Cel Sci Corporation (CVM)

[trickledownfacists]

ON THE MARKET: 3 Million Share Insider Buy in this Red-Hot Biotech *

Dr. John L. Faessel

ON THE MARKET

Commentary and Insights


Quotes of the day

“We believe that doctors would likely not be enrolling new patients in the study unless they believed that the Multikine® treatment regimen was benefiting their patients.” Link here

~ Geert Kersten ~

CEO of CEL-SCI

&

"There are many reasons insiders sell, but only one reason insiders buy."

~ Peter Lynch ~

CEL-SCI Corporation (CVM)NYSE MKT

·CEL-SCI CEO in 3 Million share / $1.1 Million Insider-Buy *

·CEL-SCI Posts Record Enrollment of 668 in History’s Largest Phase III Head and Neck Cancer Trial.


First to state the obvious about the epigraphs above: CEL-SCI’s CEO has the most up-to-date information on the company’s prospects, and his $1.1 million buy is an unquestionably and tellingly strong message to the market as to what he must think about its outlook. The old Street maxim from Peter Lynch, famed Fidelity Investments analyst and money manager, regarding insider buying: “There are many reasons insiders sell, but only one reason insiders buy: they think the price will rise.”

Let’s ponder on the why of CEL-SCI Chief Executive Officer [CEO] Geert Kersten’s 3-million share purchase of (CVM), over and above the very large position to which he has continuously added shares and warrants.

Consider carefully the following possibilities.

·As (CVM)’s CEO he would more than likely have some inkling about the protracted, 4-year-long and dramatically expanding head and neck Phase III cancer trial in which 668 persons are now enrolled.

·He would likely have some knowledge of tendencies in the company’s CRO arbitration / lawsuit, where a settlement is a near certainty, in my view.

·He would know about any deal / licensing possibilities. No sector is hotter in deal making than is the immunotherapy cancer space. This is just a matter of time, IMHO.

·He more than likely has knowledge about how the US Navy HPV study is going.

·And he would likely have some grasp of how the University of California San Francisco [UCSF] Phase I clinical trial evaluating peri-anal wart immunotherapy in HIV/HPV patients is proceeding. HPV is the world’s number one sexually transmitted disease.

For anyone who pays close attention to this stock, the sum total of what is in the public domain is remarkable, to put it mildly, especially when you consider the low price of the shares and the company’s low market-cap. Undoubtedly this is what prompted CEO Kersten to act. Also worth noting is that Kersten waited eight days (1/13/2016) from the announcement on 1/5/2016 regarding record Phase III enrollment before acquiring the shares. That Kersten more than likely knows the state of play in the ongoing $50 million lawsuit / arbitration against their former CRO seems suggestive.

For new readers who may not know this remarkable biotech story: link here to the 1/8/2016 CEL-SCI press release that summarizes the company’s remarkable 2015 accomplishments.

Throughout the world in nearly 100 top medical facilities, numerous physicians are suggesting to patients that they embark on CEL-SCI’s Multikine®immunotherapy treatment for their head and neck cancer. Clearly evident from the number of 668 enrollees (in what is the largest head and neck cancer Phase III trial ever undertaken) is that the company’s drug has potential and that the studydesign meets proper medical standards and requirements.

Research at the US National Institute of Health [NIH] has shown that cytokines—highlighted in red in the table below—are the ones necessary for the rejection of any tumor. Note that CEL-SCI’s Multikine® covers near 80% of those bases.



To this point, a large number of justifiably interested physicians deem the CEL-SCI immunotherapeutic treatment as having solid potential as a first-line treatment for advanced primary head and neck cancer. And they are advising prospective head and neck cancer patients about the availability of treatment for their malady through a Phase III clinical trial in 87 clinical sites in 22 countries on three continents.

The new record high number of 668 patients currently enrolled in this trial is just shy of the 880 that will constitute the completed enrollment number.

To date, CEL-SCI has spent over $250 million in the course of its development to achieve this “record-enrollment” milestone in the Phase III trials. Prominently, the company’s drug has already passed FDA Phase I and Phase II muster. It should be noted that about $80 million of these development costs were allocated for a development and validation of the manufacturing process. Another $25 million was spent on the manufacturing part of the plant alone, a state-of-the-art 70,000 ft.² facility built specifically for Multikine® and scaled for commercial use.

