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Cleveland Biolabs Inc. (CBLI) Reports Second Quarter 2014 Financial Results And Development Progress


8/8/2014 10:10:22 AM

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BUFFALO, NY--(Marketwired - August 07, 2014) - Cleveland BioLabs, Inc. (NASDAQ: CBLI) today reported financial results and development progress for the second quarter ended June 30, 2014.

Cleveland BioLabs reported a net loss for the second quarter of 2014 of $4.0 million, or $0.08 per share, compared to a net loss of $3.0 million, or $0.07 per share, for the same period in 2013. Net loss for the first six months of 2014 was $5.5 million, or $0.11 per share, compared to a net loss of $12.8 million, or $0.29 per share, for the same period in 2013. $3.1 million of the improvement in net loss for the six-month period was due to a non-cash change in the fair market valuation of certain outstanding warrants, with the remaining $4.2 million of this improvement, due to a reduction in operating losses. The reduced operating losses were due to a narrowed focus of development activities, lower development costs for entolimod's biodefense indication and other cost saving measures.

At June 30, 2014, the Company had cash, cash equivalents and short-term investments of $11.1 million, $7.7 million of which was available for general use and $3.4 million of which was restricted for the use of majority-owned subsidiaries.

Yakov Kogan, Ph.D., MBA, Chief Executive Officer, stated, "We are making progress towards achievement of our operational objectives for 2014. We are encouraged by the tone and direction of our recent meeting with the U.S. Food and Drug Administration to review dose conversion and evaluate the potential for a pre-emergency use authorization (pre-EUA) submission for entolimod's biodefense indication. We look forward to sharing more details regarding the meeting's outcomes and next steps once we have received and reviewed the official meeting minutes. Our oncology trials continue to advance, as well. We are analyzing interim data for the oral administration study of our lead oncology drug candidate, Curaxin CBL0137 and compiling data on immune cell response to administrations of entolimod in the ongoing advanced cancer study. Finally, we are anticipating the opening of an Investigational New Drug (IND) Application in the Russian Federation shortly for a healthy subject study supported by a contract with the Ministry of Industry and Trade of the Russian Federation for CBLB612, a drug candidate in development for the induction and mobilization of hematopoietic stem cells."

Operational Highlights

The Phase 1 study of entolimod in patients with advanced cancer at Roswell Park Cancer Institute continues.

Dosing of the fourth cohort is well underway in a multi-center, Phase 1 trial assessing the intravenous administration of Curaxin CBL0137 in patients with metastatic or unresectable advanced solid cancers and lymphomas. In parallel, dosing of the seventh cohort continues in a multicenter, Phase 1 study assessing the oral administration of Curaxin CBL0137 in patients with advanced solid tumors that are resistant or refractory to current standard treatment.

To date, no drug-related serious adverse events have been reported in any of the mentioned trials.

Further Financial Highlights

Revenue for the second quarter of 2014 decreased to $0.6 million compared to $1.6 million for the second quarter of 2013. Revenue for the first six months of 2014 decreased to $1.9 million compared to $3.0 million for the same period in 2013. These decreases were primarily the result of the completion of certain contracts with the Department of Defense for entolimod's biodefense indication and changes in other contracts with the Ministry of Industry and Trade of the Russian Federation, or MPT.

Research and development costs for the second quarter of 2014 decreased to $2.3 million compared to $5.4 million for the same period in 2013. Six-month research and development costs for the 2014 period decreased to $4.8 million compared to $10.7 million for the same period in 2013. These decreases were primarily due to completion of third-party service contracts for several compounds, as well as reduced compensation costs primarily attributable to our transfer of personnel to Buffalo BioLabs, LLC in the fourth quarter of 2013.

General and administrative costs for the second quarter of 2014 decreased to $2.3 million compared to $3.0 million for the same period in 2013. General and administrative costs for the first six months of 2014 decreased to $4.7 million compared to $6.5 million for the same period in 2013. For the second quarter, these decreases were wholly due to a reduction of personnel. For the six-month period, $1.2 million of these decreases were due to a reduction of personnel and $0.6 million were due to other cost-saving actions.

