Hollis-Eden Shares Plummet As Government Cancels Contract Request

Hollis-Eden Pharmaceuticals on Wednesday said the U.S. government canceled its request for proposal (RFP) for a contract for its drug to treat acute radiation syndrome, sending its shares down more than 18% in late electronic trade.

The company's shares continued to nosedive Thursday.

Hollis-Eden plans to meet with the government to find out the reason for canceling the RFP for the drug, Neumune.

"This is absolutely shocking to us. This is a setback we are not very pleased with. We are at a loss," Hollis-Eden Chairman and Chief Executive Officer Richard Hollis said in a company Webcast Thursday. "It is very disheartening to spend the past four years developing this technology dedicated to winning this request for proposal, and meeting and exceeding its criteria, and not being told along the way what 'technical merits' we weren't meeting. We will be very vocal on this and very outspoken."

Rodman & Renshaw analyst Navdeep Jaikaria said by phone, "The RFP was pulled by the government ... and that is why the stock is down."

Jaikaria said he did not think this was a big blow for the company, as "it would have been a small contract, in our opinion, to begin with."

Rodman & Renshaw has an investment banking relationship with the company.