NEW YORK -- The U.S. Department of Defense and investors are pinning hopes on Hollis-Eden Pharmaceuticals Inc. (HEPH) to help the nation in its war against terrorists.
Investors on Friday rallied around the Pentagon's push for Food and Drug Administration approval of Hollis-Eden's immunity stimulating hormone HE2100 - seen as a possible means to protect the military and the general public from radiation exposure.
Hollis-Eden shares recently traded up 18.3%, or $1.89, to $12.24 on volume of 1 million shares compared to average daily volume of 684,796.
"The Armed Forces Radiobiology Research Institute in Bethesda, Maryland, has confirmed that Hollis-Eden's immune-regulating compound HE2100 is its leading drug candidate to protect military personnel against exposure to radiation released by terrorists," H.C. Wainwright analyst Ronald Opel said in a Friday research note.
A Radiobiology Research Institute spokesman wasn't immediately available for comment.
"They're pushing for consideration of the compound under the same rule as Cipro for Anthrax," Hollis-Eden spokesman Dan Burgess said.
The agency is urging the FDA to approve HE2100 for this use under a new rule currently being finalized that would allow animal tests to be used for drugs aimed at countering bioterrorism, Opel said.
Because the control group would be exposed to lethal doses of radiation, human trials would be highly unethical for this drug.
The FDA approved an inhalation anthrax application of Bayer AG's (G.BAY) antibiotic Cipro, without human trials due to similar ethical concerns.
HE2100 was developed by Dr. Roger M. Loria, a professor at Virginia Commonwealth University, and Hollis-Eden holds the rights to the drug.
Hollis-Eden's immune-regulating compounds have been found to be safe and efficacious - on a preliminary basis - in several Phase II human clinical studies for HIV/AIDS and malaria.
Hollis-Eden won't provide speculation on the economic potential of HE2100, or whether the company expects approval under the radiation-related application for the general public, Burgess said. The company is "letting the military take the lead," he added.
The U.S. government has concerns that terrorists may have gotten their hands of crude, so-called "dirty nukes" - conventional non-nuclear explosive devices packed with deadly radioactive material could contaminate wide areas. The sabotage of nuclear reactors on these shores is also an ongoing a concern.
"We expect that an agreement between the Defense Department and Hollis-Eden for radiation-related bioterrorism testing will be announced soon, Opel said.
"If approved for a military personnel application, we would also expect HE2100 to be used on a widespread preventative basis for the civilian population."
HE2100 has been shown in animal models to stimulate the growth of platelets as well as white blood cells called neutrophils, thereby providing strong protection against radiation-induced immunity loss, Opel said.
In one test, a single injection protected 70% of mice in an experimental group from a radiation level that killed all the mice in the control group. In another study, none of the mice injected with HE2100 died from radiation, and all except one in the control group died.
Opel reiterated his strong buy rating and $20 price target on the shares. "We anticipate a continuing series of announcements concerning positive clinical trial results and other favorable developments and milestone performance achievements over coming months."
Ladenburg Thalmann analyst Albert Rauch started coverage on Hollis-Eden shares with a buy rating and a 12-month price target of $16.
"The immune regulatory steroids that Hollis-Eden is developing represent novel therapies that have the potential to address large markets," Rauch said. "However, the uniqueness of these therapies adds to the risk of development. While the early results have been positive, unforeseen activities could limit their potential usefulness as therapeutics." |