Conference Call Information
Cleveland BioLabs management will host a conference call at 10:00 a.m. ET today to provide updates and address investor questions regarding general business developments. Interested parties may participate by dialing 877-407-9205 (US) or 201-689-8054 (International), approximately five to ten minutes before the call start time. A live webcast of the conference call will be available on the investor page of the Cleveland BioLabs web site at www.cbiolabs.com. A replay of the call will be available starting on August 7, 2014, at 1:00 p.m. ET through August 24, 2014, at 11:59 p.m. ET. Interested parties may access the replay by dialing 877-660-6853 (US) or 201-612-7415 (International) and entering conference ID number 13586610. An archived webcast of the conference call will be available for 90 days on the Investors page of the Cleveland BioLabs web site at www.cbiolabs.com.

About Cleveland BioLabs
Cleveland BioLabs, Inc. is an innovative biopharmaceutical company seeking to develop first-in-class pharmaceuticals designed to address diseases with significant medical need. The company's lead product candidates are entolimod, which is being developed for a biodefense indication and as a potential cancer treatment and Curaxin CBL0137, our lead oncology product candidate. The company conducts business in the United States and in the Russian Federation through our three operating subsidiaries, Incuron, LLC, BioLabs 612, LLC and Panacela Labs, Inc. The company maintains strategic relationships with the Cleveland Clinic, Roswell Park Cancer Institute, and the Children's Cancer Institute Australia. To learn more about Cleveland BioLabs, Inc., please visit the Company's website at http://www.cbiolabs.com.

This press release contains certain forward-looking information about Cleveland BioLabs that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)," "feel(s)," "believe(s)," "will," "may," "making progress," "encouraged," "look forward," "continue to advance" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding our ability to successfully develop and commercialize our therapeutic products; the conduct and results of our various clinical trials; our ability to obtain approval from the U.S. Food and Drug Administration of our product candidates; and future performance. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

These risks and uncertainties include, among others, the Company's failure to successfully and timely develop existing and new products; the Company's collaborative relationships and the financial risks related thereto; the risks inherent in the early stages of drug development and in conducting clinical trials; the Company's ability to comply with its obligations under license agreements; the Company's inability to obtain regulatory approval in a timely manner or at all; the Company's history of operating losses and the potential for future losses, which may lead the Company to not be able to continue as a going concern. Some of these factors could cause future results to materially differ from the recent results or those projected in forward-looking statements. See also the "Risk Factors" and "Forward-Looking Statements" described in the Company's periodic filings with the Securities and Exchange Commission.

                                                                            
                  CLEVELAND BIOLABS, INC. AND SUBSIDIARIES                  
                        CONSOLIDATED BALANCE SHEETS                         
                                                                            
                                                   June 30,    December 31, 
                                                     2014          2013     
                                                 ------------  ------------ 
                                                  (unaudited)               
                                   ASSETS                                   
Current assets:                                                             
  Cash and cash equivalents                      $ 11,103,596  $ 10,048,466 
  Short-term investments                                    -       305,538 
  Accounts receivable                                 392,696       458,391 
  Other current assets                                477,339       344,386 
                                                 ------------  ------------ 
    Total current assets                           11,973,631    11,156,781 
                                                                            
                                                                            
  Equipment, net                                      335,230       457,912 
  Restricted cash                                   2,843,413     2,921,724 
  Other long-term assets                               74,663       159,224 
                                                 ------------  ------------ 
                                                                            
    Total assets                                 $ 15,226,937  $ 14,695,641 
                                                 ============  ============ 
                                                                            
                     LIABILITIES & STOCKHOLDERS' EQUITY                     
                                                                            
Current liabilities:                                                        
  Accounts payable                               $    719,637  $    794,397 
  Accrued expenses                                  2,122,690     2,445,446 
  Deferred revenue                                    744,500     1,069,438 
  Accrued warrant liability                         1,024,720     1,241,311 
  Current portion of note payable                     481,903       351,527 
  Current portion of capital lease obligation          50,827        83,634 
                                                 ------------  ------------ 
    Total current liabilities                       5,144,277     5,985,753 
                                                                            
Noncurrent portion of capital lease obligation              -         7,522 
Long-term debt                                      3,634,034     7,121,388 
Commitments and contingencies                               -             - 
                                                 ------------  ------------ 
                                                                            
