Cel Sci Corporation (CVM)

[sushifishman]

ADAM FEARSTEIN IS BACK!!!!

Here is his latest attack:

A few Twitter followers DM’d me recently to ask if my long-ago bearish view of Cel-Sci — dating back to my days at TheStreet — had brightened. The answer is no. Most definitely, no.

At some point this year, the Northern Virginia biotech will announce results of a Phase 3 clinical trial involving its drug Multikine in patients with head and neck cancer. The study will fail. There will be no survival benefit observed between Multikine and the control arm. I make this prediction with strong confidence. Why? Because the company was informed by independent data monitors in 2014 and again in 2016 that the Multikine study should have been shut down early.

Cel-Sci ignored the recommendation. Worse, the company never told investors or the FDA. Instead, Cel-Sci tried to wiggle out of its troubles by seeking FDA permission to increase the number of head and neck cancer patients enrolled in the Multikine study. The FDA refused Cel-Sci’s request. Then, the agency halted the clinical trial entirely, telling the company there was an “unreasonable and significant risk of illness or injury to human subjects” participating in the study. The FDA stepped in to protect patients after learning belatedly about the independent monitors’ failed effort to stop the study.

If you’re only learning about all of this bad stuff now, I suggest downloading and reading Cel-Sci’s annual report for fiscal year 2016 filed with the Securities and Exchange Commission. All the awful details are disclosed there. The company whitewashed subsequent annual reports filed for the fiscal years 2017 and 2018.

FDA eventually allowed Cel-Sci to restart the Multikine Phase 3 study but only after the company agreed to a moratorium on new patient enrollment. Head and neck cancer patients enrolled previously in the study were no longer being treated with Multikine, so the experimental drug posed no incremental safety risk to them.

Technically, the Multikine clinical trial continues, but it’s already failed. The only open question is how long Cel-Sci puts off acknowledging the negative outcome.