions. Natural alpha interferon is composed of a family of proteins containing many molecular species of interferon. In contrast, commercial recombinant alpha interferon products each contain only a single species. Researchers have reported that the various species of interferons may have differing antiviral activity depending upon the type of virus. Natural alpha interferon presents a broad complement of species, which we believe may account for its higher activity in laboratory studies. Natural alpha interferon is also glycosylated (partially covered with sugar molecules). Such glycosylation is not present on the currently U.S. marketed recombinant alpha interferons. We believe that the absence of glycosylation may be, in part, responsible for the production of interferon-neutralizing antibodies seen in patients treated with recombinant alpha interferon. Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon species, the types and relative quantity of these species are different from our natural alpha interferon.

Alferon N Injection® [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product. There are essentially no neutralizing antibodies observed against Alferon N Injection® to date and the product has a relatively low side-effect profile. The recombinant DNA derived alpha interferon formulations have been reported to have decreased effectiveness after one year, probably due to neutralizing antibody formation.

See "Manufacturing" and "Marketing/Distribution" sections below for more details on the manufacture and marketing/distribution of Alferon N Injection®.

Alferon® LDO (Low Dose Oral)

Alferon® LDO [Low Dose Oral Interferon Alfa-n3 (Human Leukocyte Derived)] is an experimental low-dose, oral liquid formulation of Natural Alpha Interferon and like Alferon N Injection®, should not cause antibody formation, which is a problem with recombinant interferon. It is an experimental immunotherapeutic believed to work by stimulating an immune cascade response in the cells of the mouth and throat, enabling it to bolster systemic immune response through the entire body by absorption through the oral mucosa. Oral interferon could be economically feasible for patients and logistically manageable globally for development programs for prevention and, or treatment of pandemic influenza, seasonal influenza and other emerging viruses. Oral administration of Alferon® LDO, with its anticipated affordability, low toxicity, no production of antibodies, and broad range of potential bioactivity, could be a breakthrough treatment or preventative for viral diseases.

Hemispherx currently has an FDA authorized protocol to conduct a Phase II, double-blind, adaptive-design, randomized, placebo-controlled, dose-ranging study of Alferon® LDO for the prophylaxis and treatment of seasonal influenza of more than 200 subjects. Our Phase II study has continued to be delayed as we have redirected many of our resources to complete the upgrades in the New Brunswick facility.

Other Diseases

In July 2011, we received FDA authorization to proceed with the initiation of a new clinical trial of intranasal Ampligen® to be used in conjunction with commercially approved seasonal influenza vaccine. On April 16, 2012, a clinical trial was initiated in which Ampligen® is being nasally administered in conjunction with FluMist® to healthy human volunteers at the University of Alabama at Birmingham under the auspices of Dr. Paul Goepfert, Associate Professor of Medicine in the Division of Infectious Diseases and Director of the Alabama Vaccine Research Clinic. This study is a first use of Ampligen® with a seasonal vaccine in humans to assess the safety of Ampligen® when nasally delivered as a vaccine adjuvant. Another objective of this study is to determine the extent to which Ampligen® mobilizes potential protections against pandemic influenza by utilization of a seasonal flu vaccine. The study will evaluate the potential immunologic enhancement of Ampligen® by comparing immune parameters in the group receiving Ampligen® plus FluMist® with another group receiving FluMist® plus placebo. We intend to conduct a broad array of immune tests to compare the immune response for both its magnitude and breadth. It is our objective to qualify and enroll 72 patients for this clinical trial. Enrollment in this study was expanded in December 2013 based on an analysis of safety results

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to date conducted by both the FDA and a Data Monitoring Committee, the latter group comprised of a team of independent clinical, basic research, and statistical professionals. Enrollment of additional subjects into Stage 2 began in March 2014 and 25 subjects have been enrolled; 12 in Stage 1 and 13 subjects in Stage 2. As of June 30, 2015, 3 subjects in Stage 2 are still enrolled.

In December 2013, we announced that we are supporting the University of Pittsburgh’s National Institutes of Health funded study (grant 1PO1CA132714) currently underway as part of the University’s Chemokine Modulation Research initiative which includes Ampligen® as an adjuvant. As part of this collaboration, Hemispherx has supplied clinical grade Ampligen® (rintatolimod) to the University. The study, under the leadership of professor of surgery Pawel Kalinski, M.D., Ph.D. and involves the Chemokine Modulatory regimen developed by Dr. Kalinski’s group, has successfully completed the lowest tier of dose escalation in patients with resectable colorectal cancer under the clinical leadership of Dr. Amer Zureikat, an assistant professor of surgery. To date, twelve patients have been treated with Ampligen as an adjuvant in this study. In addition, the University has initiated enrollment in an additional cancer study of peritoneal surface malignancies which includes Ampligen® as an adjuvant. To date, nineteen patients have been treated with Ampligen as an adjuvant in this study.

In May 2014, we announced that one of our advanced stage biological products, Alferon® N, significantly inhibited the replication of the MERS virus in vitro. MERS-CoV is a recently emerged human coronavirus responsible for the lethal pulmonary syndrome known as MERS (Middle East Respiratory Syndrome). Recent testing in laboratories of the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, has revealed that Alferon® N was inhibitory to MERS-CoV both when used before test cells were exposed to MERS-CoV, as well as after the cells were exposed to the deadly virus. NIAID researchers led the Alferon® N MERS-CoV experiments. They treated monkey kidney cells with Alferon® N either 18 hours prior to infection with MERS-CoV ("pre-treatment") or 1 hour following infection with MERS-CoV ("post-treatment"). At Day 1 and Day 3, supernatants were collected from cells and virus titers were thereafter measured. In both cases, Alferon® N showed significant dose-dependent inhibitory effects, thus suggesting the potential of Alferon® N both as a preventive and a potential treatment. Laboratory (in vitro) studies of potential antiviral agents are not necessarily predictive of clinical benefits. The Company was not involved in the conduct of the experimentation.

In June 2014, we announced that we have confirmed that Alferon® N inhibits replication of the MERS virus in vitro. Chien-Te (Kent) Tseng, Ph.D., Associate Professor, Microbiology & Immunology at the University of Texas Medical Branch at Galveston, led the Alferon® N MERS-CoV experiments. Calu-3 cells were treated with Alferon® N 24 hours prior to infection with MERS-CoV. At 36 hours, supernatants were collected from cells and the virus titers were thereafter measured. Alferon® N showed significant dose-dependent inhibitory effects, thus suggesting the potential of Alferon® N as a preventative. Laboratory (in vitro) studies of potential antiviral agents are not necessarily predictive of clinical benefits. The Company supplied the Alferon® N, but was not directly involved in the conduct of the experimentation.

In July 2015, we submitted an application for orphan drug designation to the European Medicines Agency (EMA) for Alferon® N to treat MERS. The EMA has accepted the application and the Committee for Orphan Medicinal Products (COMP) has initiated the official review process. It is anticipated that the COMP will give an opinion on the application within the next 90 days.

In June 2014, we concluded strategic discussions with Bioclones in Johannesburg with three principle goals; 1) initiating studies utilizing Ampligen® as a potential adjuvant enhancement of Bioclones' therapeutic cancer vaccine, currently in trials in Cape Town, including pre-clinical studies followed, potentially, by a Phase 1 clinical trial; 2) seeking South African Medicine's Control Council approval to conduct trials using Alferon® and/or Ampligen® to eradicate latent HIV in patients highly responsive to anti-retroviral therapy; and 3) initiating a joint effort to obtain commercial registration of both Ampligen® and Alferon® in the South African markets. This strategic alliance is subject to our entering into a formal agreement on any or all of the above points of understanding. Our current efforts have been mainly directed towards the Ebola virus disease as well as the recent developments on our CFS initiatives which have required our personnel to devote more of our time and resources towards these initiatives. We have informed Bioclones of our intention to put on hold any formal agreement until such time Bioclones would be able to obtain funding to initiate these HIV initiatives. We have also informed Bioclones that we would provide Ampligen® on an as needed basis for their clinical programs as long as adequate supply exists.

Ebola

We announced, in September 2014, a series of collaborations designed to determine the potential effectiveness of Alferon® N and Ampligen® as potential preventative and/or therapeutic treatments for Ebola related disorders. Our two platform drugs Alferon® N and Ampligen®, have certain unique structural attributes and developmental histories which suggest potential incremental value with respect to inclusion in various Ebola therapeutic cocktails under development. These collaborations have resulted in the following reports being issued:

* November 2014 - We received a report from the United States Army Medical Research Institute of Infectious Diseases ("USAMRIID") scientists that they have in-vitro data indicating that Alferon®, the only multi-species, natural alpha interferon commercially approved in the U.S., successfully protected human cells against the Ebola virus (EBOV).

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* November 2014 - We announced that we had received a new research report from Professor Tramontano in the Department of Life and Environmental Sciences, University of Cagliari, Italy. The biochemical study demonstrates Ampligen® can successfully bind to the lethal Ebola Virus protein designated VP35. VP35 protein normally inactivates a patient's immune/antiviral system by binding to viral dsRNA thereby sequestering a critical antiviral/immune activator of the body, which leads to high morbidity and death rates. Ampligen® competes with viral dsRNA for VP35 binding and this finding is consistent with recent studies at USAMRIID demonstrating that Ampligen® inhibits Ebola virus infectivity in vitro.

* December 2014 - We announced that we received a new research report from researchers at Howard University, Washington DC. The report describes a study in which Ampligen® strongly inhibited the Ebola minigenome in the human embryonic kidney cell system.

* February 2015 - We announced results of a new efficacy study of Ampligen® in a mouse model of EBOV infection performed by scientists at the USAMRIID. Ampligen® was utilized with a mouse adapted Ebola virus using multiple groups of mice with varying dosages of Ampligen® given every other day. The most effective dose, resulting in 100% percent survival at Day 21, corresponded to a human dose of approximately 400 mg, which has been used clinically approximately 50,000 times and has been generally well-tolerated when administered twice weekly. When higher doses of Ampligen® were used in the Ebola-infected mice, the survival rate dropped to 90%. The Ebola-infected mice treated with placebo had a 100% death rate by Day 7 post-infection. The EBOV data obtained from the in vitro and mouse infection studies using Ampligen® suggest a potential prophylactic and/or early onset therapeutic role in EVD. Previously published experimental results of animal studies using models of other lethal viral infections indicate possible similar applications to other lethal viral diseases. However, in vitro and animal testing is no assurance of human safety or efficacy for viral diseases. Clinical studies would be necessary to establish human efficacy and safety of Ampligen® for any treatment and/or prevention indication.

Positive results from a non-human primate ("NHP") study in all probability may be required before initiation of human clinical testing of Ampligen® in patients with Ebola Virus Disease ("EVD"). Clinical studies would also be necessary to establish human safety and efficacy of Ampligen® for either treatment and/or prevention of EVD. Clinical safety and tolerability data obtained for one indication, for example, CFS, may be different for another disorder like EVD. Currently, because of increased demand and the limited number of facilities that can conduct EBOV studies in NHP, the scheduling of a NHP study may be delayed; however, the Company is actively seeking such a study.

Our European subsidiary, Hemispherx Biopharma Europe N.V./S.A., has been formally notified of a positive opinion regarding its Orphan Medicinal Product Application for Ampligen®, an experimental therapeutic, to treat EVD. The EU final decision designates Ampligen as an Orphan Medical Product for treatment of EVD.

Biosecurity / Biodefense

Our efforts in the biosecurity/biodefense have been redirected towards the Ebola virus disease. We have entered into material transfer and research agreements with multiple research laboratories around the world to examine whether Ampligen® and/or Alferon® exhibit antiviral activity against the Ebola virus (See "Ebola" section above).

Manufacturing

On October 2, 2011, the Company finalized their Fourth Amendment to a Supply Agreement, effective through March 11, 2014, with Jubilant Hollister-Stier Laboratories LLC of Spokane, Washington (“Hollister-Stier”), pursuant to which Hollister-Stier would formulate and package Ampligen® from the key raw materials that Hemispherx would supply to them. This Supply Agreement expired March 11, 2014. The Company is working towards an amendment to the existing Supply Agreement, which may contain additional fees as part of entering into the extension. In October 2014, we entered into a purchase commitment with Hollister-Stier for approximately $700,000 for the manufacture of clinical batches of Ampligen®.

We recently completed installation of the $8 million in equipment at the core of our facility enhancement project which should provide for a higher capacity and more cost effective manufacturing process for the production of Alferon N Injection®. Commercial sales of Alferon® will not resume until new batches of commercial filled and finished product are produced and released by the FDA. We are continuing the validation of Alferon® production and production of new Alferon® API inventory commenced in February 2015. While the facility is approved by the FDA under the Biological License Application (“BLA”) for Alferon®, this status will need to be reaffirmed by an FDA pre-approval inspection. We will also need the FDA’s approval to release commercial product once we have submitted satisfactory stability and quality release data. We had anticipated that it would

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take approximately until at least the 2nd half of 2015 before we would have Alferon® approved for commercial sales; however, during the final stage of the manufacturing process we encountered issues regarding a change in both the contract supplier of leukocytes and regarding a reagent used in the formulation of Alferon®. We are currently resolving these issues and hope consequent delays will only extend our estimated time line by at least six months.

To formulate, fill, finish and package (“fill and finish”) Alferon N Injection® Drug Product, we require a FDA approved third party Contract Manufacturing Organization (“CMO”). In January 2012, we agreed to a Technology, Transfer, Validation and Commercial Supply Agreement with Althea Technologies, Inc. (“Althea”) of San Diego, CA, regarding the fill and finish process for Alferon N Injection®. In November 2014, we entered into a purchase commitment with Althea for approximately $622,000 for the production of validation batches of Alferon® N Injection for emergency use and/or commercial sale. The Company has paid approximately $210,000 to Althea with regard to this open purchase commitment as of June 30, 2015.

Marketing/Distribution

Our marketing strategy for Ampligen® reflects the differing health care systems around the world along with the different marketing and distribution systems that are used to supply pharmaceutical products to those systems. We expect that, subject to receipt of FDA, ANMAT and/or other regulatory approval, Ampligen® may be utilized in four medical arenas: physicians’ offices; clinics; hospitals; and the home treatment setting. In preparation for the FDA’s consideration of our Ampligen® NDA, we undertook early stage development of pre-launch and launch driven marketing plans focusing on audience development, medical support and payor reimbursement initiatives which could facilitate product acceptance and utilization at the time of regulatory approval, if obtained. Similarly, we continued to consider distribution scenarios for the Specialty Pharmacy/Infusion channel which could provide market access, offer 3PL (third party logistics) capabilities and provide the requisite risk management control mechanisms. It is our intent to utilize third party service providers to execute elements of both the marketing/sales and distribution plans. As a possible option, we considered a plan to utilize a small group of Managed Market account managers to introduce the product to payor, employer and government account audiences. We believe that this approach could establish a market presence and facilitate the generation of revenue without incurring the substantial costs associated with a traditional sales force. Furthermore, Management believes that any approach considered should enable us to retain multiple options for future marketing strategies.

In January 2010, we engaged an Argentinean regulatory and business design entity to explore the possibility of initiating clinical trials of Alferon N Injection®, Ampligen® and Alferon® LDO during the influenza season in Argentina. On June 14, 2010, we executed a five year exclusive Sales, Marketing, Distribution and Supply Agreement for Argentina with GP Pharm Latinoamerica (“GP Pharm”), an affiliate company of Spanish GP Pharm SA. Under this Agreement, GP Pharm will be responsible for gaining regulatory approval in Argentina for Ampligen® to treat CFS in Argentina and for commercializing Ampligen® for this indication in Argentina. We granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We also granted GP Pharm an option to market Alferon N Injection® in Argentina and other Latin America countries. Under these agreements, we will manufacture and supply Ampligen® and Alferon N Injection® to GP Pharm. On November 15, 2010, we amended our June 15, 2010 agreement with GP Pharm to include Mexico in the Territory under the Sales, Marketing, Distribution and Supply Agreement. Under this Agreement, GP Pharm Mexico will be responsible for seeking regulatory approval in Mexico for Ampligen®, an experimental therapeutic, to treat CFS in Mexico and, if approval is obtained, for commercializing Ampligen® for this indication in Mexico. We have granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We are currently working towards an amendment to this agreement with GP Pharma the agreement expired June 15, 2015.

In January 2012, the ANMAT approved the sale and distribution of Alferon N Injection® (under the brand name “Naturaferon”) in Argentina. The receipt of the ANMAT approval for HPV is the first step of a regulatory process towards the commercial sales of Naturaferon. On September 20, 2012, we filed with ANMAT an amended NDA for the use of Alferon N Injection® in patients with chronic hepatitis C who have become refractory to recombinant interferon as a result of the appearance of neutralizing antibodies against recombinant interferon. On February 6, 2013, we received the ANMAT approval for the treatment of refractory patients that failed or were intolerant to the treatment with Interferon recombinant with Naturaferon in Argentina.

On September 6, 2011, we executed an amended agreement with Armada Healthcare, LLC (“Armada”) to undertake the marketing, education and sales of Alferon N Injection® throughout the United States. This agreement also provides start-up along with ongoing sales and marketing support to the Company. On July 31, 2015, it was mutually agreed upon to extend this agreement through August 14, 2017 subject to the same terms and conditions. We previously extended this agreement for the previous three years also under the same terms and conditions

On September 6, 2011, we executed a new agreement with specialty distributor, BioRidge Pharma, LLC (”BioRidge”) to warehouse, ship, and distribute Alferon N Injection® on an exclusive basis in support of U.S. sales. On July 31, 2015, it was mutually agreed upon to extend this agreement through August 14, 2017 subject to the same terms and conditions. We previously extended this agreement for the previous three years also under the same terms and conditions

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On March 9, 2015, we executed an agreement with Emerge Health Pty Ltd. ("Emerge") to seek approval of Ampligen® for CFS in Australia and New Zealand and to commence distribution of Ampligen® in both countries on a named-patient basis, where deemed appropriate. The parties intend to collaborate on seeking regulatory approval from Australia's Therapeutic Goods Administration ("TGA") and New Zealand's Medicines and Medical Devices Safety Authority ("Medsafe"). Under this five year exclusive license to sell, market, and distribute Ampligen in Australia and New Zealand to treat CFS, Emerge will implement regulatory-compliant programs to educate physicians about Ampligen® for CFS and seek orphan drug designation and approval of Ampligen® to treat CFS. Hemispherx will support these efforts and will supply Ampligen® at a predetermined transfer price. We have the right to buy out of the agreement at a price equal to three times Ampligen® sales for the preceding 12 months if exercised within the first two years or two times such sales if exercised after year three.

On August 3, 2015, we executed a multi-year agreement with Impatients, N.V., a Netherlands based company doing business as myTomorrows, for the commencement and management of an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to Chronic Fatigue Syndrome. MyTomorrows, as Hemispherx’ exclusive service provider and distributor in the Territory, will perform EAP activities. These activities will be directed to (a) the education of physicians and patients regarding the possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval) through named-patient use, compassionate use, expanded access and hospital exemption (b) patient and physician outreach related to a patient-physician platform, (c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory authorities for medical treatments prior to Marketing Authorization) for the use of such treatments, (d) the distribution and sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the collection of data such as patient-reported outcomes, doctor-reported experiences and registry data. Hemispherx will support these efforts and will supply Ampligen to myTomorrows at a predetermined transfer price. In the event that we receive Marketing Authorization in any country in the Territory, we will pay myTomorrows a royalty on products sold. The parties will establish a Joint Steering Committee composes of representative of both parties to oversee the EAP.

On August 6, 2015, we executed an agreement with Emerge to seek approval of Alferon N Injection® in Australia and New Zealand and to commence distribution of Alferon® in both countries on a named-patient basis, for treating genital warts and other infections and diseases to which patients in Australia and New Zealand have become refractory to recombinant interferon. Hemispherx and Emerge will collaborate on seeking regulatory approval from Australia’s TGA and New Zealand’s Medsafe. Under a five year exclusive license to sell, market, and distribute Alferon N Injection® in Australia and New Zealand, Emerge will implement regulatory-compliant programs to educate physicians about Alferon®. Hemispherx will support these efforts and will supply Alferon® at a predetermined transfer price. We have the right to buy out of the agreement at a price equal to three times Alferon® sales for the preceding 12 months if exercised within the first two years or two times such sales if exercised after year three.

401(k) Plan

Each participant immediately vests in his or her deferred salary contributions, while Company contributions will vest over one year. The 6% Company matching contribution was terminated as of March 15, 2008 and then was reinstated effective January 1, 2010. For the six months ended June 30, 2015, the Company contributions towards the 401(k) Plan were approximately $87,000.

New Accounting Pronouncements

See “ Note 10: Recent Accounting Pronouncements”.

Disclosure About Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

There have been no material changes in our critical accounting policies and estimates from those disclosed in Part II; Item 7: “Management's Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2014.

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RESULTS OF OPERATIONS

Three months ended June 30, 2015 versus three months ended June 30, 2014

Net Loss

Our net loss was approximately $4,845,000 and $4,956,000 for the three months ended June 30, 2015 and 2014, respectively, representing a decrease in loss of approximately $111,000 or 2% when compared to the same period in 2014. This decrease in loss for these three months was primarily due to the following:


1)	a decrease in general and administrative expense of $495,000 or 20%; offset by


2)	an increase in research and development expense of $109,000 or 5%;


3)	an increase in production costs of approximately $213,000 or 72%; and


4)	a decrease in interest and other income/expense of approximately $75,000 or 57%.

Net loss per share was $(0.02) and $(0.03) for the three months ended June 30, 2015 and 2014, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2015 was 236,149,999 as compared to 185,749,722 as of June 30, 2014.

Revenues

Revenues from our Ampligen® Cost Recovery Program were $47,000 and $36,000 for the three months ended June 30, 2015 and 2014, respectively. For the three months ended June 30, 2015 and 2014, we had no Alferon N Injection® Finished Good product to commercially sell and all revenue was generated from the FDA approved open-label treatment protocol, (“AMP 511”), that allows patient access to Ampligen ® for treatment in an open-label safety study.

Production Costs

Production costs were approximately $507,000 and $294,000, respectively, for the three months ended June 30, 2015 and 2014. This increase of approximately $213,000 or 72% was primarily due to charges to inventory of $117,000 resulting from vials removed from inventory for testing purposes and losses incurred during the manufacturing process. The remaining increase in production costs of $96,000 was mainly due to an increase in stability testing and pre-production costs related to the initiation of manufacturing of Alferon N Injection®.

Research and Development Costs

Overall Research and Development (“R&D”) costs for the three months ended June 30, 2015 were approximately $2,439,000 as compared to $2,330,000 for the same period a year ago, reflecting an increase of approximately $109,000 or 5%. The primary reason for the increase in research and development costs was due to an increase in stability testing and pre-production costs related to the initiation of manufacturing of Alferon N Injection® of $143,000 as well as an increase in polymer production costs of $80,000 associated with Ampligen ®. This was offset by a decrease in executive bonus and incentive compensation of $153,000 and a decrease in charges of $155,000 associated with the abandonment of patents.

General and Administrative Expenses

General and Administrative (“G&A”) expenses for the three months ended June 30, 2015 and 2014, were approximately $2,002,000 and $2,497,000, respectively, reflecting a decrease of approximately $495,000 or 20%. The decrease in G&A expenses in 2015 was mainly due to lower legal fees of $432,000 associated with various legal proceedings as compared to the prior period (see "Part II - Other Information; Item 1: Legal Proceedings" for details).

Interest and Other Income/Expense

Interest and other income/expense for the three months ended June 30, 2015 and 2014 were approximately $56,000 and $131,000, respectively, representing a decrease of approximately $75,000 or 57%. The primary cause for the decrease in investment income during the current quarter was primarily due to lower fund performance and cash available for investment purposes as compared to the prior period.

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Six months ended June 30, 2015 versus six months ended June 30, 2014

Net Loss

Our net loss was approximately $8,290,000 and $8,792,000 for the six months ended June 30, 2015 and 2014, respectively, representing a decrease in loss of approximately $502,000 or 6% when compared to the same period in 2014. This decrease in loss for these six months was primarily due to the following:


1)	a decrease in general and administrative expense of $1,121,000 or 22%;


2)	an increase in the gain from sale of income tax net operating losses of $248,000 or 22%; offset by


3)	an increase in research and development expense of $457,000 or 10%;


4)	an increase in production costs of approximately $262,000 or 42%; and


5)	a decrease in interest and other income/expense of approximately $122,000 or 43%.

Net loss per share was $(0.04) and $(0.05) for the six months ended June 30, 2015 and 2014, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2015 was 224,954,200 as compared to 181,265,253 as of June 30, 2014.

Revenues

Revenues from our Ampligen® Cost Recovery Program were $83,000 and $112,000 for the six months ended June 30, 2015 and 2014, respectively. Although there was a slight increase in patients utilizing Ampligen®, there was a decrease in revenue of $29,000 or 26% primarily due to a lower dosage being prescribed to patients utilizing Ampligen ® during the current quarter. For the six months ended June 30, 2015 and 2014, we had no Alferon N Injection® Finished Good product to commercially sell and all revenue was generated from the FDA approved open-label treatment protocol, (“AMP 511”), that allows patient access to Ampligen ® for treatment in an open-label safety study.

