HHS awarded $170M to Cellerant Therapeutics for radiation-induced neutropenia treatments

Contract Overview

Contract Amount: $169,931,988 ($169.9M)

Contractor: Cellerant Therapeutics, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-08-27

End Date: 2018-08-31

Contract Duration: 2,926 days

Daily Burn Rate: $58.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: ADVANCED DEVELOPMENT OF THERAPEUTICS FOR TREATING NEUTROPENIA RESULTING FROM ACUTE EXPOSURE TO IONIZING RADIATION CAN 1990987 CAN 1990087

Place of Performance

Location: SAN CARLOS, SAN MATEO County, CALIFORNIA, 94070

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $169.9 million to CELLERANT THERAPEUTICS, INC. for work described as: ADVANCED DEVELOPMENT OF THERAPEUTICS FOR TREATING NEUTROPENIA RESULTING FROM ACUTE EXPOSURE TO IONIZING RADIATION CAN 1990987 CAN 1990087 Key points: 1. Contract awarded for advanced development of therapeutics, indicating a focus on novel solutions. 2. The contract duration of nearly 8 years suggests a long-term commitment to product development. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure implies potential for cost overruns. 4. The award was made under Full and Open Competition, suggesting a robust bidding process. 5. The biological product manufacturing sector is critical for public health preparedness. 6. The contract's value places it in the upper tier for advanced development awards in this category.

Value Assessment

Rating: fair

The contract's total value of $169.9M over nearly 8 years represents a significant investment in therapeutic development. Benchmarking this against similar advanced development contracts for novel biologics is challenging due to the specialized nature of the target condition (radiation-induced neutropenia). The CPFF structure, while allowing for flexibility in research and development, carries inherent risks of cost escalation compared to fixed-price contracts. Without detailed cost breakdowns and performance milestones, a precise value-for-money assessment is difficult, but the substantial funding suggests a high perceived need and potential impact.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 5 bids suggests a competitive environment, which typically leads to better pricing and innovation. The agency's decision to proceed with full and open competition implies confidence in the market's ability to provide suitable solutions for this complex therapeutic need.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value and most effective solution for a critical public health need.

Public Impact

The primary beneficiaries are individuals who may experience acute radiation exposure, potentially including military personnel, first responders, and the general public in emergency scenarios. The contract supports the development of novel therapeutics to treat neutropenia, a serious side effect of radiation exposure that compromises the immune system. The geographic impact is national, focusing on preparedness for widespread health emergencies. Workforce implications include supporting specialized jobs in biotechnology research, development, and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely managed.
Long contract duration (nearly 8 years) increases exposure to potential changes in technology or market needs.
The specialized nature of the therapeutic target may limit the pool of future contractors if follow-on work is needed.

Positive Signals

Awarded under full and open competition, indicating a robust and fair selection process.
Multiple bids received (5) suggest market interest and potential for competitive pricing.
Focus on a critical public health need (radiation exposure countermeasures) aligns with national security and emergency preparedness goals.

Sector Analysis

This contract falls within the Biotechnology and Pharmaceutical sector, specifically focusing on advanced therapeutic development for rare or emergency-use conditions. The market for such specialized biologics is driven by government funding for biodefense and public health preparedness. Comparable spending benchmarks would typically involve other advanced development contracts awarded by agencies like BARDA (Biomedical Advanced Research and Development Authority) for countermeasures against chemical, biological, radiological, and nuclear (CBRN) threats. The overall market for biopharmaceutical R&D is substantial, but contracts for specific, high-risk/high-reward countermeasures are a niche within it.

Small Business Impact

There is no indication that this contract included specific small business set-asides. The prime contractor, Cellerant Therapeutics, Inc., is a commercial entity. The large contract value and specialized nature of the work suggest that subcontracting opportunities might exist for niche services or supplies within the biotechnology and pharmaceutical supply chain, but the primary focus is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). Given the nature of R&D contracts, oversight likely involves regular progress reviews, milestone tracking, and financial audits to ensure funds are used appropriately and objectives are being met. Transparency is generally maintained through contract award databases and public reporting, though specific technical details of the research may be proprietary.

Related Government Programs

Biomedical Advanced Research and Development Authority (BARDA) programs
National Institutes of Health (NIH) research grants
Department of Defense (DoD) biodefense initiatives
Strategic National Stockpile (SNS) procurements
Advanced Development Contracts

Risk Flags

Contractor Viability Risk
Cost Overrun Risk (CPFF)
Technological Obsolescence Risk
Long-Term Development Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $169.9 million to CELLERANT THERAPEUTICS, INC.. ADVANCED DEVELOPMENT OF THERAPEUTICS FOR TREATING NEUTROPENIA RESULTING FROM ACUTE EXPOSURE TO IONIZING RADIATION CAN 1990987 CAN 1990087

Who is the contractor on this award?

