Like other money-losing drug development companies, Hemispherx Biopharma Inc. is now in cash-conservation mode.

The Philadelphia pharmaceutical company today said it would try a number of measures to reduce corporate expenses. Hemispherx is the company that had been unable to reach a quorum to hold its annual shareholders meeting earlier this fall.

One step it will take is to require senior staff to be paid as much as 50 percent of their compensation in restricted stock, starting no later than Jan. 1.

Hemispherx also said it will not renew the contract of its president and chief operating officer, Anthony A. Bonelli, who'd joined the company in November 2006. Bonelli's annual salary is $350,000.

The company said it will divide Bonelli's responsibilities among other senior management members. William A. Carter remains chairman and CEO of Hemipherx. According to the company's most recent proxy statement, Carter received compensation totalling $2.66 million in 2007, including a salary of $637,496.

As of Sept. 30, Hemispherx had cash of $7.59 million listed on its balance sheet. It is seeking Food and Drug Administration approval for an experimental drug called Ampligen to treat chronic fatigue syndrome. But it's early in that process; the FDA accepted the company's new drug application for review on July 7.

Drug developers are not strangers to net losses. Hemispherx has been unprofitable for years. It reported a net loss of $3.4 million for its third quarter ended Sept. 30, compared with a net loss of $5.7 million for the same quarter of 2007.

Hemispherx, which has its headquarters in 15,000 square feet of offices at 1617 John F. Kennedy Blvd. in Center City, said it won't be laying off employees. So no cuts to manufacturing, regulatory and medical services operations. As of March 3, the company had 36 full-time employees and 13 part-time workers among its regulatory/research medical personnel.

But it's going to implement a compensation program, called the "goal achievement incentive program," that's going to cover pay for quite a number of employees. This plan is aimed at paying management and others "only as strategic alliances are executed," according to a company statement.

Hemispherx filed details of the plan with the Securities and Exchange Commission.

The company has a strategic advisory firm helping it decide on its cost cuts - Sage Group Inc.

Also, the cost cutting program comes two days after Hemispherx added Thomas K. Equels to its board of directors. Equels had been the company's litigation counsel. He's president and managing director of the Equels Law Firm, which has three offices in Florida and focuses on complex litigation, government, business torts and personal injury law.

Shares of Hemispherx closed Friday at 45 cents, up 4 cents or 9.8 percent.

It’s encouraging that the stock market rallied recently on the days when President-elect Barack Obama’s transition staff announced or leaked names of people on his economic team.

Particularly after it tanked on days when Treasury Secretary Henry M. Paulson Jr. provided updates on the massive federal effort to fix what’s ailing the financial sector.

If you believe that a big part of business and investing is confidence, then investors seemed to be expressing confidence in the people being chosen and the broad outlines of how an Obama administration will tackle the credit crisis and all-but-official recession.

But bear in mind that saying you’ll do something and doing it are separate actions.

We’ve spent the last three months watching Paulson say one thing, then do another. That’s a credibility problem, and when we think someone has no credibility, we stop listening.

Paulson told Congress that it was imperative to move toxic mortgage-related assets off banks’ balance sheets in order get credit markets functioning again. But one month into the $700 billion Troubled Asset Relief Program, he said the federal government would not be buying those assets. Instead it would inject capital into banks to strengthen them and encourage lending.

Even if the switch was the better strategy, his inability to articulate what needs to be done to repair the financial sector has been disheartening. At a time when decisive action was needed, we got action, lots of it, but little of it felt decisive.

Don’t get me wrong. I’m not saying that there were easy solutions and that Paulson & Co. just blew it. The results of most of the actions taken by Treasury and the Federal Reserve won’t be known for months. It takes that long for changes in monetary policy to course through an economy.

I hold no illusions that Timothy Geithner and the rest of Obama’s economic team will flawlessly execute their strategies. But leaders do well when their message is clear, and markets thrive when muddled messages are a minor annoyance rather than a major impediment.

Down, flat, down

The Federal Reserve Bank of Philadelphia releases a monthly report on the change in economic activity of all the states.