Production Costs

Production costs were approximately $879,000 and $617,000, respectively, for the six months ended June 30, 2015 and 2014. This increase of approximately $262,000 or 43% was primarily due to charges to inventory of $117,000 resulting from vials removed from inventory for testing purposes and losses incurred during the manufacturing process. The remaining increase in production costs of $145,000 was mainly due to an increase in stability testing and pre-production costs related to the initiation of manufacturing of Alferon N Injection®.

Research and Development Costs

Overall Research and Development (“R&D”) costs for the six months ended June 30, 2015 were approximately $5,113,000 as compared to $4,656,000 for the same period a year ago, reflecting an increase of approximately $457,000 or 10%. The primary reason for the increase in research and development costs was due to an increase in stability testing and pre-production costs related to the initiation of manufacturing of Alferon N Injection® of $658,000 as well as an increase in polymer production costs of $275,000 associated with Ampligen ®. This was mainly offset by a decrease in clinical trial costs of $122,000 associated with the conclusion of our University of Washington study in 2014 utilizing Ampligen® as an adjuvant in optimally treated breast cancer patients as data from these patients was evaluated and resources were directed to other projects, a decrease in bonus payments to an executive officer of $197,000. and a decrease in charges of $253,000 associated with the abandonment of patents.

General and Administrative Expenses

General and Administrative (“G&A”) expenses for the six months ended June 30, 2015 and 2014, were approximately $3,915,000 and $5,036,000, respectively, reflecting a decrease of approximately $1,121,000 or 22%. The decrease in G&A expenses in 2015 was mainly due to lower legal fees associated with various legal proceedings as compared to the prior period (see "Part II - Other Information; Item 1: Legal Proceedings" for details).

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Interest and Other Income/Expense

Interest and other income/expense for the six months ended June 30, 2015 and 2014 were approximately $162,000 and $284,000, respectively, representing a decrease of approximately $122,000 or 43%. The primary cause for the decrease in investment income during the current quarter was primarily due to lower fund performance and cash available for investment purposes as compared to the prior period.

Sale of New Jersey Tax Net Operating Loss

In January 2015, the Company effectively sold $14,291,000 of its approximately $28,000,000 of New Jersey state net operating loss carryforwards (for the year 2013) for approximately $1,374,000. In February 2014, we effectively sold $13,900,000 of our approximately $25,000,000 of New Jersey state net operating loss carryforwards (for the year 2012) for approximately $1,126,000, representing an increase in cash gain of $248,000 or 22% (see “Note 11 : Funds Received From Sale of Income Tax Net Operating Losses”) for the six months ended June 30, 2015 as compared to the same period in 2014.

Liquidity and Capital Resources

Cash used in operating activities for the six months ended June 30, 2015 was approximately $9,237,000 compared to approximately $6,206,000 for the same period in 2014, an increase of $3,031,000 or 49%. Excluding the proceeds from the sale of New Jersey Net Operating Loss carry-forwards, cash used in operating activities for the six months ended June 30, 2015 increased by approximately $3,279,000 or 45% over the comparable period in 2014. The primary reason for this increase in 2015 was due to the payout of 2014 executive incentive bonuses for approximately $1,831,000 reflected in accrued expenses, an increase in inventory of $1,009,000, and a decrease in the accrual of legal fees due to payments on account during the six months ended June 30, 2015.

As of June 30, 2015, we had approximately $15,714,000 in cash, cash equivalents and marketable securities inclusive of approximately $13,872,000 in Marketable Securities, representing a decrease of approximately $394,000 from December 31, 2014. The primary reason for the decrease in cash, cash equivalents and marketable securities was due to cash being used in operating activities of $9,237,000 and cash used in investing activities of $355,000 for the six months ended June 30, 2015 being offset by net proceeds of $9,293,000 from the sale of 38,919,883 shares sold pursuant to the ATM during the six months ended June 30, 2015 (see below and "Note 8: Stockholders' Equity”). If we are unable to commercialize and sell Ampligen® or Alferon® LDO and/or recommence material sales of Alferon N Injection®, our operations, financial position and liquidity may be adversely impacted, and additional financing may be required. However, there is no assurance that such financing will be available.

In its February 1, 2013 CRL, the FDA communicated that we should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analyses. Until we undertake the end-of-review conference(s) with the FDA, we are unable to reasonably estimate the nature, costs, necessary efforts to obtain FDA clearance or anticipated completion dates of any additional clinical study or studies. Please see “Part II; Item 1A. Risk Factors; “ We may require additional financing which may not be available. The limitation on the number of shares of common stock available for financing without prior stockholder approval eventually may hinder our ability to raise additional funding ”. Utilizing the industry norms for undertaking a Phase III clinical study, we estimate upon acceptance of the study's design that it would take approximately 18 months to three years to complete a new well-controlled Ampligen® clinical study for resubmission to the FDA. We anticipate that the time and cost to undertake clinical trial(s), studies and data analysis are beyond our current financial resources without gaining access to additional funding. The actual duration to complete the clinical study may be different based on the length of time it takes to design the study and obtain FDA's acceptance of the study plan, the final design of an acceptable Phase III clinical study protocol, availability of suitable participants and clinical sites along with other factors that could impact the implementation of the study, analysis of results or requirements of the FDA and/or other governmental organizations which may require additional financing which may not be available. The limitation on the number of shares of common stock available for financing without prior stockholder approval eventually may hinder our ability to raise additional funding.

On July 23, 2012, we entered into a EDA with Maxim (the "EDA”) pursuant to which we may sell up to $75,000,000 worth of our shares of common stock from time to time through Maxim, as sales agent. Under the EDA, Maxim is entitled to a fixed commission rate of 4.0% of the gross sales price of Shares sold under the EDA, up to aggregate gross proceeds of $10,000,000, and thereafter, at a fixed commission rate of 3.0% of the gross sales price of Shares sold under the EDA. Sales of the Shares, if any, may be made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers' transactions, including on the NYSE MKT, at market prices or as otherwise agreed with Maxim. We have no obligation to sell any of the Shares and may at any time suspend offers

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under the EDA or terminate the EDA. Up until August 4, 2015, the shares were being sold pursuant to the Company's Universal Shelf Registration Statement on Form S-3, declared effective by the Securities and Exchange Commission on July 2, 2012. Since August 4, 2015, the shares are being sold pursuant to the Company's Universal Shelf Registration Statement on Form S-3, declared effective by the Securities and Exchange Commission on August 4, 2015 (the “2015 Universal Shelf”). On September 14, 2012, we filed a Prospectus Supplement with the SEC increasing the number of shares covered by the Prospectus from 12,000,000 to 20,000,000 shares under the New EDA. On October 5, 2012, we filed an updated Prospectus Supplement increasing the number of shares covered by the Prospectus to 40,000,000 shares. On December 23, 2013, we filed an updated Prospectus Supplement with the Securities and Exchange Commission to revise the EDA for an aggregate of 90,000,000 shares to be allocated for public sale under the Prospectus Supplement pursuant to the EDA. On March 6, 2015, we filed an updated Prospectus Supplement increasing the number of shares covered by the Prospectus to 117,600,000 shares.

On August 5, 2015, the Company filed an updated Prospectus Supplement to reflect that sales under the EDA are now being conducted pursuant to the 2015 Universal Shelf.

For the six months ended June 30, 2015, we sold an aggregate of 38,919,883 shares that resulted in net cash proceeds of approximately $9,293,000 after commissions paid to Maxim for approximately $287,000 (see “Note 8: Stockholders' Equity”). The impact of the fund raising effort through the EDA is reflected in the "Consolidated Statements of Cash Flows" comparing the various financing activities for the six months ended June 30, 2015 and 2014, respectively.

There can be no assurances that, if needed, we will be able to raise adequate funds from these or other sources or enter into licensing, partnering or other arrangements to advance our business goals. Our inability to raise such funds or enter into such arrangements, if needed, could have a material adverse effect on our ability to develop our products. Also, we have the ability to curtail discretionary spending, including some research and development activities, if required to conserve cash. Because of our long-term capital requirements, we may seek to access the public equity market whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. We are unable to estimate the amount, timing or nature of future sales of outstanding common stock or instruments convertible into or exercisable for our common stock. Any additional funding may result in significant dilution and could involve the issuance of securities with rights, which are senior to those of existing stockholders. We may also need additional funding earlier than anticipated, and our cash requirements, in general, may vary materially from those now planned, for reasons including, but not limited to, changes in our research and development programs, clinical trials, acquisitions of intellectual property or assets, enhancements to the manufacturing process, competitive and technological advances, the regulatory processes including the commercializing of Ampligen® products or new utilization of Alferon® products. See Part II, Item 1A. Risk Factors; “ We may require additional financing which may not be available. The limitation on the number of shares of common stock available for financing without prior stockholder approval eventually may hinder our ability to raise additional funding. "

The proceeds from our financing have been used to fund infrastructure growth including manufacturing, regulatory compliance and market development along with our efforts regarding the Ampligen® NDA and preparedness for the FDA pre-approval inspections of the New Brunswick manufacturing facility. There can be no assurances that, if needed, we will raise adequate funds from these or other sources, which may have a material adverse effect on our ability to develop our products. Also, we have the ability to curtail discretionary spending, including some research and development activities, if required to conserve cash.

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

We had approximately $15,714,000 in cash, cash equivalents and marketable securities at June 30, 2015 as compared to $16,108,000 at December 31, 2014.

To the extent that our cash and cash equivalents exceed our near term funding needs, we intend to invest the excess cash in money market accounts, high-grade corporate bonds or fixed-income type bond funds. We employ established conservative policies and procedures to manage any risks with respect to investment exposure.

ITEM 4: Controls and Procedures

Our Chairman of the Board (serving as the principal executive officer) and the Chief Financial Officer performed an evaluation of the effectiveness of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. In designing and evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable

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assurance of achieving the desired control objectives, and Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the controls and procedures were effective as of June 30, 2015, to ensure that material information was accumulated and communicated to our Management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the six months ended June 30, 2015, we have made no change in our internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Part II – OTHER INFORMATION

ITEM 1: Legal Proceedings

Except as set forth below, there have been no material developments in litigation from that disclosed in our Annual Report Form 10-K for the fiscal year ended December 31, 2014, Note 14 - Contingencies:



(a)	Stephanie A. Frater v. Hemispherx Biopharma, Inc., William A. Carter, David Strayer and Wayne Pambianchi, U.S. District Court for Eastern District of Pennsylvania, Case No. 2:12-cv-07152-WY.



(b)	Mark Zicherman v. Hemispherx Biopharma, Inc., William A. Carter, Thomas K. Equels, Iraj E. Kiani, William M. Mitchell, Richard C. Piani, David Strayer and Charles T. Bernhardt, U.S. District Court for Eastern District of Pennsylvania, Case No. 2:13-cv-00243-WY.



(c)	Michael Desclos v. Hemispherx Biopharma, Inc., William A. Carter, Charles T. Bernhardt, Thomas K. Equels, David R. Strayer, Richard C. Piani, William M. Mitchell, and Iraj E. Kiani, First Judicial District of Pennsylvania, Court of Common Pleas of Philadelphia, March 2013 Term, No. 110.



(d)	Richard J. Sussman and Douglas T. Lowe v. Hemispherx Biopharma, Inc., William A. Carter, Charles T. Bernhardt, Thomas K. Equels, David R. Strayer, Richard C. Piani, William M. Mitchell, and Iraj E. Kiani, First Judicial District of Pennsylvania, Court of Common Pleas of Philadelphia, April 2013 Term, No. 3458.



(e)	Rena A. Kastis and James E. Conroy v. Hemispherx Biopharma, Inc., William A. Carter, Thomas K. Equels, Richard C. Piani, William M. Mitchell, Iraj E. Kiani and Robert E Peterson, Chancery Court of the State of Delaware June 18, 2013, Case No. 8657.



(f)	Charles T. Bernhardt III v. Hemispherx Biopharma, Inc., Dr. William A. Carter, Thomas K. Equels, Esquire, Dr. Iraj Eqhbal Kiani, Dr. William M. Mitchell and Peter W. Rodino; Court of Common Pleas of Philadelphia County, Philadelphia, PA; Case: February Term, 2014 No. 000784.



(g)	Hemispherx Biopharma, Inc. v. Johannesburg Consolidated Investments, et al., U.S. District Court for the Southern District of Florida, Case No. 4-10129-CIV.



(h)	Cato Capital, LLC v. Hemispherx Biopharma, Inc., U.S. District Court for the District of Delaware, Case No. 9-549-GMS.

(a) On December 21, 2012, a putative Federal Securities Class Action Complaint was filed against the Company and three of its Officers in the United States District Court for the Eastern District of Pennsylvania. This action, Stephanie A. Frater v. Hemispherx Biopharma, Inc., et al., was purportedly brought on behalf of a putative class of Hemispherx investors who purchased the Company's publicly traded securities between March 14, 2012 and December 17, 2012. The Complaint generally asserted that Defendants made material misrepresentations and omissions regarding the status of the Company's New Drug Application for Ampligen®, which had been filed with the United States Food and Drug Administration, in alleged violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. On March 14, 2013, the Court appointed Hemispherx Investor Group as Lead Plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. § 78u-4. Pursuant to the Court's March 29, 2013 scheduling order, Lead Plaintiff filed a Consolidated Amended Class Action Complaint (“Amended Complaint”) on May 20, 2013, and in its Amended Complaint, dropped Thomas K.

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Equels and Charles T. Bernhardt as Defendants and added David R. Strayer, M.D. and Wayne Pambianchi as Defendants. The Amended Complaint alleges an expanded Class Period of March 14, 2012 to December 20, 2012, which period encompasses statements made in the Company's 2011 Form 10-K filed on March 14, 2012, and at the FDA Advisory Committee Meeting on December 20, 2012. On July 19, 2013, Defendants filed a motion to dismiss the Amended Complaint. Lead Plaintiff filed its brief in opposition to Defendants' motion to dismiss is September 17, 2013, and Defendants filed their reply brief on October 17, 2013. On January 24, 2014, the court entered an order denying defendants' motion to dismiss the Amended Complaint, and on February 20, 2014, entered a scheduling order imposing, inter alia, a March 31, 2015 deadline for completion of all fact discovery. On February 25, 2014, defendants filed an answer and affirmative defenses to the Amended Compliant. Also on February 25, 2014, the Court entered a Stipulated Protective Order, which will govern all confidential documents produced in discovery. After conducting significant fact discovery, the parties reached an agreement in principle to settle all claims on December 31, 2014. However, the settlement is subject to the Court's issuance of an order finally approving the terms of the parties' settlement agreement in all material respects. On March 11, 2015, the parties filed a joint motion with the Court seeking an order, inter alia, granting preliminary approval of their settlement agreement, preliminarily certifying a class for settlement purposes, and setting a date for a final settlement hearing. On April 8, 2015, the Court granted the parties’ joint motion, and entered an Order preliminarily approving the parties’ settlement, preliminarily certifying a class for settlement purposes, directing issuance of notice, and scheduling the final approval hearing for July 22, 2015. On July 22, 2015, the Court held the the final approval hearing to determine whether the parties’ settlement is fair, reasonable, adequate and should be approved, and on the same date entered an Order granting final approval of the parties’ settlement. No Company funds were used to pay the settlement, which was paid from the Company’s insurance coverage. The settlement did not contain any admission of fault or wrongdoing by Hemispherx or any of the individual defendants.

(b) On January 15, 2013, a Shareholder Derivative Complaint was filed against the Company, as nominal defendant, and certain of its current and former Officers and Directors in the United States District Court for the Eastern District of Pennsylvania. Purporting to assert claims on behalf of the Company, the Complaint in this action, Mark Zicherman v. Hemispherx Biopharma, Inc., et al., alleges violations of state law, including breaches of fiduciary duties, waste of corporate assets, and unjust enrichment, arising from the alleged federal securities violations asserted in the securities class action. On February 22, 2013, the Court entered an order temporarily staying this case pending the outcome of the securities class action defendants' motion to dismiss that action. On July 3, 2013, Plaintiff filed an Amended Complaint, adding David R. Strayer, M.D., as a Defendant. On July 18, 2013, the Court entered an order staying the case as against Dr. Strayer pending the outcome of the motion to dismiss the securities class action. On January 24, 2014, the Court denied the defendants' motion to dismiss the securities class action. On March 26, 2014, the Court entered an order to continue the temporary stay, and on March 27, 2014, the Court entered an order placing the action in the Civil Suspense File. On April 11, 2014, the Court entered a Stipulated Protective Order, which will govern all confidential documents produced in discovery. On January 28, 2015, on request of the parties, the Court entered an Order continuing the temporary stay, subject to the requirement that the parties submit an updated joint status report within ten days of the court’s entry of an order granting or denying the securities class action parties’ motion for preliminary approval of their settlement agreement.

(c) On March 4, 2013, a Shareholder Derivative Complaint was filed against the Company, as nominal defendant, and certain of its current and former Officers and Directors in the First Judicial District of Pennsylvania of the Court of Common Pleas of Philadelphia. Purporting to assert claims on behalf of the Company, the Complaint in this action, Michael Desclos v. Hemispherx Biopharma, Inc., et al., alleges violations of state law, including breaches of fiduciary duties, waste of corporate assets, and unjust enrichment, arising from the alleged federal securities violations asserted in the securities class action. On April 10, 2013, the Court entered an order temporarily staying this case pending the outcome of the securities class action defendants' motion to dismiss that action. On January 24, 2013, the court in the federal securities class action denied the defendants' motion to dismiss. On January 29, 2014, the court entered an order consolidating this action with the shareholder derivative action, Richard J. Sussman and Douglas T. Lowe v. Hemispherx Biopharma, Inc., et al., described below. On March 26, 2014, the Court entered an order to continue the temporary stay. On June 9, 2014, the Court entered a Stipulated Protective Order, which will govern all confidential documents produced in discovery.

(d) On April 23, 2013, a Shareholder Derivative Complaint was filed against the Company, as nominal defendant, and certain of its current and former Officers and Directors in the First Judicial District of Pennsylvania of the Court of Common Pleas of Philadelphia. Purporting to assert claims on behalf of the Company, the Complaint in this action, Richard J. Sussman and Douglas T. Lowe v. Hemispherx Biopharma, Inc., et al., alleges violations of state law, including breaches of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment, arising from the alleged federal securities violations asserted in the securities class action. On May 10, 2013, the Court entered an order staying this case pending the outcome of the ruling on the Federal Securities Class Action Defendants' motion to dismiss. On January 24, 2014, the court in the federal securities class action denied the defendants' motion to

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dismiss. On January 29, 2014, the Court entered an order consolidating this action with the shareholder derivative action, Michael Desclos v. Hemispherx Biopharma, Inc., et al., described above. On March 26, 2014, the Court entered an order to continue the temporary stay. On June 9, 2014, the Court entered a Stipulated Protective Order, which will govern all confidential documents produced in discovery.

(e) On June 18, 2013, a Stockholder Derivative Complaint was filed against the Company, as nominal defendant, and certain of its current and former Officers and Directors in the Court of Chancery of the State of Delaware. The Complaint in this action, Rena A. Kastis and James E. Conroy v. Hemispherx Biopharma, Inc., et al., alleges breaches of fiduciary duties, waste of corporate assets and unjust enrichment. The Company's Board of Directors has appointed a Special Litigation Committee (“SLC”) to review the allegations set forth in the Complaint. On September 10, 2013, the Court entered a Stipulation and Order staying all proceedings in this action pending the SLC’s review and recommendation concerning the allegations contained in the Complaint. On December 20, 2013, the SLC issued its Report, in which it concluded that dismissing the Complaint would be in the best interests of Hemispherx and its stockholders. On January 20, 2014, the SLC moved to dismiss the Complaint. During the time since the SLC filed its motion to dismiss, plaintiffs have served document requests on the SLC, noticed the depositions of the two SLC members (on dates to be mutually agreed-upon following document production), served a subpoena on the SLC’s counsel McCarter & English LLP, and served a subpoena on Sage Group, an outside advisor to Hemispherx. The SLC responded to plaintiffs’ document requests on March 6, 2014, and produced responsive documents the same day. McCarter & English responded to plaintiff's subpoena, produced responsive documents on March 20, 2014, and produced additional responsive documents on April 7, 2014 and June 23, 2014. On June 25, 2014, plaintiffs' served document requests on the Company, to which the Company responded on July 25, 2014. The deposition of Sage Group occurred on March 12, 2015. The depositions of the two members of the SLC occurred on April 16 and 17, 2015 and the deposition of McCarter & English previously scheduled for April 30, 2015 has been cancelled. On July 10, 2015, plaintiffs filed an answering brief in opposition to the SLC’s motion to dismiss the Complaint. The SLC’s reply brief is due to be filed by August 4, 2015. Oral argument on the motion to dismiss is scheduled to occur on August 18, 2015.

The Company believes that the claims asserted in the shareholder derivative litigation are without merit, and is vigorously defending these actions. While the Company also believes that the claims asserted in the securities litigation are without merit, the Company has reached a settlement agreement in principle that is satisfactory to the Company. If the Court does not issue an order finally approving the terms of the parties’ settlement agreement in all material respects, however, the Company intends to resume its vigorous defense of the securities litigation. The potential impact of these actions, which seek unspecified damages, equitable relief, attorneys' fees and expenses, is uncertain. There can be no assurance that an adverse result in these proceedings would not have a potentially material adverse effect on the Company's business, results of operations and financial condition.

(f) On February 7, 2014, Charles T. Bernhardt III (“Bernhardt”) filed a Complaint in the Philadelphia Court of Common Pleas asserting that under an employment agreement dated December 6, 2011, the Company currently owes Bernhardt certain wages, fringe benefits and severance payments by reason of his resignation from employment as Chief Financial Officer of the Company. The claims against the Company as set forth in the Second Amended Complaint include breach of contract, violation of the Pennsylvania Wage Protection Collection Law (“WPCL”) and anticipatory breach of the employment agreement. The suit also asserts claims against Dr. William A. Carter, Thomas K. Equels, Esquire, Dr. Iraj Eqhbal Kiani, Dr. William M. Mitchell and Peter W. Rodino, in their capacity as corporate officers and/or directors of the Company, for violation of the WPCL and for anticipatory breach of the employment agreement. In addition to compensatory damages of $275,824.09 on all counts, Bernhardt’s claim also includes a demand for attorneys’ fees and liquidated damages under the WPCL. The Company and individual defendants have filed an Answer, New Matter and Counterclaims. On February 11, 2015 the Company and individual defendants filed First Amended Answer, New Matter and Counterclaims which assert claims for Injurious Falsehood/Corporate Disparagement, Defamation, Replevin, Conversion, Common Law Trademark Infringement, Demand for Permanent Injunction Based on Conversion, and Demand for Permanent Injunction based on Common Law Trademark Infringement. On March 17, 2015, Bernhardt responded to the Company’s claim. The matter is currently proceeding in discovery for a trial date in December 2015.

The Company believes it has meritorious defenses and is vigorously defending against these claims by Bernhardt as unjustifiable. There is currently no projection as to the likely outcome of the case.

(g) In December 2004, the Company filed a multi-count complaint in U.S, Federal Court (Southern District of Florida) which was granted by the Court in August 2010 whereby Hemispherx was awarded $188 million, plus interest against Johannesburg Consolidated Investments (“JCI”) and former JCI officers R.B. Kebble and H.C. Buitendag. The Company attempted to domesticate the Final Judgment in South Africa and is being assisted by the South African law firm of Webber Wentzel. The action to domesticate had been filed in South Africa. No gain has been recorded for this judgment as it is too early in these proceedings to predict an outcome. As required by South African law, on October 11, 2011, Hemispherx has posted security bond of $66,873 related to the JCI proceedings and a second bond of $25,200 was posted in July 2012 related our proceedings against the Estate of Kebble. Hemispherx and the other parties to the domestication

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convened an arbitral panel in South Africa to decide the domestication issue in Johannesburg on May 5 through 9, 2014. After deliberation, the panel declined to domesticate the U.S. judgment in South Africa. These bonds have been forfeited and a fee award of approximately $200,000 has been issued. However, the final judgment still remains valid in the United States and vastly exceeds the amount of the South African fee award, thus in the United States it is fully set off.

(h) Cato Capital, LLC ("Cato") brought suit against the Company on July 31, 2009, in the United States District Court for the District of Delaware (the "Court"), alleging that under a November 2008 agreement between Cato and Hemispherx, Hemispherx owes Cato a placement fee arising from subsequent Hemispherx financing and investment transactions. Hemispherx disputed these allegations, asserting that Cato failed to comply with the provisions of its own contract. The Amended Complaint sought damages in the amount of $9,830,000.00 plus attorneys' fees and punitive damages. Pursuant to an indemnification responsibility, Hemispherx has also retained this firm to undertake the defense of the Sage Group.

The Parties had a Non-Jury trial on March 4, 5 and 6, 2013 before the United States District Court for the District of Delaware. On September 29, 2014, the Court found in favor of Hemispherx and Sage on all counts, and dismissed Cato’s claims in their entirety. On January 13, 2015, the Court granted the Company’s motion for attorney’s fees and costs and awarded the Company $770,852.76.

