Disclaimer: VFC has no affiliation with Cel-Sci Corp or with any third parties associated with the companies. VFC has received no compensation for this blog post, although there may be an unrelated advertisement or two at various locations on this blog. VFC does not offer advice or investment services and nothing you read here should be construed as such. VFC is just a guy with an opinion and access to a computer and a keyboard; bringing discussion and ideas to the table. #AhYeah.
Shares of CVM closed at $6.36 on Wednesday, 18 July, down nearly three percent on the day. We really can't go a day without discussing this stock. To follow up on yesterday's brief synopsis of where we stand with the Cel-Sci story, some after hours trading in the USA and morning trading in the European markets may be worth discussing today.
First, three large trades of CVM hit after the close on Wednesday afternoon, totaling 87,999 shares at a price of $6.36 - well over a half million dollar position taken in the company. That's a decent after-hours haul and feeds the long argument that positive positions are being taken in advance of the Multikine Phase III trial results rolling out sometime soon.
To follow that up, filings on the London Stock Exchange revealed that the Oryx Capital Growth Fund has accumulated a rather large position of Ergomed plc. For those keeping score at home, you'll know that Ergomed is the Contract Research Organization that is managing Cel-Sci's Phase III Multikine trial. The argument can be made that Ergomed share price or accumulation action is unrelated to Cel-Sci, but the fact that Ergomed's success is also tied to Multikine success due to "co-development arrangements where the risk and expense of development is shared," according to the most recent Ergomed annual report, the argument can also well be made that expected Multikine success could be influencing Ergomed trading action, too. Of Ergomed's four CRO contracts, according to the same annual report, Multikine is by far the most advanced product candidate, with two others in Phase II still and the fourth very early in pipeline progress.
Again, according to the same report, 2018 was a challenging year for Ergomed, so for a growth fund to take a pretty significant position in Ergomed, they must expect that growth (that's what growth funds do, project growth) is on the horizon. From the CRO business, Multikine is the candidate that would be speculated on as being able to provide growth over the short term, as opposed to the others. So it is possible that the recent action of Ergomed and Cel-Sci is tied. That said, it is upon each individual investor to conduct his or her own DD and come to their own conclusions on what this all means.
As I've mentioned in my previous blog posts, I don't expect the shorts to be finished in their attempt to drive the price lower as we await the end game Multikine trial news. They came swift last Friday and it's possible they could come again this Friday, as it's easier to control the markets when people leave early and take long weekends. It's the goal of any short, of course, to cover at the lowest price possible, but if we start seeing indications that shorts are covering here in the six dollar range, or even the high fives, that would be a telling sign that maybe the shorts are not as confident in their short argument as they portray in their well-timed blog posts and message board banter.
There's never a sure thing in the stock market and the biotech sector is inherently more risky and speculative than most others, but the payoffs are generally larger when you get a good hit. One ten-bagger could erase many previous speculative losses, which attracts traders with much more appetite for risk than you normally see. All of that adds to the volatility we've seen over the course of this company's lifetime. Now, tho, we are pretty close to the end. And as we've discussed above, final positions are being taken, whether they are indications of positive results or not, well that's up to each investor to decide for his or her self and invest accordingly.
Disclosure: Long CVM.