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).
Cel-Sci Corp. is in the final stages of a global Phase III trial testing the effectiveness of its lead product candidate, Multikine, in the treatment of head and neck cancer. You can click HERE for my previous blog posts on the subject or scroll down the home page, if you'd like. Although the share price and trading volume has somewhat stagnated through the summer months - as short interest continued to increase - a few items of interest are coming up that could reinvigorate life into CVM trading action.
A release this week announced that company CEO Geert Kersten will be presenting at the H.C. Wainwright Investor Conference next Tuesday, 10 September. It is not uncommon for Kersten to present at such conferences, but the timing of this one will draw increased interest.
As we know, developmental biotechs are event-driven stocks. While charts and and technical analysis can be a factor for those who trade on algorithms, news is what will dictate volume and share price in this sector. For Cel-Sci, the big news investors are waiting for is trial completion - which will come when 298 events (deaths) occur. At the 298 point, the trial will end and the data will be analysed to see if the endpoint was met, which is Multikine + Standard of Care (SoC) is 10% more effective than SoC alone.
Investors will be looking for an update on the 298 count from Kersten. Given the re-wording of some recent press releases, there has been some debate in the investing community as to whether or not the 298 point has already been met, so a solid answer at the conference would be welcome news. The general consensus has it that the longer the trial goes on, the more likely that it means Multikine is working, based on published survival rates for SoC in head and neck cancer.
Another item of interest for the month is that it is expected the IDMC will review trial data and provide another update and/or recommendation. If you recall, the last IDMC review in March came with a recommendation to continue the trial. That led to the recent run that saw shares trade from below the three dollar level up to about nine dollars. It is possible that IDMC news will come before Kersten presents, but do not expect Kersten to release any surprises on his own at the conference. Any news will be accompanied by a press release for mass dissemination. Whether IDMC news comes before or after the presentation, investors will be waiting for it, as it will be taken as a sign that the trial could succeed if another recommendation to continue is given. The more optimistic of the CVM investing community also believe that the IDMC will recommend the trial conclude, if the endpoint has already been met.
Yet one more key item of interest will be Cel-Sci's cash position. Many warrants have been exercised during this year's price run, according to the latest quarterly report, and many more are yet to be exercised. Cash position is important because investors will be able to gauge when the company will need to undertake another offering to raise funds. The hope is that any offering will come after results are in because, if positive, shares would be trading for a much higher price and the dilutive effect on current shareholders would be minimal. As of last reports, the company looked to have enough cash to last into the first few months of 2020, but investors of the biotech sector are well aware that cash offerings can come at any time. Since hope is not an investment strategy, or at least it shouldn't be, this will be an important item to look out for at the presentation so investors can make an educated assessment as to when the next cash raise will need to occur - unless Kersten straight out gives an answer.
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It's been my opinion that CVM shares are in a holding pattern while waiting on results. Although institutional interest has inched higher, much of that could be due to the Russel Index inclusion earlier this summer. Due to the long and volatile history of the company, there will still be plenty of skeptics out there who would likely rather wait on the sidelines and jump in on good news, rather than risk bad news and seeing the price freefall - because let there be no mistake, if the trial fails, then there is no reason for shares not to plummet. Of course, if a run does occur, those on the sidelines would miss out on all the percentage gains of those already in at the time of the news, but that's why it is up to each investor gauge his or her risk tolerance and invest accordingly.
In the case of VFC, I'm aware of the volatile past and speculative nature of this sector. Even when biotech stories look promising, there can always be that X-factor that appears that wasn't heavily considered; therefor, I always look to get on house money as quickly as possible to soften the blow in the event a story does go sour. With CVM, I am eagerly awaiting trial results on house money and will make a game time decision on what to do next, based on the possible September catalysts discussed above.
It's been a long and storied road for CVM, and here we are heading towards the endgame. Both the longs and shorts have been able to make money trading this one for years, and one way or another, events should start getting real interesting pretty soon. Could come as early as this month.
CVM should definitely be on the radar of the speculative investor.
Disclosure: Long CVM.