Cleveland BioLabs's candidate for radiation sickness treatment rejected

Cleveland BioLabs said its candidate for the treatment of gastrointestinal effects of acute radiation syndrome was not selected for a U.S. Department of Defense contract, driving shares down more than 60 percent. The drug company said it was “very surprised” by the DoD’s decision, given its past negotiations with the department, and has requested a debriefing to better understand the decision. The company said it plans to continue discussions related to its experimental product CBLB502 with the Department of Health and Human Services and other friendly governments.

Cleveland BioLabs also plans to develop CBLB502 for medical use and said it will submit an application to U.S. health regulators to begin clinical trials shortly. Shares in the company were trading down $4.66 at $3.34 in morning trade on the Nasdaq. They touched a new year-low of $3.02 earlier in the session.