HHS rejects Hollis-Eden radiation sickness treatment

Published 13 March 2007

Problems with Project BioShield continue after HHS decides not to buy company’s Neumune injectable; San Diego start-up’s stock plummets

Just months after the federal government pulled the plug on the $877.5 million Vaxgen anthrax vaccine boondoggle, another BioShield project has been suspended. The Department of Health and Human Services (HHS) announced last week that it had decided not to purchase an experimental radiation sickness drug manufactured by San Diego, California-based Hollis-Eden Pharmaceuticals. According to HHS, Hollis-Eden’s bid failed to meet agency requirements, even after the award date was extended four times, with the last deadline set for yesterday. The company’s product, known as Neumune, is a self-administered shot that aims to restore white blood cells and platelets and prevent hemorraghing — the main cause of death among those not killed by a nuclear blast itself.

The company was stunned by the decision. “This comes as a complete surprise to us,” said chairman Richard Hollis. “We’ve been the lead candidate all along and developing this with the Department of Defense. When other companies were getting disqualified for technical issues, we were always told that we met or exceeded the requirements of the (request for proposal).” Analysts were taken by surprise as well, with most considering Hollis-Eden a major contender for the BioShield contract to purchase enough doses to treat 20,000 military and 1,000,000 civilian casualties. Since the announcement, the company’s stock price has plunged as low as $2.76 on Monday, from $5.39 the Tuesday previous.

-read more in Terri Somers’s San Diego Union Tribune report