By John Vandermosten, CFA

NYSE:CVM

READ THE FULL CVM RESEARCH REPORT

CEL-SCI Corporation (NYSE:CVM) reports fiscal year 2024 financial and operational results. The press release and Form 10-K filing encapsulate a year of preparation for confirmatory registration studies around the globe. CEL-SCI cleared its proposed 212-patient registration study of Multikine with the FDA. This narrowed the population to patients with squamous cell carcinoma of the head and neck (SCCHN) with no lymph node involvement and low PD-L1 tumor expression. A contract research organization (CRO) was selected to run the trial and data was presented from the IT-MATTERS study showing 73% survival for Multikine vs. 45% in the control arm at five years. Outside of the US, the European Medicines Agency (EMA) Pediatric Committee and the United Kingdom’s Healthcare Products Regulatory Agency (MHRA) granted Multikine a pediatric waiver, streamlining the process for obtaining approval in these jurisdictions.

Financial Review

CEL-SCI recognized no revenues for its fiscal year ending September 30, 2024. It consumed $26.4 million in operational expenses generating a net loss of ($27.6) million or ($0.51) per share.

For the year ending September 30, 2024 versus the same prior year period:

• Expenses for research and development fell 19% to $18.2 million from $22.5 million. Lower Phase III study, employee stock compensation and miscellaneous costs contributed to the decrease and were partially offset by increases in other research and development costs;
• General and administrative expenses decreased 9% to $8.2 million from $9.0 million on lower employee stock compensation and other miscellaneous expenses;
• Other non-operating items were $177,000 compared to ($43,000) in the prior year;
• Net interest expense was relatively constant at ($0.7) million related to interest income from cash balances and expense from finance leases;
• Derivative modifications totaled ($659,000) compared to ($172,000);
• Net loss totaled ($27.6) million versus ($32.4) million or ($0.51) and ($0.73) per share, respectively.

As of September 30, 2024, cash and equivalents totaled $4.7 million. Cash burn for the twelve-month period amounted to approximately ($18.9) million, up from 2023’s ($23.2) million. Following the end of the fiscal year, CEL-SCI closed on a gross $5 million stock offering. CEL-SCI holds no debt on its balance sheet. The company estimates that the confirmatory trial will cost $30 million.

FDA Confirmatory Study Acceptance

Last May, CEL-SCI announced that its selection criteria for populating a confirmatory study and study design was cleared by the FDA. In a subsequent meeting, the agency indicated that the company may move forward with a confirmatory registration study of Multikine to evaluate its safety and efficacy in squamous cell head and neck cancer (SCCHN). Acceptable patients will be newly diagnosed with advanced primary SCCHN with no lymph node involvement (determined via PET scan) and with low PD-L1 tumor expression (determined via biopsy). Statistical analysis indicates that 212 subjects will be required to generate the confirmatory data. In November 2024, the FDA and CEL-SCI agreed upon the use of the PD-L1 biomarker to select patients for the trial.

Based on a discussion of the path forward with the FDA which was included in a 29 page report, the agency responded in written notes accepting the eligibility criteria. It further acknowledged that the nonclinical data appears to be sufficient, the stratification factors appear reasonable and CEL-SCI’s approach for product specifications is acceptable. Furthermore, the FDA had no safety objections to further treatment of patients with Multikine.

Similar to the IT-MATTERS study, we anticipate that eligible individuals will have a diagnosis of untreated SCCHN, measurable tumor, normal immune function and no use of immunosuppressives in the previous year among other criteria. Based on the performance in the Phase III trial, further population characteristics for the confirmatory study will include patients with no lymph node involvement of the disease and low PD-L1 tumor expression.

The study design calls for a two arm, two stage, 1:1 randomized controlled trial enrolling 212 subjects. The first stage will  examine pre-surgical response rates, which can be determined shortly after completion of enrollment. Stage two will assess overall survival (OS) as the primary endpoint. Histopathology biomarkers will also be measured.

In its confirmatory trial, CEL-SCI anticipates that it will need to surpass a hurdle of a 10% improvement in overall survival (OS) and produce a hazard ratio of 0.72 or less to merit approval. In the IT-MATTERS study, the target population achieved a 28.5% improvement in OS and produced a hazard ratio of 0.35.

In a December 12^th press release, CEL-SCI explained the biologic rationale for the use of Multikine in the confirmatory registrational head and neck cancer study. The discussion referred to the results from the IT-MATTERS study and emphasized the significant rates of tumor regression before surgery in both the Phase II and Phase III studies and the 73% survival with Multikine vs. a 45% for the control patients not treated with Multikine. Other supporting points include:

• Benefit to the patient prior to surgery and when the immune system remains strong;
• Statistical significance of p=0.0015 and hazard ratio of 0.35 in 114 patients for overall survival (OS);
• Eligible patients have no lymph node involvement and low PD-L1 tumor expression;
• No excess toxicity beyond the standard of care.

Links to Previous Reports and Background on Multikine 

• Summary of ESMO Poster Presentation – discussion of lymph node spread and PD-L1 expression
• Review of IT-MATTERS population analysis & overall survival comparison
• FDA ODAC Opinion

CEL-SCI Milestones

• Giovanni Selvaggi joins CEL-SCI as clinical advisor – June 2024
• Presentation at the International Drug Discovery Science & Technology (IDDST) Congress – June 2024
• CEL-SCI appoints Robert Watson as Chairperson of the Board – July 2024
• Feedback from various regulatory agencies - 2024
• Submission of license application to various agencies – 2024+
• Grant of pediatric waiver by UK’s MHRA – September 2024
• ESMO poster presentation provides new data – September 2024
• UK’s MHRA grants pediatric waiver to Multikine – September 2024
• Ergomed selected as CRO for confirmatory trial – October 2024
• FDA ODAC opines against use of checkpoints in low PD-L1 expression patients – Fall 2024
• FDA agrees to use of PD-L1 biomarker in Multikine registration study – November 2024
• Full enrollment of confirmatory trial – 2Q:26

Clinical Research Organization (CRO) Selection

CEL-SCI selected Ergomed to serve as its CRO for the upcoming confirmatory registration study of Multikine. Details of the selection were included in an October 1^st press release. Ergomed had previously provided CRO services to CEL-SCI for the management of the IT-MATTERS trial. Ergomed will manage the trial globally at multiple sites. The announcement reminded readers that the trial will be a 212-patient study enrolling newly-diagnosed, locally advanced, primary head and neck cancer. It will focus on patients with no lymph node involvement and low PD-L1 tumor expression. The anticipated start of the confirmatory trial is 1Q:25.

Capital Raise

CEL-SCI announced the closing of its $5 million offering on December 31^st in a press release. The company sold 16,130,000 shares of stock and pre-funded warrants at $0.31 per share. ThinkEquity served as the placement agent for the transaction.

Summary

CEL-SCI is completing the necessary prerequisites for launching its registrational trial in the United States. The trial design has been completed with plans to enroll 212 subjects that conform to specific biomarkers. The trial will include low-risk patients that are appropriate for radiotherapy but not chemotherapy and with low PD-L1 expression. CEL-SCI has also selected its CRO, Ergomed, which also provided these services for the IT-MATTERS trial. Other positive news for immunotherapies are the opinions shared at the November ODAC meeting. At that meeting, a majority of experts asserted that on the whole checkpoint inhibitors could be harmful for patients with low PD-L1 expression, providing support for alternatives such as Multikine if it is approved.

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