CEL-SCI Corporation (NYSE MKT: CVM) reported financial results today for the fiscal year ended September 30, 2014. The Company also reported key clinical and corporate developments achieved during, and subsequent to, fiscal 2014.
Corporate Developments Included:
- CEL-SCI raised gross proceeds of $34.1 million during fiscal 2014 and an additional $7.0 million subsequent to the end of the fiscal year, to finance its expanding Phase III trial in the treatment of head and neck cancer.
- During fiscal 2014, CEL-SCI signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Navy under which the Navy is conducting a clinical investigation of Multikine in HIV/HPV co-infected men and women with anal warts. The Phase I trial started enrolling patients in September 2014 at San Diego Naval Medical Center. We expect the study to be complete in the second half of 2015.
- In July 2014, CEL-SCI received a Phase I Small Business Innovation Research (SBIR) grant in the amount of $225,000 from the National Institute of Arthritis Musculoskeletal and Skin Diseases (NIAMS), which is part of the National Institutes of Health (NIH). The grant is funding the further development of CEL-SCI’s LEAPS technology as a potential treatment for rheumatoid arthritis. The work is being conducted at Rush University Medical Center in Chicago, Illinois.
- CEL-SCI signed two co-development and profit sharing agreements worth $6.0 million with Ergomed, one of its two new clinical research organizations (CROs). Ergomed will assume up to $3.0 million in clinical and regulatory costs for two different Multikine indications, cervical dysplasia in HIV/HPV co-infected women and peri-anal warts in HIV/HPV co-infected men and women. Ergomed will receive its return on investment based on an agreed single digit percentage of net income received by CEL-SCI for Multikine from product sales and/or certain partner milestone payments. These two co-development agreements build upon CEL-SCI’s $10.0 million co-development agreement with Ergomed for Multikine in the treatment of head and neck cancer.
- On October 31, 2013, CEL-SCI filed an arbitration claim against inVentiv, the CRO that used to run CEL-SCI’s Phase III trial with Multikine, under the Commercial Rules of the American Arbitration Association alleging (i) breach of contract, (ii) fraud in the inducement, and (iii) common law fraud, and seeks at least $50 million in damages.
Clinical Developments Included:
- In fiscal year 2014, CEL-SCI expanded the reach of its Multikine Phase III trial for the treatment of head and neck cancer. CEL-SCI received clearance from 7 new countries for the Phase III trial, added approximately 30 sites and set multiple record breaking months for enrolling patients. As of November 30, 2014, about 310 patients have been enrolled in the study.
- CEL-SCI presented data at the 12th Vaccines Research & Development: All Things Considered Conference in Boston, Massachusetts in July 2014. The presentation centered on the theory that using LEAPS vaccines to treat a complex disease like Rheumatoid Arthritis can be beneficial because CEL-SCI’s vaccine can be synthesized to stimulate the appropriate immune response to treat the disease based on its immunodominant cytokine phenotype, which can be predetermined before treatment. The data presented included results from studies conducted at Rush University Medical Center.
CEL-SCI reported an operating loss of ($27.57) million in fiscal year 2014 versus an operating loss of ($19.87) million in fiscal year 2013. The rise in operating loss was attributable to an increase in research and development expenses to $17.0 million in fiscal year 2014 compared to $12.68 million in fiscal year 2013. This expense increased based on the additional activity level of the Phase III clinical trial. It was also attributable to an increase in general and administrative expenses to $10.6 million in fiscal year 2014 compared to $6.98 million in fiscal year 2013. This increase is primarily due to equity based compensation costs of approximately $1.48 million for restricted stock issued, increased public relations cost of $440,000 and legal fees of $1.67 million. Public relations costs increased to support the progression of the products through clinical trials. Legal fees increased primarily as a result of arbitration with the Company’s former CRO.
CEL-SCI’s net loss available to common shareholders for the fiscal year 2014 was ($28.48) million, or ($0.48) per share, versus a loss of ($9.23) million, or ($0.30) per share for the fiscal year 2013. The change in net loss available to common shareholders in fiscal year 2014 was primarily due to the gain on derivative instruments of $0.25 million for fiscal year 2014 versus a gain on derivative instruments of $10.75 million for fiscal year 2013 and an increase in total operating expenses of $27.84 million for fiscal year 2014 versus $20.03 million for fiscal year 2013.
Geert Kersten, CEL-SCI’s Chief Executive Officer said, “Fiscal 2014 was a pivotal year for us. The accelerated pace of our Phase III trial with our two new CROs affirms the strength of our study and the potential of Multikine. We also made advancements in two new indications for Multikine in HIV/HPV co-infected patients with cervical dysplasia and anal-warts. These two indications have the potential for Multikine to produce data and move towards marketing approvals at a faster pace than our large Phase III trial.”
“We believe fiscal 2015 is a year in which we will achieve and report several significant milestones,” Kersten concluded.