On October 24, 2014, Cato filed a notice of appeal of the Court’s September 29, 2014 decision in the United States Court of Appeals for the Third Circuit (the “Third Circuit”). On March 3, 2015, Cato filed its Brief in the Third Circuit. The Company’s Brief in Response was filed on April 6, 2015, with a Reply Brief by Cato filed on April 19, 2015. The Court of Appeals conducted Oral Argument on July 16, 2015. The case is now fully submitted to the Court of Appeals. The Court may decide the case at any time.

(i) Summation.

In reference to Contingencies identified above, there can be no assurance that an adverse result in these proceedings would not have a potentially material adverse effect on our business, results of operations, and financial condition. The Company believes it has meritorious defenses and is vigorously defending against the claims identified in Contingency (a), (b), (c), (d), (e), (f) and (h). There is currently no projection as to the likely outcome of the cases and the Company has not recorded any gain or loss contingencies as a result of the above matters for the six months ended June 30, 2015 and the year ended December 31, 2014. Also, with regards to Contingency (a), (b), (c), (d) and (e), the Company maintains a Directors and Officers Insurance Policy that provides coverage for claims and retention of legal counsel.

ITEM 1A: Risk Factors

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in the forward-looking statements made in this Form 10-Q. Among the key factors that have a direct bearing on our results of operations are:

Risks Associated With Our Business

No assurance of successful product development.

Ampligen® and related products. The development of Ampligen® and our other related products is subject to a number of significant risks. Ampligen® may be found to be ineffective or to have adverse side effects, fail to receive necessary regulatory clearances, be difficult to manufacture on a commercial scale, be uneconomical to market or be precluded from commercialization by proprietary right of third parties. Our investigational products are in various stages of clinical and pre-clinical development and require further clinical studies and appropriate regulatory approval processes before any such products can be marketed. We do not know when, if ever, Ampligen® or our other products will be generally available for commercial sale for any indication. Generally, only a small percentage of potential therapeutic products are eventually approved by the FDA for commercial sale (Please see the next Risk Factor and Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Ampligen®” above for more information).

Alferon N Injection®. Although Alferon N Injection® is approved for marketing in the United States for the intralesional treatment of refractory or recurring external genital warts in patients 18 years of age or older, to date it has not been approved for other indications. We face many of the risks discussed above, with regard to developing this product for use to treat other ailments (Please see the next Risk Factor and Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; “Alferon N Injection®” above for more information).

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Our drug and related technologies are investigational and subject to regulatory approval. If we are unable to obtain regulatory approval in a timely manner, or at all, our operations will be materially harmed and our stock adversely affected.

All of our drugs and associated technologies, other than Alferon N Injection®, are investigational and must receive prior regulatory approval by appropriate regulatory authorities for commercial distribution and sale and are currently legally available only through clinical trials with specified disorders. At present, Alferon N Injection® is approved for the intralesional treatment of refractory or recurring external genital warts in patients 18 years of age or older. Use of Alferon N Injection® for other indications will require regulatory approval.

Our products, including Ampligen®, are subject to extensive regulation by numerous governmental authorities in the United States (“U.S.”) and other countries, including, but not limited to, the FDA in the U.S., the Health Protection Branch (“HPB”) of Canada, the Agency for the European Medicines Agency (“EMA”) in Europe and the Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (“ANMAT”) in Argentina. Obtaining regulatory approvals is a rigorous and lengthy process and requires the expenditure of substantial resources. In order to obtain final regulatory approval of a new drug, we must demonstrate to the satisfaction of the regulatory agency that the product is safe and effective for its intended uses and that we are capable of manufacturing the product to the applicable regulatory standards. We require regulatory approval in order to market Ampligen® or any other proposed product and receive product revenues or royalties. We cannot assure you that Ampligen® will ultimately be demonstrated to be safe and efficacious. While Ampligen® is authorized for use in clinical trials in the U.S., we cannot assure you that additional clinical trial approvals will be authorized in the United States or in other countries, in a timely fashion or at all, or that we will complete these clinical trials. In addition, although Ampligen® has been authorized by the FDA for treatment use under certain conditions, including provision for cost recovery, there can be no assurance that such authorization will continue in effect.

On February 1, 2013, we received a CRL from the FDA declining to approve our Ampligen® NDA for the treatment of CFS. The FDA communicated that we should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analysis. For more detailed information about the current status of our Ampligen® NDA please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Ampligen®” above.

The FDA's regulatory review and approval process is extensive, lengthy, expensive and inherently uncertain. To receive approval for a product candidate, we must, among other things, demonstrate to the FDA's satisfaction with substantial evidence from well-controlled pre-clinical and clinical trials that the product candidate is both safe and effective for each indication for which approval is sought. Before we can sell Ampligen® for any use, or promote Alferon® for any use other than as Alferon N Injection® for treatment of refractory or recurring genital warts, we will need to file the appropriate NDA with the FDA in the U.S. and the appropriate regulatory agency outside of the U.S. where we intend to market and sell such products. At present the only NDA we have filed with the FDA is the NDA for the use of Ampligen® to treat CFS. As discussed in the prior paragraph, the FDA declined to approve this NDA and indicated that we needed to conduct additional work. Therefore, ultimate FDA approval, if any, may be delayed by several years and may require us to expend more resources than we have available. It is also possible that additional studies, if performed and completed, may not be successful or considered sufficient by the FDA for approval or even to make our applications approvable. If any of these outcomes occur, we may be forced to abandon one or more of our future applications for approval, which might significantly harm our business and prospects. As a result, we cannot predict if or when we might receive regulatory approval for the use of Ampligen® to treat CFS or for the use of any other products. Even if regulatory approval from the FDA is received for the use of Ampligen® to treat CFS or eventually, for the use of any other product, any approvals that we obtain could contain significant limitations in the form of narrow indications, patient populations, warnings, precautions or contra-indications or other conditions of use, or the requirement that we implement a risk evaluation and mitigation strategy. In such an event, our ability to generate revenues from such products could be greatly reduced and our business could be harmed.

Even if we believe that data collected from our preclinical studies and clinical trials of our product candidate are promising, this data has not been, and may not be in the future, sufficient to support marketing approval by the FDA, and regulatory interpretation of these data and procedures may continue to be unfavorable.

To the extent that we are required by the FDA pursuant to the Ampligen® NDA to conduct additional studies and take additional actions, approval of any applications that we submit may be delayed by several years, or may require us to expend more resources than we have available. It is also possible that additional studies, if performed and completed, may not be successful or considered sufficient by the FDA for approval or even to make our applications approvable. If any of these outcomes occur, we may be forced to abandon one or more of our future applications for approval, which might significantly harm our business and prospects. As a result, we cannot predict when or whether regulatory approval will be obtained for any product candidate we develop.

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Obtaining approval of a NDA by the FDA, or a comparable foreign regulatory authority, is inherently uncertain. Even after completing clinical trials and other studies, a product candidate could fail to receive regulatory approval for many reasons, including the following:


•	not be able to demonstrate to the satisfaction of the FDA that our product candidate is safe and effective for any indication;


•	the FDA may disagree with the design or implementation of our clinical trials or other studies;


•	the results of the clinical trials or other studies may not demonstrate that a product candidate's clinical and other benefits outweigh its safety risks;


•	the FDA may disagree with our interpretation of data from clinical trials or other studies;


•	the data collected from clinical trials and other studies of a product candidate may not be sufficient to support the submission of a NDA;


•	the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical and other study data insufficient for approval; and


•	the FDA may not approve the proposed manufacturing processes and facilities for a product candidate.

In 2012, FDA reviewers raised certain questions about the status of our existing lots of older Work-In-Process Alferon® materials and Alferon® Active Pharmaceutical Product (“API”), which would need to be released by the FDA before those materials could be used in commercial product. After conducting all of the appropriate tests on samples of the inventory during 2013, we concluded that we could not alleviate certain questions the FDA had about the older Work-In-Process Alferon N Injection®. Accordingly, these lots were not submitted to the FDA to request release for commercial sale and their remaining dollar value was written-off. In the absence of FDA approvals for product manufactured from existing inventory, commercial sales of Alferon® will not resume until new batches of Alferon® inventory and API can be produced, filled and finished, and released by the FDA for commercial sale. (Please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Manufacturing” above for more information).

Alferon® LDO has been approved for pre-clinical testing for possible use as prophylaxis and treatment against influenza. While the studies to date have been encouraging, preliminary testing in the laboratory and in animal models is not necessarily predictive of successful results in clinical testing or human treatment. No assurance can be given that similar results will be observed in clinical trials. Use of Alferon® as a possible treatment of influenza requires prior regulatory approval. In October 2009, we originally submitted a protocol to the FDA proposing to conduct a Phase II, double-blind, adaptive-design, randomized, placebo-controlled, dose-ranging study of Alferon® LDO for the prophylaxis and treatment of seasonal and pandemic influenza of more than 200 subjects. In December 2010, the FDA authorized this Phase II, double-blind, adaptive-design, randomized, placebo-controlled, dose-ranging study of Alferon® LDO for the prophylaxis and treatment of seasonal and pandemic influenza of more than 200 subjects. Our Phase II study has been delayed. The outcome of this confirmatory study, if and when resumed, will allow us to better evaluate the potential effectiveness of this product and to proceed with this study of seasonal and pandemic influenza. We are unable to provide any assurances that the Phase II Alferon® LDO study for the prophylaxis and treatment of seasonal and pandemic influenza will be undertaken.

If we are unable to gain necessary FDA approvals related to Ampligen® and Alferon® on a timely basis, our operations most likely will be materially and/or adversely affected. Additionally, if we are unable to generate the additional data, successfully complete inspections or obtain approvals as required by the FDA on a timely manner, or at all, or determine that any of our clinical studies are not cost/justified to undertake or if, for that or any other reason, Ampligen®, Alferon® or one of our other products or production processes do not receive necessary regulatory approval in the U.S. or elsewhere:


•	our ability to generate revenues to sustain our operations will be substantially impaired, which would increase the likelihood that we would need to obtain additional financing for our other development efforts;


•	our reputation among investors might be harmed, which might make it more difficult for us to obtain equity capital on attractive terms or at all; and


•	our profitability would be delayed, our business will be materially harmed and our stock price may be adversely affected.

Biotechnology stock prices, including our stock price, have declined significantly in certain instances where companies have failed to meet expectations with respect to FDA approval or the timing for FDA approval.

We may continue to incur substantial losses and our future profitability is uncertain.

We last reported net profit from 1985 through 1987. Since 1987, with a major emphasis on new drug diagnostic and development, we have incurred substantial operating losses, as we pursued our clinical trial effort to get our experimental drug, Ampligen®, approved. As of June 30, 2015, our accumulated deficit was approximately $285,912,000. We have not yet generated

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significant revenues from our products and may incur substantial and increased losses in the future. We cannot assure that we will ever achieve significant revenues from product sales or become profitable. We require, and will continue to require, the commitment of substantial resources to develop our products. We cannot assure that our product development efforts will be successfully completed or that required regulatory approvals will be obtained or that any products will be manufactured and marketed successfully, or be profitable.

We most likely will require additional financing which may not be available. The limitation on the number of shares of common stock available for financing without prior stockholder approval eventually may hinder our ability to raise additional funding.

The development of our products requires the commitment of substantial resources to conduct the time consuming research, preclinical development, and clinical trials that are necessary to bring pharmaceutical products to market. As of June 30, 2015, we had approximately $15,714,000 in cash, cash equivalents and marketable securities (inclusive of approximately $13,872,000 in Marketable Securities). However, if we are unable to commercialize and sell Ampligen® or Alferon® LDO and/or recommence material sales of Alferon N Injection®, our operations, financial position and liquidity may be adversely impacted.

In its CRL, the FDA communicated that Hemispherx should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analyses. Until we undertake the end-of-review conference(s) with the FDA, we are unable to reasonably estimate the nature, costs, necessary efforts to obtain FDA clearance or anticipated completion dates of any additional clinical study or studies. Utilizing the industry norms for undertaking a Phase III clinical study, we estimate upon acceptance of the study's design that it would take approximately 18 months to three years to complete a new well-controlled Ampligen® clinical study for resubmission to the FDA. It can be reasonably anticipated that the time and cost to undertake clinical trial(s), studies and data analysis are beyond our current financial resources without gaining access to additional funding. The actual duration to complete the clinical study may be different based on the length of time it takes to design the study and obtain FDA's acceptance of the design, the final design of an acceptable Phase III clinical study design, availability of suitable participants and clinical sites along with other factors that could impact the implementation of the study, analysis of results or requirements of the FDA and/or other governmental organizations.

Given the challenging economic conditions, we continue to review every aspect of our operations for cost and spending reductions to assure our long-term financial stability while maintaining the resources necessary to achieve our primary objectives of obtaining NDA approval of Ampligen® along with the manufacturing, marketing and distribution of our products, including Alferon N Injection®. We may also need additional capital to eventually commercialize and sell Ampligen® or Alferon® LDO and/or recommence and increase sales of Alferon N Injection® or our other products. We anticipate considering multiple options in an attempt to secure funding, including but not limited to such methods as the sales of additional equity, licensing agreements, partnering with other organizations, debt financing or other sources of capital.

In this regard, on July 23, 2012, we entered into a New Equity Distribution Agreement with Maxim (the “EDA”) pursuant to which we may sell up to $75,000,000 worth of our shares of Common Stock from time to time through Maxim, as sales agent (See Part I; Item 2 - “Management's Discussion and Analysis of Financial Condition and Results of Operations; Liquidity and Capital Resources”). We cannot assure how much funding will be obtained from the EDA or whether it will be sufficient in conjunction with current financial resources to permit us to take all actions needed to obtain FDA approval for Ampligen® and manufacturing, commercialization, marketing and distribution of our products.

Our ability to raise additional funds from the sale of equity securities may be limited due to limitations on our ability to sell stock for funding purposes. Pursuant to our Amended and Restated Certificate of Incorporation, the purpose for which 75,000,000 of 150,000,000 of our authorized shares (the “Restricted Shares”) may be utilized is limited. Specifically, without stockholder approval, the Restricted Shares can only be issued where such issuance would be primarily in connection with strategic transactions or other non-fundraising purpose that met certain significant criteria. In this regard, 1,137,684 shares are authorized but unissued and unreserved at June 30, 2015 with an additional 72,365,463 of the Restricted Shares approved by Stockholders for certain generally defined business purposes.

There can be no assurances that we can obtain the requisite stockholder approval to use any additional Restricted Shares for funding purposes or raise adequate funds from other sources. If we are unable to obtain additional funding, through the New EDA or otherwise, our ability to develop our products, commercially produce inventory or continue our operations may be materially adversely affected.

We have recently concluded talks to enter into a strategic alliance to develop multiple projects with Bioclones (Pty) Ltd. ("Bioclones"), a leading South African biotechnology company. If we are unable to finalize our arrangement with Bioclones, obtain regulatory approval for these projects, jointly obtain source funding through Bioclones to initiate the projects, and obtain positive test results at the conclusion of the projects, our operations may be materially harmed and our stock adversely affected.

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On June 25, 2014, Bioclones and Hemispherx concluded strategic discussions in Johannesburg with three principle goals; 1) initiating studies utilizing Ampligen® as a potential adjuvant enhancement of Bioclones' therapeutic cancer vaccine, currently in trials in Cape Town, including pre-clinical studies followed, potentially, by a Phase 1 clinical trial; 2) seeking South African Medicine's Control Council approval to conduct trials using Alferon® to eradicate the HIV virus in patients highly responsive to anti-retroviral therapy (HAART); and 3) initiating a joint effort to obtain commercial registration of both Ampligen® and Alferon® in the South African markets. The first clinical program builds on the Bioclones patented (US Patent 7,981,673 entitled "Process for the maturation of dendritic cells and a vaccine") therapeutic human dendritic cell (DC) cancer vaccination approach. This invention provides a method of producing mature DCs in vitro, which comprises the step of culturing the immature DCs, thereafter exposing said cells to tumor antigens before administration to patients. The team has successfully obtained the necessary Ethics approval to use Ampligen® as an adjuvant in the Bioclones pre-clinical cancer immunotherapy program utilizing patient derived samples. Pre-clinical studies will be directed towards the potential treatment of breast cancer in particular, followed by prostate cancer. These studies are part of the effort to develop patient-specific DC immunotherapy vaccines against breast cancer and prostate cancer, which elicit an immune response that will target and kill cancer cells. Human DCs matured with Ampligen® and transfected with autologous tumor-specific mRNA are designed to elicit a potent and autologous tumoricidal antigen-specific cytotoxic response to the cancer. This strategic alliance is subject to our entering into a formal agreement on any or all of the above points of understanding. Our current efforts have been mainly directed towards the Ebola virus disease as well as the recent developments on our CFS initiatives, which has required our personnel to devote more of our time and resources towards these initiatives. We have informed Bioclones of our intention to put on hold any formal agreement until such time Bioclones would be able to obtain funding to initiate these HIV initiatives. We have also informed Bioclones that we would provide Ampligen® on an as needed basis for their clinical programs as long as adequate supply exists. We cannot assure you that we will enter into a formal agreement, that these clinical trial approvals will be authorized in South Africa, in a timely fashion or at all, or that Bioclones will complete these trials. We cannot assure you that Bioclones and the Company will be able to jointly raise the necessary resources to develop these projects and, even if we believe that data collected from these preclinical studies and clinical trials of these product candidates are promising, this data has not been, and may not be in the future, sufficient to support marketing approval by the appropriate regulatory body, and regulatory interpretation, safety and efficacy of these data and procedures may be determined to be unfavorable.

Our Alferon N Injection® Commercial Sales were halted due to lack of finished goods inventory. If we are unable to gain the necessary FDA approvals related to Alferon®, our operations most likely will be materially and/or adversely affected.

Commercial sales of Alferon N Injection® were halted in March 2008 when our finished goods inventory expired. The production of Alferon N Injection® from the Work-In-Process Inventory was restarted in May 2010, continued into January 2011 with its conversion into API.

In April 2012, FDA reviewers raised certain questions about the status of our existing lots of older Work-In-Process Alferon® materials and Alferon® API, which would need to be released by the FDA before those materials could be used in commercial product. After conducting all of the appropriate tests on samples of the inventory during 2013, we concluded that we could not alleviate certain questions the FDA had about the older Work-In-Process Alferon N Injection® and their remaining dollar value has been written-off. Commercial sales of Alferon® will not resume until new batches of Alferon® inventory and API can be produced, filled and finished, and released by the FDA for commercial sale.

While our facility is FDA approved under the BLA by the FDA for Alferon®, this status will need to be reaffirmed upon the completion of the facility's upgrades for Alferon®. We cannot provide any guarantee that the facility will necessarily pass a FDA pre-approval inspection for Ampligen® or Alferon® manufacture, which are conducted in separately dedicated areas within the overall New Brunswick manufacturing complex. Please see “There is no assurance that our manufacturing facility will again be granted a BLA certification by the FDA upon completion of the manufacturing enhancements or return to commercial, large-scale production” below for more information.

If we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon® inventory, our operations most likely will be materially and/or adversely affected. For more information on Alferon N Injection® regarding potential commercial sales, please see PART I, Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations; Manufacturing”.

In light of these contingencies, there can be no assurances that the approved Alferon N Injection® product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

We may not be profitable unless we can protect our patents and/or receive approval for additional pending patents.

We need to preserve and acquire enforceable patents covering the use of Ampligen® for a particular disease in order to obtain exclusive rights for the commercial sale of Ampligen® for such disease. We obtained all rights to Alferon N Injection®,

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and we plan to preserve and acquire enforceable patents covering its use for existing and potentially new diseases. Our success depends, in large part, on our ability to preserve and obtain patent protection for our products and to obtain and preserve our trade secrets and expertise. Certain of our know-how and technology is not patentable, particularly the procedures for the manufacture of our experimental drug, Ampligen®. We also have been issued patents on the use of Ampligen® in combination with certain other drugs for the treatment of chronic Hepatitis B virus, chronic Hepatitis C virus, and a patent which affords protection on the use of Ampligen® in patients with Chronic Fatigue Syndrome. We have not yet been issued any patents in the United States for the use of Ampligen® as a sole treatment for any of the cancers which we have sought to target.

We continually review our patents’ rights to determine whether they have continuing value. Such review includes an analysis of the patent’s ultimate revenue and profitability potential. In addition, Management’s review addresses whether each patent continues to fit into our strategic business plans for Ampligen®, Alferon N Injection® and Alferon® LDO. One U.S. patent relating to our Alferon® product expired on April 2, 2013 (#5,503,828) and another on October 14, 2014 (#5,676,942) (see discussion below on patent #5,503,828 and #5,676,942).

In 2014, we filed for three new patents that are currently pending. One patent pending is for use of Ampligen as a vaccine adjuvant for use with seasonal influenza vaccine to induce an enhanced immune response. The second is for use of Ampligen as a method of diagnosing and stabilizing CFS symptoms in patients. The third is for use of Alferon N Injection® as a possible treatment for Oseltamivir Resistant Avian Origin Influenza A (H7N9 virus). In 2013, we were granted four new patents, one in Singapore for the use of Ampligen to initiate innate immunity and to treat or prevent viral infections and tumors, and three for the use of Alferon LDO to treat bacterial or protozoan infections in Australia, New Zealand and Singapore. In 2012, we were granted two new patents, one in Australia and the other in New Zealand, both for the use of Ampligen to initiate innate immunity and to treat or prevent viral infections and tumors.

Alferon® composition patent #5,503,828 which expired in April 2013, relates to the manufacturing process for Alferon® Active Pharmaceutical Ingredient (“API”), a complex mixture of natural interferon species that is manufactured from human leukocytes obtained from human blood donors. In addition, while it is the current standard by the FDA to treat biological drug products like interferon as “Well Characterized” biologics, a process for which chemical entities can have their identity, purity, impurities, potency, and quality controlled by chemical testing, Alferon®, as a natural interferon, does not lend itself well to such testing. Moreover, FDA continues to require that each lot or Alferon we produce be tested and released by the FDA before it can be distributed for commercial sales. Because of the complexity of the Alferon manufacturing process and these additional regulatory requirements, we believe that potential manufacturers of generic, or so-called “bio-similar,” drug products are focused on developing recombinant interferon products, rather than natural interferon products. For these reasons, we believe the expiration of this Alferon® composition patent in April 2013 should have no or little impact on the Company. Additionally at the completion of the facility enhancement and receipt of the FDA certification for the revised Alferon® manufacturing process and techniques in New Brunswick, NJ, it is our intention to file for additional patent protection.

Alferon® patent #5,676,942 which expired on October 14, 2014 and Alferon® patent #5,989,441 which was set to expire on December 22, 2017 but we let lapse, relate to a manufacturing methodology which is no longer in use. For this reason, we believe the expiration of these Alferon® patens should have no impact on the Company.

With respect to Ampligen®, the main U.S. CFS treatment patent (#6,130,206) expires October 10, 2017. Our main patents covering HIV treatment (#4,820,696, #5,063,209, and #5,091,374) expired on April 11, 2006, November 5, 2008, and February 25, 2009, respectively. Our U.S. Ampligen® Trademark (#73/617,687) has been renewed through December 6, 2018. New therapeutic use patent applications are pending including new patent applications for composition of alternative matter. On May 13, 2014, the United States Patent Office issued patent U.S. 8,722,874 titled “Double-Stranded Ribonucleic Acids with Rugged Physiochemical Structure and Highly Specific Biologic Activity” to inventors Carter, et al. and assignee Hemispherx Biopharma, Inc. The patent claims a novel form of rugged dsRNA. Rugged dsRNA are nucleic acids with a unique composition and physical characteristic identified with high specificity of binding to Toll-Like Receptor 3 (TLR3), thereby conveying an important range of therapeutic opportunities. The newly discovered form of dsRNA has increased bioactivity and binding affinity to the TLR 3 receptor because of its reduced tendency to form branched dsRNA which can inhibit receptor binding. Pharmaceutical formulations containing the newly discovered nucleic acid as active ingredients, and methods of treatment with those formulations are also described in the issued patent. The issuance of U.S. Patent 8,722,874 will help ensure that Hemispherx Biopharma retains patent protection for novel formulations of Ampligen® products until at least 2029.

We cannot assure that our competitors will not seek and obtain patents regarding the use of similar products in combination with various other agents, for a particular target indication prior to our doing so. If we cannot protect our patents covering the use of our products for a particular disease, or obtain additional patents, we may not be able to successfully market our products.

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The patent position of biotechnology and pharmaceutical firms is highly uncertain and involves complex legal and factual questions.

To date, no consistent policy has emerged regarding the breadth of protection afforded by pharmaceutical and biotechnology patents. There can be no assurance that new patent applications relating to our products, process or technology will result in patents being issued or that, if issued, such patents will afford meaningful protection against competitors with similar technology. It is generally anticipated that there may be significant litigation in the industry regarding patent and intellectual property rights. Such litigation could require substantial resources from us and we may not have the financial resources necessary to enforce the patent rights that we hold. No assurance can be made that our patents will provide competitive advantages for our products, process and technology or will not be successfully challenged by competitors. No assurance can be given that patents do not exist or could not be filed which would have a materially adverse effect on our ability to develop or market our products or to obtain or maintain any competitive position that we may achieve with respect to our products. Our patents also may not prevent others from developing competitive products or process using related technology.

There can be no assurance that we will be able to obtain necessary licenses if we cannot enforce patent rights we may hold. In addition, the failure of third parties from whom we currently license certain proprietary information or from whom we may be required to obtain such licenses in the future, to adequately enforce their rights to such proprietary information, could adversely affect the value of such licenses to us.