    Total liabilities                               8,778,311    13,114,663 
                                                                            
Stockholders' equity:                                                       
  Total Cleveland BioLabs, Inc. stockholders'                               
   deficit                                         (6,387,894)   (9,522,945)
  Noncontrolling interest in stockholders'                                  
   equity                                          12,836,520    11,103,923 
                                                 ------------  ------------ 
    Total stockholders' equity                      6,448,626     1,580,978 
                                                 ------------  ------------ 
                                                                            
    Total liabilities and stockholders' equity   $ 15,226,937  $ 14,695,641 
                                                 ============  ============ 
                                                                            
                                                                            
                  CLEVELAND BIOLABS, INC. AND SUBSIDIARIES                  
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                                (UNAUDITED)                                 
                                                                            
                       Quarter Ended June 30,     Six months ended June 30, 
                         2014          2013          2014          2013     
                     ------------  ------------  ------------  ------------ 
Revenues:                                                                   
  Grants and                                                                
   contracts         $    562,087  $  1,613,262  $  1,896,341  $  2,980,734 
                                                                            
Operating expenses:                                                         
  Research and                                                              
   development          2,324,223     5,373,029     4,763,996    10,704,644 
  General and                                                               
   administrative       2,250,368     3,016,851     4,663,911     6,500,223 
                     ------------  ------------  ------------  ------------ 
    Total operating                                                         
     expenses           4,574,591     8,389,880     9,427,907    17,204,867 
                     ------------  ------------  ------------  ------------ 
                                                                            
Loss from operations   (4,012,504)   (6,776,618)   (7,531,566)  (14,224,133)
                     ------------  ------------  ------------  ------------ 
                                                                            
Other income                                                                
 (expense):                                                                 
  Interest and other                                                        
   income (expense)      (623,786)       47,809      (941,708)      127,765 
  Foreign exchange                                                          
   gain (loss)             92,594        46,776       (59,177)       74,910 
  Change in value of                                                        
   warrant liability      412,125     2,795,612     2,499,683      (652,111)
                     ------------  ------------  ------------  ------------ 
    Total other                                                             
     income                                                                 
     (expense)           (119,067)    2,890,197     1,498,798      (449,436)
                     ------------  ------------  ------------  ------------ 
                                                                            
Net loss               (4,131,571)   (3,886,421)   (6,032,768)  (14,673,569)
                                                                            
Net loss                                                                    
 attributable to                                                            
 noncontrolling                                                             
 interests                170,410       844,310       486,235     1,867,135 
                     ------------  ------------  ------------  ------------ 
                                                                            
Net loss                                                                    
 attributable to                                                            
 Cleveland BioLabs,                                                         
 Inc.                $ (3,961,161) $ (3,042,111) $ (5,546,533) $(12,806,434)
                     ============  ============  ============  ============ 
                                                                            
Net loss available                                                          
 to common                                                                  
 stockholders per                                                           
 share of common                                                            
 stock, basic and                                                           
 diluted             $      (0.08) $      (0.07) $      (0.11) $      (0.29)
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 number of shares                                                           
 used in calculating                                                        
 net loss per share,                                                        
 basic and diluted     51,891,629    44,948,591    50,935,194    44,887,920 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                  CLEVELAND BIOLABS, INC. AND SUBSIDIARIES                  
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                                (UNAUDITED)                                 
                                                                            
                                                 Six months ended June 30,  
                                                    2014           2013     
                                               -------------  ------------- 
                                                                            
Cash flows used in operating activities        $  (7,726,002) $ (14,123,795)
Cash flows provided by investing activities          275,078      2,171,034 
Cash flows provided by (used in) financing                                  
 activities                                        8,572,411        (28,176)
Effect of exchange rate change on cash and                                  
 equivalents                                         (69,292)      (425,749)
                                               -------------  ------------- 
                                                                            
Increase (decrease) in cash and cash                                        
 equivalents                                       1,052,195    (12,406,686)
                                                                            
Cash and cash equivalents at beginning of                                   
 period                                           10,048,466     25,652,083 
                                               -------------  ------------- 
                                                                            
