Contract for Anti-Nuke/Cancer Drug Worth $118M for Mission Viejo Firm

Mission Viejo-based Aeolus Pharmaceuticals has been awarded a contract worth up to $118 million from the federal government to further develop a drug that shows promise in fighting the effects of a nuclear attack on humans and of reducing the side effects of radiation in cancer patients.

The drug, known as AEOL 10150, is being studied by researchers at Duke University, the University of Maryland, the University of Colorado and National Jewish Health, a research facility in Denver, said CEO John McManus. Aeolus outsources all of its research and manufacturing. 

A portion of the grant goes to overhead, which means the company will hire two more employees in the next few weeks, for a total of eight, McManus said. 

Aeolus will receive $10.4 million in the first year of the grant, with about a dozen options kicking in throughout the next five years, meaning the contract may be worth up to $118 million. 

McManus predicts that Aeolus will receive that money.

"I'm confident we can hit all our targets this year," he said. "We'll make sure we're where we need to be to trigger those options in the next few years." 

The drug may be stockpiled to protect against damage to humans' gastrointestinal tract, lungs and bone marrow due to nuclear attack under the so called "emergency use authorization" as early as July 2013, McManus said. The company just has to show that the drug is effective in animals for this use, instead of the typical FDA approval process, because it would be unethical to irradiate people in order to test the drug afterward. 

The drug's promise for cancer treatment is especially encouraging, given that it not only protects healthy cells from damage, but that it also may help shrink tumors, he said. That development means that oncologists may be able to use a higher dose of radiation for patients with fewer side effects. 

The drug is about five years away from market for this use, McManus said.  

Aeolus's employee count is so small because of its outsourcing, which, McManus said, produces better science. "If we buy a piece of [the researchers], we get the best people in the field," he said, adding that it would be difficult for a small biotech firm like Aeolus to attract top talent such as Zeljko Vujaskovic, the head researcher at Duke, and Tom MacVittie, the head researcher at Maryland. The other researchers are Manisha Patel at Colorado and Carl White at National Jewish Health. About 30 researchers are working on the project, McManus said.

Also, because they are not full-time Aeolus employees, Vujaskovic and White are able to continue their clinical oncology practices. 

The contract comes from the federal department of Health and Human Services, under its Biomedical Advanced Research and Development Authority. 

Aeolus is also working on a drug that would help treat Parkinson's and epilepsy.

The five-year contract was announced Feb. 15.