If we cannot enforce the patent rights we currently hold we may be required to obtain licenses from others to develop, manufacture or market our products. There can be no assurance that we would be able to obtain any such licenses on commercially reasonable terms, if at all. We currently license certain proprietary information from third parties, some of which may have been developed with government grants under circumstances where the government maintained certain rights with respect to the proprietary information developed. No assurances can be given that such third parties will adequately enforce any rights they may have or that the rights, if any, retained by the government will not adversely affect the value of our license.

There is no guarantee that our trade secrets will not be disclosed or known by our competitors.

To protect our rights, we require all employees and certain consultants to enter into confidentiality agreements with us. There can be no assurance that these agreements will not be breached, that we would have adequate and enforceable remedies for any breach, or that any trade secrets of ours will not otherwise become known or be independently developed by competitors.

We have limited marketing and sales capability. If we are unable to obtain additional distributors and our current and future distributors do not market our products successfully, we may not generate significant revenues or become profitable.

We have limited marketing and sales capability. We are dependent upon existing and, possibly future, marketing agreements and third party distribution agreements for our products in order to generate significant revenues and become profitable. As a result, any revenues received by us will be dependent in large part on the efforts of third parties, and there is no assurance that these efforts will be successful.

Our commercialization strategy for Ampligen® for CFS, if and when it is approved for marketing and sale by the FDA, may include licensing/co-marketing agreements utilizing the resources and capacities of a strategic partner(s). We continue to seek a world-wide marketing partner with the goal of having a relationship in place before approval is obtained. In parallel to partnering discussions, appropriate pre-marketing activities will be undertaken. It is our current intention to control manufacturing of Ampligen® on a world-wide basis.

Our commercialization strategy for Alferon N Injection® may include the utilization of internal functions and/or licensing/co-marketing agreements that would utilize the resources and capacities of one or more strategic partners. Accordingly, we have engaged Armada Healthcare to undertake the marketing, education and sales of Alferon N Injection® throughout the United States along with GP Pharm for both Ampligen® and Alferon® in Argentina along with other South and Latin American countries.

We cannot assure that our U.S. or foreign marketing strategy will be successful or that we will be able to establish future marketing or third party distribution agreements on terms acceptable to us, or that the cost of establishing these arrangements will not exceed any product revenues. Our inability to establish viable marketing and sales capabilities would most likely have a materially adverse effect on us. There can be no assurances that the approved Alferon N Injection® product will be returned to prior sales levels.

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There are no long-term agreements with suppliers of required materials and services for Ampligen® and there are a limited number of raw material suppliers. If we are unable to obtain the required raw materials and/or services, we may not be able to manufacture Ampligen®.

A number of essential raw materials are used in the production of Ampligen® as well as packaging materials utilized in the fill and finish process. We do not have, but continue to work towards having long-term agreements for the supply of such materials, when possible. There can be no assurance we can enter into long-term supply agreements covering essential materials on commercially reasonable terms, if at all.

There are a limited number of suppliers in the United States available to provide the raw and packaging materials for use in manufacturing Ampligen®. At present, we do not have any agreements with third parties for the supply of any of these materials. We have established relevant manufacturing operations within our New Brunswick, New Jersey facility for the production of Ampligen® polymers from raw materials in order to obtain a more consistent manufacturing basis in the quantities necessary for clinical testing. In September 2011 and similar to our prior agreements, Hollister-Stier has agreed to undertake the manufacturing sets to formulate, fill, finish and package Ampligen® from the key polymers that we would supply. Hollister-Stier would have the right of first refusal to manufacture certain Ampligen® related products.

If we are unable to obtain or manufacture the required materials, and/or procure services needed in the final steps in the manufacturing process, we may be unable to manufacture Ampligen®. The costs and availability of products and materials we need for the production of Ampligen® are subject to fluctuation depending on a variety of factors beyond our control, including competitive factors, changes in technology, ownership of intellectual property, FDA and other governmental regulations. There can be no assurance that we will be able to obtain such products and materials on terms acceptable to us or at all. For more information on Ampligen® manufacturing, please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Manufacturing” above.

There are a limited number of organizations in the United States available to provide the final manufacturing steps of formulation, fill, finish and packing sets for Alferon N Injection® and Ampligen®.

There are a limited number of organizations in the United States available to provide the final steps in the manufacturing for Alferon N Injection® and Ampligen®. To formulate, fill, finish and package our products (“fill and finish”), we require a FDA approved third party CMO.

In January 2012, we agreed to a Technology, Transfer, Validation and Commercial Supply Agreement with Althea Technologies, Inc. regarding the fill and finish process for Alferon N Injection®. As we no longer have any existing inventory, commercial sales of Alferon® will not resume until new batches of Alferon® inventory and API can be produced, filled and finished, and released by the FDA for commercial sale.

Pursuant our Supply Agreement with Hollister-Stier, they will formulate, fill, finish and package Ampligen® from the key raw materials that we would supply. We are unable to provide any assurances that the FDA will approve the inventory manufactured by us or produced by Hollister-Stier. If this finish goods inventory is not granted approval by the FDA, our operations may be materially adversely affected. This Supply Agreement expired on March 11, 2014. The Company is working towards an amendment to the existing Supply Agreement which may contain additional fees as part of entering into the extension. In October 2014, we entered into a purchase commitment with a contract manufacturer (Hollister Stier) for approximately $700,000 for the manufacture of clinical batches of Ampligen®.

If we are unable to procure services needed in the final steps in the manufacturing process, we may be unable to manufacture Alferon N Injection® and/or Ampligen®. The costs and availability of products and materials we need for the production of Ampligen® and the commercial production of Alferon N Injection® and other products which we may commercially produce are subject to fluctuation depending on a variety of factors beyond our control, including competitive factors, changes in technology, and FDA and other governmental regulations and there can be no assurance that we will be able to obtain such products and materials on terms acceptable to us or at all. For more information on Ampligen® and Alferon N Injection® manufacturing, please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Manufacturing” above.

There is no assurance that our manufacturing facility will again be granted a BLA certification by the FDA upon completion of the manufacturing enhancements or return to commercial, large-scale production.

We recently completed our $8 million facility enhancement project which should provide for a higher capacity, more cost effective manufacturing process for the production of Alferon N Injection®. The production of new Alferon® API inventory

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commenced in February 2015. While the facility is approved by FDA under the BLA for Alferon®, this status will need to be reaffirmed upon the completion of the facility's enhancements prior to commercial sale of newly produced inventory product. If and when we obtain a reaffirmation of FDA BLA status, we will need FDA approval to release the final product confirming the quality and stability to allow commercial sales to resume. For more information, please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Manufacturing” above for more information. There can be no assurance the BLA status will be recertified by the FDA upon the completion of the enhancement process or that the manufacturing facility will return to commercial, large-scale production for Alferon®. Additionally, there can be no assurance that any given product will be determined to be safe and effective, or capable of being manufactured under applicable quality standards.

Only if and when our BLA status is recertified by the FDA to produce Alferon® API at our enhanced manufacturing facility and Althea gains FDA’s approval to formulate, fill and finish Alferon, can batches of Alferon® be released by the FDA for commercial sales. We are unable to provide any assurances that the FDA will approve our enhanced manufacturing process and/or newly created finish product lots formulated, filled and finished at Althea. Without FDA approval, our Alferon N Injection® will not be considered suitable for commercial sales.

In light of these contingencies, there can be no assurances that the approved Alferon N Injection® product will be returned to commercial production or sale on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

There is no assurance that upon successful manufacture of a drug on a limited scale basis for investigational use will lead to a successful transition to commercial, large-scale production.

Changes in methods of manufacturing, including commercial scale-up, may affect the chemical structure of Ampligen® and other RNA drugs, as well as their safety and efficacy. The transition from limited production of pre-clinical and clinical research quantities to production of commercial quantities of our products will involve distinct management and technical challenges and may require additional management, technical personnel and capital to the extent such manufacturing is not handled by third parties. While we believe that the Company could successfully upgrade our production capability at our New Brunswick, NJ facility in a commercial scale-up of Ampligen®, there can be no assurance that our manufacturing will be successful or that any given product will be determined to be safe and effective, or capable of being manufactured under applicable quality standards, economically, and in commercial quantities, or successfully marketed.

We have limited manufacturing experience for Ampligen® and Alferon®. We may not be profitable unless we can produce Ampligen®, Alferon® or other products in commercial quantities at costs acceptable to us .

Satisfactory inspection by the FDA of both our Ampligen® and Alferon® manufacturing process is required before commercial sale of project would be allowed. The CRL from the FDA on February 1, 2013, requests evaluation of variation between lots of Ampligen® tested in the development process and recommends tighter control of the Ampligen® manufacturing process. We cannot provide any guarantee that the facility will pass a FDA pre-approval inspection for Ampligen® or Alferon® manufacture, which are conducted in separately dedicated areas within the overall New Brunswick manufacturing complex. The failure to obtain FDA approval for either of our manufacturing process areas would most likely have a materially adverse impact upon us.

Ampligen® has been produced to date in limited quantities for use in our clinical trials, and we are dependent upon a qualified third party supplier for the manufacturing, filling, finish and packaging process. The failure to continue these arrangements or to achieve other such arrangements on satisfactory terms could have a material adverse effect on us. In furtherance of the capital improvement program at our New Brunswick, NJ facility to upgrade our manufacturing capability to produce bulk quantities of Alferon N Injection® API, the validation phase of the Alferon® manufacturing project is currently underway. While the facility is approved by FDA under the BLA for Alferon®, this status will need to be reaffirmed upon the completion of the facility's enhancements prior to commercial sale of newly produced inventory product. If and when we obtain a reaffirmation of FDA BLA status, we will need FDA approval to release the final product confirming the quality and stability to allow commercial sales to resume. For more information, please see Part 1, Item II: “Management's Discussion and Analysis of Financial Condition and Results of Operations Business; Our Products; Manufacturing” above. In light of these contingencies, there can be no assurances that the approved Alferon N Injection® product will be returned to production on a timely basis, if at all. The failure to obtain FDA approval of any of our manufacturing process would most likely have a materially adverse impact upon us.

Also to be successful, our products must be manufactured in commercial quantities in compliance with regulatory requirements and at acceptable costs. We believe, but cannot assure, that our enhancements to our manufacturing facilities will be adequate for our future needs for the production of our proposed products for large-scale commercialization. We intend to ramp

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up our existing facility and/or utilize third party facilities if and when the need arises or, if we are unable to do so, to build or acquire commercial-scale manufacturing facilities. We will need to comply with regulatory requirements for such facilities, including those of the FDA pertaining to cGMP requirements or maintaining our BLA status. There can be no assurance that such facilities can be used, built, or acquired on commercially acceptable terms, or that such facilities, if used, built, or acquired, will be adequate for the production of our proposed products for large-scale commercialization or our long-term needs.

We have never produced Ampligen®, Alferon® or any other products in large commercial quantities. We must manufacture our products in compliance with regulatory requirements in large commercial quantities and at acceptable costs in order for us to be profitable. We intend to utilize third party manufacturers and/or facilities if and when the need arises or, if we are unable to do so, to build or acquire commercial-scale manufacturing facilities. If we cannot manufacture commercial quantities of Ampligen® and/or Alferon®, or continue to maintain third party agreements for its manufacture at costs acceptable to us, our operations will be significantly affected. If and when the Ampligen® NDA is approved, we may need to find an additional vendor to manufacture the product for commercial sales. Also, each production lot of Alferon N Injection® is subject to FDA review and approval prior to releasing the lots to be sold. This review and approval process could take considerable time, which would delay our having product in inventory to sell, nor can we provide any assurance as to the receipt of FDA approval of our finished inventory product. There can be no assurances that the Ampligen® and/or Alferon® can be commercially produced at costs acceptable to us.

Rapid technological change may render our products obsolete or non-competitive.

The pharmaceutical and biotechnology industries are subject to rapid and substantial technological change. Technological competition from pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying into the field is intense and is expected to increase. Most of these entities have significantly greater research and development capabilities than us, as well as substantial marketing, financial and managerial resources, and represent significant competition for us. There can be no assurance that developments by others will not render our products or technologies obsolete or noncompetitive or that we will be able to keep pace with technological developments.

Our products may be subject to substantial competition.

Ampligen®. Competitors may be developing technologies that are, or in the future may be, the basis for competitive products. Some of these potential products may have an entirely different approach or means of accomplishing similar therapeutic effects to products being developed by us. These competing products may be more effective and less costly than our products. In addition, conventional drug therapy, surgery and other more familiar treatments may offer competition to our products. Furthermore, many of our competitors have significantly greater experience than we do in preclinical testing and human clinical trials of pharmaceutical products and in obtaining FDA, HPB and other regulatory approvals of products. Accordingly, our competitors may succeed in obtaining FDA, HPB or other regulatory product approvals more rapidly than us. There are no drugs approved for commercial sale with respect to treating CFS in the United States. The dominant competitors with drugs to treat disease indications in which we plan to address include Pfizer, GlaxoSmithKline, Merck & Co., Novartis and AstraZeneca. Biotech competitors include Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta. These potential competitors are among the largest pharmaceutical companies in the world, are well known to the public and the medical community, and have substantially greater financial resources, product development, and manufacturing and marketing capabilities than we have. Although we believe our principal advantage is the unique mechanism of action of Ampligen® on the immune system, we cannot assure that we will be able to compete.

Alferon N Injection®. Our competitors are among the largest pharmaceutical companies in the world, are well known to the public and the medical community, and have substantially greater financial resources, product development, and manufacturing and marketing capabilities than we have. Alferon N Injection® currently competes with Merck's injectable recombinant alpha interferon product (INTRON® A) for the treatment of genital warts. In addition, other pharmaceutical firms offer self-administered topical cream, for the treatment of external genital and perianal warts such as Graceway Pharmaceuticals (Aldara®), Watson Pharma (Condylox®) and MediGene (Veregen®). Alferon N Injection® also competes with surgical, chemical, and other methods of treating genital warts. We cannot assess the impact products developed by our competitors, or advances in other methods of the treatment of genital warts, will have on the commercial viability of Alferon N Injection®. If and when we obtain additional approvals of uses of this product, we expect to compete primarily on the basis of product performance. Our competitors have developed or may develop products (containing either alpha or beta interferon or other therapeutic compounds) or other treatment modalities for those uses. There can be no assurance that, if we are able to obtain regulatory approval of Alferon N Injection® for the treatment of new indications, we will be able to achieve any significant penetration into those markets. In addition, because certain competitive products are not dependent on a source of human blood cells, such products may be able to be produced in greater volume and at a lower cost than Alferon N Injection®. Currently, our wholesale price on a per unit basis of Alferon N Injection® is higher than that of the competitive recombinant alpha and beta interferon products. Please see “We

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may not be profitable unless we can protect our patents and/or receive approval for additional pending patents" above for additional information.

General. Other companies may succeed in developing products earlier than we do, obtaining approvals for such products from the FDA more rapidly than we do, or developing products that are more effective than those we may develop. While we will attempt to expand our technological capabilities in order to remain competitive, there can be no assurance that research and development by others or other medical advances will not render our technology or products obsolete or non-competitive or result in treatments or cures superior to any therapy we develop.

Possible side effects from the use of Ampligen® or Alferon N Injection® could adversely affect potential revenues and physician/patient acceptability of our product.

Ampligen®. We believe that Ampligen® has been generally well tolerated with a low incidence of clinical toxicity, particularly given the severely debilitating or life threatening diseases that have been treated. A mild flushing reaction has been observed in approximately 15-20% of patients treated in our various studies. This reaction is occasionally accompanied by a rapid heartbeat, a tightness of the chest, urticaria (swelling of the skin), anxiety, shortness of breath, subjective reports of “feeling hot”, sweating and nausea. The reaction is usually infusion-rate related and can generally be controlled by reducing the rate of infusion. Other adverse side effects include liver enzyme level elevations, diarrhea, itching, asthma, low blood pressure, photophobia, rash, visual disturbances, slow or irregular heart rate, decreases in platelets and white blood cell counts, anemia, dizziness, confusion, elevation of kidney function tests, occasional temporary hair loss and various flu-like symptoms, including fever, chills, fatigue, muscular aches, joint pains, headaches, nausea and vomiting. These flu-like side effects typically subside within several months.

The FDA in its February 1, 2013 CRL, set forth the reasons for not approving Ampligen® at this time and provided recommendations to address certain of the outstanding issues. The Agency stated that the submitted data do not provide substantial evidence of efficacy of Ampligen® for the treatment of CFS and that the data do not provide sufficient information to determine whether the product is safe for use in CFS due to the limited size of the safety database and multiple discrepancies within the submitted data.

If approved, one or more of the potential side effects of the drug might deter usage of Ampligen® in certain clinical situations and therefore, could adversely affect potential revenues and physician/patient acceptability of our product.

Alferon N Injection®. At present, Alferon N Injection® is approved for the intralesional (within the lesion) treatment of refractory or recurring external genital warts in adults. In clinical trials conducted for the treatment of genital warts with Alferon N Injection®, patients did not experience serious side effects; however, there can be no assurance that unexpected or unacceptable side effects will not be found in the future for this use or other potential uses of Alferon N Injection® which could threaten or limit such product's usefulness.

We may be subject to product liability claims from the use of Ampligen®, Alferon N Injection®, or other of our products which could negatively affect our future operations. We have limited product liability and clinical trial insurance.

We maintain a limited amount of Products Liability and Clinical Trial insurance coverage world-wide for Ampligen® and Alferon® due to the minimal amount of historical loss claims regarding these products in the marketplace. Any claims against our products, Ampligen®, Alferon N Injection® and Alferon® LDO, could have a materially adverse effect on our business and financial condition.

We face an inherent business risk of exposure to product liability claims in the event that the use of Ampligen®, Alferon N Injection® or other of our products results in adverse effects. This liability might result from claims made directly by patients, hospitals, clinics or other consumers, or by pharmaceutical companies or others manufacturing these products on our behalf. Our future operations may be negatively affected from the litigation costs, settlement expenses and lost product sales inherent to these claims. While we will continue to attempt to take appropriate precautions, we cannot assure that we will avoid significant product liability exposure.

The loss of services of key personnel including Dr. William A. Carter could hurt our chances for success.

Our success is dependent on the continued efforts of our staff, especially certain doctors and researchers along with the continued efforts of Dr. William A. Carter because of his position as a pioneer in the field of nucleic acid drugs, his being the co-inventor of Ampligen®, and his knowledge of our overall activities, including patents and clinical trials. The loss of the services of Dr. Carter or other personnel key to our operations could have a material adverse effect on our operations and chances for success. As a cash conservation measure, we have elected to discontinue the Key Man life insurance on the life of Dr. Carter. An employment agreement continues to exist with Dr. Carter that, as amended, runs until December 31, 2016. However, Dr. Carter

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has the right to terminate his employment upon not less than 30 days prior written notice. The loss of Dr. Carter or other key personnel or the failure to recruit additional personnel as needed could have a materially adverse effect on our ability to achieve our objectives.

Uncertainty of health care reimbursement for our products.

Our ability to successfully commercialize our products will depend, in part, on the extent to which reimbursement for the cost of such products and related treatment will be available from government health administration authorities, private health coverage insurers and other organizations. Significant uncertainty exists as to the reimbursement status of newly approved health care products, and from time to time legislation is proposed, which, if adopted, could further restrict the prices charged by and/or amounts reimbursable to manufacturers of pharmaceutical products. We cannot predict what, if any, legislation will ultimately be adopted or the impact of such legislation on us. There can be no assurance that third party insurance companies will allow us to charge and receive payments for products sufficient to realize an appropriate return on our investment in product development.

There are risks of liabilities associated with handling and disposing of hazardous materials.

Our business involves the controlled use of hazardous materials, carcinogenic chemicals, flammable solvents and various radioactive compounds. Although we believe that our safety procedures for handling and disposing of such materials comply in all material respects with the standards prescribed by applicable regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident or the failure to comply with applicable regulations, we could be held liable for any damages that result, and any such liability could be significant. We do not maintain insurance coverage against such liabilities.

A Securities Federal Class Action and Four Shareholder Derivative Actions Have Been Filed Against Us and We May Be Subject to Civil Liabilities.

As described in Part II; Item 1. Legal Proceedings five actions have been filed against Hemispherx and certain of its Officers and Directors: a putative class action alleging violations of the federal securities laws and seeking monetary damages, costs, and attorneys' fees; and four shareholder derivative actions alleging various state law breach of fiduciary duty, waste of corporate assets and unjust enrichment claims along with seeking monetary damages, costs, attorneys' fees, and equitable and injunctive relief. Defending against these suits, even if meritless, can result in substantial costs to us and could divert the attention of our management.

The existence of these proceedings could have a material adverse effect on our ability to access the capital markets to raise additional funds. While Management believes that the lawsuits are without merit, we cannot predict or determine the timing or final outcomes of the lawsuits and are unable to estimate the amount or range of loss that could result from unfavorable outcomes. Adverse results in some or all of these legal proceedings could be material to our results of operations, financial condition or cash flows.

Risks Associated With an Investment in Our Common Stock:

The market price of our stock may be adversely affected by market volatility.

The market price of our common stock has been and is likely to be volatile. This is especially true given the current significant instability in the financial markets. In addition to general economic, political and market conditions, the price and trading volume of our stock could fluctuate widely in response to many factors, including:


•	announcements of the results of clinical trials by us or our competitors;


•	announcements of availability or projections of our products for commercial sale;


•	announcements of legal actions against us and/or settlements or verdicts adverse to us;


•	adverse reactions to products;


•	governmental approvals, delays in expected governmental approvals or withdrawals of any prior governmental approvals or public or regulatory agency comments regarding the safety or effectiveness of our products, or the adequacy of the procedures, facilities or controls employed in the manufacture of our products;


•	changes in U.S. or foreign regulatory policy during the period of product development;


•	developments in patent or other proprietary rights, including any third party challenges of our intellectual property rights;

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•	announcements of technological innovations by us or our competitors;


•	announcements of new products or new contracts by us or our competitors;


•	actual or anticipated variations in our operating results due to the level of development expenses and other factors;


•	changes in financial estimates by securities analysts and whether our earnings meet or exceed the estimates;


•	conditions and trends in the pharmaceutical and other industries;


•	new accounting standards;


•	overall investment market fluctuation;


•	restatement of prior financial results;


•	notice of NYSE MKT non-compliance with requirements; and


•	occurrence of any of the risks described in these "Risk Factors".

Our common stock is listed for quotation on the NYSE MKT. For the six month period ended June 30, 2015, the trading price of our common stock has ranged from $0.33 to $0.20 per share. We expect the price of our common stock to remain volatile. The average daily trading volume of our common stock varies significantly.

In the past, following periods of volatility in the market price of the securities of companies in our industry, securities class action litigation has often been instituted against companies in our industry. In this regard, please see “ A Securities Federal Class Action and Four Shareholder Derivative Actions Have Been Filed Against Us and We May Be Subject to Civil Liabilities " above.

Our stock price may be adversely affected if a significant amount of shares are sold in the public market.

We may issue shares to be used to meet our capital requirements or use shares to compensate employees, consultants and/or Directors. In this regard, we have registered $150,000,000 of securities for public sale pursuant to a universal shelf registration statement and we have been selling shares under this shelf registration statement and the EDA with Maxim. Through June 30, 2015, we had sold an aggregate of approximately 104,505,454 shares under the EDA.

Pursuant to the EDA, we may sell up to $75,000,000 worth of our shares of Common Stock from time to time through Maxim, as sales agent. While we have no obligation to sell any of the Shares and may at any time suspend offers under the EDA or terminate the EDA, the sale of substantial numbers of Shares under the EDA may have an adverse impact on the trading value of the stock.

We are unable to estimate the amount, timing or nature of future sales of outstanding common stock or instruments convertible into or exercisable for our common stock. Sales of substantial amounts of our common stock in the public market, including additional sale of securities pursuant to the EDA with Maxim or otherwise under the universal shelf registration statement or upon exercise of outstanding options, could cause the market price for our common stock to decrease. Furthermore, a decline in the price of our common stock would likely impede our ability to raise capital through the issuance of additional shares of common stock or other equity securities.

Provisions of our Certificate of Incorporation and Delaware law could defer a change of our Management which could discourage or delay offers to acquire us.

Provisions of our Certificate of Incorporation and Delaware law may make it more difficult for someone to acquire control of us or for our stockholders to remove existing management, and might discourage a third party from offering to acquire us, even if a change in control or in Management would be beneficial to our stockholders. For example, our Certificate of Incorporation allows us to issue shares of preferred stock without any vote or further action by our stockholders. Our Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors also has the authority to issue preferred stock without further stockholder approval. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In this regard, on November 2, 2012, we amended and restated our Stockholder Rights Plan (“Rights Plan”) and, under the Rights Plan, our Board of Directors declared a dividend distribution of one Right for each outstanding share of Common Stock to stockholders of record at the close of business on November 29, 2002. Each Right initially entitles holders to buy one-hundredth unit of preferred stock for $30.00 and may be redeemed prior to November 19, 2017, the expiration date, at $0.001 per Right under certain circumstances. The Rights generally are not transferable apart from the common stock and will not be exercisable unless and until a person or group acquires or commences a tender or exchange offer to acquire, beneficial ownership of 15% or more of our common stock. At June 30, 2015, for Dr. Carter, our Chief Executive Officer and President, who already beneficially owns approximately 4.14% of our common stock, the Rights Plan’s threshold will be 20%, instead of 15%.

