May 22--Cleveland BioLabs is close to getting a $15 million investment from a Russian venture capital fund to help finance the development of one of the Buffalo life sciences company's drugs for use by cancer patients.

The preliminary agreement with Bioprocess Capital Ventures calls for the formation of a joint venture that will control the rights to Cleveland BioLabs' Curaxin anticancer drugs. Each company will hold a roughly 50 percent stake in the venture, with Cleveland BioLabs controlling a slight majority.

Michael Fonstein, Cleveland BioLabs' president and chief executive officer, said Thursday the joint venture will help the company continue to develop its Curaxin products and push them into human trials.

Curaxin is in tests to determine its effectiveness in killing tumor cells.

The joint venture still hinges on a final agreement being reached, but it calls for three separate payments totaling $15 million to support the development of Curaxin. Each payment would be dependent on Cleveland BioLabs reaching certain targets in the development process.

Cleveland BioLabs earlier this year raised $4.5 million in new capital by selling convertible preferred stock. Raising new capital is important for development-stage companies, like Cleveland BioLabs, because their products have not advanced to the stage where they can bring in revenue. Cleveland BioLabs lost $3 million in the first quarter.

The company has been focusing much of its recent efforts on the development of its Protectan drug as a treatment for radiation sickness. The company has done first-phase testing of Protectan on healthy human volunteers and will do further animal tests on its effectiveness.

The company has secured about $20 million in federal funds for the development of Protectan, which is being studied for its potential to protect soldiers from radiation sickness.

drobinson@buffnews.com

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