A number of factors go into what it calls the state coincident indexes, including payroll employment, average hours worked, and the unemployment rate.

The coincident index for Pennsylvania for October fell 0.5 percent, the 10th month in a row it’s fallen. The Fed calculates the index is down 3.7 percent for the last 12 months, the worst such stretch since the period ending January 1992.

For all the gloom expressed in New Jersey, the state’s economic activity has remained flat over the last 12 months.

As for tiny Delaware, well, its coincident index is down 2.4 percent over the last 12 months. Not as bad as Pennsylvania, but it’s the worst 12-month reading for Delaware over the history of its index, which began in January 1980.

Unfortunately for the top management of Hill International Inc., the national “do-not-call” list doesn’t prevent margin calls.

The Marlton project management firm said this week that CEO Irvin E. Richter and president David L. Richter had sold about two million shares in response to margin calls.

The company, which employs 2,100 people in more than 30 countries, said the Richters had personal loans backed by some of their shares in Hill International.

Typically in a margin account, an investor can borrow against the value of the stock he owns. If the securities fall to a certain level, the broker makes a margin call, requiring the investor to add more cash to the account or sell some stock.

During a Nov. 6 conference call, Arnold Ursaner of CJS Securities Inc. asked David Richter about the likelihood of a margin call.

“We both put the margin loans in place very conservatively, or so it seemed six months ago,” Richter said in response. Hill shares then traded in the $14 to $15 range.

Richter told the analysts that he expected he and his father would sell some shares to address the loans.

According to a filing with the Securities and Exchange Commission, David Richter sold 48,140 shares at $3.50 each on Nov. 21 and 550,000 shares at $3.30 the following Monday.

His father sold 1.45 million shares at $3.30 on Nov. 24, according to a separate filing.

Combined, they sold $6.77 million worth of Hill International common shares to meet their margin calls.

To reduce the chance that they might get another such call, the Richters also entered in a long-term refinancing of other personal loans, the company said.

“We have worked extremely hard over the past few weeks to minimize any involuntary sales of our significant equity holdings in Hill at the current depressed levels,” Irvin Richter said in a statement.

He still owns 8,732,305 shares of Hill International, worth about $49 million based on Wednesday’s closing price of $5.63. David Richter owns 3,865,313 shares, worth nearly $22 million.

Think QVC and the image that comes to mind is likely a TV host selling some type of jewelry.

Now when you’re selling consumer goods 24 hours a day, 364 days a year, a network can’t live on jewelry alone. But it’s been a key driver of the West Chester cable shopping channel’s business for years.

That’s why it’s a little surprising to learn that electronics is QVC’s most popular business right now.

“That seems to be one of the categories that has held up better for us than other categories,” QVC CEO Michael George said during a Morgan Stanley conference call yesterday.

Unfortunately for QVC, electronics is a low-margin business, meaning it makes less profit per sale than jewelry, which is its highest-margin business. QVC doesn’t disclose what those margins are.

QVC is the engine that runs Englewood, Colo.-based Liberty Media Corp. For its nine months ended Sept. 30, QVC generated revenues of $5.7 billion, or nearly 80 percent of Liberty Media’s consolidated revenue.

Like its storefront kindred, QVC has been seeing its financial results hurt by the slide in consumer spending.

No silver linings

Among the many snapshots of the U.S. economy released yesterday, the Organization for Economic Cooperation and Development was particularly downbeat.

“The U.S. economy is facing extremely difficult conditions,” the OECD said in its semi-annual economic outlook. The report says the current environment is “the most serious recession since the early 1980s.”

And the group points the finger squarely at the financial crisis, saying that how bad things get depends on how quickly the financial crisis is overcome.

“The unfolding events since mid-2007 have highlighted the need for a major overhaul of financial regulation and supervision,” the report says.

I don’t think anyone disagrees, but we need to get beyond the daily announcements from the Treasury and Federal Reserve about new efforts to jump-start credit markets that remain stalled.

I had hoped we’d seen the last of the mega-bailouts in the financial sector.

