Cleveland BioLabs executives think the Buffalo biotechnology company has made “enormous progress” in clearing the funding hurdles facing its efforts to bring its anti-radiation sickness drug to the market.
That progress stems from the agreements and guidance it received during a series of meetings with the U.S. Food and Drug Administration over questions about the proper path the company should follow for the important clinical trials that Cleveland BioLabs must complete successfully before its Entolimod drug can be approved for use as a treatment for radiation sickness.
“We have made enormous headway with the FDA,” said Yakov Kogan, Cleveland BioLabs’ chief executive officer, who hopes that progress will accelerate the company’s efforts to gain funding from a U.S. Health and Human Services agency for its remaining clinical trials for the radiation sickness drug.
Since then, Kogan noted that the company received additional funding or redirected funds from a pair of Defense Department agencies. Cleveland BioLabs in mid-October also submitted a proposal for major clinical trial funding to the Biomedical Advanced Research and Development Authority, which has been a key source of funds in the past. That agency typically makes a decision on proposals within six months, which could mean a response by the end of April.
Because Cleveland BioLabs lacks the regulatory approval it needs to sell its radiation sickness drug and other cancer treatment drugs that are in less advanced stages of development, the company relies on money it raises from investors and government agencies to fund its operations.
The company raised $15 million through a stock sale last month, leaving the company with nearly $33 million in cash – enough to last into the second half of 2014 based on a cash burn rate that is averaging about $800,000 a month.
The company also is pursuing “potential partnerships” with other drugmakers and biotechnology firms to fund its drug development efforts, especially if BARDA declines to provide additional funding, Kogan said in a conference call.
“This remains an important part of our strategy,” he said. “We do have a backup scenario. The Plan B is related to business development opportunities,” rather than further stock sales.
Cleveland BioLabs’ Entolimod drug has shown promise in earlier-stage tests in limiting the damage from exposure to radiation, but additional animal studies are required to measure its effectiveness and further human trials are needed to determine the proper dosage.
Cleveland BioLabs executives held the conference call after reporting that the company’s third-quarter losses quadrupled as its revenue stream slowed to a trickle while it seeks new funding sources for its efforts to develop its radiation sickness and cancer drugs.
The company blamed the growing losses on an accounting change that resulted in a steep increase in the value of the warrants it has issued to investors to purchase Cleveland BioLabs shares in the future.
Cleveland BioLabs lost $10.9 million, or 30 cents per share, compared with a loss of $2.7 million, or 8 cents per share, a year ago. The company’s revenues skidded to $220,000 from $3.8 million as new grant and contract funding virtually dried up.