Drug discovery company Cleveland BioLabs (NASDAQ: CBLI) has been awarded a $45 million contract from the United States Department of Defense (DoD) to develop and stockpile drug CBLB502 as a way to prevent death from lethal doses of radiation, it said Friday.
The $45 million contract, which was awarded by the US DoD's Chemical Biological and Medical Systems (CBMS) and Medical Identification and Treatment Systems (MITS) departments, is worth roughly 40% of Cleveland BioLabs' $144 million market capitalization.
Under the terms of the contract, CBMS and MITS will initially pay $14.8 million for the company to develop CBLB502 and bring it through to FDA approval.
Once the drug is licensed, the contract then gives the option to purchase $30 million worth of CBLB502 troop equivalent doses.
The DoD selected CBLB502 based on a thorough examination over a span of two years of safety and efficacy data, manufacturing capacity, the company's development plan and proposed schedule, it said.
"We view this initial commitment as the first potential commercial validation of CBLB502 and the beginning of our shift from development to procurement. We believe that CBLB502 will play a significant role in domestic and global biodefense preparedness," said president and CEO of Cleveland BioLabs, Michael Fonstein.
Once licensed, CBLB502 would protect warfighters from the effects of lethal doses of radiation following a radiation disaster, decreasing incapacitation from radiation.
In July, CBLB502 was granted fast track status from the FDA for reducing the risk of death following a radiation disaster, as there is currently no FDA-approved medical counter-measure for this purpose.
CBLB502 is a derivative of a microbial protein that reduces injury from acute stresses, such as radiation and chemotherapy, by mobilizing several natural cell protective mechanisms.
Data from 50 human subjects in an initial Phase I study showed that CBLB502 was well tolerated and that results corresponded to previous results of animal testing.
A second human study of 100 subjects was completed in May, for which analysis is still ongoing.
Cleveland BioLabs uses its discoveries around programmed cell death to develop treatments for cancer and protection of normal tissues from exposure to radiation and other stresses.
The company was up more than 12% on Friday morning, trading at $5.49 as of 10:35am ET on the Nasdaq.