But last week, when Citigroup Inc.’s stock price collapsed, it was clear something would have to be done. We’d seen this scenario before: American International Group, Lehman Bros., Washington Mutual and more.

All saw a massive evaporation of shareholder value just before bailout, bankruptcy or forced merger.

Just eight weeks ago, Citi was to be Wachovia’s rescuer. The sprawling financial supermarket, with the federal government’s encouragement and dollars, would prevent what some feared was a meltdown in the making.

Then Wells Fargo topped Citi with a deal to acquire Wachovia that was richer and less dependent on federal help. I can remember thinking at the time that maybe it was better for Citi not to inherit the problems that had plagued Wachovia.

Instead, Citi’s own stresses prompted federal regulators to write another big check.

That Citi could go from hero to zero so quickly should serve notice that the credit crisis is not simply a subplot to this recession.

The captains of the auto and home-building industries campaign publicly and loudly for billion-dollar loans to prop up their broken companies. I worry about what we won’t hear: the fears being expressed in bankers’ boardrooms and financial regulators’ war rooms about liquidity and capital adequacy.

Our nation has committed trillions to stabilizing the financial sector in 2008, trying to restore confidence in the banking world.

But if Citigroup can have a near-death experience after receiving $25 billion in capital less than a month ago, I’m far from confident.

Brian Bethune, chief U.S. financial economist at IHS Global Insight, said the nation is “navigating through uncharted territory in the scale of the economic and financial crisis and the magnitude of the government response required to contain it.”

The credit crisis continues to spawn wildfires. One week, it’s life insurers buying banks to gain tickets to Washington’s Bailout Ball. The next, it’s Citigroup.

From here, it doesn’t look like we’ve got the blaze under control.

The City of Philadelphia is hoping to sell $350 million in tax and revenue anticipation notes.

The thick prospectus released last week that accompanies the offering is, of course, a sales pitch to investors. It soberly describes the financial challenges facing the city’s budget.

There’s no avoiding the historical numbers showing employment declining in the city. Non-farm payroll has gone from 685,200 in 1999 to 662,400 in 2007.

But there are some interesting lines in the prospectus worth noting:

* AppTec Laboratory Services, which provides contract manufacturing services to the pharmaceutical sector, opened at the Navy Yard with 40 employees. It now has more than 260.

* The Philadelphia Industrial Development Corp. closed nine land sales in the fiscal year ended June 30. “Publicly-owned industrial land holdings in the City are reaching all-time lows,” the prospectus states.

* Rent per square foot for office space in Philadelphia was $23.97 in March 2003, according to CB Richard Ellis. In May 2008, it was $24.35. That upward trend is better than a lot of other metro areas.

Condo sales

So how’s the luxury condominium business?

Thomas Properties Group Inc. provided an update on sales at the Murano, the nearly completed 42-story high-rise at 21st and Market Streets.

Of its 302 units, the Los Angeles-based developer said it had closed sales on 101 units and 94 parking spaces. An additional 24 units and 28 parking spaces are under contract.

Earnings

Today: Campbell Soup

Tuesday: Charming Shoppes

Wednesday: Encorium Group

Friday: Pep Boys - Manny, Moe & Jack.

Quotable

Our ability to fund losses is not strong, nor is it something we should tolerate going into the future.

- Robert Lux, chief financial officer of the Temple University Health System, talking to investors about the hospital network’s financial condition.

Remember 11 days ago Unisys Corp. got bounced from the S&P 500 Index because its low market capitalization no longer made it one of the nation's biggest companies?

Well, the Financial Times says that Standard & Poor's Corp. might as well as chuck 244 other companies too.

One requirement for being included in the widely watched measure of the U.S. stock market is a market cap of more than $4 billion. But as of the opening of the market on Friday, only 256 companies had a value greater than that.

Still, don't look for wholesale index cleaning. The FT points out that the S&P 500 is run by committee, which often strives to minimize churn in the index. Turnover in 2007 was just 5 percent.

