Cleveland Biolabs (NASDAQ: CBLI) set for significant capital appreciation Print
By Ray Dirks   
Tuesday, 01 February 2011 00:00
best penny stock picksOn January 20, 2011 Cleveland BioLabs, Inc. (NASDAQ:CBLI)  announced that they had accumulated preclinical data demonstrating that CBLB502, a drug under development to treat exposure to radiation poisoning from nuclear or radiological weapons or from a nuclear accident, has direct anticancer effect in several cancer models including colon and lung cancer, lymphoma and melanoma.
The company shared some very exciting preclinical data in the recent press release.  They stated that CBLB502 had shown potential to suppress tumors.  In one animal model, it was said that CBLB502 led to complete regression of tumors with little –to-no recurrence.   

CBLI also stated that they will be looking at starting Phase I/II trials in cancer patients this year to look at both this new anticancer ability, and the previously discussed potential to offset the horrible side effects of radio and chemotherapy.

For those of you who follow developments in the $50 billion cancer market, both of these potential indications represent huge market dollars, if safety and trends of efficacy are seen in some of these trials.

The company’s first potential line to revenues is still the defense application, however, and we remain bullish on upcoming developments there as well.   For example, CBLI has been working with the BARDA (Biomedical Advanced Research and Development Authority) of the Department of Health and Human Services on a potentially significant additional grant to fund remaining development of CBLB502 through and past FDA approval.   

Five Reasons to Buy:

1.    Potential Direct Anticancer Effect of CBLB502

2.    CBLI already received its first conditional purchase order for CBLB502 from the Department of Defense back in September and is moving steadily towards submission for FDA licensure with both fast track and orphan drug status.

3.    Expected news on BARDA publishing a formal Request for Proposal or RFP for buying of doses of radiation countermeasures for the national stockpile to protect civilians in this country.  If you all recall, BARDA is the agency that has been spending hundreds of millions of dollars on these countermeasures over the past few years.  

4.    The recent infusion of capital from a single institutional investor, which we believe to be Michael Dell.

5.    CBLI is well positioned to continue its climb in valuation.

We are reiterating our strong buy for Cleveland BioLabs based on expected near term drivers in the defense business with more development money from BARDA and hopefully a request for buying of doses. 

We also believe that the start of medical trials for CBLB502 in cancer patients will bring a lot more attention from more traditional biotech investors and push the stock to significantly higher levels.

Disclosure: No Positions

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