- 41 -

Special Note Regarding Forward Looking Statements

Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Our research in clinical efforts may continue for the next several years and we may continue to incur losses due to clinical costs incurred in the development of Ampligen® for commercial application. Possible losses may fluctuate from quarter to quarter as a result of differences in the timing of significant expenses incurred and receipt of licensing fees and/or cost recovery treatment revenue.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

We did not have any unregistered sales nor repurchase any of our securities during the six months ended June 30, 2015.

ITEM 3: Defaults upon Senior Securities

None.

ITEM 4: Mine Safety Disclosures

Not Applicable.

ITEM 5: Other Information

- 42 -

ITEM 6: Exhibits

(a) Exhibits



10.1		Vendor Agreement extension with Armada Healthcare, LLC dated July 31, 2015*

10.2		Vendor Agreement extension with Bio Ridge Pharma, LLC dated July 31, 2015*

10.3		Early Access Agreement with Impatients N.V. dated August 3, 2015*(1)

10.4		Sales, Marketing, Distribution, and Supply Agreement with Emerge Health Pty Ltd. dated August 6, 2015*(1)

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company's Chief Executive Officer.

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company's Chief Financial Officer.

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company's Chief Executive Officer.

32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company's Chief Financial Officer.

101		The following materials from Hemispherx’ Quarterly Report on Form 10-Q for the period ended June 30,
		2015 formatted in eXtensible Business Reporting Language (“XBRL”): (i) Condensed Balance Sheets ; (ii)
		Condensed Consolidated Statements of Comprehensive Loss; (iii) Changes in Stockholders' Equity;
		(iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.
*		Filed herewith

(1)		Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

- 43 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	HEMISPHERX BIOPHARMA, INC.

	/s/ William A. Carter
	William A. Carter, M.D.
	Chief Executive Officer

	/s/ Thomas K. Equels
	Thomas K. Equels, Esq.
	Executive Vice Chairman of the Board, Secretary,
	President, General Counsel and Chief Financial Officer

Date: August 12, 2015

- 44 -

ARM ADA

Health Care

July 29, 2015

Dr. William A. Carter Chairman and CEO

Hemispherx Biopharma, Inc. JFK Boulevard

Suite 500

Philadelphia, Pa 19103

Re: Agreement Between Armada Health Care, LLC and Hemispherx Biopharma, Inc.

Dear Dr. Carter,

Armada Health Care would like to request an extension to the above mentioned contracts, initially signed on August 15, 2011 and extended in 2012, 2013 and 2014 subject to the same terms and conditions currently in place.

Please sign this acceptance letter as acknowledgment of the extension through August 14, 2017 and return to my attention via fax or e-mail. I can be reached at 973-564-8004 if you have any questions or concerns.

Regards,

/S/: Ryan Oligino

Ryan Oligino

Vice President

Armada Health Care

Phone: 973-564-8004

Fax: 973-564-8010

/S/: William A. Carter _______________ (signature)

William A. Carter____________________

(print name)

CEO and Chairman___________________

(Title)

_ 7/31/15 ____________________________

(Date)

BIORIDGE

PHARMA

Specially Distributors of Biotech Products

July 29, 2015

Dr. William A. Carter Chairman and CEO

Hemispherx Biopharma, Inc. JFK Boulevard

Suite 500

Philadelphia, Pa 19103

Re: Agreement Between BioRidge Pharma and Hemispherx Biopharma, Inc.

Dear Dr. Carter,

BioRidge Pharma would like to request an extension to the above mentioned contracts, initially signed on August 15, 2011 and extended in 2012, 2013 and 2014 subject to the same terms and conditions currently in place.

Please sign this acceptance letter as acknowledgment of the extension through August 14,

2017 and return to my attention via fax or e-mail. I can be reached at 973-564-8004 if you

have any questions or concerns.

Regards,

/S/: Robert Anderson

Robert Anderson, CFO

Bio Ridge Pharma, LLC Phone: 973-564-8004 Fax: 973-564-8010

/S/: William A. Carter _______________ (signature)

William A. Carter____________________

(print name)

CEO and Chairman___________________

(Title)

_ 7/31/15 ____________________________

(Date)

Redacted Version

EARLY ACCESS AGREEMENT

This exclusive Early Access Agreement (“Agreement”) is made and entered into the 3 ^rd day of August, 2015 , (“ Effective Date ”) by and between

Hemispherx Biopharma, Inc, a company formed and registered under the laws of Delaware and located at One Penn Center, 1617 JFK Boulevard, Suite 500, Philadelphia, PA 19103, U.S.A. (hereinafter referred to as “ HEMISPHERX ”),

and

Impatients N.V., a company formed and registered under the laws of the Netherlands, and located at Pilotenstraat 45, 1059 CH, Amsterdam, The Netherlands (hereinafter referred to as “ IMPATIENTS ”),

hereinafter each of HEMISPHERX and IMPATIENTS, referred individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, HEMISPHERX has developed, and is developing the Product (as defined below), and owns or controls certain patent rights, and technical and scientific information relating to, and the global exclusive rights to distribute, market and sell Product,

WHEREAS, IMPATIENTS specialises under the brand myTomorrows in services related to the supply and distribution of products to patients in Early Access Programs (also referred to as EAP and as defined below) through a patient and physician platform (hereinafter referred to as the “myTomorrows platform”),

WHEREAS, HEMISPHERX is willing to grant IMPATIENTS the exclusive right to develop and execute Early Access Programs in the Territory (as defined below) and to supply quantities of Product to IMPATIENTS for these Early Access Programs in the Territory,

WHEREAS, IMPATIENTS agrees to accept such right and to use the Product for Early Access Programs from HEMISPHERX pursuant to the terms of this Agreement, and

WHEREAS, the Parties wish to set forth the terms and conditions under which HEMISPHERX grants the exclusive right and supplies the Product and IMPATIENTS implements the Early Access Program.

NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the Parties hereto, intending to be legally bound, agree as follows:

1. Definitions

The following terms when used in this Agreement, shall have the meanings set forth in this clause:


1.1	“ Accounting Standards ” with respect to a Party means that such Party shall maintain records and books of accounts in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

1.2

“Affiliate” means, as to any person or entity, any other person or entity, which controls, is controlled by, or is under common control with such person or entity. A person or entity shall be regarded as in control of another entity only if it owns or controls, directly or indirectly, at least fifty percent (50%) of the equity securities or other ownership interests in the subject entity entitled to vote in the election of directors or with the power to direct or elect management of such subject entity.

1.3

“ HEMISPHERX Patents ” means all of the Patents that are (a) under Control by HEMISPHERX or any of its Affiliates as of the Effective Date or at any time during the Term, and (b) reasonably necessary or useful (or, with respect to Patent applications, would be reasonably necessary or useful if such Patent applications were to issue as Patents) for the development, manufacture, or use or sale of the Product.

1.4

“ Applicable Law ” means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity and/or country or other jurisdiction hereunder.

1.5

“ Change of Control ” means when an unaffiliated third party gains control over the management decisions of a Party relating to this Agreement by virtue of (a) the sale of all or substantially all of the assets of the Party to said unaffiliated third party; (b) a sale resulting in more than fifty (50) % of the equity of the Party being held by said unaffiliated third party; (c) a merger, consolidation, recapitalization or reorganization of the Party with or into an unaffiliated third party; (d) the assignment of the rights and obligations pursuant to the Agreement to said unaffiliated third party.

1.6

“ Confidential Information ” means any Information provided orally, visually, in writing or other form by or on behalf of one Party to the other Party in connection with this Agreement, whether prior to, on, or after the Effective Date, including information relating to the terms of this Agreement, the Product (including the Regulatory Documentation and Regulatory Data), any use of the Product, any know-how with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of either Party. Notwithstanding the foregoing, (a) jointly owned Know-How shall be deemed to be the Confidential Information of both Parties, and both Parties shall be deemed to be the receiving Party and the disclosing Party with respect thereto; and (b) after IMPATIENTS proceeds with the EAP, all Regulatory Documentation developed by IMPATIENTS shall be deemed to be the Confidential Information of HEMISPHERX, and HEMISPHERX shall be deemed to be the disclosing Party and IMPATIENTS shall be deemed to be the receiving Party with respect thereto.

1.7

“ Control ” means, with respect to any item of Information, Regulatory Documentation, material, Patent, or other property right existing on or after the Effective Date and during the Term, the possession of the right, whether directly or indirectly, and whether by ownership, license, covenant not to sue, or otherwise (other than by operation of the license and other grants herein), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent, or other property right as provided for herein without violating the terms of any agreement or other arrangement with any third party; provided, however, neither Party shall be deemed to Control any item of Information, Regulatory Documentation, material, Patent, or other property right of a third party if access requires or triggers a payment obligation.

1.8

“ Early Access Program ” or “ EAP ” means the activities directed to (a) the education of physicians and patients regarding the possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization through named-patient use, compassionate use, expanded access and hospital exemption (b) patient and physician outreach related to the platform, (c) the securing of Early Access Approvals, for the use of such treatments, (d) the distribution and sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance activities in accordance with the Pharmacovigilance agreement, attached as Exhibit 6 and/or (f) the collection of data, including but not limited to patient-reported outcomes, doctor-reported experiences and registry data.


1.9	“ EAP Plan ” means the p lan to be agreed by the JSC for the initiation and performance of an Early Access Program for Product in the Field. The EAP Plan will be attached hereto as Exhibit 1.


1.10	“ Early Access Approvals ” means the permissions, exemptions, approvals, authorizations and/or waivers required by Regulatory Authorities for medical treatments, not subject of a Marketing Authorization in the relevant country, to be sold to a pharmacy or wholesaler, to be dispensed to a physician, to be administered to and/or used by a patient.


1.11	“ Field ” means treatment of chronic fatigue syndrome.

1.12

“ First Commercial Sale ” means, with respect to a Product and a country, the first sale for monetary value for ultimate use by the patient of such Product in such country after Marketing Authorization for such Product has been obtained in such country. Sales prior to receipt of Marketing Authorization for such Product, such as so-called “treatment IND sales,” “named patient sales,” or other “compassionate use sales,” shall not be construed as a First Commercial Sale.


1.13	“ Good Manufacturing Practice ” or “ GMP ” means the current good manufacturing practices applicable from time to time to the manufacturing of a Product or any intermediate thereof pursuant to Applicable Law.

1.14

“ Information ” means knowledge of a technical, scientific, business, and other nature, including know-how, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, Regulatory Data, and other biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols; assays, and biological methodology; in each case (whether or not confidential, proprietary, patented or patentable, of commercial advantage or not) in written, electronic or any other form now known or hereafter developed.


1.15	“ Joint Steering Committee or JSC ” means the joint steering committee to be established by the Parties as referred to in Clause 2.

1.16

“ Know How ” means information and materials, whether or not confidential, including, but not limited to, pharmaceutical, chemical, products, economic and commercial information, including and not limited to all market information, strategies and tactics relevant to the Product in the Territory and any lists of physicians and/or clinicians active in the Field in the Territory, technical and non-technical manufacturing process and equipment data and information, product and process validation data, the results of tests on products, reports and results of product assays, pre-clinical and clinical studies, and drawings, plans, diagrams, specifications and/or other documents containing said information relating to the Product.


1.17	“ Manufacturer “ means the legal entity that physically manufactures and/or fills and/or finishes and/or labels and/or stockpiles cGMP grade Product .

1.18

“ Marketing Authorization ” means, with respect to a country, region or other jurisdiction in the Territory and in the Field, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to commercially distribute, sell, or market Product in the Field in such country or other jurisdiction, including, where applicable, (a) pre- and post-approval regulatory approvals (including any prerequisite manufacturing approval or authorization related thereto), and (b) approval of Product labeling in the Field.

1.19

“Net EAP Sales ” means the gross amount invoiced by IMPATIENTS or its affiliates to non-affiliated third parties for the sale of Product, less the following reasonable and customary deductions consistent with IMPATIENTS’ cash or accrual accounting method to the extent applicable to such invoiced amounts (to the extent each is actually incurred and included in the invoiced gross sales price) in accordance with Accounting Standards:


(a)	all trade discounts or rebates;


(b)	amounts for claims, allowances or credits for rejections or returns;


(c)	packaging, handling fees and costs of freight, insurance, sales taxes, duties and other governmental charges (including value added tax), but excluding what is commonly known as income taxes.

The specific deductions taken under, and the general provision of, (a) through (c) above may be adjusted periodically after agreement between both Parties as necessary to reflect amounts actually incurred.

1.20

“ Net Sales ” means the gross amount invoiced by HEMISPHERX or its affiliates to non-affiliated third parties for the sale of Product, less the following reasonable and customary deductions consistent with HEMISPHERX’s cash or accrual accounting method to the extent applicable to such invoiced amounts (to the extent each is actually incurred and included in the invoiced gross sales price) in accordance with Accounting Standards:


(a)	all trade discounts, or rebates;


(b)	amounts for claims, allowances or credits for rejections or returns;;


(c)	packaging, handling fees and costs of freight, insurance, sales taxes, duties and other governmental charges (including value added tax), but excluding what is commonly known as income taxes.

For the avoidance of doubt, Net Sales shall not include sales for resale to Affiliates of HEMISPHERX.

For purpose of this definition 1.20, a sale shall also include a transfer or other disposition for consideration other than cash, in which case such consideration shall be valued at the fair market value thereof. Transfers or dispositions for charitable purposes or for pre-clinical, clinical, regulatory or governmental purposes prior to receiving Marketing Authorization are not considered a "sale".

1.21

“ Patents ” means (a) all national, regional and international patent applications, including provisional patent applications, and all applications claiming priority therefrom, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (b) any and all national patents issued or granted from the foregoing patent applications, including utility patents, utility models, petty patents and design patents and certificates of invention; (c) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a) and (b)); and (d) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.


1.22	Pharmacovigilance Agreement” or “PhVA ” means the pharmacovigilance agreement attached as Exhibit 6.


1.23	“ Price” means the price of Product invoiced by IMPATIENTS to third parties other than Affiliates of IMPATIENTS in accordance with Exhibit 4 excluding any VAT or other taxes or levies that are applicable.

1.24

“ Product ” means all available stock-keeping units (SKU)’s of the product referred to as of the Effective Date, as Ampligen® , a double-stranded RNA product, supplied ready packed and labeled, such labeling to include the Ampligen Trademark and the fact that the Product is manufactured and supplied by HEMISPHERX on both primary and secondary containers, quality tested and QP released in accordance with applicable pharmaceutical law and regulations.


1.25	“ Quality Agreement or QA ” means the quality agreement attached as Exhibit 5 to this Agreement.


1.26	“ Regulatory Authority ” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., the FDA, EMA and PMDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement.


1.27	“Regulatory Data” shall have the meaning given to it in Clause 4.2 of this Agreement.

1.28

“ Regulatory Documentation ” means all (a) applications (including all INDs and Drug Approval Applications and other regulatory filings), registrations, licenses, authorizations, and approvals (including Regulatory Approvals); (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, adverse event files, and complaint files; and (c) pre-clinical and clinical data, and data contained or relied upon in any of the foregoing, in each case (a), (b), and (c) relating to Product.


1.29	“ Specifications ” means all data necessary to manufacture the Product and contained in the most recent version of the product specification file, IMPD or IND.


1.30	“ Territory ” means all the countries of the European Union and Turkey.


1.31	“ Trademark ” means any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo, business symbol or domain names whether or not registered.


1	– EAP activities & management


2.1	EAP Activities .

IMPATIENTS shall perform EAP activities, including selling and distributing the Product in the Territory. IMPATIENTS shall use reasonable commercial efforts to assure that all requested and relevant information is presented to regulatory authorities, decision makers, patients and/or responsible medical specialists, including informing patients and health care practitioners in general about their opportunities to apply for Early Access Approvals in the Territory.


2.2	Collaborative Committees .

As soon as practical after the Effective Date, but no later than thirty (30) days thereafter, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”), which shall (a) oversee the EAP plan for the Product in the Territory, (b) resolve Disputes that may arise in any subcommittees formed by the JSC, (c) coordinate the Parties’ activities under this Agreement, including oversight of any subcommittees formed by the JSC, and (d) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement. The details of the composition, operating procedures and responsibilities of the Collaborative Committees are described in Exhibit 2.


2.3	Packaging .

Subject to the provision by HEMISPHERX of appropriately labeled and packaged Product and associated materials, IMPATIENTS shall ensure that such amounts of the Product and its associated materials as are supplied and distributed under the EAP Program shall prominently display the Product Trademark, together with the information that the Product is manufactured and supplied by HEMISPHERX.


2	– Grants of rights, disclosure of know how


3.1	Appointment .


3.1.1	HEMISPHERX hereby appoints IMPATIENTS as its exclusive service provider to perform EAP activities for Product in the Field in the Territory.


3.1.2	HEMISPHERX hereby grants IMPATIENTS an exclusive, non-transferable, royalty-free right to reproduce and use the Product’s Trademarks solely in connection with performing the EAP activities for Product in the Field in the Territory, subject to the terms and conditions set forth herein, including in Exhibit 3.


3.2	IMPATIENTS Know How Contribution .

IMPATIENTS undertakes to contribute its Know How to perform the EAP, including but not limited its EAP technical and business knowledge regarding patient and physician outreach, regulatory and legal support, pharmacovigilance, reimbursement, data collection, logistics and marketing.


3.3	HEMISPHERX Know How Disclosure .

Immediately after the Effective Date, HEMISPHERX shall collaborate with IMPATIENTS make available to IMPATIENTS, in whatever form IMPATIENTS may reasonably request, Regulatory Documentation, HEMISPHERX Know How, and any other Information relating directly or indirectly to the Product and reasonably required to implement and manage the EAP in the Territory (including, but not limited to, information related to Manufacturing), to the extent not done so already, and thereafter immediately upon the availability of such Regulatory Documentation, HEMISPHERX Know How, or other Information. For the avoidance of doubt, where necessary, HEMISPHERX will and shall cause its Affiliates and collaborators, without additional compensation, to make available to IMPATIENTS relevant information agreed upon with IMPATIENTS under this Clause 3.3.


3.4	HEMISPHERX Know How Assistance .

HEMISPHERX, at its sole cost and expense, shall provide IMPATIENTS with reasonable assistance required in order to transfer to IMPATIENTS the Regulatory Documentation, HEMISPHERX Know How and other Information required to be produced hereunder, in each case in a timely manner. HEMISPHERX shall reasonably assist IMPATIENTS with respect to the implementation of the EAP for the Product.


3	- Regulatory matters


4.1	Regulatory Activities .

4.1.1

IMPATIENTS shall have the sole and exclusive right to make contact with patients and physicians relating to the EAP of Product, and to file applications for Early Access Approvals therefor (including the setting of the overall regulatory strategy therefor), and to communicate with the Regulatory Authorities to secure Early Access Approvals for Product in the Territory. HEMISPHERX shall support IMPATIENTS as may be reasonably necessary in obtaining Early Access Approvals for the Product, and in the activities in support thereof, including providing necessary documents or other materials required by Applicable Law to obtain Early Access Approvals, in each case in accordance with the terms and conditions of this Agreement.

4.1.2

HEMISPHERX shall collaborate with IMPATIENTS to provide IMPATIENTS with (a) access to or copies of all material written or electronic correspondence (other than regulatory filings) relating to the development of Product in the Field received by HEMISPHERX or its Affiliates, collaborators or licensees from, or filed by HEMISPHERX or its Affiliates, collaborators or licensees with, the Regulatory Authorities, and (b) copies of all meeting minutes and summaries of all meetings, conferences, and discussions held by HEMISPHERX or its Affiliates, collaborators or licensees with the Regulatory Authorities relating to the development or commercialization of Product in the Field, including copies of all contact reports produced by HEMISPHERX or its Affiliates or licensees, in each case ((a) and (b)) within fifteen (15) Business Days of its receipt, forwarding or production of the foregoing, as applicable. If such written or electronic correspondence received from any such Regulatory Authority relates to the withdrawal, suspension, or revocation of a Regulatory Approval or Early Access Approval for Product in the Field, the prohibition or suspension of the supply of a Product in the Field, or the initiation of any investigation, review, or inquiry by such Regulatory Authority concerning the safety and quality of a Product in the Field, the notified Party shall notify the other Party and provide the other Party with copies of such written or electronic correspondence as soon as practicable.

4.1.3

HEMISPHERX shall, in accordance with the Quality Agreement, make every reasonable effort to notify IMPATIENTS promptly following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension, or market withdrawal of a Product in the Territory in the Field, and shall include in such notice the reasoning behind such determination, and any supporting facts. HEMISPHERX (or its licensee) shall have the right to make the final determination whether to voluntarily implement any such recall, market suspension, or market withdrawal in the Territory. If a Regulatory Authority in the Territory mandates a recall, market suspension, or market withdrawal, then HEMISPHERX (or its licensee) shall initiate such a recall, market suspension, or market withdrawal in compliance with Applicable Law. For all recalls, market suspensions or market withdrawals undertaken pursuant to this Section 4.1.3, HEMISPHERX or its licensee, whichever responsible for the recall, market suspension, or market withdrawal, shall be solely responsible for the execution thereof, and IMPATIENTS shall reasonably cooperate in all such recall efforts.


4.2	Regulatory Data .

Within the Field, each Party shall promptly provide to the other Party copies of, or access to all non-clinical and clinical data, and other information, results, and analyses with respect to any development activities that are carried out by on or behalf of or otherwise controlled by such Party or any of its Affiliates, collaborators or licensees (collectively, “Regulatory Data”), when such Regulatory Data becomes available. For the avoidance of doubt, the requirements under this Clause 4.2 shall include that HEMISPHERX shall provide IMPATIENTS with copies of up-to-date versions of (a) the EU GMP certificate of the manufacturing site, (b) if applicable, the Product’s GMP certificate, (c) the Manufacturer’s manufacturing license for the Product, (d) Product stability data and certificate of analysis, together with all other Know How that IMPATIENTS is required to include, or may need to include, in its Early Access Approval applications.


4.3	Pharmacovigilance.

Parties shall enter into a separate agreement related to the responsibility and performance of pharmacovigilance activities related to the Product. This Pharmacovigilance Agreement is attached as Exhibit 6.


4.4	Compliance.

Each Party shall perform or cause to be performed, any and all of its development activities, in good scientific manner and in compliance with all Applicable Law.


4.5	Records .

4.5.1

Each of HEMISPHERX and IMPATIENTS shall, and shall ensure that its third party providers shall, maintain records in sufficient detail and in good scientific manner appropriate for regulatory purposes, and in compliance with Applicable Law, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of its activities. HEMISPHERX or IMPATIENTS shall and retain all such records, as the case may be, for at least three (3) years after termination of this Agreement, or for such longer period as may be required by Applicable Law.

4.5.2

Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and make copies of all records of the other Party that pertain to the subject matter of this Agreement and that are reasonably required by such Party, except, without limitation, for files that cannot be shared due to applicable privacy regulations or that are subject to the attorney-client privilege. The inspecting Party shall maintain such records and the information disclosed therein in accordance with the confidentiality clauses of Clause 9 of this Agreement.


4.5.3	Without prejudice to the provisions of Clause 2, the JSC shall determine what reports shall be generated to track the EAP activities, including the content and timing thereof.


4	– Exclusive distribution, supply and manufacture


5.1	Distribution .

HEMISPHERX hereby appoints IMPATIENTS as its sole and exclusive distributor in respect of EAP use of Product for use in the Field in the Territory, limited to EAP use of Product in accordance with Early Access Approvals.


5.2	Product Supply .


5.2.1	HEMISPHERX undertakes and agrees to supply to IMPATIENTS on an exclusive basis, IMPATIENTS’ requirements of Product ordered in accordance with the terms of this Agreement, for distribution and sale in the Territory, limited to EAP use of Product in accordance with Early Access Approvals.


5.2.2	IMPATIENTS undertakes and agrees to obtain its requirements of Product for use in the Field from HEMISPHERX in accordance with the terms of this Agreement.


5.3	Product Manufacturing .


5.3.1	Manufacturing .

HEMISPHERX shall solely be responsible for the manufacturing, fill & finish, labeling and, if applicable, stockpiling of cGMP grade Product in compliance with the Quality Agreement attached as Exhibit 5, and shall exert its reasonable commercial best efforts to provide quantities of cGMP Product sufficient to meet the requirements of the EAP. If HEMISPHERX contracts the manufacturing and/or filling and/or finishing and/or labeling and/or stockpiling of Product to a third party, such third party shall be considered a Manufacturer. HEMISPHERX will ensure that all relevant obligations deriving from this Agreement (including the Quality Agreement) between Parties are part of the contractual relationship between HEMISPHERX and any Manufacturer. HEMISPHERX shall provide all required documentation to IMPATIENTS related to the manufacturing for purposes of furthering the activities of the EAP.


5.3.2	Interruption of Supply.

If HEMISPHERX is unable to meet IMPATIENTS’ requirements for Product, HEMISPHERX will notify IMPATIENTS and the JSC will meet as soon as possible to negotiate a possible resolution.


