Cleveland BioLabs shares tank after BARDA drops support

Shares of Cleveland BioLabs ($CBLI) were trounced yesterday as word spread that a division of Health and Human Services had turned a cold shoulder to its experimental treatment for radiation poisoning. The Biomedical Advanced Research and Development Authority--better known as BARDA--declined to provide further funding for CBLB502, designed to counter the effects of a possible "dirty bomb" attack on a U.S. city. The company has been heavily dependent on government support for its work, and investors didn't like the sound of this latest twist in its fortunes; company shares plunged 35%.

BARDA has expressed dissatisfaction before with Cleveland BioLabs' study designs. Despite the setback, the biotech says it plans to push ahead on its own for now. A meeting with the FDA is planned to review the trial plans for the program. 

"There is currently no FDA approved countermeasure for Acute Radiation Syndrome, and we believe that CBLB502 is the most effective and furthest advanced drug candidate for treatment of ARS caused by exposure to radiation from a nuclear or radiological weapon or from a nuclear accident," said interim CEO Yakov Kogan. "We will keep pursuing additional funding from various governmental agencies, including BARDA and our existing Department of Defense funding partners at the Chemical Biological Medical Systems and Defense Threat Reduction Agency."

Kogan was named interim CEO in January, when CEO Michael Fonstein, Ph.D., stepped down from the top post but remained at the company as president in a reorganization.

- here's the press release from Cleveland BioLabs