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. ptember could be a big month for Cel-Sci (CVM).
Shares of Cel-Sci Corp (CVM) had a very solid trading day on Wednesday, trading up by over five percent on volume that was nearly double the recent daily trading average - aside from a couple of days of high volume that pushed the price through nine bucks in mid-September. For recent followers of my blog, I've been pointing out the potential catalysts for this company since early this year. For those who have been following for a while, you'll know I've been tracking CVM since prior to the commencement of the Phase III trial and have traded in and out over the years.
As with every developing biotech, Cel-Sci has experienced many peaks and valleys during the process of bringing Multikine, the company's lead product candidate for the treatment (or cure, as stated in the company's investor presentation) of head and neck cancer. Although many on the short side of the biotech sector will use these peaks and valleys to incite fear into the less battle-hardened investors, the volatility is absolutely normal during the process and is no indication of the final success or failure of a drug or treatment. "Biotech" is a trading sector in the broad markets and it is not run by science; the scientists run the science in the labs and - for the most part - steer clear of navigating the trading sector.
The biotech sector is dominated by big money. Loansharks, private investors, hedge funds, Jimmy "Two Fingers" on the street corner - you get the picture; people that have no interest in the success or failure of a drug, nor the science behind the research, nor saving lives if a trial is successful. These people are out to make a buck, whether on the long or short side.
This process is not necessarily a bad thing, tho, as the federal government cannot afford to issue grants to every new company that is investigating a new drug, so the private sector has to keep research and development alive. That said, it puts a lot of pressure on smaller bio-pharmaceuticals to stay afloat. Some of these companies bail out of the process early, not being able to survive the incessant hostility of the money-raising market, while others will do all they can to stay alive, even if it "making a deal with the devil," as can be said. For those that persevere, however, there can be great rewards paid off to the company, its investors, and - when a late-stage trial is successful - to the advancement of medicine.
Cel-Sci Corp is a company that has persevered and may be on the verge of something huge; for itself, its lead product treatment, and for its investors.
I will not rehash the last ten years or so of the Multikine trial. Those in the stock for a prolonged perioed already know the struggle that CEO Geert Kersten has had with financing deals to keep the trial funded and alive. They know the struggles with the first CRO that badly mis-managed the trial. For those who are new to CVM, they are looking forward to imminent trial results, not backwards, so again - no need to rehash.
Since I last blogged about Cel-Sci, a couple of key items have occurred. I invite you to read the following articles on Seeking Alpha (not a fan of the site, but I am a fan of some of the authors);
Check out North Shore Research by clicking here.
And Fosco Research by clicking here.
These guys are long-time followers of CVM and break down the specifics very well. Of course, one of the most popular CVM long sites is KillCVMShorts.com.
Each of the above links will spill a lot more recent details than I can or will get to in this article and are well worth the navigation to those pages.
On the share price front, CVM busted through the nine dollar mark earlier in the month on volume. Although the share price has since receded on light volume, that was likely a key benchmark for some investors sitting on the sidelines - and there are quite a few who, in my opinion, have been waiting on the sidelines for the IDMC news that should be coming this month. For those keeping score at home, the IDMC recommended the trial continue in March. That led to the initial price run this year. It is suspected by many that this upcoming IDMC review will be a definitive determination as to whether the trial will succeed or not. In light of that, the action that spiked shares through nine and then lifted the price yesterday is likely an indication that this next IDMC update is close. As I type, premarket shares are trading for above nine, but on negligent volume, so not much can be ascertained from that.
Another key event that took place this week is that Jim Cramer, the Lord of Investing Fame for his CNBC Mad Money program gave CVM a "speculative buy" rating during the lightning round on his program. Cramer the Entertainer rose to fame in the early 2000s when online and investing blogs were just starting out. He wrote a few books (that I do recommend) geared towards getting the small investor in the game: Jim Cramer's Real Money: Sane Investing in an Insane World and his influence was huge. He ran with his Mad Money program and started TheStreet.com, which gave everyone's least favorite biotech blogger Adam Feuerstein a forum to try and manipulate markets (in my opinion) and keep small investors away from making a few bucks.
Since investors are now overwhelmed with sources to research their stocks and no one really watches TV anymore (it's all streaming devices), his influence has waned, but it is still a pretty big deal that he gave CVM a speculative nod. Speculative investors have loved this stock for a long time and many have attempted to call in to Cramer's lightning round before and get it on the air, so the timing that whoever makes the decision to air this one allowed it to air now - right before the IDMC news is expected - will pique the interest of new investors and possibly some of that sideline money who were waiting for some kind of signal to jump in.
That said, I don't trust the guy, and his nod should not be taken as a sign of guaranteed success. He's been wrong before, especially when he told everyone to sell everything during the crash of 2008/09 when those who were buying made bank. No doubt that he put CVM on a few radars, tho.
Much has been made by the shorts about a few chump-change insider sales of late. A few insiders sold small fractions of their holdings. Of course the shorts will play that to the negative, but for all anyone knows, these cats were selling to have money for a huge celebratory party since they still held many many more shares than they sold. Maybe they wanted a new boat now before the summer ended. College started up this month, maybe it was college money for a nephew, son, or daughter. Maybe they wanted to purchase some bullpen help for the Mets since the Wilpons are soft. In all likelihood, tho, if bad news had incited them to sell, the selling would have been more widespread and these guys would be open to Martha Stewart-like charges for insider trading. Truth is, them sales are a non factor in the grande scheme.
For CVM - it's all about the trial results. Since we are still waiting on 298 deaths before the results can be tallied, the longer the trial goes, the better the odds of success, according to the long argument. This trial was expected to end about a year ago, and it hasn't yet. According to most of the information that can be found on the subject on the internet, the Standard of Care against which Multikine is competing has not improved by any significant margins, so it could be said that Multikine - in combination with the Standard of Care - is working.
If that is the case and if the trial results are positive, then Multikine will likely become a part of the Standard of Care. That speaks billions in potential revenue and it speaks BANK for the investors who have hung along for the ride.
On the other hand - and let's be clear here - if Multikine fails, this stock will plummet to a point where you may not be able to buy lollipop. It's all or nothing and investors should be WELL AWARE of that risk. LEAPS is not far enough along in development to stave off a share price collapse in the event of trial failure.
Other concerns investors may have is the need to raise money. According to recent company reports, there should be enough cash in the coffers to last into the first portion of 2020, maybe more depending on the exercise of warrants. That's not to say a company cannot raise revenue whenever they want and not tell you about it until after the fact, but it is more likely than not, in my opinion, that we will hear from the IDMC before the company needs to raise cash. But it's always on the table in this sector.
Earlier this year I stated that we were in the Endgame for the Multikine trial. Well Cap just heard "on your left" in his ear and Doc Strange just started opening up the portals. The Endgame is over, now it's game time and we are all waiting to see which way this one goes.
If it goes well, then expect quite a bit more travel videos on the 'VFCs Travels' channel.
Disclosure: Long CVM.