With remarkable swiftness, Cel-Sci Corporation (NYSEMKT:CVM) has been enrolling patients for its large Phase III clinical trial testing lead drug Multikine in cancer of the head and neck, and in the process defeating skeptics that believed filling patient slots would be a protracted and lengthy process. After a number of setbacks not of its own making, the company now appears on track to reach its goal of complete enrollment of 880 patients by the end of next year, a formidable task but looking more feasible now than in the past, and stemming largely from the decision to make a change to its contract research organization (CRO). In the meantime, Cel-Sci still possesses positive data from its successful Phase II showing a robust 33% survival rate at 3 ½ years, which should convey a solid measure of confidence in the current trials' results. With new CROs in place, clinical site development and enrollment on the rise, and a manufacturing facility that has received a 'Current Good Manufacturing Practices ((cGMP)) designation from the FDA, Cel-Sci appears to have turned a corner in its mission to prove that Multikine helps stimulate the human immune system to fight cancer.
Attempts at forward progress for the extensive Phase III were undoubtedly hindered by inVentiv Clinical LLC, Cel-Sci's original CRO that was finally terminated in April of last year after a poor showing of patient enrollment for the study in question. Evidence suggests inVentiv lost focus amidst a rapid-fire string of mergers that included the acquisitions of CROs i3 and PharmaNet, and management consultant Campbell Alliance, along with an internal restructuring and the appointment of a new chief - a former investor with scant hands-on experience in managing the business of a CRO.
The situation was fixed by hiring CROs Ergomed Clinical Research and Aptiv Solutions in April 2013. Ergomed's belief that it could enroll Phase III patients quickly and that Multikine would be successful resulted in a $10 million investment of its own money, to be repaid from sales of the drug after commercialization, up to a designated fixed amount. Further, Ergomed signed two additional, similar agreements with Cel-Sci, worth $6 million, for other disease indications using Multikine. Speaking to its competence as a CRO operator, Ergomed retains a group of doctors, former investigators themselves who will contact clinical sites to facilitate recruitment and help with the retention of subjects that tend to drop out of studies over time.
Cel-Sci now reports vastly improved enrollment in its Phase III; as of February 2014, 146 new patients entered trials to date, with a total of 84 already receiving Multikine. This includes sites that had never seen participation under the prior CRO. The company's target is 100 to 110 clinical sites in 20 countries, along with those already set up in Israel with Teva Pharmaceutical Industries (NYSE:TEVA) and Taiwan with Orient Europharma. Just recently, Cel-Sci announced that March had enrollment of 14 patients; however, to reach its goal, Cel-Sci would have to enroll at a clip of roughly 34 patients per month for a fully-complete trial by the end of 2015, 21 months from now. This is not to say investors should use that figure as a benchmark because site enrollment often varies with seasonality (less patients tend to join studies in summer months), and the company intends to add at least eight new countries to its clinical trial site line-up, hopefully hastening the process.
A determined effort will be made to select clinical sites in the US; recently Cel-Sci identified its first state-side location - 21st Century Oncology of Greenville, NC, with Ron Allison, M.D., a board-certified oncologist specializing in head and neck cancer, as head researcher whose expansive clinic comprises 133 cancer care centers in 16 states and 33 in six Latin American countries. Best of all, Dr. Allison knows where the patients are; he was quoted saying an estimated 300 to 400 people in eastern Carolina have been diagnosed with the disease and has publicly displayed his conviction that Multikine will win approval within the next several years, and that its use will not be limited to one particular cancer. Although it is impossible to estimate how many clinical trial patients Dr. Allison can enlist, or how quickly, the sheer number of clinics he oversees, both here and abroad, should aid in raising the number of monthly enrollees higher than the trial's showing of 14 new subjects in March.
The drug itself is a biological blend of human cytokines (groups of small proteins inside the body that alerts cells to perform certain functions with heavy implications in the immune response) long suspected to exert a destructive effect on solid tumors when delivered through the skin, via the lymphatic system or around the tumor itself. One of the first human studies in head and neck cancer was conducted 20 years ago by a group of researchers who could no longer ignore the fact that this form of cancer arises in the presence of immune system deficiency, and that boosting immunity may prove a viable treatment.
Multikine's goal is to prevent tumor recurrence and prolong survival. While mechanism of action remains under more rigorous investigation, it is widely believed that Multikine overpowers immunosuppression exerted by the tumor itself, wearing down and eventually breaking the tumor's tolerance to allow the infection-seeking proteins to infiltrate tumor cells and create an immune response at the site of disease. Earlier independent studies had shown Multikine to cause tumor disintegration and activation of cytokines, leading to a supposition that the drug could someday take its place next to surgery, radiation or chemotherapy that encompasses existing standards of care for head and neck cancer.