The obligated recipient is CELLERANT THERAPEUTICS, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $169.9 million.

What is the period of performance?

Start: 2010-08-27. End: 2018-08-31.

What is the track record of Cellerant Therapeutics, Inc. in developing and delivering similar therapeutics?

Cellerant Therapeutics, Inc. was a biotechnology company focused on developing treatments for blood cancers and other conditions. Their lead product candidate, CLTX-001, was a novel immunotherapy designed to target CD33-positive leukemic cells. While they showed promise in early-stage research and received significant funding, including this large government contract, the company faced challenges. Publicly available information suggests that Cellerant Therapeutics ceased operations around 2018-2019, potentially due to difficulties in advancing their pipeline through clinical trials or securing further funding. Therefore, their track record in successfully bringing similar therapeutics to market is limited, and the long-term success of this specific contract's objective may have been impacted by the company's eventual dissolution.

How does the $170M contract value compare to other advanced development contracts for radiation countermeasures?

The $170 million contract awarded to Cellerant Therapeutics is substantial and falls within the higher range for advanced development contracts specifically aimed at countermeasures for radiation-induced injuries. Agencies like HHS's ASPR and BARDA frequently award large contracts in the tens to hundreds of millions of dollars for the development of medical countermeasures against CBRN threats, including radiation. For instance, contracts for radioprotectants, medical treatments for acute radiation syndrome (ARS), or decorporation agents can reach similar or even higher values, depending on the stage of development, complexity, and projected market need. This contract's value reflects the significant investment required for novel biologic development and the high priority placed on addressing potential radiation emergencies.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract structure for this project?

The Cost Plus Fixed Fee (CPFF) contract structure, used for this $170M award, presents several risks. Primarily, it shifts a significant portion of the financial risk to the government. While the contractor is reimbursed for allowable costs, the 'fixed fee' component provides a predetermined profit margin. If the project encounters unforeseen technical challenges, requires more resources than initially estimated, or experiences delays, the total cost to the government can escalate considerably beyond initial projections. The contractor has less incentive to control costs tightly compared to fixed-price contracts, as their fee is fixed regardless of the final cost. Effective oversight, stringent cost monitoring, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What is the potential impact of this contract on the development of treatments for acute radiation syndrome (ARS)?

This contract specifically targets the development of therapeutics for neutropenia resulting from acute radiation exposure. Neutropenia, a severe reduction in white blood cells, is a critical component of Acute Radiation Syndrome (ARS), significantly increasing the risk of life-threatening infections. By funding the advanced development of treatments for this specific condition, the contract directly contributes to the broader goal of mitigating ARS. Successful development could provide a vital medical countermeasure for individuals exposed to high levels of ionizing radiation, enhancing the nation's preparedness for nuclear or radiological incidents. It represents a targeted investment in a crucial aspect of ARS treatment.

How does the 'Full and Open Competition' award mechanism influence the outcome for taxpayers?

Awarding this contract through 'Full and Open Competition' is generally beneficial for taxpayers. This process ensures that a wide range of potential contractors can compete, fostering a robust marketplace where innovative solutions and competitive pricing are encouraged. By allowing all responsible sources to submit bids, the government increases the likelihood of selecting the most capable contractor at the best possible value. This competitive pressure can drive down costs, improve the quality of the delivered product or service, and reduce the risk of contractor lock-in. For taxpayers, it means their funds are more likely to be used efficiently and effectively to meet critical public health needs.

What is the significance of the 'Biological Product (except Diagnostic) Manufacturing' Product Service Code (PSC) for this contract?

The Product Service Code (PSC) '325414 - Biological Product (except Diagnostic) Manufacturing' signifies that the contract's primary focus is on the manufacturing and development of biological products, excluding those intended for diagnostic purposes. In the context of this contract with Cellerant Therapeutics, it underscores that the funding is directed towards creating therapeutic agents derived from living organisms or their components, such as proteins, antibodies, or cell-based therapies. This PSC is crucial for understanding the nature of the work being performed – advanced research, development, and potentially early-stage manufacturing of a novel drug intended for treating a specific medical condition, rather than a diagnostic tool or a chemical compound.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1561 INDUSTRIAL RD, SAN CARLOS, CA, 94070

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $169,931,988

Exercised Options: $169,931,988

Current Obligation: $169,931,988

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline