Zacks Small Cap Research – CVM: Start Your Engines – FDA Green Lights Confirmatory Registration Study – Technologist

By John Vandermosten, CFA

NYSE:CVM

READ THE FULL CVM RESEARCH REPORT

CEL-SCI Corporation (NYSE:CVM) reported its fiscal third quarter on August 15, 2024 with the submission of its Form 10-Q with the SEC and a press release on the following day. Since our previous update for the fiscal second quarter, CEL-SCI has added several new individuals to its ranks, conducted a population analysis and presented data at IDDST for IT-MATTERS and raised additional capital to support the advance of Multikine towards the confirmatory registrational trial.

Financial Review

CEL-SCI recognized no revenues for its fiscal third quarter ending June 30, 2023 and incurred operating expenses totaling $6.7 million during the three-month period. This resulted in a net loss available to common shareholders of ($7.5) million, or ($0.14) per share.

For the quarter ending June 30, 2023 versus the same prior year period:

➢ Expenses for research and development fell 18% to $4.7 million from $5.7 million. Lower Phase III study, employee stock compensation and miscellaneous costs contributed to the decrease and were partially offset by increased spending to prepare for the confirmatory registration study;

➢ General and administrative expenses decreased 20% to $2.0 million from $2.5 million on lower consulting fees and employee stock compensation partially offset by other miscellaneous expenses;

➢ Other non-operating items were $14,000 compared to ($8,000) in the prior year;

➢ Net interest expense of ($0.2) million compared with ($0.2) million was related to lease liabilities and was relatively constant;

➢ Modification of warrants totaled ($659,000) compared to zero as several series of warrants received an extension of expiration dates;

➢ Net loss totaled ($7.5) million versus ($8.4) million or ($0.14) and ($0.19) per share, respectively.

As of June 30, 2024, cash and equivalents totaled $0.4 million. Cash burn for the three-month period amounted to approximately ($4.6) million, up from 3Q:23’s ($5.9) million. Following the end of the quarter, CEL-SCI closed on a gross $10.8 million common stock offering. CEL-SCI holds no debt on its balance sheet.

CEL-SCI Milestones

➢ Appointment of Mario Gobbo to Board of Directors – April 2024

➢ Dr. Giovanni Selvaggi joins CEL-SCI as clinical advisor – June 2024

➢ Presentation at the International Drug Discovery Science & Technology (IDDST) Congress – June 2024

o Neoadjuvant Immunotherapy for Head and Neck Cancer: Low Tumor PD-L1 Expression – IT-MATTERS – RCT

o Presented by Dr. Eyal Talor

➢ 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+

➢ Preparation for Multikine confirmatory trial – 2024

Post-Reporting Period Capital Raise

CEL-SCI announced the closing of its $10.8 million offering on July 29th in a press release. The company sold 10,845,000 shares of stock and pre-funded warrants at $1.00 per share. ThinkEquity served as the placement agent for the transaction. A post transaction summary identified 3,715,000 shares of common stock and 7,130,000 pre-funded warrants were issued.

Population Analysis

In further review of the IT-MATTERS data, CEL-SCI has conducted a bias analysis that was detailed in a July 26th press release. The analysis was conducted to ensure data quality, improve study validity, inform the interpretation of the data and to guide the upcoming confirmatory registration study. The data on patients’ age, sex, race, tumor location and staging find that the active arm and control arm are similar. It finds that the results in the study are reliable, generate reasonable conclusions and minimize the risk of bias.

The bias analysis was conducted for the Phase III study population of 923 patients with newly diagnosed resectable, locally advanced primary head and neck cancer, as well as the subgroup of 114 patients who had no lymph node involvement and had low PD-L1 tumor expression (determined via biopsy). This is the same population which will be drawn from for CEL-SCI’s upcoming confirmatory registration study.

Summary

Since our previous update, CEL-SCI has reported its latest quarterly financial and operational results, conducted a population analysis on the IT-MATTERS subjects, presented data at IDDST and added new faces to its ranks. CEL-SCI continues the planning for its anticipated confirmatory registrational study and raised an additional $10.8 million in July to further this effort. We maintain our valuation of $7.00.

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