Why Has Cel-Sci Quietly Amended Some Previously Filed Paperwork?

Is the management at CEL-SCI Corporation (CVM) signaling that something big is coming?

In mid September, on the same day that CEL-SCI Corporation announced that the U.S. Food and Drug Administration (FDA) had indicated that the company could proceed with its first clinical trial to evaluate the effect of its investigational LEAPS-H1N1 treatment on the white blood cells of hospitalized H1N1 patients, CEL-SCI Corporation also announced plans to raise $20 Million in Registered Direct Offering. Shares showed some resiliency after investors were told that the net proceeds from the offering would be used to commence a pivotal Phase III clinical trial with its cancer drug Multikine and that the company would rapidly take its new LEAPS - H1N1 compound into human studies for the treatment of hospitalized H1N1 patients.

After the market closed on Tuesday, investors learned that the company had filed an "amended" Form S-3 with the SEC. The form appears to be part of a $30 million bump to a previously filed "shelf offering" that had just been filed with the SEC two weeks ago, on October 30th.

In that original filing, the company had disclosed that they were looking to raise only $10 million. The total now is $40 million. Was there a miscalculation? Did something unforeseen develop at the recent vaccine conference in D.C.?

While the filing has impacted the shares negatively over the last couple of days, the company may not even be planning to take advantage of the new shelf immediately.

These types of filings, while not usually publicized, give informed investors significant information regarding the securities offered, and are basically designed to help alert investors ahead of any sudden moves.

Still, one is left to wonder. Is this a "tell?" Especially given the odd timing of the filing.

One day prior to the amendment, the company had reported from the big conference in Washington that their L.E.A.P.S. platform had shown the ability to modify immune response. Those findings based on studies conducted by Dr. Kenneth S. Rosenthal, Professor of Immunology and Microbiology of Northeastern Ohio Universities College of Medicine and Pharmacy, in collaboration with scientists at the Cleveland Clinic were supportive of the role that the technology might play in the treatment of H1N1 hospitalized patients.

That news, coupled with a release two days earlier that an Institutional Review Board of The Johns Hopkins University School of Medicine (Johns Hopkins) had given clearance for the company's H1N1 clinical study to proceed. The news boosted credibility among investors and basically let them know that CEL-SCI had indeed been working diligently with their CRO and Johns Hopkins to actively prepare submissions to the FDA.

The aim, as explained by company officials in a pre-released statement, is to move ahead "in the fastest and most effective way" towards clinical trials going forward for this unique investigational treatment. That sent shares up 50% during back-to-back sessions on Friday and Monday.

Then came the new amended filing.

Here is what we do know:

Some time in the next two years (as allowed by the SEC), Cel-Sci can offer and sell up to $40 million of the securities described in the registration statement. The terms of any future offering would be established at the time of the offering and would be subject to market conditions and approval by the company’s board of directors.

So while the Company doesn't appear to have any immediate plans to use the shelf registration statement, this filing may allow CEL-SCI to offer and sell securities on an expedited basis if market opportunities present themselves and that prospect has left investors wondering if some kind of news, event or even partnership is in the works.

We know that the company has several pending news items including, but not limited to:

1. The validation of its newly completed state-of-the-art facility in Maryland which it expects to utilize to launch aseptic filling for stem cell produced therapies and other biological products. In addition to serving as the "home base" for manufacturing Multikine® going forward, the facility could also bring substantial revenue to the company if they decide to lease it to other companies on a per-hour or per-day basis.
2. The official announcement that the long awaited global Phase III trials for Multikine®- which is being readied as a cancer vaccine in advanced primary head and neck cancer- have begun.
3. An announcement- or series of announcements - regarding CEL-SCI's prevention and treatment for H1N1 swine flu using their L.E.A.P.S. technology platform. Those announcements could include the results of clinical human blood tests, FDA designation or status changes for the H1N1 treatment. Another expedited trial announcement or change of clinical process itself . After this past weekend's hearing in front of congress, where the nation's top health officials were criticized for not investing more into U.S. based flu prevention platforms and being "ill-prepared" to deal with the pandemic flu- as evidenced by the late delivery of vaccines, it's not even far fetched to think that some kind of federal funding for the L.E.A.P.S. H1N1 program (similar to the funding seen for BioCryst's (BCRX) Peramavir) could come into play.

Take a look at that company's stock performance during the last two months. Impressive. Especially given the criticism that Peramavir has gotten in the press.

Like Tamiflu and Relenza, Peramavir is a neuraminidase inhibitor and the problem with neuraminidase blocking is that there are human genes that utilize neuraminidase for normal and healthy cell function (NEU1, NEU2, NEU3, NEU4). Critics of the drug argue that any neuraminidase blocking drug runs the risk of interfering with general communication needed for healthy cell function. The L.E.A.P.S. platform works completely differently and is intended to enable stimulation of the specifically-needed immune responses, while avoiding the administration of regions of H1N1, and other viruses, which may exacerbate the problem of cytokine storm, which scientists believe may be involved in the death of these H1N1 patients.

"What's promising is LEAPS immunogen's ability to activate the desired immune response without generating pro-inflammatory responses, which should make for inherently safe vaccines," According to Melly Alazraki of AOL's Daily Finance which published a story about researchers who are rushing to build better defenses against H1N1 on Wednesday.

Speculation. All of it. Yet it fuels the market and particularly stocks like CVM, who have so much ammo in their trunk.

On the other side of the coin, critics pounce on CEl-SCI's possible motives and cry "Dilution!"

"We just hope the company gives some of it's investors a chance to actually make money on good news, instead of simply raising money and keeping that entirely for themselves," says one long time investor in the company. "I'm not happy about the latest filing and it makes me wonder why they're going to go after more money. After all, didn't the company just announce that they had enough money to finally start Phase III trials for Multikine and to provide funding for their H1N1 program the last time they raised money?"

As explained so clearly in Investopedia, "sometimes current market conditions are not favorable for a specific firm to issue a public offering. For example, suppose the housing market is heading toward a dramatic decline. In this case, it may not be a good time for a home builder to come out with its second offering, as many investors will be pessimistic about companies working in that sector. By using shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable."

After cruisin' the message boards, one reader sent me this comment by a poster who goes by the name xji590. Apparently, his take has attracted quite a bit of attention from the longs.

The shelf is an opportunistic move," he writes. "It is there in case someone comes along willing to buy a major block of shares at a price that the company thinks is reasonable. But clearly he needs to wait to utilize the shares made available through this shelf until he can minimize dilution. They are well capitalize right now, however, the H1N1 opportunity has thrust upon the company cash flow requirements, I'm sure, that were not anticipated a year ago, or even six months ago. Geert (Kersten, the CEO) knows that his cash flow model has changed, and needs to put the company in a position, through the shelf, to raise additional working capital should the company need to do that... I love seeing the company going out with a bold statement like this shelf offering... They have confidence. So what are they confident in? That's the $60 thousand dollar question... If they just need cash, Geert would go out with a shelf grabbing $2M, $5M maybe even $10M... But $40M??? That's a big shelf for CVM. That conveys management confidence.

Shares closed down only slightly for the second day in a row.

I'd venture to say that given all the drama and attention, what comes next will definitely be interesting.

Disclosure: Long CVM

Comments

[homeschooled]

A funny thing has happened in the new media on the way to publishing. The wellhead has become the reporter. The reporter becomes the textbook analysis. You may wish to see news as it happens on the yahoo discussion board as found here:
messages.finance.yahoo...
CVM is on the way to saving the population from long lists of painful deaths. On the same court are the shorts who scream fraud
( too loud to be believed!) Witness the drama live 24hrs a day

2009 Nov 12 06:04 AM

[jay brebner]

"That news, coupled with a release two days earlier that an Institutional Review Board of The Johns Hopkins University School of Medicine (Johns Hopkins) had given clearance for the company's H1N1 clinical study to proceed."

That statement is misleading as the study is not a clinical trial as any retail investor would understand the term. it is a laboratory study and should be described as preclinical. this manipulation of news is why I don't trust these guys. why can't they use the regular media instead of pumpers? it looks like a scam when they do this.

