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.
If you haven't been paying attention to Cel-Sci Corp (CVM) yet, you might want to pay attention now. We've discussed CVM many times on this blog over the course of the past decade as the company has taken its lead product candidate, Multikine, from successful Phase II trials through what is thought to be the largest head and neck cancer trial ever undertaken.
Shares trades over two dollars higher (a nearly 20% price spike) on higher-than-normal volume on Friday, making it a stock to watch during the coming week.
If you are new to the CVM stock, take a read of the next couple of paragraphs for a quick catch-up on the Multikine story, as discussed in previous blog posts on VFC's Stock House. If you're already caught up, skip the italics.
Why the interest?
Cel-Sci is in the late stages of a robust Phase III trial testing Multikine, the company's lead developmental product, for the treatment of head and neck cancer. Multikine is one of the newer breed of cancer immunotherapy treatments, which are designed to harness the body's own immune system to fight and possibly defeat cancer cells. What is unique about Multikine, tho, is that the treatment is administered before the Standard of Care (SOC) treatment.
Why is this significant?
A patient's immune system is at its strongest prior to the commencement of SOC treatment, which includes surgery along with radiation and chemotherapy treatments. Such treatments weaken the body and therefor weaken the body's immune system, too. The vision of Multikine is to harness the patient's own immune system before it is ravaged by radiation and chemotherapy to provide the best chance for the immune system to to fight the cancer itself. In this sense, the company has eyes on moving towards a cure for cancer, rather than a treatment. (Not the words of VFC, rather ideas set forth in the most recent Cel-Sci power point presentation and some recent interviews by CEO Geert Kersten on YouTube).
Yes, using the word "cure" in association with a cancer treatment can lead to some skepticism and shock therapy, but this idea - again, according to the presentations and interviews linked above - is the goal towards which Cel-Sci wishes to march. Regardless, if successful, Multikine is likely to be considered a breakthrough cancer treatment, should it work, and the speculative investment community is keying in on this.
What is key here, is that if Multikine is successful, it will not be just a treatment - it will likely be included as a Standard of Care (SoC) for head and neck cancer, before potential approvals into the treatment of other cancer types. We're talking billions and dollars of potential for this small company. There are risks, lots of them, to consider and we will discuss those later.
For now, here's the latest:
Shares of CVM have traded with great volatility over the past year, on the way to a quadruple in price. The volatility is based around the expectations of the last few trial "events" occurring so that the trial can be stopped and data analysis can begin. "Events" means "deaths," as by trial design, 298 deaths must occur in order to accumulate data that is "statistically significant" and prove the efficacy of Multikine. A couple of essential elements of information were released over the past few weeks that may indicate that the number of deaths has already happened or is about to.
For one, the Independent Data Monitoring Committee (IDMC) who has met every six months over the recent past to review the trial data recommended to continue the trial "without change," according to a recent press release. Trials are often halted for futility by IDMCs, so it can be heavily speculated that if Multikine had no chance to reach the trial endpoint of a 10% survival benefit over the SoC, then the trial would have been halted either now or previously due to "futility." This was a key indicator for longs that trial success is likely, and may be a part of the reason for Friday's price action.
Another item of interest was that the company pulled the annual shareholders meeting forward, which occurred on April 17th. Nothing of note was released at the meeting, although it is speculated by some that it was moved forward to allow for incentive-based options to be awarded to company officials and employees. Additionally, the Clinical Trials website was recently updated to state an expected trial completion date of 15 May. Interesting, and this has led to speculation that the 298th event has either already taken place or is about to. Again, that speculation could have contributed to Friday's action.
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Will Friday's momentum be enough to propel CVM higher through the week? There is a pretty good chance of that. On positive trial results, the market cap of this company will be trading in the billions. As investors key on to the imminent announcements, the swing, day, and momentum traders may start showing up again and launch the stock over twenty in a heartbeat. With all that, tho, expect some volatility, because many will trade the "news," rather than hold for the long term.
That may give some of the shorts a chance to play their games, too, at points. CVM has a pretty significant amount of short interest and they will try to cover at as low a price as possible. The "face" of the shorts is long-time biotech blogger Adam Feuerstein, who has done all he can to convince small investors to stay away from Cel-Sci since it traded for a dollar. CVM has been such a tradeable play over the years, it's a shame so many who still listen to that guy have missed out on another ten-bagger. There will be convinced buyers and traders who will be around to "buy the dips," should the shorts drive shares lower, especially with big news so imminent.
That said, if the Multikine trial is deemed a failure, then this stock will plummet a long way down. If it is deemed a complete failure, we're talking potentially a drop to the sub-one dollar mark. This is a boom or bust play base on this trial. Although we've recently discussed Cel-Sci's second product candidate, LEAPS, for the treatment of Covid19, development is nowhere near the stages needed to prop up the share price should Mulitkine fail. Just beware of the downside risk and understand that nothing is guaranteed, no matter how well the story looks to be playing out.
Friday's action will certainly bring more eyes to the Cel-Sci story this week. Expect volatility, but barring any unexpected bad news, this thing should start trading higher into that "May 15" date that is being eyeballed since the clinical trial website.
Company CEO Geert Kersten has indicated in the past that he is under no obligation to report the 298 number as a significant event, so we may or may not hear about that. If we do hear about, even more interest will show up and should shorts start to cover, that could add to the growing momentum.
Financing is not an issue in the immediate future, but in the biotech sector, you never know when the next dilutive stock offering will come. Cel-Sci has been very shrewd of late in raising money through minimally-dilutive offerings and the exercising of warrants, so they are set up pretty good, at least until the timeframe we expect for results.
This is all about the Mulitkine trial right now. And CVM is definitely one to watch this week.
Disclosure: VFC is long CVM.