Is Cleveland Biolabs preparing to bounce back? Print E-mail
By Ray Dirks, Ray Dirks Research   
Tuesday, 06 September 2011 08:50
fda calendarCleveland BioLabs almost doubled to $7 in 3 months and then proceeded to get as high as $9.60 in March 2011, with the Japan post-earthquake nuclear plant crisis.  After raising money in mid-2011, CBLI dropped, along with the rest of the stock market, to as low as $2.21 per share closing at $2.24 on Friday.  

Ray Dirks of Ray Dirks Research believes that several recent developments are extremely positive for CBLI, and Ray and his team of money managers and security analysts are convinced that Cleveland BioLabs will rally sharply in the near term.  

Cleveland BioLabs has a market capitalization of only $92 million with a wealth of breakthrough technologies in place, many of which are patented and/or patent pending. Investors punished the company for creating dilution aftar an anticipated government grant was post-poned a few months ago, but now CBLI possesses a substantial amount of cash, most of which was raised during that financing.

Just two weeks ago, Cleveland BioLabs presented its first quarterly conference call, wherein its extraordinarily talented and experienced management team discussed the most significant recent developments.

First, CBLI is initiating several medical trials with its CBLB502 product for cancer patients. Earlier this year, Cleveland Bio-Labs announced preclinical data demonstrating that CBLB502 has direct anticancer effect in several transplanted cancer models grown in mice and rats including Lung Cancer, Lymphoma, and Melanoma. In one of the animal models of transplanted Colon Cancer, CBLB502 treatments resulted in complete tumor regression with no recurrence of the disease in a large portion of animals.

Experimental results suggest that CBLB502’s anticancer effects stem from the same mechanism that underlies its ability to treat radiation exposure, and that involves tissue specific activation of an innate immune response mitigated by CBLB502’s interaction with its receptor, toll-like receptor 5. Anti-tumor effects largely depend on the expression of TLR-5 by the tumor; however, in the case of tumors residing in the liver, the organ which has been identified as the natural primary target site for CBLB502 activity, experimental results suggest that tumors become effectively suppressed as the result of host immune system attack, regardless of their TLR-5 status. This characteristic makes liver metastases a favorable target for potential anticancer application of CBLB502.

This discovery has led CBLI to adjust the definition of CBLB502 as an agent potentially suitable for both supportive care and direct anticancer applications. The importance of this discovery is hard to overestimate. It further strengthens CBLI’s confidence in the ultimate success of CBLB502 in the medical arena and will help them to adjust priorities of their clinical program.

Due to the exciting nature of this discovery and the enormous support of leading physicians at Roswell Park Cancer Institute, CBLI will be pursuing clinical development of CBLB502’s potential immunotherapy effects as an immediate priority. They have developed a trial protocol to evaluate CBLB502’s ability to act as a single anticancer agent in advanced cancer patients with liver metastases. This protocol has already been approved by Roswell Park’s Scientific Review Committee and reviewed by the Oncology Division of the FDA (the Food and Drug Administration). CBLI had a chance to review FDA’s comments on this protocol at a recent pre-IND meeting, and now are planning to submit an IND to the Division to open this trial. If there are no significant comments, they should be able to achieve the remaining Roswell Park committee approvals and kickoff this trial later this year. Again, the goal of this trial will be to establish tolerability in cancer patients, and then identify trends of efficacy through suppression of growth or regression of liver tumors.  

CBLI is also discussing options for a second trial to assess CBLB502’s immunotherapy effects as they believe this could significantly accelerate their development and help facilitate new trials of CBLB502 in the supportive care setting.  CBLI has already gained approval of the Roswell Park Scientific Review Committee for a revised supportive care protocol in head and neck cancer patients, but they want to get the first immunotherapy trial underway before moving this one forward.    

Overall, this exciting progress towards clinical implementation of CBLB502 strengthens the reliability of CBLI’s program and reduces its risks. Two parallel lines of development are expected to cross fertilize each other and should allow CBLI to eliminate many fears that are commonly associated with drugs developed solely according to the Animal Rule.

CBLI also announced several new peer review publications, which are expected to be published shortly in high-level journals covering the new properties of CBLB502 that were just discussed. This provides more 3rd party confirmation from top independent authorities. 