2009 Nov 12 07:44 AM

[Jerry Atrick]

The shelf offering details the extent of the costs of warrants and options given to obtain financing, which, according to it, can double the number of outstanding shares. Payment price is about 20 cents per share.

2009 Nov 12 08:49 AM

[[e-mail]]

Why has Celsci made an amendment?

Why does M.E. Garza continue to put out press releases and articles on Celsci? How much are they paying him? How much stock does he have to get rid of?

2009 Nov 12 09:41 AM

[User 476730]

M.E Garza,
In another post you answered me that CVM is waiting for word on their treatment for H1N1- not a vaccine

I'm still confuse with the 2 articles you published at BioMedReports:

1.
Filing wih the SEC Makes Cel-Sci's Plans Look Even More Enticing to Investors
Written by M.E.Garza
Tuesday, 25 August 2009 02:27

... "The latest filing with the SEC confirms, that CEL-SCI has created one (and perhaps even several) potential peptide VACCINE/treatments against H1N1 swine flu using their L.E.A.P.S.™ technology- a patented, T-cell modulation, peptide epitope delivery technology. The platform has enabled CEL-SCI to begin pre-clinical formulation, evaluation and testing of a new application of its H1N1 VACCINE, which will allow the targeting of "mutated" versions of H1N1 swine and other influenza viruses. World health officials believe that the influenza virus may mutate and evolve between now and the winter flu season.
According to the filing: "In conjunction with the testing, CEL-SCI has produced several L.E.A.P.S. flu VACCINES that focus on the conserved, non changing epitopes of the different strains of Type A Influenza viruses (H1N1,H5N1, H3N1, etc.), including "swine", "avian or bird", and "Spanish Influenza", in order to minimize the change of viral "escape by mutations" from immune recognition. CEL-SCI's L.E.A.P.S. flu VACCINE contains epitopes known to be associated with immune protection against influenza in animal models."...

2.
Cloak and Dagger Developments at CEL-SCI (Amex:CVM)
Written by M.E.Garza
Monday, 14 September 2009 17:00

... "As I reported in my last article about CEL-SCI Corporation (AMEX:CVM) the company’s latest filing with the SEC confirms that scientists there have created one (and perhaps even several) potential peptide VACCINES and treatments against the H1N1 swine flu using their L.E.A.P.S.™ technology- a patented, T-cell modulation, peptide epitope delivery technology.

The platform has enabled CEL-SCI to begin pre-clinical evaluation and testing of the new applications of its H1N1 VACCINE and treatments, which will allow the targeting of "mutated" versions of H1N1 swine and other influenza viruses." ...


The capital letters at VACCINE are mine.

As far as I understand you mentioned in both articles that CVM has been working in both, vaccine and treatment for H1N1. I understand they may be waiting for a word on their treatment for H1N1, but why do you say they are not in their H1N1 vaccine?

If they have been working in an H1N1 vaccine, wouldn't CVM be affected as well, and therefore should be included in your list of companies affected by this decision? (I'm referring to your article "CDC Sticking with 'Tried and True' Methods for Flu Vaccines" here).

I appreciate you could clarify if CVM has been working in an H1N1 vaccine besides the treatment you mentioned.

Thanks.

2009 Nov 12 11:43 AM

[User 200905]

I like Garza's list of facts about CVM. I have read the emotional diatribes against CVM written at thestreet.com, and they ignore the facts that Garza presents. Investing in CVM stock puts my money at risk, but not an unreasonable risk.

Wayne

2009 Nov 12 12:43 PM

[Ray Ray]

Here we go again, Why CVM is playing the game, If in fact it is game.
All of us have suffered enough from the financial sector debacle.
I am a simple investor, all I want is a small gain. These types of moves makes the common investor distasteful.

Ray Ray

2009 Nov 12 02:54 PM

[BEE-BEE]

About J H....They do not waste their time and lab. space on long shots.... whether the h1n1 (treatment) is a money maker is speculation.... J H thinks it is worth a look and that tells most that are familiar with J H m.o. that there is more to CVM than just a guess....they seldom back a loser.....but who knows?

2009 Nov 12 03:04 PM

[M. E. Garza]

The product which the FDA has the most interest in is not the VACCINE. It is the LEAPS H1N1 Treatment.

