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TMCNet:  CEL-SCI Reports Fiscal 2013 Financial Results and Clinical & Corporate Developments

[January 02, 2014]

CEL-SCI Reports Fiscal 2013 Financial Results and Clinical & Corporate Developments

VIENNA, Va. --(Business Wire)--

CEL-SCI Corporation (NYSE MKT: CVM) reported financial results today for the fiscal year ended September 30, 2013. The Company also reported key clinical and corporate developments achieved during, and subsequent to, fiscal 2013.

Corporate Developments Included:

  • CEL-SCI raised gross proceeds of $21.1 million, subsequent to the end of its 2013 fiscal year, to finance its expanding Phase III trial in the treatment of head and neck cancer.
  • CEL-SCI's warrants issued in connection with its October 2013 public offering were approved for trading under the ticker symbol "CSCIW", subsequent to the end of its 2013 fiscal year. We expect them to start trading soon, once they have become DTC eligible.
  • During fiscal 2013, CEL-SCI terminated its former clinical research organization (CRO), inVentiv Health Clinical, LLC (inVentiv), which had been charged with running the Company's Phase III head and neck cancer trial. On October 31, 2013, CEL-SCI filed an arbitration claim against inVentiv 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. On December 12, 2013, inVentiv filed an answer and counterclaim in response to CEL-SCI's claims against it. The counterclaim alleges breach of contract on the part of CEL-SCI and seeks at least $2 million in damages. On December 20, 2013, inVentiv moved to dismiss certain claims. Given that this matter is at a preliminary stage, the Company is not in a position to predict or assess the likely outcome of these proceedings.
  • CEL-SCI received a key patent in Japan for its investigational Phase III cancer therapy Multikine (Leucocyte Interleukin Inj.).
  • CEL-SCI signed three co-development agreements with Ergomed, its new co-development partner (and one of the CROs charged with running the Company's Phase III head and neck cancer trial), for a total of up to $16 million. Ergomed will pay for part of CEL-SCI's clinical expenses for three trials including $10 million for the Phase III head and neck cancer trial; $3 million for the treatment for HIV/HPV co-infected men and women with peri-anal warts; and $3 million for the treatment of HIV/HPV co-infected women with cervical dysplasia. Ergomed will be repaid from future sales of Multikine.
  • Subsequent to the end of fiscal 2013, CEL-SCI signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Navy under which the Navy will conduct a clinical investigation of Multikine in HIV/HPV co-infected men and women with anal warts. The trial will be conducted at San Diego Naval Medical Center and paid for by the US Navy.

Clinical Developments Included:

  • In 2013, CEL-SCI expanded the reach of its Multikine Phase III trial for the treatment of head and neck cancer into several additional European countries and also increased the number of clinical centers at which the trial is being conducted. In 2014 CEL-SCI plans to expand its Phase III Multikine clinical trial into additional countries and add a significant number of additional clinical investigation sites in order to accelerate patient enrollment.
  • CEL-SCI announced that a second interim review of the safety data from its open label, randomized, controlled, pivotal Phase III study of Multikine investigational new drug immunotherapy was conducted by the study's Independent Data Monitoring Committee (IDMC). Following their review the IDMC stated that the data raised no safety concerns and recommended that the Phase III study continue unmodified.
  • CEL-SCI and the National Institute of Allergy and Infectious Diseases (NIAID) of the National Institutes of Health (NIH) published data in the Journal of Clinical Investigation, a leading journal for discoveries in basic and clinical biomedical research (2013 J Clin Invest. doi: 10.1172/JCI67550 2013, supplemental information at www.jci.org/articles/view/67550), which demonstrated that CEL-SCI's LEAPS technology halted progression of lethal influenza in three different influenza virus strains, including a drug-resistant strain and a 2009 pandemic flu strain.
  • The Company presented results at the symposium on "Therapeutic Approaches to Autoimmunity" during the American Association of Immunologists (AAI) 100th annual meeting in Honolulu, HI from an efficacy study in a second animal model of rheumatoid arthritis using its LEAPS technology. The study demonstrated that LEAPS has the potential for use as a therapeutic vaccine to treat different types of rheumatoid arthritis.
  • Along with its collaborator Northeast Ohio Medical University, CEL-SCI produced a new investigational breast cancer vaccine which was shown to prevent and treat a HER-2/neu expressing breast cancer tumor in a mouse model of the disease. In animals immunized with this vaccine the following was observed : 1) reduction of number of tumors; 2) reduction of tumor mass; 3) absence of tumor in lymph nodes or peritoneal membranes; and 4) changes in angiogenesis.