The main question on everyone’s mind during the call was how CBLI is progressing with the FDA and BARDA on CBLB502 Defense.   The management team shared that they have had their first in-person meeting with the new division of the FDA that is overseeing CBLB502, and they feel good about the collaborative nature and tone of the meeting. They are in the process of familiarizing the new division with the IND for CBLB502 and updating them on the results of the Phase one studies and data from preclinical studies. They are working towards reaching an agreement on the scope and design of the remaining development program for CBLB502. BARDA was in attendance at the meeting, and CBLI anticipates that they will continue to attend the FDA meetings relating to CBLB502.

CBLI said that although they are not yet able to make any public declarations regarding resubmission of an updated proposal for BARDA funding, they are making good progress with both organizations and feel comfortable about the process. In particular, they said that they have the next important steps clearly defined. They have scheduled their next meeting with the FDA and BARDA for the end of September to continue their discussions of specific aspects of the remaining portion of development tasks for CBLB502.

CBLI’s management stated that they plan to update the market further after they have resubmitted a revised proposal to BARDA. They also addressed a concern in the market about missing the September 30 fiscal year-end for government agencies; however, management added that they believe there is ongoing support in the budget for countermeasure development as evidenced by recent legislation reauthorizing the Pandemic All Hazards Preparedness Act, including BARDA and the Bioshield Special Reserve Fund.  The type of proposed BARDA development contract CBLI anticipates applying for is a multi-year contract similar to other development contracts previously awarded.  

In the meantime, CBLI is pushing ahead with the CBLB502 development program under the Animal Rule, while they continue discussions with the FDA. They are getting ready to start a study with non-human primates as part of the work they believe will be necessary for the pivotal animal program. They said they will not be issuing a press release regarding this study due to sensitivities around animal testing, but want investors to know that they remain committed to advancing the CLB502 defense program toward licensure as fast as possible.

Management made a point to mention that all remaining animal studies to complete a license application for the FDA will be conducted under Good Laboratory Practice or GLP conditions. This differs from the previous animal studies they conducted over the past years, many of which were done in non-GLP conditions due to time and cost limitations. This means CBLI is reaching the final stage of its animal program, which has to be done in accordance with the highest compliance standards. Management reiterated that this was always in their plan and that they are happy the program has matured to this level.

CBLI remains confident in their belief that CBLB502 is the strongest radiation countermeasure in development based on a growing body of outstanding efficacy in non-human primates and the lack of comparable data on other drugs in development. CBLI also stated that they believe that CBLB502 is the farthest advanced radiation compound along the Animal Rule, which justifies the intense scrutiny on next steps forward from the FDA and BARDA.

Management reminded investors that the CBLB502 defense program has both Fast-Track and Orphan Drug designations and has progressed in a fairly rapid manner through its development to this point thanks to the Company’s highly experienced regulatory affairs team.  

CBLI management stated that their commitment, and they believe the commitment of their government funding partners, has not wavered. They are pressing forward as aggressively as possible in collaboration with the FDA.

The team then reviewed the Curaxin family of molecules. Curaxins are synthetic small molecules designed to simultaneously target major cell stress response pathways, which are commonly deregulated in cancer. These compounds are being developed by Incuron, a Moscow, Russia- based Joint Venture between Cleveland BioLabs and BioProcess Capital Ventures.

The team discussed a recent major publication in Science Translational Medicine, accompanied by an extremely positive article co-authored by Dr. Ron DePinho, the recently appointed President of the MD Anderson Cancer Center. Although Curaxins’ ability to activate p53 and inhibit NF-kappaB has been known as the signature property of these molecules, the mechanism through which Curaxins caused these effects remained unknown, and this paper is the first description of this mechanism.

It showed that Curaxins act by intercalating in the minor groove of DNA, resulting in a functional inactivation of a nuclear complex named FACT, or Facilitator of Chromatin Transcription. FACT trapping makes cells deficient in this factor. Trapped FACT stimulates activation of the major tumor suppressor protein, p53, that is commonly inactive in tumors.  At the same time, this trapping makes the cell incapable of conducting its normal function, such as promoting NF-kappaB, an important pro-survival factor that is constitutively active in tumors and plays the role of an oncogene. Importantly, the mechanism of action of Curaxins does not involve DNA damage, a highly typical side effect of conventional chemotherapeutic drugs.      

