CEL-SCI's Technical Breakout Fueled By Improving Fundamentals
(Thomson Reuters ONE) -
Shares of Virginia based biotechnology company, CEL-SCI Corporation (AMEX: CVM)
appear to be technically breaking out to the upside again. Interest and volume
in the stock has been on the rise and some recent fundamental developments
appear to be fuelling the price rise.
Primarily focused on Oncology, CEL-SCI seems to have most of its value is locked
in Multikine, its lead drug candidate currently undergoing late-stage clinical
trials as a first-line treatment in advanced primary head and neck cancer.
Globally, about 600,000 new cases of head and neck cancer - 5%-6% of total
cancer cases - occur every year. With five-year survival rates of just 30% and
the need for better treatments, regulators will be keen to promote new
treatments for this killer disease.
Since Multikine is administered before traditional forms of cancer treatment -
chemotherapy, radiotherapy and surgery - it may generate a better immune
response because it galvanizes lethal action against cancerous cells when the
immune system is at its strongest. Besides ensuring the treatment's
effectiveness, this mechanism of action is also likely to score highly with
regulators during the review process.
An estimated US market size of US$3.2 billion for head and neck cancer treatment
implies that there is ample elbow room for new treatments such as Multikine to
rake in dollars by the millions. In fact, due to its first-line indication and
solid clinical data, CEL-SCI is confident that the pipeline candidate can gobble
up two-thirds of the market upon launch. Multikine's orphan drug status means
that it will enjoy a seven-year marketing exclusivity upon launch, thereby
enabling it to squeeze in a pricing advantage upon commercialization in the US.
Critically, the immunotherapy will need to demonstrate effectiveness in just one
pivotal study to reach the market, which can save CEL-SCI precious R&D dollars.
In December 2010, after having breezed through early and mid-stage trials with
impressive results, Multikine strode confidently into an ambitious 880-subject,
48-centre Phase III clinical trial. The trial was designed to compare Multikine
as an adjuvant therapy with the standard-of-care treatment versus the standard-
of-care alone to treat primary advanced head and neck cancer. To protect its
limited cash resources, CEL-SCI has adopted a smart strategy of granting
licensing rights for Multikine on a country-specific basis to partners such as
Israel-based Teva Pharmaceutical Industries (NASDAQ: TEVA), who are willing to
pick up part of the expenses tab for conducting the trial. CEL-SCI anticipates
that excluding its clinical trial partners - Teva and Taiwan-based Orient
Europharma - conducting the Phase III trials will entail a cost of US$26
million. The Company expects to fund these expenses through new partnering
agreements and additional capital injection - such as the
US$5.76 million raised through an equity issue in January 2012.
Data from the Phase III study - the largest head and neck cancer study ever
conducted - is expected to be comprehensive enough to facilitate a clear "go/no
go" decision for regulators. To understand Multikine's prospects of getting a
thumbs-up sign from regulators, it would be apt to take a quick peek at results
from previous clinical trials. A 22-subject Phase II study on Multikine as a
fist-line therapy followed by surgery and radiotherapy resulted in an overall
survival rate of 63.2% after 3.5 years from surgery compared to a mere 47.5% for
7,294 subjects in 55 historical clinical trials on other drug candidates for the
same indication. The study also found that a mere three-week regimen of
Multikine resulted in a sharp 50% reduction in tumor cells, with 12% of the
subjects being cancer-free. CEL-SCI expects to conclude the Multikine Phase III
clinical trials by May 2015. Given the time lag expected for data read out from
this humongous trial, the immunotherapy may be launched in the second half of
2016. Gazing beyond the horizon, Multikine's label could be expanded to include
treatment of other cancers such as breast, skin, bladder etc.
With so much attention on its Oncology franchise, it is very easy to overlook
CEL-SCI's nascent infectious diseases business platform - enabled by its
proprietary LEAPS technology. LEAPS-H1N1 - a Phase I candidate from the LEAPS
stable - is being tested for treating hospitalized H1N1 patients and could even
find use as a broad-spectrum influenza treatment to target different strains of
the Type A influenza virus (e.g. H3N1, H5N1). CEL-SCI's other pipeline
candidates under the LEAPS program are currently in pre-clinical testing - for
Rheumatoid Arthritis, Herpes, Malaria and Viral Encephalitis. However, CEL-SCI's
investors may presently be seeing value only from the clinical advancement of
Multikine, treating the infectious diseases program as an out-of-the-money call
option on the stock.
CEL-SCI has been whip-lashed by the markets since Multikine entered late-stage
clinical trials, but investors are starting to take notice of the firm's
execution and leaks about early clinical observations in Phase III appear to be
attracting more attention from both speculators and pharmaceutical partners.
CEL-SCI's management seems to be wading cautiously and quitely through the
waters at present - a strategy that could provide a rich pay-off for the long-
term investor - and possibly, earlier if it attracts acquisitive interest.
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Source: BioMedReports via Thomson Reuters ONE
[HUG#1596029]
Datum: 21.03.2012 - 12:01 Uhr
Sprache: Deutsch
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