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CVM: 1Q:21 Financial Update

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By John Vandermosten, CFA


First Quarter Fiscal Year 2021 Operational and Financial Results

CEL-SCI Corporation (NYSE:CVM) posted a press release and filed its 10-Q for its first quarter of fiscal year 2021 in mid-February. Since our previous report update on January 6, CEL-SCI has continued to monitor its contract research organization’s progress analyzing locked data for the IT-MATTERS trial. Management also participated in the Bioconnect Virtual Conference in early January. During the first quarter, ending December 31, 2020, CEL-SCI raised additional capital, provided an update on the IT-MATTERS trial and demonstrated a survival benefit in SARS-CoV-2 infected mice using its LEAPS platform.

Following a near decade-long duration of the IT-MATTERS trial that evaluated biologic Multikine in head and neck cancer, the company announced the trial had reached the targeted 298 event threshold on May 4, 2020. Reaching this milestone signalled the company’s contract research organization (CRO) to begin data evaluation. Data base lock has been completed and the study is now in the analysis phase. In December 2020, CEL-SCI provided an update on the study data analysis highlighting that it continues to be conducted according to its initially approved plan. The effort has been complicated by both the geographical diversity of trial sites and delays related to the pandemic. CEL-SCI will announce the results once the full analysis has been finalized and results will be published.

CEL-SCI has initiated the development of an immunotherapy targeting SARS-CoV-2 using the company’s patented Ligand Epitope Antigen Presentation System (LEAPS) peptide technology. Initial in vivo experiments demonstrated that after a single injection, LEAPS COVID-19 conjugates induced antibody response faster and in higher titers than expected against a highly conserved region of SARS-CoV-2, paving the way for challenge studies using live virus at the University of Georgia Vaccine Center. In December 2020, CEL-SCI announced results from its SARS-CoV-2 virus challenge in mice transgenic for human ACE2. LEAPS COV-19 peptides achieved a 40% survival rate in the treated group compared to 0% survival in the two control groups.

Financial results were summarized in the earnings press release and in the Form 10-Q. No revenues were reported in 1Q:21 compared with $36,000 in the same quarter of the prior year. Total operating expenses rose 28% during the period to $8.7 million.

For the fiscal first quarter ending December 31, 2020, compared to the fiscal first quarter ended December 31, 2019:

➢ Expenses for R&D were $5.4 million, up 29% from $4.2 million, with the increase attributable to higher expenses related to the Phase III clinical study and greater stock compensation expense;

➢ G&A expenses were $3.3 million, up 26% from $2.6 million, on greater employee stock compensation costs;

➢ Gain on derivative instruments was $933,000 compared to $767,000, due to change in fair value of derivative liabilities based on CEL-SCI’s stock price;

➢ Other non-operating gains were $122,000 compared with $791,000;

➢ Net interest expense was ($260,000) compared with ($251,000) million due to reduction in interest rate applied to CEL-SCI’s finance leases, adjusted to reflect adoption of ASC 842;

As of December 31, 2020, cash was $21.9 million and cash burn for 1Q:21 was ($3.8) million, below the ($4.2) million recognized in the prior year period. Financing cash flows were $13.3 million reflecting proceeds from sale of common stock and a small amount from exercise of warrants and options. Following the end of the reporting period and up to February 5, 2021, CEL-SCI received $3.9 million from the exercise of warrants and options.

Final Event in IT-MATTERS Trial

After almost a decade, the IT-MATTERS clinical trial experienced its final event, reported in a press release on May 4, 2020. The study is now in the analysis phase. The event-driven trial for head and neck cancer added its first patients in 2011 in the US, Canada, UK, France and 20 other countries. 928 patients were enrolled, with the final individual treated in September 2016. The primary endpoint for the study was an overall survival benefit of 10% over standard of care alone in defined areas of the head and neck.

The trial had three arms including:

1) Multikine plus CIZ followed by SOC

2) Multikine (CIZ-exclusion) followed by SOC

3) SOC therapy as the active comparator

Only the M+CIZ and SOC groups were used to contribute to the event total for the trial. Over the duration of the trial, an independent data monitoring committee (IDMC) provided periodic checks approximately every 6 months to ensure patient interests were met and the trial was conducted ethically. In December 2020, the study entered its final stage of statistical analysis of all study data. The development of the full analysis has taken longer than we expected in an extended process that management has attributed to the geographical breadth of the trial and impacts from the pandemic. Once the full analysis is available, CEL-SCI will share data via a public release, and publish the results. Concurrently, the team will meet with the FDA and other regulatory authorities to develop a plan for the submission of a biologics license application (BLA). The CROs are fully responsible for the timing for the development of the data analysis and CEL-SCI management is required to disclose material information once available. Therefore, we expect CEL-SCI will share the results with investors within a few days of it being available to the company.

Capital Raise

On December 11, 2020, CEL-SCI announced the closing of a capital raise that yielded $14.7 million in proceeds, issuing 1 million common shares at $14.65 per share. The underwriter was granted 30-day option to purchase up to 15,000 additional shares to cover over-allotments which was not exercised.

Letter to Shareholders

On January 4, 2021, CEL-SCI CEO, Geert Kersten, issued a Letter to Shareholders. The missive summarized CEL-SCI’s Multikine cancer immunotherapy and the motives behind development noting that 3-year survival rates for this indication have not improved in decades. Mr. Kersten highlighted the unique feature of Multikine’s administration before surgical intervention and that some Multikine-treated patients in Phase II experienced complete tumor elimination in the three weeks leading up to surgery. Furthermore, the lack of Multikine toxicity enables it to be added to current standard of care without further patient burden. The Phase III trial’s 298 required events were met later than originally anticipated due to improved patient survival.


The IT-MATTERS trial reached its final event in early May 2020 and we expect the final analysis to be available shortly. The company added $13.3 million in cash from financing during 1Q:21 and another $3.9 million after the end of the quarter. We eagerly await results while CEL-SCI readies itself for data publication and BLA submission. If Multikine is able to meet or surpass its primary endpoint of a 10% increase in overall survival as compared to standard of care alone, we see substantial upside to current levels.

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