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Hollis-Eden Pulls Plug on Nuclear Radiation Treatment

Drug developer Hollis-Eden Pharmaceuticals scrapped plans to develop its radiation sickness treatment Neumune, but remains confident that it has other drugs in its pipeline that will provide shareholders with the returns they were expecting, according to Chairman and Chief Executive Richard Hollis.

“We’re working on adrenal steroid hormones, they have important properties to treat human diabetes, type 2 diabetes," Hollis said, in an interview with CNBC's Mike Huckman on "Squawk Box." "We’re looking into getting into arthritis and we have a cancer program we’re moving into as well.”

The Department of Health and Human Services recently told Hollis-Eden management that Neumune was “technically unacceptable” and required additional data. The agency also said the drug did not seem competitive compared with other treatments and did not warrant an advance purchase contract under Project BioShield, which is aimed at developing a stockpile of treatments to be used in case of nuclear or chemical attack.

Hollis disagrees with that assessment.

“We believe we’re the only company in the procurement process that should have received the award," Hollis said. "For them to, at the last moment, request data that really requires a pivotal trial without an advance purchase contract, absolutely makes no sense to us.”

Hollis said he is not seeking publicity to force the government’s hand, but believes the company has “the best science, the best drug.” He added that the firm is open to being acquired by a bigger pharmaceutical company to help bring Neumune to the market. The company may also license or sell the drug.

“A medical counter measure to mitigate the consequences of radiological exposure is absolutely vital,” he said.