Hollis-Eden stock roars up 29%

Shares of Hollis-Eden Pharmaceuticals Inc. rose as much as 52 percent after the company said it is stopping further development of radiation drug Neumune and instead focus on its diabetes and prostrate cancer drugs.

The share spike, which made the stock the biggest percentage gainer on the Nasdaq Friday, reversed some of its prior-week losses that followed the contract rejection of Neumune by the U.S. Department of Health and Human Services.

Neumune was being developed to treat acute radiation syndrome under the U.S. government's Project BioShield program.

Analyst Joseph Pantginis of Canaccord Adams said as a public company, Hollis-Eden needed to go after drugs with real markets where it could potentially get return on investment.

The San Diego-based company had spent between $80 million to $90 million over four years developing Neumune with no current potential for reimbursements from the government.

It plans to file an investigational new drug application to treat type 2 diabetes by the end of the month. The company is also considering the same compound as a treatment of rheumatoid arthritis.

What is Neumune and how does it work?
Neumune was being developed as an acute radiation syndrome drug. Neumune or 5-androstenediol (AED), is a naturally occurring adrenal steroid hormone which stimulates multilineage recovery of bone marrow cells [Immune system cells like macrophages and T cells]. In other words, it stimulates the immune system to recover from radiation and grow new cells derived from the bone marrow. This relates directly to survival, in that any opportunistic infections can be stopped by the body's ability to defend itself unlike an irradiated animal which cannot defend itself without a functioning immune system.

AED is often misused by athletes as a performance enhancing anabolic steroid as well.

HEPH.O closed friday's trading up 74 cents per share to $3.25.