Cleveland BioLabs is selling 75 percent of its stake in one of its cancer drugs it is developing to the head of one of its Russian partners in a deal that will bring in $3 million in badly needed cash to the Buffalo drug development company.
Cleveland BioLabs is selling its stake in Incuron LLC to Dr. Mikhail Mogutov, the chairman of the Russian joint venture and founder of Bioprocess Capital Ventures. Mogutov, who owns 11 percent of Cleveland BioLabs’ stock, had threatened to nominate his own slate of directors for the company’s board election earlier this month, but ultimately failed to submit a slate of candidates.
The deal gives Cleveland BioLabs an immediate $3 million infusion of cash through the sale of three quarters of its stake in Incuron, with the potential for about $1 million more by the end of the year if Mogutov exercises his option to purchase Cleveland BioLabs’ remaining stake in the venture. Incuron currently is conducting Phase 1 trials on a drug called Curaxin as a potential treatment for patients with advanced cancerous tumors that have been resistant to other treatments.
The deal will give Cleveland BioLabs, which had been on a path to run out of cash by the end of June, enough money to fund its operations into the third quarter as it seeks authorization from federal regulators to sell its anti-radiation sickness drug for stockpiling as an emergency treatment in the event of a nuclear accident or terrorist attack.