The findings highlighted by this publication introduce both a novel anticancer target, FACT, and a new class of DNA intercalators that exert their function without genotoxic effects. By hitting multiple cancer treatment targets, Curaxins resemble long known, and efficacious anticancer drugs such as Doxorubicin or Cisplatin, but without genotoxicity, which is the main challenge of historical chemotherapy.                                
CBLI management stated that their studies continue to reinforce the belief that Curaxins are promising drug candidates that may be effective against a wide range of cancer types. The hope is that the lack of mutagenic activity and the multi-targeted nature of Curaxins should make it difficult for tumors to develop treatment-resistant variance, the most common obstacle of cancer therapy.                                                                           

A multi-center Phase I trial of the predecessor of these Curaxins, formally known as antimalaria drug Quinacrine, is ongoing in the Russian Federation. The primary objective of this study is to determine the maximal tolerated dose and dose limiting toxicity in patients receiving Quinacrine. Secondary objectives of the study include describing the safety profile, pharmacokinetics, and response to Quinacrine. Dosing in the study is reportedly progressing well, and CBLI management hopes to report results around the end of this year.                                                

A Phase I clinical trial of the oral formulation of next generation Curaxin CBLC137 in solid tumors is planned to start in the first quarter of 2012, again in Russia. An intravenous formulation of the compound is currently being developed to further optimize the bioavailability of CBLC137 with plans to initiate a Phase I trial in the United States as soon as formal preclinical toxicology and other preparations supporting an IND filing are completed.                                                                                     

Closer Look: Some of the early stage compounds in the pipeline of Cleveland BioLabs                                                                                 

First – Protectant CBLB612 is in development for stimulation of hematopoietic stem cell proliferation and mobilization to peripheral blood. Development of CBLB612 is moving ahead through CBLI’s licensing agreement with Hisun Pharmaceuticals, a leading pharmaceutical manufacturer in the People’s Republic of China. In the meantime, CBLI has been putting some resources into accelerating development of this program here in the United States and supporting formal preclinical development efforts towards an IND. It will be some time before they are ready to test CBLB612’s effects on humans, but they are excited to see this program becoming active again.                                           

Another compound is called Mobilan, an adenovirus-based treatment inducing an immune response to kill cancer. Basically, it turns the tumor cells into a vaccine. Mobilan is ready to enter formal toxicology and preclinical preparations for clinical trial. Initial indications CBLI is considering include Head and Neck Carcinoma, Bladder Cancer, and Metastatic Melanoma.                                                                                          

Revercom is another compound - a liposome-packaged combination of a proprietary inhibitor of multi-drug resistant transporter and a conventional chemotherapy drug. Revercom is also ready to enter formal toxicology and preclinical preparations for clinical trial. Initial indications being considered are Renal Cell Carcinoma and Non-Small Cell Lung Carcinoma.

Xenomycin is a family of compounds for both topical and systemic anti-infective treatment that have shown efficacy in vitro and in vivo with multiple pathogens such as Malaria, Herpes, Trypanosome, and more. These compounds will be ready to enter formal toxicology and preclinical preparations after some additional optimization.

Antimycon is the name for a Myc inhibitor, which is being prepared for hit-to-lead optimization studies. Myc is a transcription factor that coordinates expression of a diverse group of intracellular and extracellular programs that drive cell proliferation. While Myc has long been recognized as one of the most attractive anticancer treatment targets, no effective inhibitors were ever reported due to technical difficulties, which resulted in general consideration of Myc as a non-druggable target. CBLI’s team, however, was pleased to say that experimental work in a large panel of cancer cells as well as in preclinical animal models has suggested that they may have an answer to these challenges.                 

They believe that Antimycon has a good chance to become the first meaningful Myc inhibitor and sets the beginning of one of the most exciting and long expected developments in the anticancer drug field. Initial indications for this program include all major cancer types, such as Colon Cancer, Breast, and Lung.                                                                 

CBLI’s management stated its belief that each of these early developments presents a potentially significant therapeutic opportunity, and that they should be brought into the clinic as soon as possible. They are working to establish further collaborative partnerships to bring this dream into reality.                                                                  

Readers are urged to read thoroughly the complete transcript of Cleveland BioLabs recent quarterly conference call, which is available on the Investor page of CBLI’s website at:
If you wish to contact Ray personally, please e-mail him directly.

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