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Time To Dote On Cleveland BioLabs' Radiation Antidote?

CBLI 022310

Radiation is harmful to humans when exposed to large doses. The health risks from exposure to radiation range from acute radiation syndrome to carcinogenesis depending on the dose and duration of exposure. The *radioactive fallout (*deposition of radioactive particles on the earth's surface) can either be due to terrorist nuclear detonations or accidents involving nuclear materials.

Acute radiation syndrome, or ARS, is caused due to exposure to large amounts of radiation over a brief period. Some of the symptoms of ARS include skin irritation, nausea, vomiting, burns to the skin, diarrhea, inflammation of tissues, bleeding from the nose, mouth, gums or rectum, and anemia. It can even lead to death if the radiation dose is too high.

Cleveland BioLabs Inc. (CBLI) is one such company developing drugs to treat cancer and protect normal tissues from exposure to radiation and other stresses.

The company's most advanced drug candidate is Protectan CBLB502, which is under phase I safety trial for use in ARS. The development of Protectan CBLB502 for the ARS indication is expected to be completed by the end of 2010. The normally lengthy FDA approval process for Protectan CBLB502 is substantially abbreviated because of its potential military and defense implication.

As mentioned earlier, the approval pathway of CBLB502 is abbreviated and it requires only demonstration of efficacy in two animal species and safety and drug metabolism testing in a representative sample of healthy human volunteers. CBLB502 was issued the first U.S. patent on January 6 and European patent on January 28.

In animal studies, Protectan CBLB502 administered through intramuscular injection has shown to protect mice without increasing the risk of radiation-induced cancer development and has demonstrated significant survival benefits at a single dose.

The development costs of the drug are covered by government development contracts. The company has received more than $20 million in federal funds for the development of Protectan CBLB502. According to the company, the pending proposals for additional grants and contracts to support the company's development programs total about $37.5 million.

Last month, the company was issued a Request for Proposal, or RFP, by the Department of Defense for the advanced development, FDA approval/licensure and delivery of Medical Radiation Countermeasure. Cleveland BioLabs submitted CBLB502 as a candidate for the contract award, expanding upon its existing relationships with the DoD and other federal agencies.

Cleveland BioLabs is also testing CBLB502 for the medical indication of reducing toxicities of chemotherapeutic drugs. A phase I/II study of Protectan CBLB502 in head and neck cancer patients is expected to be initiated this quarter.

A second investigational drug belonging to the family of Protectan is CBLB612. Last September, the company licensed exclusive rights to develop and commercialize CBLB612, a stem cell inducing agent, in the People's Republic of China to Zhejiang Hisun Pharmaceutical Co. Ltd.

Yet another experimental drug in Cleveland BioLabs' pipeline is CBLC102, which belongs to the Curaxin family of compounds. The company completed a phase II study of CBLC102 as a monotherapy in late stage, hormone-refractory taxane-resistant prostate cancer.

Late last year, Cleveland BioLabs established a joint venture with Russian venture capital fund Bioprocess Capital to develop Curaxin compounds for cancer applications. The 50/50 joint venture Incuron will control the rights to Cleveland BioLabs' Curaxin anticancer molecules and Bioprocess Capital Ventures agreed to contribute about $18 million over three payments to support development of the compounds.

The company has zero debt and as of September 30, 2009 had $5.2 million in cash and receivables.

With the nuclear and radiation threats for military and civilian populations becoming imminent, there has been a continued interest and investment on part of the U.S. government in licensure and procurement of a radiation antidote.

According to Cleveland BioLabs, if successfully launched for the ARS indication, Protectan CBLB502 has the potential to address a market worth $500 million per year. There are currently no FDA-approved countermeasures to treat ARS.

CBLI, which has been trading in the range of $1.15-$6.35 over the last twelve months, closed Monday's trade at $4.40.

Cleveland BioLabs is scheduled to host a press conference at NASDAQ MarketSite, 4 Times Square, New York, on February 24 to discuss its business and clinical advances. Stay tuned...

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