About Multikine
Multikine (Leukocyte Interleukin, Injection) is an investigational immunotherapeutic agent that is being tested in an open-label, randomized, controlled, global pivotal Phase III clinical trial as a potential first-line treatment for advanced primary head and neck cancer. If approved for use following completion of CEL-SCI's clinical development program for head and neck cancer, Multikine would be a different type of therapy in the fight against cancer; one that appears to have the potential to work with the body's natural immune system in the fight against tumors. CEL-SCI is aiming to complete enrollment of subjects to the Phase III head and neck cancer study by the end of 2015. The trial is expected to expand into a total of approximately 100 clinical centers in over 20 countries.
About CEL-SCI Corporation
CEL-SCI’s work is focused on finding the best way to activate the immune system to fight cancer and infectious diseases. Its lead investigational therapy Multikine (Leukocyte Interleukin, Injection) is currently being studied in a pivotal Phase III clinical trial against head and neck cancer. If the study endpoint, which is a 10% improvement in overall survival of the subjects treated with Multikine treatment regimen as compared to subjects treated with current standard of care only is satisfied, the study results will be used to support applications which will be submitted to regulatory agencies in order to receive from these agencies commercial marketing approvals for Multikine in major markets around the world. Additional clinical indications for Multikine which are being investigated include cervical dysplasia in HIV/HPV co-infected women, and the treatment of peri-anal warts in HIV/HPV co-infected men and women. A Phase I trial of the former indication has been completed at the University of Maryland. The latter indication is now in a Phase I trial in conjunction with the U.S. Navy under a CRADA.
CEL-SCI is also developing its LEAPS technology for the treatment of pandemic influenza and as a potential therapeutic vaccine against rheumatoid arthritis. The Company has recently received a Phase I SBIR Grant from the National Institutes of Health to develop LEAPS as a potential treatment for RA with researchers from Rush University Medical Center in Chicago, Illinois. The Company has operations in Vienna, Virginia, and in/near Baltimore, Maryland.
For more information, please visit www.cel-sci.com.
* Multikine is the trademark that CEL-SCI has registered for this investigational therapy, and this proprietary name is subject to FDA review in connection with its future anticipated regulatory submission for approval. Multikine has not been licensed or approved for sale, barter or exchange by the FDA or any other regulatory agency. Similarly, its safety or efficacy has not been established for any use. Moreover, no definitive conclusions can be drawn from the early-phase, clinical-trials data involving the investigational therapy Multikine (Leukocyte Interleukin, Injection). Further research is required, and early-phase clinical trial results must be confirmed in the well-controlled, Phase III clinical trial of this investigational therapy that is currently in progress.
When used in this release, the words "intends," "believes," "anticipated" and "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Factors that could cause or contribute to such differences include, an inability to duplicate the clinical results demonstrated in clinical studies, timely development of any potential products that can be shown to be safe and effective, receiving necessary regulatory approvals, difficulties in manufacturing any of the Company's potential products, inability to raise the necessary capital and the risk factors set forth from time to time in CEL-SCI Corporation's SEC filings, including but not limited to its report on Form 10-K for the year ended September 30, 2014. The Company undertakes no obligation to publicly release the result of any revision to these forward-looking statements which may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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CEL-SCI CORPORATION |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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YEARS ENDED SEPTEMBER 30, 2014 and 2013 |
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| 2014 | 2013 | |||||||
| GRANT INCOME AND OTHER | $ | 264,033 | $ | 159,583 | ||||
| OPERATING EXPENSES: | ||||||||
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Research and development (excluding R&D depreciation of $172,442, $253,072 and $445,710 respectively, included below) |
17,000,145 | 12,681,049 | ||||||
| Depreciation and amortization | 231,752 | 364,124 | ||||||
| General & administrative | 10,606,248 | 6,982,686 | ||||||
| Total operating expenses | 27,838,145 | 20,027,859 | ||||||
| OPERATING LOSS | (27,574,112 | ) | (19,868,276 | ) | ||||
| GAIN ON DERIVATIVE INSTRUMENTS | 248,767 | 10,750,666 | ||||||
| INTEREST INCOME | 122,854 | 117,086 | ||||||
| INTEREST EXPENSE | (163,774 | ) | (170,423 | ) | ||||
| NET LOSS | (27,366,265 | ) | (9,170,947 | ) | ||||
| ISSUANCE OF ADDITIONAL SHARES DUE TO RESET PROVISIONS | (1,117,447 | ) | - | |||||
| MODIFICATIONS OF WARRANTS | - | (59,531 | ) | |||||
| INDUCEMENT WARRANTS | - | - | ||||||
| NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ | (28,483,712 | ) | $ | (9,230,478 | ) | ||
| NET LOSS PER COMMON SHARE | ||||||||
| BASIC | $ | (0.48 | ) | $ | (0.30 | ) | ||
| DILUTED | $ | (0.49 | ) | $ | (0.66 | ) | ||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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| BASIC and DILUTED | 58,804,622 | 30,279,442 | ||||||
Contacts
CEL-SCI Corporation
Gavin de Windt, 703-506-9460