Investor Jeff Chokel keeps looking for signs that Cleveland BioLabs is poised to turn its promise into profits.
And after owning the Buffalo life sciences company’s stock for nearly seven years – adding to his holdings along the way – Chokel is growing frustrated over the company’s stock price, now hovering just above its seven-year low, and the long delays Cleveland BioLabs has endured in gaining approval for the drugs it is developing.
“We have not heard a lot that has influenced the stock favorably in the past year,” Chokel, an investor from suburban Cleveland, told company executives during Cleveland BioLabs’ annual shareholder’s meeting on Friday.
“I’ve added to my holdings and, obviously, it’s been disappointing most recently,” Chokel said. “I’m looking for something where I might say the stock will be above $1.60 at this time next year.”
Yakov Kogan, Cleveland BioLabs’ chief executive officer, said he thinks the company is making progress building its core of developmental drugs – spearheaded by its Entolimod anti-radiation sickness drug that officials believe could be stockpiled by governments worldwide to protect citizens and soldiers in the event of a nuclear accident or a terrorist attack.
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. But further studies must be done before Cleveland BioLabs can start selling the drug, and those additional tests will take a considerable amount of both time and money.
Kogan said the company also is accelerating its less-advanced efforts to develop Entolimod as a cancer treatment. Other drugs being developed by the company also have shown promise in treating certain types of cancer, but they require major clinical studies that will take years – and cost millions – to complete.
“We are advancing our pipelines,” Kogan said. “Drug development is a relatively slow and expensive process.”
The slow process, however, has weighed heavily on Cleveland BioLabs shares, which fell 3 cents on Friday to close at $1.58, slightly higher than its all-time low of $1.21 set in May 2012 and more than 80 percent less than its five-year high of $8.40, set in March 2011.
While Cleveland BioLabs executives had hoped to have won regulatory approval to start selling Entolimod as a radiation sickness treatment by now, the process has been delayed by funding shortfalls and uncertainty over the scope of the clinical trials the company has conducted on the 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. Kogan said Friday he does not know when BARDA will give its answer.
The company had hoped that response would come by the end of this month, but 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.
The FDA has said Cleveland BioLabs must do a pair of additional studies before Entolimod can be considered for approval, but company executives said they hope the upcoming meeting with the federal regulators could lead to a streamlining of those studies.
While Cleveland BioLabs executives are hopeful that BARDA ultimately will provide funding, they said the company has enough cash to fund its operations into the first quarter of next year – and even longer if spending is cut back and planned investments to develop its stable of cancer drugs are pushed back.
But 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 the company currently is developing. Those drugs, while they have shown promise in early-stage testing and trials, are still years away from being approved.