5	- Supply of Product and Invoicing


6.1	Notification of Requirements .

IMPATIENTS shall notify HEMISPHERX of its estimated Product requirements for the following {***} months {***} days before the start of {***} (“Rolling Forecast”). Said estimate shall not constitute a firm commitment by IMPATIENTS.


6.2	Available Stock .

HEMISPHERX will make sure that sufficient quantities of Product for the following six months projected sales, based on the most recent Rolling Forecast, are in stock at the warehouse of IMPATIENTS’s logistics service provider (“LSP”). The legal ownership of the stock in the warehouse of IMPATIENTS’ LSP (further referred to as “Consignment Stock”) shall remain with HEMISPHERX and will at no time be transferred to IMPATIENTS or the LSP. At the time of IMPATIENTS’ delivery of the Product through its LSP to its clients, legal ownership of the Product will directly transfer from HEMISPHERX to the relevant client of IMPATIENTS. Any costs related to the keeping Consignment Stock shall be at the expense of IMPATIENTS.


6.3	Product Shipment .

HEMISPHERX shall deliver the Product DDP (INCOTERMS 2010) at the Consignment Stock warehouse address of IMPATIENTS’ LSP. At the warehouse of IMPATIENTS’ LSP, Product will be made ready for delivery to IMPATIENTS’ clients, in a manner controlled by IMPATIENTS and in accordance with the Quality Agreement.


6.4	Shipment Authorization .

HEMISPHERX hereby authorizes IMPATIENTS to order its LSP to use Product from the Consignment Stock for the fulfilling of orders from IMPATIENTS’ clients without further approval from HEMISPHERX. HEMISPHERX shall make sure the Consignment Stock is replenished in a timely manner to comply with the stock level requirement as mentioned in Clause 6.2.


6.5	Invoice .

IMPATIENTS shall notify HEMISPHERX at the beginning of each {***} of all fulfilled Product orders and Net EAP Sales (in Euros (€)) of Product from the preceding {***} . HEMISPHERX shall send IMPATIENTS an invoice in Euros (€) for {***} % of Net EAP Sales in such {***} and IMPATIENTS shall pay the amount of such invoice to HEMISPHERX in Euros (€) within {***} days of receipt.


6.6	Product Pricing .

The Price of the Product is specified in Exhibit 4. Prices are stated excluding VAT or other taxes or levies.


6	– Compensation to IMPATIENTS for agreed services


7.1	Royalty Obligation .

7.1.2.1

During the EAP, IMPATIENTS shall collect information and data, including but not limited to patient-reported outcomes, doctor-reported experiences and registry data, and shall provide support services useful for Marketing Authorization applications in the Territory. As a compensation for the collection of such information and data, and/or the performance of such services, HEMISPHERX will pay to IMPATIENTS a royalty as further provided in this Clause 7.1.

7.1.2.2

In the event that HEMISPHERX or any of its Affiliates receives Marketing Authorization in the Field for the Product in any country in the Territory, then HEMISPHERX shall pay IMPATIENTS (or its successors or assigns) a royalty of up to a maximum of {***} % of Net Sales of Product in the countries in the Territory for which Marketing Authorization is granted. In the event that {***} patients are entered into the EAP, such royalty percentage shall be calculated in accordance with the following formula:

{***}

Exhibit 7 sets out a number of worked examples for this calculation.


7.1.3	Royalties payable in respect of Net Sales shall be payable on a {*} basis for a period starting from the receipt of Marketing Authorization and ending the date {} years from the {} of such Product {*} .

7.1.4

HEMISPHERX shall not be entitled to assign, sell or dispose of its rights in respect of the Product in the Field to a third party (including granting a third party the right to file for a Marketing Authorization based on HEMISPHERX’s rights and know how) unless such third party undertakes in writing to IMPATIENTS to be bound by the provisions of this Clause 7 as if such third party were a party to this Clause 7 instead of HEMISPHERX. For the avoidance of doubt, by third party in this Clause 7 is meant any person or entity that is not a Party to this agreement, including any Affiliate of HEMISPHERX.

7.1.5

For the purposes of the calculation of the royalty payment under this Clause 7.1, Product Net Sales shall be reported, and royalties based on such Product Net Sales shall be paid, to IMPATIENTS within {***} after the end of each {***} during which Product has been sold. HEMISPHERX, its Affiliates, licensees, successors and/or assigns shall maintain accurate records of Product sales for a period of no less than seven years. Such records may be audited for accuracy once a year by an independent public accounting firm, acceptable to both Parties, which accounting firm would be allowed reasonable access at reasonable times to review all relevant records.


7	– Warranties and Undertakings, Liability and Indemnity


8.1	Mutual Representations and Warranties.

The Parties represent and warrant and, where relevant, undertake to each other, as of the Effective Date, as follows:


8.1.4	Organization .

It is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement.


8.1.5	Authorization .

The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (a) such Party’s charter documents, bylaws, articles of association or other organizational documents, (b) any material respect, any agreement, instrument, or contractual obligation to which such Party is bound, (c) any requirement of any Applicable Law, or (d) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.


8.1.6	Binding Agreement .

This Agreement is a legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).


8.1.7	No Inconsistent Obligation .

It is not under any obligation, contractual or otherwise, to any person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the diligent and complete fulfillment of its obligations hereunder.


8.2	Product Warranty and Undertaking .

HEMISPHERX warrants and undertakes that all Product supplied to IMPATIENTS under this Agreement shall comply with the Specifications; be manufactured, filled, finished, labeled and packed in GMP facilities and in accordance with the Quality Agreement and all Applicable Laws; be free from contamination or adulteration; be adequately packed to withstand transportation. At the time of delivery, each Product shall have no less than 9 (nine) months of the Product’s registered shelf life remaining.


8.3	Product Liability.

HEMISPHERX represents and warrants to IMPATIENTS that HEMISPHERX is legally bound to retain responsibility and liability for the manufacture of the Product at all times and undertakes that it shall maintain product and general liability insurance covering any loss, costs, expenses, liability, actions, demands, claims or proceedings relating to the Product.


8.4	Indemnity.

Each Party shall indemnify and hold the other Party harmless from any claims, suits, demands, judgments, actions, liabilities, (including strict liability and infringement of a third party’s patent rights) expenses (including reasonable attorney’s fees) and damages relating to the Product and caused directly or indirectly by any act or omission of the other Party and its officers, directors , employees, subcontractors, agents or suppliers, or (in the case of HEMISPHERX only) the Manufacturer. This indemnity shall not apply if any such liability, loss, damage, cost or expense is due to the gross negligence or default in performance by the indemnified Party, its officers, directors , employees, subcontractors, agents or suppliers.


8.5	Waiver of consequential or punitive damages .

Save as for intentional wrongdoing by a Party, neither Party, nor any of their respective directors, officers, employees or agents shall have any liability towards the other Party, for any indirect or consequential damages claimed by the other Party, including, but not limited to the loss of opportunity, loss of use, and/or loss of revenue or profit, in connection with or arising out of this Agreement or breach thereof.


8.6	Insurance

Each Party shall maintain at its own cost at all times during the term of this Agreement, policies of insurance in such amounts and to cover such risks as are reasonable, prudent and/or potentially foreseeable hereunder. Maintenance of such insurance coverage will not relieve a Party of any responsibility under this Agreement for damages in excess of insurance limits or otherwise.


8	- Confidentiality

9.1

The Parties will continue to abide by the confidentiality agreement signed by both Parties dated 11 June 2015, provided that the term of the confidentiality agreement shall be extended as long as necessary so as not to expire before the expiration or termination of this Agreement . The terms of confidentiality respecting Information shall not impede the appropriate use thereof in IMPATIENTS’s submission of Information in Early Access Approvals applications with Regulatory Authorities, in HEMISPHERX’s submission of Information in Marketing Authorization Applications with Regulatory Authorities, or in execution of the EAP of Product according to the EAP Plan.

9.2

HEMISPHERX acknowledges that the EAP Plan involves the publication of safety and efficacy information relating to the Product, including HEMISPHERX Confidential Information included in the Regulatory Documentation, and the patient- and doctor-reported outcomes and registry data generated and collected during the performance of the EAP. Therefore, HEMISPHERX hereby consents to IMPATIENTS publishing such HEMISPHERX’s Confidential Information as is required in accordance with Applicable Laws.


9	- Duration, termination

10.1

This Agreement will become legally effective on the Effective Date and, unless earlier terminated pursuant to the terms hereof, shall continue in full force and effect for an initial period of {***} years. This initial period may be extended upon mutual written agreement between the Parties and in the absence of a notice to the other Party (to be given with at least 90 days notice) from a Party that it does not agree to the extension of this Agreement under this Clause 10.1, shall be extended each anniversary by 12 months until commercial availability of the Product in the Territory following receipt by HEMISPHERIX or one of its Affiliates of appropriate Marketing Authorization.


10.2	Subject to any mandatory provision of law, this Agreement may be terminated by a Party, without any liability to the other, if the other Party is dissolved or liquidated, files or has filed against it a petition under any applicable bankruptcy or insolvency law, makes a general assignment for the benefit of its creditors, or has a receiver appointed for substantially all of its assets.


10.3	Following expiry of the initial {***} year term as set out in Clause 10.1, either Party may terminate this Agreement, provided the non-terminating Party is provided with 6 (six) months written notification.


10.4	HEMISPHERX shall have the right to terminate this agreement at any time during the Term provided that it shall provide IMPATIENTS with ninety (90) days written notification.

10.5

Each Party reserves the right to immediately terminate this Agreement if the other Party is in breach of its material obligations under this Agreement and fails to remedy such breach within 6 (six) months written notification by the other Party of said breach. In the event of a breach not being capable of remedy within 6 (six) months of written notification, the parties shall negotiate in good faith to agree a period for remedy after which, if the breach remains, the Party whose obligations are not in such continuing breach shall be entitled to terminate this Agreement.


10.6	In the event that, on the date 6 months from the Effective Date of this Agreement, no patient has yet enrolled in the EAP for the Product, HEMISPHERX shall be entitled to terminate this Agreement with immediate effect.


10.7	Consequences of Termination.


10.7.1	In the event of a termination of this Agreement under Clauses 10.1 to 10.5 (inclusive), HEMISPHERX shall permit IMPATIENTS to continue to distribute and sell the Product until such time that the entire quantity of the Consignment Stock has been sold.


10.7.2	In the event of termination of this Agreement pursuant to Clause 10.1, termination by HEMISPHERX pursuant to Clause 10.3 or by IMPATIENTS pursuant to Clause 10.5, Clause 7.1 shall survive such termination and the royalty rate to be applied to Net Sales of Product shall be the percentage as calculated in accordance with such Clause 7.1.


10.7.3	In the event of termination of this Agreement by HEMISPHERX pursuant to Clause 10.4, Clause 7.1 shall survive such termination and the royalty rate to be applied to Net Sales of Product shall be set according to the Termination Algorithm outlined in Exhibit 7.


10.7.4	Upon termination of this Agreement by IMPATIENTS pursuant to Clause 10.3 or by HEMISPHERX pursuant to Clauses 10.5 or 10.6, Clause 7.1 shall not survive termination and no royalty shall be payable to IMPATIENTS under such provision.


10.8	Survival .

In addition to and subject to the provisions of Clause 10.6, Clause 1, Clauses 4.5.1 and 4.5.2, Clause 6.5 and Clauses 8 to 11 shall survive termination of this Agreement.


10	– Miscellaneous


11.1	Entire Agreement .

This Agreement, together with the Confidentiality Agreement dated 11 June 2015 and signed by the Parties prior to the Effective Date, constitutes the entire agreement between the Parties as regards the Product, and any former agreement relating to the same subject matter hereby becomes null and void. In the event of any inconsistencies between the terms of these Agreements, the terms of this Agreement shall prevail.


11.2	Amendments .

Modifications to this Agreement shall be made in writing only, and shall only take effect when signed by both Parties.


11.3	Press releases

Each Party shall have the right to disclose the existence of this Agreement, but not any of its material terms (which shall remain Confidential Information of both Parties), provided that such disclosing Party shall provide to the other Party the proposed text of any press release for review not less than five (5) days prior to public disclosure.


11.4	Independent Contractors .

It is understood that both Parties hereto are independent contractors and engage in the operation of their own respective businesses. Neither Party hereto is to be considered the agent of the other Party for any purpose whatsoever, and neither Party has any authority to enter into any contract or assume any obligation for the other Party or to make any warranty or representation on behalf of the other Party. Each Party shall be fully responsible for its own employees, servants and agents, and the employees, servants and agents of one Party shall not be deemed to be employees, servants and agents of the other Party for any purpose whatsoever.


11.5	Remedy; Waiver .

Exercise by any Party of any of its rights under this Agreement shall not be deemed to limit any other right or remedy that such Party may have in law or equity. The waiver by either Party of a breach of any of the provisions of this Agreement by the other Party shall not be construed as a waiver of any succeeding breach of the same or other provisions, nor shall any delay or omission by either Party in exercising any right that it may have under this Agreement operate as a waiver of any breach or default by the other Party.


11.6	Formalities .

Each Party agrees to execute deliver and/or do such further papers, agreements or acts as may be necessary or desirable to give effect to this Agreement and its purpose and to carry out its provisions.


11.7	Choice of Law and Dispute Resolution .

This Agreement shall be governed by and interpreted under the laws of the Netherlands. All disputes arising out of or in connection with this Agreement shall be submitted to the International Court of Arbitration of the International Chamber of Commerce and shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. Any such arbitration shall take place in Amsterdam, the Netherlands and in the English language.


11.8	Language .

This Agreement is executed in the English language. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent and no rule of strict construction against either Party shall apply to any term or condition of this Agreement. The definitive language of this Agreement is English and no reliance shall be placed upon any translation into any other language.


11.9	Assignment; Assumption .

Subject to the provisions of Clause 7.1.3, neither this Agreement nor any rights or obligations hereunder may be assigned or duties delegated (other than specified in the EAP Plan) by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Any assignment in violation of this clause shall be null and void. Any permitted assignee shall, upon the request of the other Party hereto, expressly acknowledge, by written agreement, its assumption of all obligations and liabilities under this Agreement.


11.10	Force Majeure .

Should a Party be unable to perform any of its obligations under this Agreement due to an event of force majeure as determined by law such Party shall be excused to perform its obligation during the period of such force majeure event provided always that it gives the other Party prompt written notice of such force majeure event. If the event of force majeure were to prevent such Party performing its obligations in connection with this Agreement for a continuous period of more than three (3) months, the other Party may terminate the Agreement at its sole option by giving written notice thereof, without any indemnity to be paid by either Party. The termination would then take effect without further notice, at the date of receipt of the above notice. In no event shall this provision relieve either Party of its obligation to make payment when owing.


11.11	Severability .

If any provision of this Agreement is found to be invalid or unenforceable by any court or administrative body of competent jurisdiction, then the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect. The Parties agree to attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision, which achieves to the greatest extent possible the economic objectives of the invalid or unenforceable provision. If any provision of this Agreement conflicts with applicable legislation, then the Parties shall modify such provision in order to comply with said legislation. This modification shall not affect the other provisions of this Agreement.


11.12	Notice .

All formal notices to be given pursuant to this Agreement shall be in writing and in English and shall be delivered by hand, sent by registered mail return receipt, or by express courier service to the address of the Party to receive such notice as set out below (or such other address as may be notified by a Party to the other from time to time). Notices shall be deemed to have been received at the time of delivery by hand, at the date affixed on the return receipt or 3 (three) business days after sending if sent by express courier service.

For HEMISPHERX: For IMPATIENTS:

HEMISPHERX: Impatients N.V.:

Attn: William A Carter, M.D. Attn.: {***}

1617 JFK Boulevard Pilotenstraat 45

Suite 500 1059 CH

Philadelphia, Pa. 19013 Amsterdam

The Netherlands

Email : {***}


11.13	Construction .

Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including,” “include,” or “includes” as used herein shall mean “including, but not limited to,” and shall not limit the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.

IN WITNESS WHEREOF , the Parties have executed this Agreement by their respective, duly authorized, representatives:

For HEMISPHERX: For IMPATIENTS:

s/ William A. Carter s/ Ronald H.P. Brus

Dr. William A. Carter, MD Dr. Ronald H.P. Brus, MD

Chairman and CEO Founder and CEO

Exhibit 1. – EAP Plan

(to be inserted after being agreed by JSC)

Exhibit 2 – JSC and subcommittees


1	JSC.


1.1	Composition.

The JSC shall consist of {***} , each with the requisite experience and seniority to enable such person to make decisions on behalf of a Party with respect to the issues falling within the jurisdiction of the JSC. From time to time, each Party may substitute one or more of its representatives to the JSC on written notice to the other Party. {***} . The chairperson shall appoint a secretary of the Joint Steering Committee, who shall be {***} .


1.2	Specific Responsibilities .

The JSC shall oversee the EAP for the Product in the Territory, and shall serve as a forum for the coordination of activities for the Product for the Territory. In particular, the JSC shall:


(a)	periodically (no less often than annually) review and serve as a forum for discussing the EAP, and review and approve amendments thereto;


(b)	oversee the conduct of EAP activities;


(c)	serve as a forum for discussing and coordinating strategies for obtaining Early Access Approvals and Regulatory Approvals for the Product in the Territory;


(d)	establish secure access methods (such as secure databases) for each Party to access Regulatory Documentation and other JSC related Information as contemplated under this Agreement; and


(e)	perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement.


(f)	Approve HEMISPHERX Know-How and Regulatory Documentation to be shared with Regulatory Authorities and physicians both under relevant confidentiality mechanisms.


1.3	Disbandment .

Upon Marketing Authorization of the Product in all countries of the Territory, unless otherwise mutually agreed in writing, the JSC shall have no further responsibilities or authority under this Agreement and will be considered dissolved by the Parties.


1.4	Subcommittees .

From time to time, the JSC may establish and delegate duties to sub-committees or directed teams (“Subcommittees(s)”) on an “as-needed” basis to oversee particular projects or activities (for example, joint project team, joint finance group, and/or joint intellectual property group). Each such Subcommittee shall be constituted and shall operate as the JSC determines; provided that each Subcommittee shall have equal representation from each Party, unless otherwise mutually agreed. Subcommittees may be established on an ad hoc basis for purposes of a specific project or on such other basis as the JSC may determine. Each Subcommittee and its activities shall be subject to the oversight, review and approval of, and shall report to, the JSC. In no event shall the authority of the Subcommittee exceed that specified for the JSC. All decisions of a Subcommittee shall be by unanimous agreement.


2	General Provisions Applicable to committees .


2.1	Meetings and Minutes .

The committees shall meet quarterly by telephonic or tele video means, or, when necessary as agreed between the Parties, face-to-face, with the location of such face-to-face meetings alternating between locations designated by HEMISPHERX and locations designated by IMPATIENTS. The chairperson of the applicable committee shall be responsible for calling meetings on no less than thirty (30) Business Days’ notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least ten (10) Business Days in advance of the applicable meeting; provided that under exigent circumstances requiring input by the committee, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld or delayed. The chairperson of the committee shall prepare and circulate for review and approval of the Parties minutes of each meeting within thirty (30) days after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the committee. If the Parties cannot agree on the content of the minutes the objecting party shall append a notice of objection with the specific details of the objection to the proposed minutes.


2.2	Procedural Rules .

Each committee shall have the right to adopt such standing rules as shall be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the committee shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party. Representatives of the Parties on a committee may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants. Representation by proxy shall be allowed. Each committee shall take action by unanimous agreement of the representatives present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one (1) representative appointed by each Party. Employees or consultants of either Party that are not representatives of the Parties on a Committee may attend meetings of such committee; provided, however , that such attendees (a) shall not vote or otherwise participate in the decision-making process of the Committee, and (b) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in Section 11.1 of the Agreement.


2.3	Committee Dispute Resolution .

If a subcommittee cannot, or does not, reach unanimous agreement on an issue at a meeting or within a period of ten (10) Business Days thereafter or such other period as the Parties may agree, then the dispute shall be referred to the JSC for resolution and a special meeting of the JSC may be called for such purpose. If the JSC cannot, or does not, reach unanimous agreement on an issue, including any dispute arising from the JSC, then the dispute shall first be referred to the senior officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the senior officers shall be conclusive and binding on the Parties. If the senior officers are not able to agree on the resolution of any such issue within thirty (30) days after such issue was first referred to them, then, such dispute shall be finally and definitively resolved by: (a) the senior officer of IMPATIENTS to the extent the Dispute relates to the performance of the EAP (other than a Material Amendment which shall require mutual agreement of the Parties) and (b) by the senior officer of HEMISPHERX for all other disputes.


2.4	Limitations on Authority .

Each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in a committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. No committee shall have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 11.2 of the Agreement.


2.5	Alliance Manager .

Each Party shall appoint a person(s) who shall oversee contact between the Parties for all matters between meetings of each committee and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an “Alliance Manager”). Each Party may replace its Alliance Manager at any time by notice in writing to the other Party.


3	Discontinuation of Participation on a Committee .

Each committee shall continue to exist until the first to occur of: (i) the Parties mutually agreeing to disband the committee; or (ii) upon receipt of Marketing Authorization of the Product in the last country of the Territory.


4	Expenses .

Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, a committee.

Exhibit 3 – Trademark usage conditions


1.	Product Trademark License Terms .

1.1.

IMPATIENTS acknowledges HEMISPHERX’s exclusive right, title, and interest in and to the Product Trademarks and acknowledges that (i) neither this Agreement, nor its use of the Product Trademarks hereunder, shall be construed to accord to IMPATIENTS any rights in the Product Trademarks other than the limited license rights granted herein, and (ii) the goodwill generated thereby will inure solely and entirely to the benefit of HEMISPHERX.


1.2.	Should it be necessary to record IMPATIENTS as a registered licensee of the Product Trademarks in any jurisdiction, HEMISPHERX shall do so at IMPATIENTS's expense, and IMPATIENTS will cooperate with HEMISPHERX to effect such recordation.


2.	Trademark Use .

IMPATIENTS may use the Product Trademarks solely in conjunction with the Product EAP.


2.1.	Product Trademarks Usage Requirements .

IMPATIENTS agrees to comply with the Product Trademarks usage requirements of this Exhibit 2.1.


2.2.	The Product Trademarks may not be used in connection with the display, advertising, or promotion of Product for any purpose IMPATIENTS has not been appointed for.

2.3.

The Product Trademarks may not to be altered. The Product Trademarks are not to be used in conjunction with any other mark or design, i.e., the Product Trademarks must stand alone in terms of the commercial impression generated by the particular usage; provided, however , that IMPATIENTS’s trademarks may be used along with the Product Trademarks as long as such trademarks do not combine, superimpose or overlap with the Product Trademarks.


2.4.	IMPATIENTS must exercise care in the use of the Product Trademarks so as not to indicate to the public that IMPATIENTS is a division or affiliate of HEMISPHERX or otherwise related to HEMISPHERX.


2.5.	IMPATIENTS shall not use as its own trademark any word(s) or design(s) confusingly similar to the Product Trademarks.


3.	Protection of Interest .

If IMPATIENTS becomes aware of any unauthorized use of the Product Trademarks by a third party, IMPATIENTS, subject to its confidentiality obligations to other parties, agrees to promptly notify HEMISPHERX and to cooperate fully, at HEMISPHERX's expense, in the enforcement of HEMISPHERX's rights against such a third party. Nothing contained in this Section shall be construed as to require HEMISPHERX to enforce any rights against a third party or to restrict HEMISPHERX's rights to license or consent to such a third party's use of the Product Trademarks.

Exhibit 4 – Price of Product

Product Price to be invoiced by IMPATIENTS to third parties (excluding VAT):

USD {***} for a {***} course of treatment of {***} vials {***} . Meaning {***} vials in total, with an equivalent price of USD {***} per vial

Exhibit 5 - Quality Agreement

(to be inserted )

Exhibit 6 - Pharmacovigilance Agreement

(to be inserted)

Exhibit 7 – Royalty Payment Example Calculations

For the purposes of illustration of the calculation of the royalty payments under Clause 7.1, the formula(s) would be calculated in the following situations as follows:

{***}

This demonstrates that if, during the course of the EAP, {***} patients have been admitted to the EAP the maximum royalty percentage will have been reached.

In the event of termination of this Agreement by HEMISPHERX pursuant to Clause 10.4, Clause 7.1 shall survive such termination and the royalty rate to be applied to Net Sales of Product shall be set according to the following Termination Algorithm:

If Hemispherx terminates without cause:

Royalty Rate on Hemispherx Commerical Sales As a Function of EAP Performance and Time

Cumulative EAP Patients >6 mos <1 year >1 yr <2 yrs >2 yrs <3yrs >3 yrs <4 yrs >4 yrs <5 yrs

{***}

For the avoidance of doubt, where the Termination Algorithm matrix above provides that, on termination by Hemispherx in accordance with clause 10.4, the royalty rate shall be calculated in accordance with the formula, then such formula shall be the formula set out in Clause 7.1.