Read the press release:

www.cel-sci.com/press_...


On Nov 12 11:43 AM User 476730 wrote:

> M.E Garza,
> In another post you answered me that CVM is waiting for word on their
> treatment for H1N1- not a vaccine
>
> I'm still confuse with the 2 articles you published at BioMedReports:
>
>
> 1.
> Filing wih the SEC Makes Cel-Sci's Plans Look Even More Enticing
> to Investors
> Written by M.E.Garza
> Tuesday, 25 August 2009 02:27
>
> ... "The latest filing with the SEC confirms, that CEL-SCI has created
> one (and perhaps even several) potential peptide VACCINE/treatments
> against H1N1 swine flu using their L.E.A.P.S.™ technology- a patented,
> T-cell modulation, peptide epitope delivery technology. The platform
> has enabled CEL-SCI to begin pre-clinical formulation, evaluation
> and testing of a new application of its H1N1 VACCINE, which will
> allow the targeting of "mutated" versions of H1N1 swine and other
> influenza viruses. World health officials believe that the influenza
> virus may mutate and evolve between now and the winter flu season.
>
> According to the filing: "In conjunction with the testing, CEL-SCI
> has produced several L.E.A.P.S. flu VACCINES that focus on the conserved,
> non changing epitopes of the different strains of Type A Influenza
> viruses (H1N1,H5N1, H3N1, etc.), including "swine", "avian or bird",
> and "Spanish Influenza", in order to minimize the change of viral
> "escape by mutations" from immune recognition. CEL-SCI's L.E.A.P.S.
> flu VACCINE contains epitopes known to be associated with immune
> protection against influenza in animal models."...
>
> 2.
> Cloak and Dagger Developments at CEL-SCI (Amex:seekingalpha.com/symbo...)
>
> Written by M.E.Garza
> Monday, 14 September 2009 17:00
>
> ... "As I reported in my last article about CEL-SCI Corporation (AMEX:seekingalpha.com/symbo...)
> the company’s latest filing with the SEC confirms that scientists
> there have created one (and perhaps even several) potential peptide
> VACCINES and treatments against the H1N1 swine flu using their L.E.A.P.S.™
> technology- a patented, T-cell modulation, peptide epitope delivery
> technology.
>
> The platform has enabled CEL-SCI to begin pre-clinical evaluation
> and testing of the new applications of its H1N1 VACCINE and treatments,
> which will allow the targeting of "mutated" versions of H1N1 swine
> and other influenza viruses." ...
>
>
> The capital letters at VACCINE are mine.
>
> As far as I understand you mentioned in both articles that CVM has
> been working in both, vaccine and treatment for H1N1. I understand
> they may be waiting for a word on their treatment for H1N1, but why
> do you say they are not in their H1N1 vaccine?
>
> If they have been working in an H1N1 vaccine, wouldn't CVM be affected
> as well, and therefore should be included in your list of companies
> affected by this decision? (I'm referring to your article "CDC Sticking
> with 'Tried and True' Methods for Flu Vaccines" here).
>
> I appreciate you could clarify if CVM has been working in an H1N1
> vaccine besides the treatment you mentioned.
>
> Thanks.

2009 Nov 12 10:52 PM

[M. E. Garza]

Given the number of shares trading and the number of new investors, I have a feeling you're not alone in thinking that way. ;)


On Nov 12 12:43 PM User 200905 wrote:

> I like Garza's list of facts about CVM. I have read the emotional
> diatribes against CVM written at thestreet.com, and they ignore the
> facts that Garza presents. Investing in CVM stock puts my money at
> risk, but not an unreasonable risk.
>
> Wayne

2009 Nov 12 10:53 PM

[M. E. Garza]

I don't get paid by any company to report news.
As disclosed, I am long CVM. Have been since it was $.29 and plan to be until someone provides me with scientific proof that I shouldn't be.


On Nov 12 09:41 AM [e-mail] wrote:

> Why has Celsci made an amendment?
>
> Why does M.E. Garza continue to put out press releases and articles
> on Celsci? How much are they paying him? How much stock does he have
> to get rid of?

