HHS CANCELS SOLICITATION FOR HOLLIS-EDEN'S RADIATION DRUG

The U.S. HHS has found Hollis-Eden Pharmaceuticals' acute radiation syndrome drug candidate, Neumune, to be "technically unacceptable," the company said. The agency told Hollis-Eden that it has cancelled its solicitation for radiation countermeasures entirely. The company's stock lost nearly half its value following the news.

The company said it was surprised by the decision. In June 2006 the agency informed Hollis-Eden that its Neumune proposal was within the competitive range, and the company believes that as of October its proposal was the only one still being considered. Since then, HHS has not requested any additional safety or efficacy data on Neumune, the company said.

"While we will attempt to gain a better understanding from HHS why this determination was made, we clearly met all of the very detailed requirements of the solicitation," Richard Hollis, chairman and CEO of Hollis-Eden, said. "It would be more understandable if there were other medical countermeasures as far along in development with a superior profile, but given that HHS has chosen to cancel the solicitation altogether, that is clearly not the case."

Hollis said that Neumune is the only experimental drug to have demonstrated the ability to reduce the effects of radiation in primates when administered hours after exposure, adding that it has been shown to be safe in humans.

"We know that this is not the process Congress intended in overwhelmingly passing the Project BioShield legislation," he added. Project BioShield is a $5.6 billion program to fund medical defenses against chemical, biological and radiological weapons.