Less than three years after it was spun out of the Cleveland Clinic, Cleveland BioLabs Inc. filed for its initial public offering with hopes of raising $13.8 million to support its apoptosis manipulation platform in the areas of nuclear radiation protection and cancer.
The price and number of shares have not yet been determined. Upon completion of the IPO, the company would trade on Nasdaq under the symbol "CBLI."
According to its prospectus, proceeds from this offering would be used to support commercialization of its Protectan CBLB502 for treating radiation exposure, as well as fund further development of that drug in reducing side effects of cancer therapy. Money also would go toward clinical development of CBLC102, a cancer drug set to enter a Phase IIa trial later this year, and for general corporate purposes.
Founded in June 2003, Cleveland BioLabs (CBL) focuses on drug discovery and development based on apoptosis, a mechanism that has been used by a number of firms in the area of cancer treatment, where the focus is on inducing cell death in tumors. But work at CBL has shown that the ability to suppress apoptotic pathways could be used to protect healthy tissues against external events, such as nuclear radiation exposure.
The company’s lead candidate in its Protectan series is CBLB502, a radioprotectant molecule that represents a derivative of flagellin, a microbial protein that acts as a natural activator of NF-kB. Preclinical studies demonstrated that mice injected with CBLB502 were protected from lethal doses of total body gamma radiation, and the drug has shown success in protecting both the hematopoietic system and the gastrointestinal tract.
CBL started a pilot study in December in which primates receiving lethal doses of radiation showed a significant delay of radiation-associated mortality and a significant reduction in death rates when treated with CBLB502. The product also demonstrated effectiveness in multiple administrations.
Because of CBLB502’s defense applications, CBL expects a streamlined development and approval process under the Project BioShield Act that bypasses the lengthy and costly Phase II and Phase III trials normally required for drug approval. Instead, CBL will have to complete only preclinical efficacy testing in primates and Phase I safety testing in humans. Under those guidelines, CBLB502 could be approved within 18 months to 36 months.
The drug’s apoptosis-suppressing action also could be used as an adjuvant to cancer treatment, specifically in reducing toxicity to healthy tissues. Most existing cancer treatments, drugs and radiation, are limited in dosage due to severe side effects. CBL said that by providing a way of protecting healthy tissues from those side effects, cancer treatments could be administered more aggressively.
The company also has a second series of compounds, known as Curaxins, in its pipeline to directly treat cancer by targeting two regulators of apoptosis. The lead Curaxin, CBLC102, is set to begin clinical testing in prostate cancer patients. The company also plans to investigate the small molecule in renal cell carcinoma and soft tissue sarcoma.
Since its inception, CBL has relied on collaboration work with the Cleveland Clinic. The company also has received 10 grants totaling about $2.7 million from government agencies, such as the National Institutes of Health, the Defense Advanced Research Projects Agency and NASA.
CBL raised $1 million in an angel round, and followed that up with a Series A financing of $5.9 million in March 2005. (See BioWorld Today, March 28, 2005.)
The company reported a net loss of $2.4 million for 2005. As of Dec. 31, it had cash and cash equivalents totaling $1.2 million. CBL said that cash, plus proceeds from the IPO, would be expected to sustain operations for about two years.
Prior to the offering, CBL’s largest shareholders included: Cleveland Clinic Foundation, which owns 2.9 million shares, or about 29.4 percent of the company; New York firms Sunrise Equity Partners LP and Sunrise Securities Corp., which each hold 1.4 million shares, or 14 percent; and San Diego-based Chembridge Corp., with 622,224 shares, or 6.2 percent.