2009 Nov 12 10:56 PM

[gretel]

Children of Adam Feuerstein-Frankenstein and the Street , stop WHINING,
if you don't like CVM don't buy it or sell what you have I like to buy more
of CVM. Is there a sure Investment out there ? Yes, if you are happy with
a few penny's of gain .CVM can be a SUPER WINNER and I take the risk becauseI have a strong stomache and GUT'S too .
Like for any Company cash flow is importand , I let the Manager's at Cel-sci
find a great direction for the company because I know they know a lot more
about Bio Tech then I ever will know. I am not a Jack of all trades, but reading
between the lines and not watching CRAMER tells me CVM will be over $ 6
before we know. Remember DNDN-Dendreon and HGSI ? The Street,
Frankenstein and Cramer and there Blind Followers had a great time
in bashing the stocks for there HEDGES BUDDIES .DNDN went in a short
time from a few Dollars to Dollar 29 .CVM got hit real hard by Frankenstein's LIES but he can't stop CVM from moving up and down and one day soon "RUN". Yes, my english is bad but my knowlledge is VAST.
You all have a great day and stop WHINNING !

2009 Nov 13 12:21 AM

[BioGuy]

Wow, I thought people discussed legitimate companies on SA.

If you play ticker symbols, go for it. I own some penny stocks myself. I just never talk about them.

For those looking at actual biotech stocks-
My previous comments regarding Cel-Sci were cursory and a waste of time, this company practically dos not exist. So now I'm irritated.
Aside from several minor inconsistencies- my favorite being that C. Richard Kinsolving is CEO of BioPharmacon, a company that hasn't existed in 8 years- there are problems.
sunbiz.org/scripts/cor...=

1) No clinical data of any kind.
clinicaltrials.gov/

2) Multikine has been under development for over 25 years. That's not a good sign at all. There are many new, better technologies out there for T-cell activation.
"... funded the early Multikine® research at the Max Plank Institute in 1978, founded CEL-SCI around the idea of Multikine® in 1983..."
www.cel-sci.com/histor...

3) Hardly any published data. One real paper is all that I found, which no one has cited. I had 2 papers 5 years out of school.
www.ncbi.nlm.nih.gov/p.../
A company that has been around that long should have a huge literature collection, preferably with citations. This is how science works, look up any other biotech that has an FDA approval and you will see a published history.

4) The company is very willing to overstate their activities. A biology experiment at Johns Hopkins has **nothing to do with a clinical trial whatsoever.** At school, I worked with lots of material from outside companies- it's very common- they never trumpeted out prestige to drum up stock prices. Since Cel-Sci only has 30 employees, obviously they needed the cheap labor (and probably the talent) to do some biology. Sad. Desperate. Embarrassing to science.

5) Personally, I consider Cel-Sci's patents weak. In fact, "LEAPS" seems to be nothing more than a "trademarked phrase" inserted in to a peptide sequence patent. A synthesized peptide stuck onto a T-cell receptor ligand is a technology platform? No. They have sequences patented and would like it to appear to be a "platform". Which is likely why LEAPS has been stirring around for 10 years. Not to mention unsupportable claims on naturally occurring receptors. That's so 1980's.

6) I see no proof they have an agreement with Teva. I won't even get into this "Byron" thing. I wonder if anything they say is true. All news seems to come from Cel-Sci or BioMedReports, who's founder is long CVM, as stated below the article.

Which reminds me- M.E. Garza, you state that disclosures are available on BioMedReports at the bottom of the "About" page. There are none.

I like my industry. Anyone that is really looking for exciting publicly traded early phase biotech or pharmaceutical companies, there are good ones out there worth talking about- just be very careful of your info. Trade what you know.
www.sec.gov/answers/pu...

2009 Nov 13 08:28 PM

[Redland]

I love investing in Biotech Companies. Where do you find them? Why is it so difficult to find an accurate FDA decision calendar?


On Nov 13 08:28 PM BioGuy wrote:


> I like my industry. Anyone that is really looking for exciting publicly
> traded early phase biotech or pharmaceutical companies, there are
> good ones out there worth talking about- just be very careful of
> your info. Trade what you know.
> www.sec.gov/answers/pu...

2009 Nov 14 06:13 PM