CEL-SCI reported an operating loss of ($19.87) million in fiscal year 2013 versus an operating loss of ($17.24) million in fiscal year 2012. The rise in operating loss was partially attributable to an increase in research and development expenses to $12.68 million in fiscal year 2013 compared to $10.37 million in fiscal year 2012. CEL-SCI's net loss available to common shareholders for the fiscal year 2013 was ($9.23) million, or ($0.30) per share, versus a loss of ($17.65) million, or ($0.70) per share for the fiscal year 2012. The change in net loss available to common shareholders in fiscal year 2013 was primarily due to the gain on derivative instruments of $10.75 million for fiscal year 2013 versus a gain on derivative instruments of $1.91 million for fiscal year 2012.

Geert Kersten, CEL-SCI's Chief Executive Officer said, "During and immediately following fiscal 2013 we advanced our science on several fronts including adding two new potential treatment indications for Multikine for HIV/HPV co-infected patients. These new indications address critical unmet medical needs, and due to the characteristics of these diseases, the trials may proceed at a more accelerated pace than our ongoing Phase III cancer trial. We also showed important results in animal studies for our LEAPS technology which implied that these products may be possibly useful as treatments for influenza, rheumatoid arthritis and breast cancer."

"Following the termination of our former CRO and the filing of our arbitration claim against them, we are seeing substantial improvement in the pace of our Phase III trial with our two new CROs. We expect to achieve significant progress in our Phase III trial in 2014. Having raised substantial amounts of money during the 4th quarter of 2013, we are able to go full speed towards adding more countries and clinical centers and increasing enrollment for what we believe is the largest Phase III trial in the world for head and neck cancer," Kersten concluded.

About Multikine

Multikine is an immunotherapeutic agent that is in a global 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 enrollments of subjects in the second half of 2015. In December 2013, CEL-SCI received approval to commence the Phase III clinical trial from the 10th country overall, which included one-half of the number of countries in the currently planned expansion. The trial is expected to expand into a total of approximately 100 clinical centers in 20 countries.

In November 2013, CEL-SCI announced that a second interim review of the safety data from its open label, randomized, controlled, pivotal Phase III study of Multikine investigational new drug immunotherapy was completed by the Independent Data Monitoring Committee (IDMC). The Committee, which is comprised of world class leaders in head and neck cancer, concluded that the data raised no safety concerns, and recommended that the Phase III study continue unmodified.

In October 2013, CEL-SCI announced that it had signed a CRADA (Cooperative Research and Development Agreement) with the US Naval Medical Center, San Diego, to develop Multikine as a potential treatment for HIV/HPV co-infected men and women with peri-anal warts. CEL-SCI also announced that it entered into two new co-development agreements with Ergomed to further develop Multikine for cervical dysplasia/neoplasia in women who are co-infected with HIV and HPV and for peri-anal warts in men and women who are co-infected with HIV and HPV.

About CEL-SCI Corporation

CEL-SCI is dedicated to research and development directed at improving the treatment of cancer and other diseases by utilizing the immune system, the body's natural defense system. Its lead investigational therapy is Multikine (Leukocyte Interleukin, Injection), currently being studied in a pivotal global Phase III clinical trial. CEL-SCI is also investigating an immunotherapy (LEAPS-H1N1-DC) as a possible treatment for H1N1 hospitalized patients and as a vaccine (CEL-2000) for Rheumatoid Arthritis (currently in preclinical testing) using its LEAPS technology platform. The investigational immunotherapy LEAPS-H1N1-DC treatment involves non-changing regions of H1N1 Pandemic Flu, Avian Flu (H5N1), and the Spanish Flu, as CEL-SCI scientists are very concerned about the possible emergence of a new more virulent hybrid virus through the combination of H1N1 and Avian Flu, or maybe Spanish Flu. 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 (News - Alert) filings, including but not limited to its report on Form 10-K for the year ended September 30, 2013. 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.



CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2013 and 2012
2013 2012
GRANT INCOME AND OTHER $ 159,583 $ 254,610
OPERATING EXPENSES:
Research and development (excluding
R&D depreciation of $253,072, $445,710,
and $438,738 respectively, included below) 12,681,049 10,368,695
Depreciation and amortization 364,124 533,468
General & administrative 6,982,686 6,595,287
Total operating expenses 20,027,859 17,497,450
OPERATING LOSS (19,868,276 ) (17,242,840 )
OTHER EXPENSES - -
GAIN ON (News - Alert) DERIVATIVE INSTRUMENTS 10,750,666 1,911,683
INTEREST INCOME 117,086 116,061
INTEREST EXPENSE (170,423 ) (262,214 )
NET (News - Alert) LOSS (9,170,947 ) (15,477,310 )
ISSUANCE OF ADDITIONAL SHARES DUE TO RESET PROVISIONS - (250,000 )
MODIFICATIONS OF WARRANTS (59,531 ) (325,620 )
INDUCEMENT WARRANTS - (1,593,000 )
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (9,230,478 ) $ (17,645,930 )
NET LOSS PER COMMON SHARE
BASIC $ (0.30 ) $ (0.70 )
DILUTED $ (0.66 ) $ (0.78 )
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
BASIC and DILUTED 30,279,442 25,183,654


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