Cleveland BioLabs’ long hunt for federal funding keeps dragging on.
The Buffalo life sciences company is working on a drug, called Entolimod, that has shown good promise in being able to keep people alive after they’ve been exposed to what normally would be a fatal dose of radiation.
If that wasn’t good enough, preliminary studies indicate that it just takes one dose to do the job, and that dose even can be taken a day after the exposure. The treatment doesn’t require a lot of other supporting treatments, either, like blood transfusions or antibiotics. You don’t even have to be in a hospital.
But the company has run into one financial and regulatory hurdle after another over the last five years. It proves once again that there is no such thing as a sure thing when it comes to the life sciences sector that the Buffalo Niagara region is pinning so much of its economic hopes for the future.
Good ideas sometimes don’t pan out. Good ideas sometimes can’t find the funding they need, as was the case with SmartPill and its ingestible diagnostic capsules. And even the good ideas that really do turn out to be good drugs or good medical devices often take a lot longer to pan out – and cost a lot more money to get there.
Cleveland BioLabs is a case in point. The clinical trials that have been done with Entolimod have shown that it has great promise as anti-radiation sickness drug. That’s planted visions in the minds of Cleveland BioLabs executives and investors of governments around the world stockpiling millions of doses apiece, just in case a terrorist attacks or a nuclear power plant has an accident. Other, less advanced research, has shown it could be a useful drug in treating some types of cancer, another potentially huge market.
But U.S. drug regulators are cautious, and they’ve raised questions about the structure of the remaining clinical trials that need to be done. That uncertainty caused a key federal funding source to back away more than two years ago from committing as much as $50 million to fund the remaining studies until the issues surrounding the trials are resolved. And even then, there’s no guarantee Cleveland BioLabs will get any money.
As a result, Entolimod, which Cleveland BioLabs executives once thought would be generating significant sales by last year, is stuck in a holding pattern while the company and federal regulators hammer out the details of those final studies.
But they’re still hopeful. “We believe there is strong evidence to continue the development of Entolimod as a radiation countermeasure,” said Yakov Kogan, Cleveland BioLabs’ chief executive officer.
A crucial meeting with U.S. Food and Drug Administration officials over the design of those final crucial studies over the proper dosage and overall safety of the drug has been pushed back yet again and now won’t be held until mid-summer. Even if that meeting goes well, Cleveland BioLabs still will need to actually do the studies, which will easily take the whole process into next year. And, of course, those studies will have to show that the drug really works and is safe to use.
Dr. Jean Viallet, Cleveland BioLabs’ new chief development officer, said the company doesn’t want to rush into the meeting unprepared. Better to take your time and gather all the information needed to address the regulators’ anticipated concerns, rather than come out of the meeting with more questions that need answering later, he said.
All the while, though, Cleveland BioLabs is burning through its remaining cash. At the end of March, it had $13.4 million in cash, and was burning through an average of about $1.15 million of it every month. At that pace, Cleveland BioLabs would run out of money sometime during the first quarter of next year, although C. Neil Lyons, the company’s chief financial officer, said the cash could be stretched through most of next year by scaling back planned increases in spending on the development of its cancer drugs.
In the best case scenario, the meeting with the federal regulators this summer goes well and the company is able to get its remaining clinical studies back on track. With the company and its regulators on the same page once again, BARDA ponies up the money to pay for the studies and Cleveland BioLabs is suddenly sitting pretty, able to switch out of survival mode and use its cash to step up funding for the development of its cancer drugs.
But there’s no guarantee that will happen. The questions over the clinical trials could linger, further straining the company’s cash reserves as the discussions drag on. And even if the trial does get back on track, BARDA might decide it doesn’t want to pay for the studies, leaving Cleveland BioLabs high and dry.
“We have spent a good amount of time thinking about our options,” Kogan said.
Those include seeking other funding sources, possibly through the U.S. Defense Department, or maybe even foreign governments. The company said it might consider selling some of its other drugs or subsidiaries to raise cash or bringing in a partner to help fund the trials. Selling more stock is another option, but it’s not terribly attractive in a dismal scenario because the shares almost certainly would sell at a deeply depressed price and anger its existing shareholders by watering down the value of their own shares.
For now, though, all Cleveland BioLabs executives can do is plan for the worst and hope for the best.
“We remain very hopeful that the outcome will be positive,” Kogan said.