Redacted Version

Sales, Marketing, Distribution, and Supply Agreement

WHEREAS HEMISPHERX is a biopharmaceutical company with headquarters at One Penn Center, 1617 JFK Boulevard, Suite 500, Philadelphia, PA 19103, U.S. (" HEMISPHERX ") and Emerge Health Pty Ltd. is a pharmaceutical company with its primary offices located at Suite 3, Level 1, 2 Theatre Place, Canterbury VIC 3126, Australia (" EMERGE ”), each a “Party” together, “Parties” and

WHEREAS HEMISPHERX owns intellectual proprietary rights relating to Alferon N Injection ® [Interferon alfa-n3 (human leukocyte derived)] Alferon and

WHEREAS HEMISPHERX desires to have Alferon provided to physicians treating genital warts and other infections and diseases to which patients in Australia and New Zealand have become refractory to recombinant interferon prior to regulatory approval and to have Alferon approved by the Australian regulatory authority, Therapeutic Goods Administration (“TGA”) and New Zealand’s Medicines and Medical Devices Safety Authority (“Medsafe”)

WHEREAS HEMISPHERX presently has no registered company or subsidiary in Australia or New Zealand and

WHEREAS EMERGE has sales, marketing, distribution capabilities in Australia and New Zealand and

WHEREAS EMERGE has the ability to supply Alferon in Australia and New Zealand prior to approval by TGA and Medsafe in accordance with Australia’s Special Access Scheme (“SAS”) and New Zealand’s Section 29 of the Medicines Act (“Section 29”) and to seek to gain TGA and Medsafe approval of Alferon and subsequently to sell market and distribute Alferon in Australia and New Zealand and

WHEREAS, EMERGE desires to supply Alferon under Australia’s SAS and New Zealand’s Section 29 and to seek approval of Alferon from TGA and Medsafe to subsequently sell market and distribute Alferon in Australia and New Zealand and

WHEREAS, HEMISPHERX desires to supply and sell Alferon to EMERGE, and EMERGE is willing to purchase Alferon from HEMISPHERX

NOW THEREFORE, in consideration of the mutual covenants and agreements made herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

I. DEFINITIONS

"Affiliate" means any corporation or other business entity, which controls, is controlled by, or is under the common control of a Party.

"Alferon N Injection (“Alferon”) means an injectable formulation of Interferon Alfa-N3 (Human Leukocyte Derived)

"Alferon Data" means all data possessed by HEMISPHERX relating to the use of Alferon to treat patients in the Field and which is needed to obtain regulatory approval in the Territory. "Alferon Unit" means 1 x1ml vial containing 5 million international units (I.U.) of Alferon.

"End User" means a physician, medical facility or institution, or government agency that purchases Alferon with the intent of administering it to a patient.

"Field" means Refractory/ Recurrent Genital Warts and Recombinant Interferon Refractory.

"HEMISPHERX Intellectual Property" means all HEMISPHERX patents, patent applications, know-how, and trademarks owned or controlled by HEMISPHERX up to the termination or expiration of this Agreement.

"Refractory/ Recurrent Genital Warts” means genital warts which do not or have not responded to previous treatments.

The “Recombinant Interferon Refractory” means any patient who no longer responds positively to a recombinant interferon.

"Sales Price" means the price EMERGE and/or its Affiliates charge an End User for an Alferon Unit.

"Territory" means Australia and New Zealand.

“Transfer Price” means the price charged by HEMISPHERX to EMERGE for an Alferon Unit.

II. LICENSE

A. HEMISPHERX hereby grants EMERGE the exclusive license to sell, market, and distribute Alferon for use in the Field in the Territory.

B. EMERGE shall not use HEMISPHERX Intellectual Property nor sell nor permit the sale of any products that use the HEMISPHERX Intellectual Property outside the Territory or knowingly sell or have sold any products that use the HEMISPHERX Intellectual Property to any party in or outside the Territory for export or sale outside the Territory, without HEMISPHERX's prior written consent.

C. EMERGE will have 24 months to gain TGA and Medsafe approval of Alferon from the date of submission and assuming that HEMISPHERX has provided all the appropriate documentation and technical/medical support in a timely fashion to assist with the Registration otherwise the license can be terminated by HEMISPHERX (without penalty or payment) or HEMISPHERX can extend the period for approval.

Ill. COMMERCIAL DEVELOPMENT

A. HEMISPHERX will provide EMERGE:

1. A CTD dossier for Alferon which will assist EMERGE in attaining regulatory approval in the Territory. EMERGE will keep a record of each person in EMERGE to see any part of the dossier and will provide this record to HEMISPHERX. EMERGE will not allow anyone outside EMERGE to view the dossier or any part thereof without HEMISPHERX written permission.

2. All the appropriate information about Alferon that will assist with the promotion of Alferon in the Territory.

3. Market place information from overseas on successful strategies and tactics that can be utilized in the Territory.

4. Ongoing scientific and medical support.

5. Alferon Units in quantities sufficient for EMERGE's commercial needs in the Territory.

B. EMERGE will:

1. Within 90 days after execution of this Agreement, prepare and provide a Business Plan, under Australia’s SAS and New Zealand’s Section 29, to be provided and attached to this Agreement as Exhibit 1, to make aware and educate physicians and patients about Alferon.

2. Assist in determining reimbursable End User pricing of Alferon and gain reimbursement for Alferon under SAS and Section 29 and post approval of Alferon in the Territory.

3. Assist physicians who desire to administer Alferon to their patients with the required paperwork under Australia’s SAS and New Zealand’s Section 29.

4. Manage the cold chain logistics within the Territory from arrival to End user supply.

5. Register Alferon as an orphan drug in the Territory.

6. Be the sponsor, hold the product registration, and maintain all regulatory requirements as the sponsor in the Territory until HEMISPHERX establishes an Australian entity whereupon EMERGE will fully cooperative in transferring sponsorship and product registration to the HEMISPHERX Australian entity.

7. Prepare and provide a 3-year post regulatory approval Sales, Marketing, and Distribution Plan including a 3-year minimum sale forecast and a committed dollar field sales force, product manager and marketing budget to be agreed by both Parties and a non-binding 12 month Product forecast no later than six (6) months prior to the anticipated registration and subsequent launch date, also to be agreed by both parties,

8. Pay for all the above activities and related expenses.

9. Hold 3 months inventory of the forecasted sales at all times.

10. Assist in recruiting clinical trial sites and principal investigators.

11. Provide HEMISPHERX a monthly written report of EMERGE's efforts and status thereof under this Agreement.

IV. SUPPLY


A.	Subject to the terms and conditions of this Agreement, HEMISPHERX agrees to exclusively supply Alferon to EMERGE with a minimum expiry for stock of 24 months at the date of shipment arrival.


B.	EMERGE shall pay manufacturer for each order of Alferon within 45 days after receipt of the goods except for the for first purchase order, which will be paid in advance of the order being delivered. All purchase orders are final.


C.	HEMISPHERX will supply Alferon to EMERGE at a Transfer Price of US$ {*} with a targeted sale price of US$ {*} /Unit. However, the Parties agree that a pricing/value assessment by Emerge may result in the Transfer Price and targeted sales price being lowered or increased provided the parties mutually agree in writing.


D.	EMERGE will ensure all necessary QA testing / approval for use occurs in the Territory and that Alferon is stored under the conditions stipulated in a Quality Agreement (QA) to be executed and appended to this Agreement as Exhibit 2.

E. Forecasts, Orders, Payment, and Delivery .

Unapproved Setting

Following the signing of this Agreement, EMERGE will start a full and comprehensive market analysis of the potential of Alferon in an unapproved setting. This will be from a market potential and willingness to pay point of view and will be completed within 3months of the signature of this Agreement. Forecasts will then be provided for Alferon as an unapproved medicine and this data will be added as a supplement to the Business Plan (Exhibit 1).

Approved Setting

Six (6) months prior to the approval of Alferon in the Territory:

1. EMERGE will provide HEMISPHERX a rolling 12-month forecast of the estimated sales of Alferon Units, the first 3 months of which will be firm and the second three (3) months of which cannot vary by more than 25% when these become the first three (3) months. This forecast will be updated at 3-month intervals thereafter.

2. In accordance with this forecast, EMERGE agrees to order Alferon from HEMISPHERX under this Agreement by submitting to HEMISPHERX written purchase orders specifying the quantity, packaging, delivery dates, and delivery location.

3. HEMISPHERX shall manufacture Alferon as described in the purchase order from EMERGE and HEMISPHERX shall make all shipments to the location specified on EMERGE's purchase order as follows:

(a) Delivery of Products is INCOTERMS 2010, CIP. The risk of loss or damage in transit shall be upon HEMISPHERX.

(b) Hemispherx shall pack, mark and ship Alferon in accordance with temperature thermometer specifications as clearly set out in the QA Agreement. Hemispherx shall package Alferon so as to prevent damage or deterioration

and shall comply with all applicable temperature and packaging laws.

4. Unless otherwise stipulated, Alferon shall be packaged, marked, crated and otherwise prepared in accordance with HEMISPHERX's current packaging and crating practices, and good commercial practices.

5. EMERGE will prominently display on all Alferon it sells the Alferon trademark, which shall remain the sole property of HEMISPHERX and be so noted and on a visible surface thereof and/or on tags, labels, manuals, and other materials with which Alferon is sold, the fact that the Alferon is manufactured and supplied to EMERGE by HEMISPHERX for sale in the Territory shall be clearly displayed.

If, for any reason, at any time, HEMISPHERX shall be unable, or should reasonably anticipate being unable to deliver any part or all of the ordered Alferon in accordance with the terms hereof or the accompanying purchase order, HEMISPHERX shall notify EMERGE of such inability at the earliest possible time (but no later than five (5) workings after HEMISPHERX becomes aware of this their inability to supply Alferon), whereupon HEMISPHERX and EMERGE will devise a plan to manage the situation.

HEMISPHERX warrants that the Alferon (i) shall conform to the specifications set out in the EMERGE purchase order for Alferon and (ii) shall meet all, if any, reasonably applicable regulatory requirements in the Territory once Alferon is Registered. In the unapproved setting, the Alferon that HEMISPHERX supplies must confirm with all manufacturing and regulatory requirements (including labelling) for the country in which Alferon is approved in and was intended to be sold. EMERGE's acceptance of the Alferon shall relieve HEMISPHERX from the obligations arising from this warranty


H.	EMERGE shall have the right to return and demand replacement of any Alferon which violates this warranty.


I.	HEMISPHERX and/or EMERGE shall have the right to cancel, without further obligation to the other party, one or more orders for Alferon if HEMISPHERX's or EMERGE's business is interrupted because of an event of force majeure beyond the control of HEMISPHERX or EMERGE.

HEMISPHERX shall permit EMERGE or its agent, at EMERGEs' expense, to conduct periodic audits of HEMISPHERX's Quality System and Manufacturing records relating to HEMISPHERX's performance under this Agreement. The audits shall be conducted upon reasonable advance notice during regular business hours at HEMISPHERX's principal office and in such a manner as not to unduly interfere with HEMISPHERX's operations.

EMERGE will provide HEMISPHERX with copies of product specification sheets, product inserts, user manuals, user bulletins, and user product updates and any other customer materials such as brochures, educational materials, web pages or other electronic information relating to EMERGE's efforts to sell, market and distribute Alferon under this Agreement at least 10 (ten) days prior to the public release or use of such information.

V. REPORTS AND PAYMENTS


A.	Within 30 days following the end of each calendar quarter after execution of the Agreement, EMERGE will provide HEMISPHERX with quarterly reports on the number of Alferon Units sold and the Sales Price during the preceding three months, key market place issues and successes, regulatory and reimbursement subjects and revisions to the sales and marketing plans.


B.	Alferon will be considered sold by EMERGE on the date it is shipped or invoiced to an End User, whichever is earlier. All shipping, taxes, duties and other expenses in the Territory is the responsibility of EMERGE.

Price Increase: Beginning on the second year anniversary of the signing of this Agreement (“Effective Date”) and on each succeeding anniversary of the Effective Date during the term of this agreement and in consideration of a varies of economic factors such as for example, costs of labour, costs of material and costs the price paid by Emerge for Alferon shall be renegotiated. Any price increase will need to be justified by HEMISPHERX. Both parties shall, in good faith, attempt to agree upon a reasonable price increase. In the event agreement cannot be reached the agreement shall terminate.


D.	All payments hereunder will be made by EMERGE in United States Dollars by wire transfer of immediately available funds to an account designated by HEMISPHERX. The following is wire transfer information:

{***}

To manage a possible variation of the USD/AUD exchange rate (the “ Exchange Rate ”), EMERGE and HEMISPHERX will conduct a review of the evolution of the Exchange Rate over every six-month period (the “ Exchange Rate Review ”), within 30 days following the end of each such six-month period.

If the average Exchange Rate taken from the Reserve Bank of Australia (https//www.rba.gov.au/statistics/hist-exchange-rates/) during the previous six-month period (the “ Average Exchange Rate ”) varies by more than 10% (upwards or downwards) as compared to the Exchange Rate applied by the Parties under this Agreement during the same period, the Purchase Price will be adjusted accordingly to ensure that the EMERGE’s and HEMISPHERX’s margin as per the pricing provided under Clause IV. C. of this Agreement are maintained. The corresponding adjustment, calculated on the basis of the sales invoiced to the EMERGE in the corresponding six-month period, will be invoiced within 45 days following the end of the corresponding six-month period.

VI. TERM/TERMINATION


A.	The Term will be 5 years from Effective Date with an automatic 2 year term extensions unless otherwise advised by one of the Parties.

B. Termination for breach will include:


1.	Failure of EMERGE achieving less than 50% achievement of the minimum sales as in III B.7. for two (2) consecutive years,

2. Insolvency, or the filing for protection under either Parties’ bankruptcy laws. Upon the filing of a petition in bankruptcy, insolvency or reorganization against or by either Party, or either Party becoming subject to a composition for creditors , whether by law or agreement, or either party going into receivership or otherwise becoming insolvent (such party hereinafter referred to as the "insolvent party"), this Agreement may be terminated by the other Party by giving written notice of termination to the insolvent Party, such termination immediately effective upon the giving of such notice of termination.

Upon the occurrence of a breach or default as to any obligation hereunder by either Party and the failure of the breaching Party to cure (within thirty (30) days after receiving written notice thereof from the non-breaching Party) such breach or default, this Agreement may be terminated by the non- breaching Party by giving written notice of termination to the breaching Party, such termination being immediately effective upon the giving of such notice of termination.


D.	In the event this Agreement is terminated by either Party for any reason whatsoever, HEMISPHERX agrees to reasonable efforts to make Alferon available to EMERGE for a period of six (6) months after the termination date at the same Transfer Price and under the same terms of payment.

In the event of termination of this Agreement, EMERGE will have the right to complete all contracts for the sale or disposition of Alferon under which EMERGE is obligated on the date of termination, provided EMERGE pays the associated Transfer Price and provided all such sales or dispositions are completed within six (6) months after the date of termination. Thereafter, HEMISPHERX shall purchase from the EMERGE all remaining stock of Alferon that is of merchantable quality at the same price as was paid by EMERGE.

VII. ASSIGNMENT

Neither this Agreement nor any rights or obligations or licenses hereunder may be assigned, pledged, transferred or encumbered by either party without the express prior written approval of the other party, except that either HEMISPHERX or EMERGE may assign this Agreement to any successor by merger or sale of substantially all of its business or assets to which this Agreement pertains, without any such consent. Any assignment in violation hereof is void.

VIII. AUTHORITY

EMERGE and HEMISPHERX each warrant and represent that it has the full right and power to make the promises set forth in this Agreement and that there are no outstanding agreements, assignments, or encumbrances inconsistent with the provisions of this Agreement.

IX. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION IX, HEMISPHERX MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED, REGARDING THE DEVELOPMENT, VIABILITY, COMMERCIAL OR OTHER USEFULNESS OR SUCCESS OF ALFERON AND THAT NO WARRANTY OR REPRESENTATION THAT ANYTHING MADE, USED, SOLD OR OTHERWISE PRACTICED OR ANY SERVICE PROVIDED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET, OR OTHER PROPRIETARY RIGHT, FOREIGN OR DOMESTIC, OF ANY THIRD PARTY AND MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY HEMISPHERX INTELLECTUAL PROPERTY.

X. INDEMNIFICATION AND WARRANTIES

A. INDEMNIFICATION

EMERGE and HEMISPHERX (each an "Indemnifying Party") shall indemnify, defend and hold harmless and the other Party's subsidiaries or affiliates, their agents, directors, officers, employees and assigns (the "Indemnified Parties") from and against all losses, liabilities, damages, demands and expenses (including reasonable attorneys' fees and expenses) arising out of, as a result of, or in connection with (i) the negligent actions of the Indemnifying Party, its employees or any third party acting on behalf of or under authority of the Indemnifying Party in the performance of this Agreement and/or (ii) the violation of any representation or warranty of Indemnifying Party in this Agreement. Each Party's obligations under this provision shall be subject to the other Party providing reasonable notice of any such claim. Each Party shall defend with competent counsel and pay all costs of defence, including attorneys' fees, and any and all damages and court costs awarded in respect to such claim, action or proceeding regarding the claim of infringement. The Indemnified Parties agree to permit the Indemnifying Party to defend, compromise, or settle any such claim, action or proceeding and further agree to provide all available information, and reasonable assistance to enable the other Indemnifying Party to do so. However, neither party will be liable under this indemnity for any losses, liabilities, damages, demands or expenses arising out of the gross negligence or wilful misconduct of the other party or any of its affiliates, agents, directors, officers, employees or assigns. Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE LICENSE GRANTED PURSUANT TO THIS AGREEMENT OR THE USE OR COMMERCIAL DEVELOPMENT OF ALFERON.

B. WARRANTIES

Subject as herein provided HEMISPHERX warrants to EMERGE that:


•	All Products supplied hereunder will comply with the Dossier and with any specification agreed for them in the Quality Agreement;


•	It is not aware of any rights of any third party in the Territory which would or might render the sale of the Products, or the use of any of the Trademarks on or in relation to the Products, unlawful;


•	It is the owner or the permitted licensee of all Intellectual Property Rights and it is not aware of any claims of any third party in the Territory or worldwide related to the fact that the Products infringes any intellectual property of such third party.


•	Nothing in this Agreement shall exclude either party’s liability for death or personal injury.

Subject to the above WARRANTIEs, HEMISPHERX shall indemnify and hold harmless EMERGE and its respective employees from any loss, damage or claim made by a third party in respect of (i) the death or personal injury arising from the manufacture or use of the Products in the Territory or (ii) infringement of third party intellectual property, if and to the extent such loss, damage or claim is caused by any act or omission of HEMISPHERX and is not attributable directly or indirectly to the breach of any of the material terms of this Agreement by EMERGE or by any wilful default or negligent act or omission of EMERGE, its employees or its agents.

1. The indemnity given by HEMISPHERX shall be subject to the following conditions:


•	No indemnity shall be claimed unless notice is given by EMERGE claiming the indemnity to HEMISPHERX together with details of the claim promptly on notice of such claim being received by the EMERGE;


•	No admissions of liability or compromise or offer of settlement of any claim shall be made by EMERGE without the prior written consent of HEMISPHERX; and


•	HEMISPHERX shall have full control over any claim, proceedings or settlement negotiations in respect of which it is providing the indemnity.

Subject to clause X.B 1.), EMERGE shall defend and indemnify HEMISPHERX and its Affiliates and hold each of them harmless against all claims, demands, actions, losses, expenses, damages, liabilities, costs (including interest, penalties and reasonable attorneys' fees) and judgements suffered by each of them, which arise out of EMERGE’s negligent or wilful acts or omissions or which otherwise arise out of EMERGE’s breach of the Agreement.

Survivability. The obligations set forth in this Section X. shall survive the termination of this Agreement for the legal periods of limitation provided by US law.

XI. CONFIDENTIALITY


A.	EMERGE and HEMISPHERX agree to keep secret and confidential all confidential, proprietary or non-public information ("Confidential Information") of the other Party .This provision shall survive termination or expiration of this Agreement.

Such Confidential Information will be kept confidential until 5 years after the expiration of termination of this Agreement. Notwithstanding the foregoing , Confidential Information of a Party shall not include information which the other Party can establish by written documentation was (a) to have been publicly known prior to disclosure of such information by the disclosing Party to the other Party, (b) to have become publicly known, without fault on the part of the other Party, subsequent to disclosure of such information by the disclosing Party to the other Party , (c) to have been received by the other Party at any time from a source , other than the disclosing Party , rightfully having possession of and the right to disclose such information, (d) to have been otherwise known by the other Party prior to disclosure of such information by the disclosing Party to the other Party, or (e) to have been independently developed by employees or agents of the other Party without access to or use of such information disclosed by the disclosing Party to the other Party.

The confidentiality obligations contained in this section XI shall not apply to the extent that the receiving Party (the "Recipient") is required (a) to disclose information by law, order or regulation of a governmental agency or a court of competent jurisdiction , or (b) to disclose information to any governmental agency for purposes of obtaining approval to test or market a Product , provided in either case that the Recipient shall provide written notice thereof to the other Party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof.

XII. PROSECUTION, INFRINGEMENT, AND DEFENSE OF HEMISPHERX INTELLECTUAL PROPERTY


A.	HEMISPHERX will be responsible for and shall control, at its expense, the preparation, filing, prosecution and maintenance of HEMISPHERX Intellectual Property.


B.	EMERGE will cooperate in all reasonable ways to establish and protect HEMISPHERX Intellectual Property in the Territory.

HEMISPHERX, at its expense, will have the right to determine the appropriate course of action to enforce its HEMISPHERX Intellectual Property against infringement or otherwise abate the infringement thereof , to take (or refrain from taking) appropriate action to enforce its HEMISPHERX Intellectual Property, to control any litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation or other enforcement action with respect to its Intellectual Property .


D.	Each Party shall promptly notify the other Party in writing if any claim, action, demand or other proceeding (a "Claim") is brought against or is threatened to be brought against such Party alleging that the sale of Alferon violates another party's intellectual property.

EMERGE will promptly notify HEMISPHERX of any Third party EMERGE knows or believes may be infringing HEMISPHERX Intellectual Property and will, to the greatest extent reasonably possible, provide to HEMISPHERX any information EMERGE has in support of such belief. HEMISPHERX will have the right, but not the obligation, to use such information in an infringement action against such third Party. EMERGE agrees to cooperate with HEMISPHERX in any action for infringement of HEMISPHERX, and HEMISPHERX will reimburse EMERGE for all reasonable costs incurred by it in providing cooperation requested by HEMISPHERX.

F. HEMISPHERX is the sole legal and registered owner of "Alferon® ".

HEMISPHERX hereby grants to EMERGE and EMERGE hereby accepts the right, privilege and exclusive license to use "Alferon®" solely in connection with the terms of the Sales, Marketing, Distribution and Supply Agreement of Alferon in the Territory for the Term of this Agreement. Should the Agreement expire or terminate, the right to use the trademark shall also terminate. EMERGE shall use Alferon at all times for the sole purpose of marketing Alferon and for no other purpose.


H.	The terms of the intellectual property license hereby granted shall be effective upon the Effective Date of this Agreement and during the term of this Agreement, unless sooner terminated in accordance with the provisions of the Sales, Marketing, Distribution and Supply Agreement between the parties.

1. Good Will. EMERGE recognizes that there exists great value and good will associated with the Trademark and Intellectual Property use of "Alferon®".

2. EMERGE agrees that it will not during the term of this Agreement, or thereafter, attack the title or any rights of HEMISPHERX in and to “Alferon®" or attack the validity of the license granted herein by HEMISPHERX and solely owned by HEMISPHERX.

EMERGE agrees to assist HEMISPHERX to the extent necessary in the procurement of any protection or to protect any of HEMISPHERX's right to “Alferon®" and HEMISPHERX, if it so desires, may commence or prosecute any claims or suits in its own name or in the name of EMERGE or join EMERGE as a party thereto. EMERGE shall notify HEMISPHERX in writing of any infringements or imitations by others of “Alferon®" which may come to EMERGE 's attention, and HEMISPHERX shall have the sole right to determine whether or not any action shall be taken on account of any such infringements or imitations. EMERGE shall not institute any suit or take any action on account of any such infringements or imitation without first obtaining the written consent of the HEMISPHERX so to do.


J.	EMERGE agrees to cooperate fully and in good faith with HEMISPHERX for the purpose of securing and preserving HEMISPHERX's rights.

K. It is agreed that nothing contained in this Sales, Marketing, Distribution, and Supply Agreement shall be construed as an assignment or grant to the EMERGE of any rights, title or interest in or to "Alferon® ".


L.	It is further understood that all rights relating thereto are reserved by HEMISPHERX, except for the license hereunder to EMERGE of the right to use and utilize the name Alferon only as specifically and expressly provided in this Agreement.

In the event of termination of this license for any reason, EMERGE shall within 6months (as described in the Termination clause), cease all use of the "Alferon®". EMERGE shall not thereafter use any names, mark or trade name similar thereto belonging to HEMISPHERX. Termination of the license under the provisions of this Agreement shall be without prejudice to any rights which HEMISPHERX may otherwise have against EMERGE.


N.	EMERGE shall, and shall cause its shareholders, officers, directors, and managing personnel to, comply with all laws, rules and government regulations pertaining to its business and shall not violate any laws which would create an adverse effect on the “Alferon®" in the U.S. and/or the Territory.

