CLEVELAND, April 16 /PRNewswire-FirstCall/ -- Cleveland BioLabs, Inc. (NASDAQ:CBLI)(BSE:CFB), announced today a letter to supporters and stakeholders from its President and CEO, Michael Fonstein, Ph.D., providing a progress report on clinical and corporate developments since the previous update published in October 2006. The letter is included in its entirety below:

Dear Supporters and Stakeholders,

It has been an exciting time for Cleveland BioLabs since our last update in October 2006. I would like to update you on developments of the past few months, as we are now in a position to potentially generate commercial revenue beginning in 2008.

Cleveland BioLabs is committed to leveraging our discoveries in the area of programmed cell death to develop drug candidates that protect against radiation and fight cancer. Through our research efforts, we are also exploring several additional applications for our drug candidates, including reducing the side effects of cancer treatment, generating adult stem cells and protecting from acute organ failure.

We are actively pursuing development of our two lead product candidates: Protectan CBLB502, a radiation protector, and Curaxin CBLC102, an oral anticancer compound with a demonstrated safety profile.

Protectan CBLB502

Protectan CBLB502 has demonstrated survival benefits as a radiation protector in animal models when administered up to two hours prior to exposure or up to eight hours after exposure. CBLB502 is the first compound to provide protection of both the gastrointestinal and hematopoietic (bone marrow/blood production) systems against damage caused by the effects of radiation. The compound does not appear to display toxicity at therapeutic doses.

CBLB502 is being developed initially as a radiation antidote for the military, rescue workers, nuclear plant personnel and eventually for all people who may be subject or vulnerable to nuclear attack or accident. This drug is undergoing an accelerated development program under the FDA two-animal rule, which requires us to show efficacy in two animal species and only safety in humans. We are in the process of completing Good Manufacturing Practices compliant (cGMP) manufacturing of the compound and plan to submit an Investigational New Drug (IND) application for a human safety study later this year.

In February 2007, the Department of Defense (DoD) published a Request For Proposal (RFP) aimed at the acquisition of up to 500,000 doses of radiation antidote. We believe that the two key features outlined in the RFP, protection of gastrointestinal tract and overall survival benefits, put our lead compound ahead of any known competition. The RFP award would provide funding for development through FDA approval, as well as a commitment to purchase, thereafter. We expect the RFP to be awarded later in the year.

Based on examples of previous DoD RFP awards for similar products, we believe that winning this RFP may result in an initial contract with potential revenues in excess of $200 million. A contract of this nature would also serve as strong validation and might aid our ability to sell this product to other democracies prone to nuclear threat, such as Japan, South Korea, and Israel, as approved by the U.S. Government.

As an example of our competitive position within the DoD, we recently received a contract for over $1 million from the Defense Threat Reduction Agency (DTRA) of the DoD to fund "development leading to the acquisition" of CBLB502, in collaboration with the Armed Forces Radiobiology Research Institute (AFRRI), which has also received significant independent funding for work on our compound.

In March 2007, another significant opportunity for our radiation protector compounds emerged through the Department of Health and Human Services (HHS). HHS declared that it was terminating existing negotiations for a radiation protector with a competing company under the auspices of a RFP published over a year ago, and instead would issue an entirely new RFP. At the time the original RFP was issued, we did not have our primate data available and were not able to participate; however, we have now completed the necessary trials to qualify for the new RFP. We believe that this new RFP will mimic the requirements of the DoD.

In addition, Congress has since passed the Pandemic and All-Hazards Preparedness Act, which creates the Biomedical Advanced Research and Development Authority (BARDA) agency that enables the HHS to award contracts that grant development funds prior to FDA approval. We believe this legislation was intended to correct some of the shortcomings of the 2004 Bio Shield Act. BARDA requires nearly $1.5 billion to be spent on vaccines and counter measures over the next two years and some sources have indicated that potentially more than $750 million may be spent on radiation counter measures. We believe Cleveland BioLabs is well positioned to get a share of those expenditures.

Overall, we have a high degree of confidence that we are on track for the formal development of CBLB502 as a powerful, FDA approved, radiation protector within the next 12-24 months, and that this product has a promising future.

Protectan CBLB612

Our studies of the mechanism of action of our second radiation protector, Protectan CBLB612, led us to discover its ability to generate hematopoietic stem cells (which are responsible for maintenance of our blood and immune system) and their mobilization into peripheral blood. The effect of a single injection of CBLB612, as demonstrated in experiments in mice and non-human primates, exceeded the results of an existing drug on the market with documented sales of more than $1 billion. If borne out by further research, the potential applications for this technology are staggering. Producing a ready supply of hematopoietic stem cells for an individual without painful procedures, risk of contamination, or side effects would be tantamount to enabling the body to repair itself from any damage to its blood-forming system.

This discovery and others open a huge array of prospects for our Protectan compounds in supportive care of cancer, stem cell medicine, and prevention of acute organ failure.

Curaxin CBLC102

In January 2006, we began a Phase II efficacy study of Curaxin CBLC102 in hormone-refractory prostate cancer. CBLC102 is a safe, oral drug used in the past to treat malaria that demonstrates efficacy in vitro, in animal models, and in live tumors removed from human patients. We have successfully progressed into the second phase of the trial at our three trial centers at the University of Chicago, the Cleveland Clinic and University Hospitals Case Medical Center.

We expect to report anecdotal data from the hormone-refractory prostate trial in late 2007, and it is our intention to initiate additional Phase II trials for CBLC102 in multiple myeloma and renal cell carcinoma this summer. CBLC102 has a unique mechanism of action, simultaneously hitting two key cancer targets; which our research indicates would be effective in multiple cancers.

We are also pleased to share some successes in our corporate development. We signed a strategic agreement with Roswell Park Cancer Institute, establishing a collaborative effort in the area of anti-cancer research and drug trials. In addition to providing us up to $5 million of non-dilutive funding for our research, this partnership will allow us to run more productive and less expensive drug trials at this distinguished cancer center. This agreement adds a new dimension to our research and development capabilities and we consider one of our greatest assets to be the support we receive from both the Cleveland Clinic, one of our founders, and Roswell Park.

We recently raised an additional $30 million in funding through a private placement with accredited investors. These funds, together with the cash remaining from our IPO and committed grant funds, form a solid capital base for our planned research and development efforts and should be sufficient to support our activities for the next two years.

In summary, we are in the midst of several exciting developments, all of which have the potential to drive tangible value:

    * A successful response to the DOD's RFP and further development of
      Protectan CBLB502, which we forecast to generate revenues in 2008;
    * The launch of additional Phase II clinical trials for Curaxin CBLC102;
    * The progress of our potential stem cell applications from research to
      clinical development; and
    * The movement of our radiation protection compounds into human studies in
      new therapeutic areas such as supportive care for cancer and acute organ

We look forward to sharing our progress on all of these fronts with you and appreciate your support.

    Michael Fonstein
    President and Chief Executive Officer
    Cleveland BioLabs, Inc.

About Cleveland BioLabs, Inc.

Cleveland BioLabs, Inc. is a drug discovery and development company leveraging its proprietary discoveries about programmed cell death to treat cancer and protect normal tissues from exposure to radiation and other stresses. The Company has strategic partnerships with the Cleveland Clinic Foundation, Roswell Park Cancer Institute, ChemBridge Corporation and the Armed Forces Research Radiobiology Institute. To learn more about Cleveland BioLabs Inc., please visit the company's website at

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the "Risk Factors" described in our filings with the Securities and Exchange Commission.

    The Global Consulting Group
    Rachel Levine
    T: (646) 284-9439