Presentation sheds light on significant upcoming developments for Cleveland Biolabs Print E-mail
By M.E.Garza   
Tuesday, 11 January 2011 04:13

As we told our subscribers on Monday, Cleveland Biolabs (Nasdaq:CBLI) has confirmed some significant pending developments in regards to thier radiation counter-measure, CBLB502, which protects mammals from radiation using flagellin or its derivatives.

On Monday afternoon, Michael Fonstein, Ph.D., Chief Executive Officer and President of Cleveland BioLabs, gave a presentation at the Sidoti Microcap Conference in New York City. He told attendees that a significant BARDA development contract for CBLB502 is pending. In addition to a number of other developments and milestones which are on-tap for the company during 2011, Fonstein indicated to the group of gathered investors that his company is anticipating the publication of a buying request for proposal (RFP) from the Biomedical Advanced Research and Development Authority (BARDA) of the Department of Health and Human Services (DHHS) for a radiation-countermeasure.

The bullet-points, which were highlighted in a slide during the company's presentation line up perfectly with some of the rumors we have been hearing for the last couple of months. Cleveland Biolabs- who has been awarded millions by the U.S. government for helping to develop CBLB502- may be close to actually landing tens of millions of dollars in additional grant monies which should lead to a major U.S. government purchase.

That purchase, according to our sources, would be followed by an order from the government of Israel- whose leadership and constituency have grown increasingly anxious given the development of Iran's nuclear programs and recent Wikileaks revelations that Iran has obtained North Korean missiles which can strike as far away as Europe. The sources who spoke to BioMedReports on condition of anonymity, said Company officials have been asked by some of these foreign governments not to speak about potential orders, but published reports from Israel  have previsouly indicated interest in CBLI's radiation counter-measure.

"For Israel, the discovery (of a cure for radiation sickness by Professor Andrei Gudkov – Chief Scientific Officer at Cleveland BioLabs) marks a particularly dramatic development that could deeply affect the main issue on the defense establishment's agenda: Protection against a nuclear attack by Iran or against 'dirty bomb' attacks by terror groups," wrote Ronen Bergman of Ynetnews in a report for Israel's largest news content website.

Cleveland BioLabs' presentation from the Sidoti Micro Cap Conference

We are told that management at CBLI has been approached by several other countries who have all, ubiquitously, expressed an interest in obtaining the same product for their own defense stockpiles. Since U.S. Government grants have played a significant role in developing the product, it stands to reason that the U.S. will be first in line and may even have some say about which countries would be allowed to come in behind them for the game-changing bio-defense drug.

A little over two weeks ago, after the company announced that they had taken a substantial investment from a mysterious "individual investor" we shared with our readers that Michael Dell may be revealed as that buyer soon. No one from Dell's office, Cleveland Biolabs, the banks or legal firms involved in that transaction have contacted us to correct our report, and we continue to assert that when that news finally becomes public via filings or otherwise, the market will react favorably. Dell's $14+ billion fund targets winners with Warren Buffet like accuracy and we were told by someone close to the deal that he reportedly went out of his way make sure his $8.39 million bet on CBLI was in place as soon as possible.

As we understand it, Fonstein will spend the rest of his time in New York City making presentations to institutional investors and large funds. If he shares some of the same information he shared during Mondays presentation, it is not unreasonable to assume that some of those groups will add significant buying pressure to the stock in the weeks ahead- particularly since our sources tell us that those the significant BARDA development could come into play as soon as February. U.S. Defense related progress had been expected to occur during Q4 2010, so in some respects, they may be considered "over-due."

Multiple sources indicate to us that the U.S. agency could be awarding almost twice as much as we previously reported. That $50 million dollar figure may actually be closer to $100 million. Confirmation of those rumors via official news would easily rocket shares beyond analyst expectations for 2011. Until then, we can only assume that rising tensions in Asia may be responsible for the increased chatter. On Tueday, Defense Secretary Robert Gates said North Korea's development of nuclear weapons and long-range missiles poses a direct threat to the United States. It was, according to the Associated Press, a blunt assessment of the risk posed by an erratic dictatorship that considers the U.S. its foremost enemy.  The same report says that War on the Korean peninsula could involve the United States apart from any North Korean ability to deliver a nuclear weapon across the Pacific. The United States has 29,000 troops stationed in South Korea as a legacy of the Korean War, and is pledged to help defend Seoul.

We've been covering CBLI since the stock was below $3 and feel more strongly than ever that the company shows the markings of a multi-billion dollar company waiting to happen. It would not be out of the question to anticipate share prices starting to rise significantly during Q1- given the number of other significant and forward looking news items that are listed in the 2011 milestones list.

CBLI announced last summer that their radiation counter-measure, CBLB502 was granted Fast Track status from the FDA for reducing the risk of death following total body irradiation during or after a radiation disaster.

Disclosure: Long CBLI

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