Relationship of Parties. EMERGE shall not in any manner or respect be the legal representative or agent of HEMISPHERX and shall not enter into or create any contracts, Agreements, or obligations on the part of HEMISPHERX, either expressed or implied, nor bind HEMISPHERX in any manner or respect whatsoever regarding its intellectual property; it being understood that this Agreement is only a contract for the licensed use of the product names in connection with the terms in this Agreement.

XIII. BUYOUT

HEMISPHERX will have the option at any time to buy out this Agreement. If exercised within the first two (2) years HEMISPHERX will pay EMERGE three (3) times the Alferon sales for the preceding 12 months. If exercised after year 3, HEMISPHERX will pay EMERGE two (2) times the Alferon sales for the preceding 12 months.

XIV. MISCELLANEOUS.

Notices. Notices sent pursuant to this Agreement are valid if in writing and addressed to the parties at the respective addresses given below or at such other addresses as either party shall notify the other in writing and sent by registered or certified mail, postage prepaid and return receipt requested, or by Federal Express or other comparable courier providing proof of delivery, and shall be deemed duly given and received (i) if mailed, on the third business day following the mailing thereof, or (ii) if sent by courier, the date of its receipt (or if not on a business day, the next succeeding business day).

If to HEMISPHERX:

William Carter, MD, Chairman and CEO

One Penn Center

1617 JFK Boulevard

Suite 500

Philadelphia, PA 19103 United States

If to EMERGE:

Chris Rossidis, Head of Commercial Operations

Suite 3, Level 1

2 Theatre Place,

Canterbury VIC 3126, Australia


B.	This Agreement and the transactions contemplated herein shall be governed by, and construed in accordance with, the laws of the State of Delaware, USA and disputes, if not resolved by the Parties, will be settled by binding arbitration in and under the rules of arbitration in London, England.


C.	This Agreement constitutes the entire understanding of the parties with respect to the purchase and sale of Alferon and supersedes all prior discussions, agreements, and understandings between HEMISPHERX and EMERGE.


D.	Each party an independent contractor to the other and the relationship between the parties shall not be construed to be that of an employer and employee, or to constitute a partnership, joint venture, or agency of any kind.

E. This Agreement may only be amended in a writing signed by both parties hereto.


F.	If any provision of this Agreement is declared invalid or unenforceable by a court having competent jurisdiction, it is mutually agreed that this Agreement shall endure except for the part declared invalid or unenforceable by order of such court.


G.	This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.


H.	Prior to their release, the parties must agree on press releases or market communication that utilises the other Party’s name.

Counterparts; Integration; Effectiveness; Electronic Execution

This Agreement may be executed in counterparts (and by different parties hereto in different counterparts}, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

This Agreement shall become effective when it shall have been executed by all parties and upon receipt of all counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by e-mail and/or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

The words "execution," "signed," "signature," and words of like shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, and any other similar State laws based on the Uniform Electronic Transactions Act.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above.

EMERGE HEALTH PTY LTD: HEMISPHERX BIOPHARMA, INC:

s/Chris Rossidis s/William Carter

Chris Rossidis William Carter, MD

Head of Commercial Operations Chairman and CEO

Date: Date:

3 August 2015 August 6, 2015

Exhibit 1

(Full Business plan is to be completed by Emerge Health and sent to Hemispherx 90 days post signing of the main agreement – see page 2 of the Sales, Marketing, Supply & Distribution Agreement, clause III. B.) {***}

"Specialised Medicines for Life"

Alferon ® Overview Australia and New Zealand

Exhibit 2

TECHNICAL / QUALITY AGREEMENT


1.	Parties

This Quality Agreement is entered by and between Emerge Health Pty Ltd., a pharmaceutical company with its primary offices located at Suite 3, Level 1, 2 Theatre Place, Canterbury VIC 3126, Australia (“ COMPANY”) and Hemispherx Biopharma, Inc. 783 Jersey Avenue, New Brunswick, New Jersey 08901(HEB).


2.	Purpose

The purpose of this Quality Agreement is to clearly define the quality operating procedures, duties and responsibilities to be employed by COMPANY and HEB in the conduct of activities by COMPANY for Hemispherx Biopharma, Inc. The objective of these procedures and this Quality Agreement is assurance that services are conducted in a timely, consistent and uniform manner and in accordance with current laws, directives, regulations and guidelines, as may be applicable to the specific project(s). These requirements may include those defined by the U.S. FDA’s regulations At 21CFR314.80 (Post-marketing reporting of adverse drug experiences for drugs), 21CFR312.32 (IND safety reporting) 21CFR600.80 (Post marketing reporting of adverse experiences for biologics) 21CFR Parts 210 and 211 (“current Good Manufacturing Practices” or “cGMPs”) with particular interest in 21CFR211.1.42 (Warehousing), 21CFR211.150 (Distribution), 21CFR211.204 (Returned drug) and 21CFR211.208 (Drug product salvaging) and/or others that may be appropriate for the particular project.

3. Scope

This Quality Agreement is to be applied to the activities performed by COMPANY, for HEB as specifically defined by the Sales, Marketing, Distribution, and Supply Agreement July (“Agreement”) to which this Quality Agreement is an integral Exhibit. In the event of a conflict between the terms of the Agreement and this Quality Agreement, the terms of the Agreement shall control. Unless otherwise stated in these documents, COMPANY shall follow its Standard Operating Procedures (“SOPs”) with respect to the activities it shall carry out in accordance with the Agreement. Copies of all relevant SOPs shall be provided to HEB for review during audits.

4. Confidentiality

The information and procedures contained in this Quality Agreement are confidential and subject to the terms and conditions of the confidentiality provisions as set forth in the Confidential Disclosure Agreement September 22, 2014 (“CDA”) executed by HEB and COMPANY .

5. Terms

This Agreement between HEB and COMPANY shall be in effect beginning the last date of execution set forth on the signature page to the Agreement (the “Effective Date”) to which this Quality Agreement is Exhibit 2 and remain in effect until HEB and COMPANY terminate the Agreement or it is superseded by a revised Quality Agreement executed by both parties. This Quality Agreement should be reviewed periodically by both parties for any needed updating, revisions, amendments, and the like. Regular periodic review of this Quality Agreement should be conducted to ensure it is up-to-date.

HEB may perform audits for initial qualification of COMPANY as well as periodic audits and “for cause” audits. At mutually agreed upon times, HEB may review standard operating and other quality control procedures and records and the records of COMPANY relating to the Agreement. Such routine and general oversight review is to be requested at least twenty (20) business days in advance, limited to two (2) persons, completed within one (1) to two (2) business days and shall be offered to HEB one (1) time each calendar year. COMPANY will make every reasonable effort to accommodate the special circumstances that may arise pursuant to “for cause” audits. The following applies to all audits:


•	Prior to an audit HEB will communicate to COMPANY the scope of the audit.


•	HEB will prepare a written report of the results of the audit and forward a copy to COMPANY .

COMPANY will provide a written response to HEB’s written audit report within twenty (20) business days of receipt of such report setting forth the corrective actions to be taken by COMPANY , if any, and a timeline for such implementation.

In the event of an inspection by any governmental or regulatory authority concerning the activities carried out under the Agreement, COMPANY shall notify HEB promptly upon learning of such an inspection, shall supply HEB with copies of any correspondence or portions of correspondence relating to HEB’s materials and shall inform HEB of the general findings and outcomes of such inspections.

COMPANY and HEB shall cooperate with each other during any such inspection, investigation or other inquiry, including applying reasonable effort, as might be practical, at allowing, upon reasonable request, a representative of HEB to be on site during such inspection, investigation or other inquiry, and providing copies of all documents related to the inspection. Each party acknowledges that it may not direct the manner in which the other party fulfills its obligations to permit inspection by governmental entities

6. Dispute Resolution

If a dispute arises between the parties under this Agreement, the parties agree that, prior to either pursuing other available remedies, decision-making individuals from each party will promptly meet, either in person or by telephone, to attempt in good faith to negotiate a resolution of the dispute. If, within sixty days after such meeting, the parties are unable to resolve the dispute (or such longer time as the parties may agree) either party is free to pursue its legal remedies.

7. Definitions

Adverse experience : Any adverse event associated with the use of a biological or drug product in humans, whether or not considered product related, including the following: an adverse event occurring in the course of the use of a biological or drug product in professional practice; an adverse event occurring from overdose of the product whether accidental or intentional; an adverse event occurring from abuse of the product; an adverse event occurring from withdrawal of the product; and any failure of expected pharmacological action.

Disability : A substantial disruption of a person’s ability to conduct normal life functions.

Life-threatening adverse experience: Any adverse experience that places the patient, in the view of the initial reporter, at immediate risk of death from the adverse experience as it occurred, i.e., it does not include an adverse experience that, had it occurred in a more severe form, might have caused death.

Labeled event: An adverse experience that is listed on the product insert as having been observed in patients who are receiving the drug product.

Drug Product: A finished dosage form, for example, tablet, capsule, or solution that contains an active ingredient generally, but not necessarily, in association with inactive ingredients

Serious adverse experience : Any adverse experience occurring at any dose that results in any of the following outcomes: Death, a life-threatening adverse experience, inpatient hospitalization or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a serious adverse experience when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed in this definition.

Unexpected adverse experience : Any adverse experience that is not listed in the current labelling for the biological or drug product. This includes events that may be symptomatically and pathophysiologically related to an event listed in the labelling, but differ from the event because of greater severity or specificity.

For example, under this definition, hepatic necrosis would be unexpected (by virtue of greater severity) if the labeling only referred to elevated hepatic enzymes or hepatitis. Similarly, cerebral thromboembolism and cerebral vasculitis would be unexpected (by virtue of greater specificity) if the labeling only listed cerebral vascular accidents. “Unexpected,” as used in this definition, refers to an adverse experience that has not been previously observed (i.e., included in the labeling) rather than from the perspective of such experience not being anticipated from the pharmacological properties of the pharmaceutical product.

Call report : A list of all questions, requests for circulars, and physician/patient complaints received by COMPANY's Clinical Support Department is prepared monthly by COMPANY staff and is forwarded to HEB RA/QA Department.

Audit : A systematic examination of processes, controls and systems, operating procedures, reports, records and/or data to assess COMPANY’s compliance with standards, regulatory submissions, SOPs; applicable laws, regulations, directives, standards and guidelines; the terms of this Agreement and other contracts in place defining the services being provided and to verify data integrity.

Good Manufacturing Practices (“GMPs”): The recognized pharmaceutical regulations and requirements of regulatory authorities such as those defined by the U.S. FDA’s regulations at 21CFR Parts 210 and 211.

Key Contacts: Persons at COMPANY and HEB assigned to assure proper communication and follow-up in a timely manner within both parties’ organizations. Names, titles and full contact information for Key Contacts shall be appended to this Agreement as Attachment 1 and should be maintained up-to-date during the course of the project.

Observation: A statement of fact made during an audit that is substantiated by objective evidence. HEB categorizes observations as follows:


◦	Critical: May pose risk to patient or consumer or otherwise compromise the integrity or quality of the material, product, process, or service being provided. Other instances that could be defined as a critical observation include: A practice that poses an immediate safety risk to personnel; Quality System(s) missing or not in compliance with regulations, guidelines, or corporate policies.

◦

Major: Does not fully comply with regulations, guidelines or corporate policies and may pose unnecessary risks to the integrity or quality of material, product, process or service being provided. Other instances that could be defined as a major observation include: Likely or probable safety risk to personnel; Quality System(s) weak or needing improvement; repeated Minor deficiencies of a similar nature that indicate a systemic problem and therefore may be classified as Major.


◦	Minor: Does not comply with regulations, guidelines, or corporate policies but does not directly impact the integrity or quality of the material, product, process, or service being provided.


◦	Comment: Compliant with regulations, guidelines and/or corporate policies; however, the auditor comment serves as a recommendation relative to maintaining or improving a specific condition noted.

Out-of-Specification / Out-of-Trend (“OOS / “OOT”): A result that is not within the established specifications or trend, whether these are qualitative or quantitative.

Standard Operating Procedures (“SOPs”): Procedures in effect at COMPANY that define the processes and controls by and under which activities are to be conducted to assure compliance with the appropriate Code of Federal Regulations.

7. Communications

To assure proper communication, notification and follow-up in a timely manner by both parties, “Key” contacts are listed in Attachment 1 of this Agreement. Key contacts shall have access to project managers and technical staff and, upon reasonable notice and as required, facilitate resolution of any issues. Every effort will be made by COMPANY to accommodate timely communications, including face-to-face meetings, with HEB.

8. Change of Control

COMPANY will maintain and follow change control SOP(s) to ensure that changes to equipment, procedures, processes, etc. occur in a controlled manner and in compliance with requirements e defined by the U.S. FDA’s regulations (see Section 2). The implementation of any change that may directly impact the integrity of the activities conducted or data being supplied for HEB will require prior written approval of HEB. COMPANY and HEB will advise the appropriate organization’s staff member (See Attachment 1) before implementation of a change, by either party, to equipment, procedures, specifications, processes, clinical protocols, product claims or facilities directly related to HEB’s specific products and processes. Each party agrees to review the proposed change in a timely manner and, at its discretion, may audit and/or request an alternative or additional change prior to the implementation of the proposed change. The respective party will review the proposed change, determine if it is reasonably practicable to implement the change and can suggest alternative or additional changes prior to the implementation of the proposed change. Change control requirements should be articulated within the specific operation’s documentation practices.

HEB is responsible for assuring changes are in accordance with and/or reported to the investigational, marketing and/or any other filing with regulatory agencies (IND, IMPD, CTA, NDA, MA, etc.) and for informing COMPANY of any changes requested by regulatory agencies. COMPANY agrees to keep HEB fully informed of any and all communications with regulatory agencies that may affect the services being provided to HEB by COMPANY .

This Agreement is not meant to supersede or replace controlled documents typically used to define and record the work to be conducted by COMPANY for HEB. Specific requirements of this Agreement and/or any service contracts shall be articulated within COMPANY’s current operating procedures and documentation systems.

9. Responsibilities

COMPANY is responsible for:


1)	case management support services to patients and maintain a 24-hour/365-day a year telephone service for assistance of prescription drug-related medical emergencies to patients


2)	the distribution of product, including the shipping, handling and storage and all rules and regulations of every governmental authority having jurisdiction over the shipping, handling, storage, distribution, and dispensing of Product


3)	confirming the product labelling requirements in the territory


4)	conforming to all labeled specifications concerning the shipping, handling and storage of Product


5)	notifying HEB of any unacceptable storage or handling deviation within one (1) business day


6)	inspecting all product shipments received by COMPANY from HEB and reporting any damage, defect, loss in transit, or other shipping errors to HEB within one (1) business days of receipt by COMPANY


7)	administering recalls, field alerts, warning letters, quarantines or withdrawals in accordance with HEB instructions (See Attachment 2)


8)	administering HEB’s Returned Goods Policy (See Attachment 3)


9)	immediately notifying HEB of any serious and unexpected side effects (Adverse Experiences reported to COMPANY, as defined by 21CFR 34.80))


10)	providing HEB with written Adverse Experience Reports


11)	keeping HEB fully informed of any and all communications with regulatory agencies that may affect the services being provided to HEB by COMPANY


12)	receiving and processing complaints


13)	notifying HEB of complaints and actions taken or to be taken to address the complaints


14)	the performance of all services provided by COMPANY’s subcontractors

15)

communicating to HEB any events of non-conformance that impact the quality of HEB’s product. Examples of non-conformances may include, but are not limited to: equipment failure, shipping error or documentation error, labeling error, improper storage, facilities system error, and unplanned study protocol deviations. When a non-conformance event occurs that is specific to HEB’s product, COMPANY will conduct an investigation and provide copies of all investigation documentation to HEB for review and input


16)	for initiating, monitoring and completing CAPA tasks related to discrepancies, errors and incidents involving services that are under COMPANY’s control

HEB is responsible for:


1)	release of product following review of all manufacturing and quality control testing requirements to confirm the batch has been manufactured according to approved processes and specifications


2)	supply all necessary quality documentation with shipments to allow product importation and release


3)	ensuring product intended for supply in territory is labelled accordingly


4)	assuring changes to the established operations are in accordance with and/or reported to the investigational, marketing and/or any other filing with regulatory agencies (IND, IMPD, CTA, NDA, MA, etc.).


5)	informing COMPANY of any changes requested by regulatory agencies


6)	assist with/address any Agencies requests relating to manufacture of product

providing COMPANY any information that could result in a field alert or recall of a product under a HEB NDA or ANDA immediately, but no more than one (1) business day after discovery. HEB interprets FDA 21 CFR 314.81, “Other Post-Marketing Reports,” to require a Field Alert Report to be made within three (3) days of an occurrence of an OOS result, whether that result is confirmed or not. The only exception to this would be where the original result was invalidated within the three (3) days. In that case, no field alert would be required


8)	making the proper reports to the FDA regarding a field alert or recall


9)	communicating to COMPANY any events of non-conformance that impact the quality of HEB’s product. Examples of non-conformances may include, but are not limited to: contamination, calculation or documentation error, labeling error. When a non-conformance event occurs HEB will conduct an investigation and inform COMPANY of any appropriate action to be taken


10)	for initiating, monitoring and completing CAPA tasks related to discrepancies, errors and incidents involving services that are under HEB’s control


11)	contribute to customer complaint investigations where possible issues due to manufacturing process may have contributed to complaint

HEB and COMPANY are separately responsible for securing and maintaining all required licenses, permits and certificates applicable to their respective operations and each shall comply with any and all applicable federal, state and local laws, including but not limited to (i) the Federal Food Drug and Cosmetic Act; (ii) the Social Security Act; (iii) HIPPAA; (iv) all federal and state health care anti-fraud and abuse laws, and (v) all state privacy, and consumer protection laws, including those relating to the use of medical and prescription information for commercial purposes.

10. Subcontractors

COMPANY may enter into agreements between COMPANY and a subcontractor. COMPANY will identify the services performed by each such subcontractor. COMPANY is responsible for the performance of all services provided on behalf HEB and the compliance of each subcontractor to the terms of this Agreement. HEB will be permitted to conduct periodic audits of the subcontractors to assure compliance to applicable GMP’s, GLP’s and federal regulations (CFR’s).

11. Standard Operating Procedures (SOP’s)

The following HEB SOP’s are relevant to this Quality Agreement and interactions between HEB and COMPANY and affiliates.


A.	CLN-009 Handling Adverse Event Reports and Records


B.	QC-006 Investigation of Out of Specification Results

12. Laboratory Controls-N/A

13 Documentation and Record Maintenance

COMPANY shall preserve all records in accordance with any applicable federal, state or local requirements. Raw data, documentation, batch records, source documents, product disposition records and reports (collectively, “Documentation”) shall be retained by COMPANY for a minimum period of two (2) years after termination or expiration of the Specialty Distributor Purchase and Service Agreement between HEB and COMPANY. COMPANY shall, upon written receipt of a written request from HEB, finish such Documentation in a format reasonably acceptable to HEB with thirty (30) days of receipt of such request. In this case, the Documentation will be shipped to the Quality Assurance Manager named in this Agreement (see Key Contact List, Attachment 1). It is the responsibility of HEB to notify COMPANY of any changes in this contact. During the retention period, documentation shall be available for inspection by HEB, its authorized agents and authorized government agencies.

14. Complaints

In the event COMPANY is notified of a complaint, COMPANY will receive, investigate and respond to the complaint following its internal procedures. A copy of all complaint investigation documentation will be provided to HEB.

15. Contact List of Key Personnel . See Attachment 1

IN WITNESS WHEREOF, the parties hereto have executed this Quality Agreement as of the Effective Date.

Hemispherx Biopharma Inc.

Signature: s/Chris Rossidis

Printed Name: Chris Rossidis

Title: Director, Head of Commercial Operations

Date: 03, August, 2015

COMPANY.

Signature: s/William A Carter

Printed Name: William A Carter

Title: Chief Executive Officer

Date: August 6, 2015

Attachment 1

List of Key Contacts



SUBJECT	HEB CONTACT	COMPANY CONTACT
Regulatory Compliance Requirements Notification of Regulatory Agencies and Regulatory Submissions	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Recall of Marketed Product	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Adverse Drug Events	David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: David.Strayer@Hemispherx.net	{***}
Product Complaint	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Field Alert Reports/Biological Product Deviation Reports	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Change Control	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Clinical Study Protocol Changes	David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: David.Strayer@Hemispherx.net	{***}
New or Revised Product Clams	David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: David.Strayer@Hemispherx.net	{***}
Documentation Quality Records Record Retention	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
SUBJECT	HEB CONTACT	COMPANY CONTACT
Product Testing and Release	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Control of Components, Labeling and Packaging Materials	Chris Cavalli VP Quality Control Phone: 732-249-3550 ext 559 Email:Chris.Cavalli@Hemispherx.net Fax:732-249-6895	{***}
Product Storage and Shipping	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Returned Goods	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.	{***}
Deviations/Investigations Nonconforming or Rejected Material	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Supplier Qualification	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}
Quality Audits & Regulatory Inspections	Victoria Scott Director/Quality and Regulatory Phone: 732-249-3550 ext 567 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net	{***}

Attachment 2

QA-007-Product Recall

Attachment 3

HEB Return Goods Policy

This Return Goods Policy us for all HEB products, Alferon N ^® and Alferon ^® distributed by COMPANY .

The following products are eligible for return and reimbursement:


•	Outdated Product: Product within two (2) months prior or six (6) months past expiration date and noted on product;

AND


•	Product in its original container and bearing its original label.


•	Product which HEB has specified be returned

The following products are not eligible for return and reimbursement:


•	Product that is not outdated.


•	Product in which the lot number and/or expiration date is missing, illegible, covered, and/or unreadable on original container.


•	Product that has been damaged due to improper storage handling, fire, flood, or catastrophe.


•	Product that has been sold expressly on a non-returnable basis.


•	Product that is not in its original container and/or not bearing its original label.


•	Product that is in its original container with a prescription label attached.


•	Product that has been repackaged


•	Partial Vials


•	Product obtained illegally or via diverted means


•	Product purchased on the “secondary source” market or from a distributor other than COMPANY .


•	Product that HEB determines, in its sole discretion, is otherwise adulterated, misbranded, or counterfeit.

HEB will only accept returns shipped to COMPANY . All eligible products shall be shipped in a safe, secure, and reliable manner, and in compliance with all applicable federal, state and local laws, regulations and statutes. It is the shipper’s responsibility to securely package all return goods to prevent to prevent breakage during transit and otherwise comply with the laws and regulations applicable to the packaging, shipping, and transport of return goods shipments.

HEB is not responsible for shipments lost and/or damaged in transit. HEB recommends that all customers insure return goods shipments.

HEB will audit the quantities of return goods and final reimbursement will be based on HEB count. All products will be reimbursed based on the price paid Direct purchasing customers reimbursement will be issued in the form of credit or product replacement to the appropriate party.

To assist in accurate credit memo processing, please include the following information:


1.	Purchasers Name and Mailing Address


2.	Date and Quantity

Return goods shipments which are deemed to be outside of this policy will not be returned to the customer or the third party processor and no reimbursement will be issued by HEB. HEB return goods policy is subject to change at any time and without prior notices to other parties.

Attachment 3

HEB Return Goods Policy

This Return Goods Policy us for all HEB products, Alferon N ^® and Alferon ^® distributed by COMPANY .

The following products are eligible for return and reimbursement:


•	Outdated Product: Product within two (2) months prior or six (6) months past expiration date and noted on product;

AND


•	Product in its original container and bearing its original label.


•	Product which HEB has specified be returned

The following products are not eligible for return and reimbursement:


•	Product that is not outdated.


•	Product in which the lot number and/or expiration date is missing, illegible, covered, and/or unreadable on original container.


•	Product that has been damaged due to improper storage handling, fire, flood, or catastrophe.


•	Product that has been sold expressly on a non-returnable basis.


•	Product that is not in its original container and/or not bearing its original label.


•	Product that is in its original container with a prescription label attached.


•	Product that has been repackaged


•	Partial Vials


•	Product obtained illegally or via diverted means


•	Product purchased on the “secondary source” market or from a distributor other than COMPANY .


•	Product that HEB determines, in its sole discretion, is otherwise adulterated, misbranded, or counterfeit.

HEB is not responsible for shipments lost and/or damaged in transit. HEB recommends that all customers insure return goods shipments.

To assist in accurate credit memo processing, please include the following information:


3.	Purchasers Name and Mailing Address


4.	Date and Quantity

421290 1

{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit 1, when prepared, will be redacted from this agreement and filed separately with the Commission pursuant to the request for confidential treatment.

EXHIBIT 31.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, William A. Carter certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Hemispherx Biopharma, Inc. (the “Registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;


4.	The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and


5.	The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.



Date: August 12, 2015
		/s/ William A. Carter
		William A. Carter, M.D.
		Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Thomas K. Equels certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Hemispherx Biopharma, Inc. (the “Registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;


4.	The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and


5.	The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.



Date: August 12, 2015
		/s/ Thomas K. Equels
		Thomas K. Equels, Esq.
		Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hemispherx Biopharma, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William A. Carter, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



Date: August 12, 2015
		/s/ William A. Carter
		William A. Carter, M.D.
		Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hemispherx Biopharma, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas K. Equels, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



Date: August 12, 2015
		/s/ Thomas K. Equels
		Thomas K. Equels, Esq.
		Chief Financial Officer