Cleveland BioLabs Inc. CEO and President Interview: Dr. Michael Fonstein, PhD.

• On 1:50 pm EDT, Tuesday September 15, 2009

67 WALL STREET, New York - September 15, 2009 - The Wall Street Transcript has just published its Medical Research Services report offering a timely review of the sector to serious investors and industry executives. This 23 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Medical Device Research Services - Pharmaceutical Research Services - Diagnostics - Life Science Research Supplies - Biology R & D - Lab Services Business Model - International Economic Exposure - Effect of Recession on Sector Stocks - Top Stock Winners and Losers in Medical Research Services - Top Stock Winners and Losers in Medical Diagnostics

Companies include: Arrowhead Research (ARWR); Cleveland BioLabs (CBLI); IR BioSciences Holdings (IRBS); Power3 Medical Products (PWRM); Illumina (ILMN); Luminex (LMNX); Waters (WAT); Life Technologies (LIFE); QIAGEN (QGEN); Sangamo BioSciences (SGMO); Beckman Coulter (BEC); Invitrogen (IVGN); Amgen (AMGN); Bristol-Myers (BMY); Eli Lilly & Co. (LLY); Myriad Genetics (MYGN); Genomic Health (GHDX); Targeted Genetics (TGEN); Dow Chemical (DOW); Sigma-Aldrich (SIAL); MDS (MDZ); Danaher (DHR); Cepheid (CPHD); Inverness Medical Innovations (IMA); Quidel (QDEL); Meridian Bioscience (VIVO); Gen-Probe (GPRO); Sequenom (SQNM); Genoptix (GXDX); Response Genetics (RGDX); Affymetrix (AFFX); Monogram Bioscience (MGRN); LabCorp (LH)

In the following brief excerpt from the 23 page report, Michael Fonstein discusses the outlook for the sector and for investors.

TWST: Would you give me a brief history of your company and what your focus is on now?

Mr. Fonstein: Cleveland BioLabs is a company which develops two types of drugs. One of them is Protectans, which protect healthy tissues from various stresses, and the main focus is radiation. Radiation, as we know it, exists in two basic incarnations: One, as the threat of nuclear events, accidents or dirty bombs, and the other as a commonly used treatment for cancer. We are developing our Protectans, specifically our lead Protectan CBLB502, for both of these applications. The first application, however, is defense because it is a faster path to commercialization and we believe we are slightly more than a year from filing for licensure with the FDA. We just finished a critical human safety trial, which allows us to feel pretty good about our progress. Our second group of compounds is called Curaxins, which are pure play anticancer compounds.

TWST: What do they do?

Mr. Fonstein: Curaxins wake up sleeping apoptosis in cancer cells and push them into cell suicide.

TWST: Is this for people who have developed cancer and are under radiation therapy?

Mr. Fonstein: Curaxins are direct-acting anticancer drugs. For a cell to become cancerous, it has to shut down one of the cell's defensive mechanisms called "cell suicide" or "apoptosis." Our Curaxin drugs are meant to bring this function back, when possible, killing cancer cells. On the other side of that equation, as I mentioned earlier, we do have a drug (Protectan CBLB502) in development to protect normal cells and tissues from the side effects of radiation treatment. So if you have a cancer patient treated with radiation, then it could enable them to stay within treatment regimens and hopefully have a better outcome.

TWST: At the moment you don't have any products waiting for FDA approval?

Mr. Fonstein: Our lead compound is in advanced development and needs to complete a few more steps before we can submit our filing to the FDA for licensure. If we remain on plan, we hope to submit our application in the latter half of 2010.

TWST: What products do you consider as having the most potential to impact the market once they have been FDA approved?

Mr. Fonstein: I believe we have several compounds with breakthrough market potential, but the most advanced is clearly Protectan CBLB502 for defense use. We believe that the government will start its acquisition process to procure a radiation countermeasure by issuing a Request for Proposal. The Department of Defense recently issued a Request for Information, which we responded to and believe will eventually lead to acquisition. The potential impact on the market would be enormous, since there are no existing licensed countermeasures for acute radiation syndrome.

TWST: What is your funding situation like?

Mr. Fonstein: Funding for the defense program comes from the government. Within the last 14 months, we received about $25 million to support activities related to development of CBLB502. We also concluded a small investment a few months ago, which has given us limited but we believe sufficient capital to move this project to its conclusion.

TWST: Would you discuss the nature of your contract with the Department of Defense?

Mr. Fonstein: This contract was awarded in April of 2008 to support specific activities relating to the development of CBLB502 as a radiation countermeasure. Recently, the Department of Defense released an additional portion of funding under the contract, which was conditional upon achieving a certain technical milestone. We are pretty happy with the support we have received form several federal agencies.

TWST: What is your competitive advantage?

Mr. Fonstein: I believe it is the caliber of our underlying science. Our scientific founder, Dr. Andrei Gudkov, has come up with an absolutely revolutionary approach to protection from acute stresses, such as radiation. These discoveries have been published in Science magazine and other high-profile scientific journals. In addition, we are very advanced in our development of this concept and have protected ourselves with multiple patent applications.

TWST: What are two or three reasons for investors to look at your company right now?

Mr. Fonstein: One of the major reasons is that, as far as we understand, there are no real competing products for the radiation countermeasure market for defense. We estimate this market to be potentially a few hundred million dollars per year, and we would expect to penetrate this market within very few years. For a $70 million market cap company, having a few hundred million dollars in potential sales would give us a very bright and optimistic future. We could be there within a very short period of time. The second reason is our broad technological platform. We have several drug candidates at varying degrees of development targeting multibillion-dollar medical markets. So the moment we achieve sales, we should be able to support advances in numerous other programs. Those two things should get people excited.

TWST: You have 20 families of patents under development, I read on your Web site. Is that correct?

Mr. Fonstein: Yes.

TWST: Is there a large variety of products?

Mr. Fonstein: The number of patent applications is large due to the fact that we are covering several chemical entities among the two families of compounds I mentioned as well as multiple applications, negative uses and methods of discovery. As I said, our science is quite revolutionary and we believe a great asset.

TWST: Is there anything else that you'll like to add?

Mr. Fonstein: No, I think we've covered all the salient points. We are very excited about our progress and look forward to the future.

TWST: Thank you. (MRR)

MICHAEL FONSTEIN Chief Executive Officer & President Cleveland BioLabs Inc.73 High St. Buffalo, NY 14203 (716) 849-6810(716) 849-6820 - FAX www.cbiolabs.com

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