Besides at the rate the market value is being destroyed, there soon may little difference between small cap and large cap stocks.

During quieter days on Wall Street, when a CEO sold shares, it was big news.

But since the stock market gyrates by triple digits nearly every day now, the actions of CEOs and other “insiders” - officers and board members - often go unnoticed.

We should pay attention when a CEO buys or sells stock because there are lots of reasons why he or she might do so. At the most basic level, those who watch insider activity interpret buying as a good sign that the stock price could rise in the future. Selling sends the opposite message.

Over the last 30 days, the CEOs of 12 area companies have changed their holdings. Given that the stock prices of nearly every company have been beaten down quite severely, you’d be right to guess that most bosses are buyers.

Ten made purchases, including new Sunoco Inc. CEO Lynn Laverty Elsenhans (10,000 shares) and new Unisys Corp. CEO J. Edward Coleman (141,000 shares).

That leaves two sellers. Campbell Soup Co.’s Douglas R. Conant sold 37,371 shares on Nov. 3 for $1.42 million, or $38.06 per share. Up until Thursday, the Camden food processor was one of the few stocks in the Standard & Poor’s 500 index that could boast (quietly) that it had appreciated. Its shares are down 0.9 percent for 2008.

But by number of shares, the biggest transaction by a local CEO in the last 30 days was announced Thursday when J&J Snack Foods Corp. disclosed that it bought 400,000 shares from CEO Gerald B. Shreiber.

The Pennsauken company paid $27.90 per share, making the total value of the transaction $11.16 million.

In the news release disclosing the sale, Shreiber said he sold for estate and tax planning purposes, which is perfectly understandable for someone in his mid-60s who’s been running the company he founded in 1971.

Shreiber remains J&J’s biggest shareholder, owning 3.9 million shares, or about 21 percent of a food processor with a market value of $480 million. He’s got a lot of skin in the game and he let investors know it:

“The sale is in no way a reflection of my thoughts about the company or its future, either over the short or long term,” Shreiber said in the press release.

The maker of soft pretzels and frozen beverages bought the shares as part of a plan announced in February to buy back 1 million shares. With the Shreiber deal, J&J has now bought 549,433 shares.

Sallying Forth

SLM Corp., which everyone calls Sallie Mae, Thursday opened a credit operations center in Newark, Del., where the student loan provider expects to hire 750 people by the end of 2010.

Chalk up another win for Delaware’s economic development efforts to build on its critical mass of operations in the financial-services industry.

In the debate over the rescue of the Big Three automakers, what gets lost is that General Motors, Ford and Chrysler are not the sum total of the U.S. industry.

Foreign companies have made big capital investments in car and truck plants in the United States. Everyone thinks of Toyota and Honda. But don’t forget BMW and Daimler, Nissan and Hyundai.

The Center for Automotive Research’s economic impact report on the contraction of the Big Three has gotten a lot of news coverage. The group says up to 3 million jobs could be lost in the first year after a total collapse. The 2007 U.S. employment for the Terrible Trio was 239,341.

Foreign car makers don’t have as many, but they employ more than I realized.

The Association of International Automobile Manufacturers has been keeping a low profile lately, but its members directly employed 92,700 people in the U.S. in 2007.

The group has 14 companies as members, including Toyota, Honda, Nissan and even Cherry Hill-based Subaru. BMW and Daimler don’t belong, but they employ nearly 9,300 in two states.

So that’s more than 100,000 U.S. workers for the foreign companies. I’m sure I’ve missed some others.

No automaker is immune from the global economic swoon: Toyota laid off workers from its Texas truck plant, and Mercedes offered buyouts to all of its Alabama workers.

The point is, the U.S. auto industry won’t vanish should the Big Three CEOs fail to leave Washington with $25 billion in loans.

Feting Lenfest

Cable pioneer and philanthropist H.F. “Gerry” Lenfest will receive the 2008 William Penn Award from the Greater Philadelphia Chamber of Commerce.

The award is considered the highest honor given to a local business executive. As per chamber tradition, Lenfest won’t get the award until April 17.