Cel-Sci believes Multikine is most effective before standards of care are given, when the immune system has not been compromised. If the compound proves successful in Phase III trials, Cel-Sci will apply to the FDA for use of Multikine plus the current standard of care (surgery and radiation, or surgery and radiochemotherapy) as a first-line treatment for head and neck cancer, an estimated $3.6 billion market in the US where death strikes half of sufferers within three years.
Success in trials means a statistically significant 10% increase in overall survival against control patients receiving the standard alone. Multikine appears to be safe with few adverse effects, and has an added advantage - administration consists of 15 localized injections over a three-week period versus long, uncomfortable intravenous drips, as is the case with other treatment.
Multikine is also being tested in human papillomavirus (HPV), under the hypothesis that infection with certain types of HPV causes over 50% of all cases of oropharyngeal cancer, a type of head and neck cancer. Cytokines present in Multikine are believed to activate a protein complex that controls the flow of genetic information within the nucleus of the cell, and is intimately implicated in regulating the immune response. Several of these cytokines have specific anti-viral properties and research has shown that when in the presence of HPV, genital warts shrink while the body undergoes an immune response mediated by T lymphocytes, a type of white blood cell that plays a central role in fighting infection.
Cel-Sci operational results for 1Q2014 show a company using cash prudently: a 37.5% rise in research and development costs, to $4.0 million was offset by a 1.5% decline in general and administrative expense, creating an operating loss of only $5.9 million versus $5.0 million in the comparable quarter last year. Cash stood at $13.5 million after two common stock offerings with total gross proceeds of $21.1 million, done late last year. Cel-Sci remains debt-free.
Another piece of good news for Cel-Sci: last November an independent data monitoring committee (IDMC) concluded that because there were no safety issues, the Phase III trial of Multikine in head and neck cancer may continue, which drove plans for more clinical sites. This was the second positive review by the IDMC and a strong testament that adverse side effects will most likely be absent in larger trials. Biotech and pharmaceutical firms do not always fare so well. Earlier this month, Roche Holding AG (OTCQX:RHHBY) failed an IDMC review of its lung cancer drug MetMab in Phase I after it was shown to be ineffective, resulting in abandonment of the study. Last May, Pfizer, Inc. (NYSE:PFE) felt the IDMC's sting when the committee determined that late-stage trials of a drug for non-Hodgkin's lymphoma was not improving survival when compared to a competitor's compound.
The principal risk for investing in Cel-Sci is slower than expected enrollment, which would dredge up past concerns that have kept the stock depressed. The Tufts Center for the Study of Drug Development that supplies strategic information to drug firms found that although patient recruitment and enrollment occupy 30% of a CRO's time, enrollment rates have nonetheless been dropping over the last decade with 11% of sites in a given trial failing to enroll even a single patient. Cel-Sci today, however, stands a good chance of quelling enrollment fears if it continues with reports of timely filling of clinical trial slots accomplished through its CROs. Another specific risk lies in Cel-Sci's market capitalization; at less than $100 million, it, like similar micro-cap companies, may experience irregular news flow to keep investors informed, a lack of near-term catalysts to keep trading active, and periods of illiquidity due to low volume.
Immunotherapy is a relatively new area of cancer research and practicing oncologists retain a degree of skepticism, particularly if an experimental compound like Multikine aims to treat the disease first, before more proven methods are used. The FDA has already approved cytokine immunotherapy for cancer - interleukin-2 (IL-2) for metastatic melanoma and renal cell carcinoma - but the effectiveness of this passive immunotherapy is short. On the other hand, active immunotherapy, such as that employed by Provenge sold by Dendreon Corp. (NASDAQ:DNDN) is more durable but carries harsher side effects like fever, blurred vision, rapid heartbeat, breathing difficulties, anxiety and mental confusion.
Multikine has the potential to strike the right balance between passive and active immunotherapies for cancer. Dosages used in clinical trials have shown efficacy, avoiding the IL-2 trap of diminished potency over time. There are no severe adverse effects like those seen with Provenge. With Phase III head and neck cancer trials underway at dozens of clinical sites across 12 countries including the US, a lead compound that looks to become a platform technology addressing more than one indication, safety data in place, manufacturing protocols validated, and the US Navy as a partner, Cel-Sci embodies the definition of an undervalued biotechnology play.
Disclosure: I am long CVM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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