An estimated 600,000 new cases of head and neck cancer are diagnosed each year worldwide, which represent about 5-6% of all newly diagnosed cancers. The five-year survival rate is around 30%, a rate that unfortunately has not significantly improved across decades. Head and neck cancer is one of the most deadly classifications of cancers.

Due to Multikine’s® FDA designated Orphan Drug Status in the USA, it is currently anticipated that only one pivotal study should be necessary for Multikine’s® approval. Advanced primary (not yet treated) head and neck cancer represents a recognized unmet medical need—since about 50% of the patients diagnosed with the disease will die within three years following treatment.

** Early-phase data suggests that Multikine® potentially shows combination immunotherapy activity: that is, it may have the potential to simultaneously present both active and passive properties to act against cancer cells. If confirmed, the research would suggest that the combined activity of Multikine® could closely resemble the activity imparted by a healthy person's immune system, which can monitor for and take action against cancer cells. The Phase I and II clinical trial data suggest that Multikine®has the potential to directly affect/kill the tumor cells. In clinical trials using Multikine® in over 200 patients that have been completed in Phase II (the “proof of concept” trial), data demonstrated a 33% improvement in survival over standard care at 3.5 years post-treatment in the Phase II trial. In addition, CVM’s anticancer immunotherapy increased the overall survival to 63.2% at 3.5 years from treatment. Link herefor the data from the Journal of Clinical Oncology.

As regards the end point of the Phase III study:for the Multikine® arm in the current trial, a 10% (or better) advantage in overall survival over standard of care interventions by themselves is the basis for demonstrating efficacy and establishing the use of Multikine as a first-line therapy.

Bottom line, Multikine® is in the sweet spot of immunotherapy / immune-system-enhancement therapy for head and neck cancer—which itself encompasses a market of $6 billion. The company—especially with a market-cap of only $58 million—could well be an acquisition / partnership target with a “gold-ring” multi-bag payoff if the current Phase III trials go well. Currently it’s being valued as a company in Phase I or II.I believe that the market is clearly not factoring in the numerous positive developments for CEL-SCI and its improving outlook.

Savvy management continues to execute from an ever more substantial and sound platform; hence my “home run” posture re CEL-SCI’s shares.

* On January 13, 2016 CEL-SCI sold 3,000,000 shares of its common stock and 3,000,000 warrants to the de Clara Trust for $1,110,000. The de Clara Trust is controlled by Geert Kersten, CEL-SCI’s CEO and a director. This acquisition by Kersten brings his total share count to almost 12 million shares.

Each warrant allows Kersten to purchase one share of the Company's common stock at a price of $0.37 per share at any time on or before January 13, 2021.

I have bought shares of CEL-SCI Corporation (CVM) on the open market and it is my intention to buy additional shares.

For further information see (CVM)’s web site: www.cel-sci.com

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Multikine®is the trademark that CEL-SCI has registered for this investigational therapy, and this proprietary name is subject to FDA review in connection with (CVM)’s future anticipated regulatory submission for approval. Multikine® has not been licensed or approved for sale, barter or exchange by the FDA or any other regulatory agency. Similarly, its safety or efficacy has not been established for any use. Moreover, no definitive conclusions can be drawn from the early-phase, clinical-trials data summarized in this report or elsewhere on the company’s website involving the investigational therapy Multikine® (Leukocyte Interleukin, Injection). Further research is required, and early-phase clinical trial results must be confirmed in the well-controlled, Phase III clinical trial of this investigational therapy that is currently in progress.

Investment risks

·CEL-SCI is far along in its Phase III trial, although to date it does not yet have a product approved for marketing.

·There is the inherent risk associated with all micro-cap biotech companies of the need for additional dilutive financings to fund operations.

·The cost of conducting this Phase III clinical trial and the time required to meet regulatory approval could take additional years.

·CEL-SCI may need to raise additional capital to fund these trials.

·CEL-SCI may not prevail in the upcoming arbitration and there may not be a settlement.

·CEL-SCI’s outcome as company is heavily dependent on the results of its large Phase III trial.

·CEL-SCI has other indications in early stage trials, unfavorable data in the Phase III trial could be damaging to the company.

·A new class of immune-therapies is meeting with success in clinical trials. Yet, should one of these immune-based therapies not succeed, it may cast a negative shadow on all, or similar, immune technologies, in the eyes of regulators including the FDA.

For further information, please see (CVM)’s comprehensive web site: www.cel-sci.com

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