Cleveland BioLabs said Thursday it remains hopeful that it will win financing from a key federal agency to complete important trials for its anti-radiation sickness drug, but company executives also detailed for the first time their contingency plans in case the funding falls through.
While Cleveland BioLabs executives believe the company has enough cash to fund its operations into the first few months of next year – and even longer if planned spending on its efforts to develop its stable of cancer drugs is scaled back – the company is facing a cloudy financial future because of the uncertainty surrounding the development of its Entolimod anti-radiation sickness drug.
The Buffalo drug development company is seeking around $50 million from federal agencies to fund the final stages of development for Entolimod as an anti-radiation sickness drug. Cleveland BioLabs in mid-October 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, but it is still waiting for a response.
The company had hoped that response would come by the end of June, but Cleveland BioLabs executives said Thursday that a key meeting with U.S. Food and Drug Administration officials over the design of the remaining clinical studies needed for the drug to be considered for approval now won’t be held until mid-summer.
If all goes well, and the company and regulators agree on a plan for the remaining studies, Cleveland BioLabs executives are hoping that BARDA then will agree to provide the funding for the studies, which would lift a major financial burden on the company and ease the drain on its steadily shrinking cash reserves.
But if the talks fail, or if BARDA declines to provide funding, Cleveland BioLabs executives said they are considering other options, including selling all or part of its stake in some of the cancer drugs that it currently is developing. Those drugs, while they have shown promise in early-stage testing and trials, are still years away from being approved as cancer treatments, assuming they are proved in the clinical studies to be effective.
The company also could pursue funding for Entolimod from the U.S. Defense Department or from foreign governments, said Yakov Kogan, Cleveland Bio-Labs’ chief executive officer, during a conference call. It also could consider raising additional cash through a debt offering.
“We have a few discussions in progress,” said Chief Financial Officer C. Neil Lyons.
The tests that the company has conducted so far have shown encouraging results that a single dose of Entolimod, administered 25 hours after exposure, can greatly increase survival rates following a potentially lethal exposure to radiation.
That has company executives hopeful that Entolimod can build a substantial market from government agencies as a drug that can be stockpiled for use after a nuclear accident or a terrorist attack involving widespread radiation exposure. But, following a recent meeting with federal officials, Cleveland BioLabs officials said they believe the government is interested in building a stockpile of several different drugs, rather than just one.
The company raised $15 million through a stock sale last fall and finished the year with $13.4 million in cash – enough to last into 2014 based on a cash burn rate that is averaging about $1.15 million a month. The cash could last even longer if the company delays anticipated increases in spending on the development of its cancer drugs during the second half of the year, Lyons said.