Cleveland BioLabs trading higher on possible DOD contract
Shares of Cleveland BioLabs Inc. (Nasdaq: CBLI) were up 7.4% or $0.81 to $11.65 this morning on a report that the U.S. Department of Defense may be the first customer for the company’s radiation protection compound called Protectan or CBLB502.
The development-stage company focused on radiation drug discovery reportedly responded to a Defense Dept. request for Proposal in April, according to Business Week.
“Based on the science [a DOD contract] is very likely,” WBB Securities analyst Steve Brozak told SmallCapInvestor.com. “The science is the most significant we’ve ever seen. The pre-clinical models are the company’s core competencies.”
Barring timing difficulties from the government, if awarded, Brozak stated that the contract could amount to $100-200 million.
Brozak, whose firm WBB Securities has a financial consulting relationship with Cleveland BioLabs, says the company has a great opportunity because there are currently no available products that offer the same level of protection from radiation exposure.
“There’s not just DOD potential here,” said Brozak, “the potential commercial opportunities [for Biolabs] are enormous. It’s a technology platform to build from that presents tremendous opportunity.”
Brozak estimates a loss for fiscal year 2007 of $1.10 per share and a loss of $1.07 per share in 2008. These estimates compare with a loss of $0.84 per share in fiscal year 2006. Despite the forecasted losses, Brozak rates the micro-cap stock as a “buy.”
Over the last year, the stock has traded in a range of $4.17 to $13.