Cash and cash equivalents at end of period     $  11,100,661  $  13,245,397 
                                               =============  ============= 
                                                                            
                                                                            
                  CLEVELAND BIOLABS, INC. AND SUBSIDIARIES                  
                        NON-GAAP FINANCIAL MEASURES                         
                                (UNAUDITED)                                 
                                                                            
We define net cash burn as the net increase (or decrease) in cash, cash     
equivalents and short-term investments excluding the effect of capital      
markets financing activities, and the net increase (or decrease) in         
restricted cash, as determined in accordance with generally accepted        
accounting principles or GAAP. And we separately track net cash burn for    
Cleveland BioLabs, Inc. and its wholly-owned subsidiary BioLab 612, LLC,    
which we refer to as CBLI Stand-alone, as well as for the consolidated      
entity which includes the accounts of Incuron, LLC, Panacela Labs, Inc. and 
Panacela Labs, LLC. This non-GAAP measure may be considered in addition to  
results prepared in accordance with GAAP, but should not be considered a    
substitute for, or superior to, GAAP results. We believe that net cash burn 
is relevant and useful information for the Company and our investors as it  
provides a simple method of determining net cash used by the Company. A     
calculation of net cash burn is provided below:                             
                                                                            
                       Quarter Ended June 30,     Six months Ended June 30, 
                         2014          2013          2014          2013     
                     ------------  ------------  ------------  ------------ 
CBLI Stand-alone:                                                           
  Cash, cash                                                                
   equivalents, and                                                         
   short-term                                                               
   investments,                                                             
   beginning of                                                             
   period            $ 12,021,569  $ 13,333,966  $  7,957,302  $ 17,945,147 
  Cash, cash                                                                
   equivalents and                                                          
   short-term                                                               
   investments, end                                                         
   of period            7,654,233     8,789,689     7,654,233     8,789,689 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Period decrease    (4,367,336)   (4,544,277)     (303,069)   (9,155,458)
  Plus repayment of                                                         
   long-term debt       4,000,000             -     4,000,000             - 
  Less net proceeds                                                         
   from the sale of                                                         
   common stock        (3,342,500)            -    (9,697,501)            - 
                     ------------  ------------  ------------  ------------ 
  Net operating cash                                                        
   burn for the                                                             
   period              (3,709,836)   (4,544,277)   (6,000,570)   (9,155,458)
  Number of months                                                          
   in period                    3             3             6             6 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Net monthly                                                             
     operating cash                                                         
     burn            $ (1,236,612) $ (1,514,759) $ (1,000,095) $ (1,525,910)
                     ============  ============  ============  ============ 
                                                                            
                                                                            
Consolidated:                                                               
  Cash, cash                                                                
   equivalents, and                                                         
   short-term                                                               
   investments,                                                             
   beginning of                                                             
   period            $ 13,671,910  $ 21,055,874  $ 10,354,004  $ 28,286,027 
  Cash, cash                                                                
   equivalents and                                                          
   short-term                                                               
   investments, end                                                         
   of period           11,103,596    13,551,123    11,103,596    13,551,123 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Period                                                                  
     increase/
     (decrease)        (2,568,314)   (7,504,751)      749,592   (14,734,904)
  Plus repayment of                                                         
   long-term debt       4,000,000             -     4,000,000             - 
  Less                                                                      
   noncontrolling                                                           
   interest capital                                                         
   contribution to                                                          
   Incuron, LLC        (2,915,239)            -    (2,915,239)            - 
  Less net proceeds                                                         
   from the sale of                                                         
   common stock        (3,342,500)            -    (9,697,501)            - 
                     ------------  ------------  ------------  ------------ 
  Net operating cash                                                        
   burn for the                                                             
   period              (4,826,053)   (7,504,751)   (7,863,148)  (14,734,904)
  Number of months                                                          
   in period                    3             3             6             6 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Net monthly                                                             
     operating cash                                                         
     burn            $ (1,608,684) $ (2,501,584) $ (1,310,525) $ (2,455,817)
                     ============  ============  ============  ============ 
                                                                            

Contact:
Rachel Levine
Vice President, Investor Relations
Cleveland BioLabs, Inc.
T: (917) 375-2935
E: rlevine@cbiolabs.com



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