CEL-SCI's Flu Work: Diligent Preparation, Promising Results

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Includes: CVM, GILD, GSK, SNY
by: M. E. Garza

…Off the record, in a deep conversation in a dark bar, a government scientist researching pandemic flu would say that they’re scared to death because they see just how intelligent this virus is…

Like many of you, over the last few months, I’ve been drawn in by the alarming - often unnerving - headlines about the H1N1 flu pandemic.

“It’s all hype,” some say. “Don’t buy into what the establishment is selling."

From the start, I couldn’t help myself from suspiciously scoffing at some of the ratings and readership driven headlines.

That all changed for me late last month when I decided to research what all this noise was really about.

Now, frankly, I wish I had been less overcritical and more ostrich-like. Some part of me wishes to rediscover the peace of mind that got lost since my journey into the darkness of the coming flu pandemic and the brutal truth behind it.

That this is a space about biotech investing reminds me to tell you, my captive audience, that I’m very cognizant of that fact and that this isn’t going to turn into the type of exposé found in a sensational cheap magazine.

Better yet, I can tell you that this company is flying under the same radar screens that point the flock of eager investors into playing the “swine flu stocks.”

As with the rest of story, the truth is, there is much more substance than sizzle here.

As with the rest of the tale, there is also much more terror in the truth than I bargained for.

I realized early on that if I were to get anywhere near the truth about H1N1, my first challenge was to find someone trustworthy and experienced who could help point the way. I needed to clear my already cynical mind from further clouding.

I began to scour the Centers for Disease Control and Prevention website and found various estimates of flu-related deaths (since apparently there is no true method or count for these deaths) and experts there will tell you that the actual number of deaths vary greatly from year to year because flu seasons often fluctuate in length and severity.

I found alarming press clippings from the U.S. Military stating that they are confident that years of pandemic planning will help it deal with H1N1. Those of us who watched the events surrounding Hurricane Katrina and our national government’s reactions can rest easy now, right?

I dug deeper.

I connected to someone who has spent twenty-five years working on biopharmaceutical development and regulatory issues in the U.S. He also spent the last quarter of a century working on various therapeutic and preventative platforms as well as vaccines, but he would only speak to me on the record under strict conditions of anonymity.

Having taken part in many collaborations with the government at various levels with several agencies, he wanted the public to know the truth, but he was also not thrilled by the idea of being castigated or confused in any way with Chicken Little.

After a brief pause, I slipped on my best Woodward and Bernstein and told him I’d agree to his conditions.

“The biggest concern is to ask ourselves what this is and how is it being addressed, “ he began.

There are some great limitations of existing technologies and approaches that are being used currently and that have been used historically. Where they’ve got the biggest challenge from a public health perspective is that these methods are all backwards looking, and we’re using a strain of this virus that is a strain that was identified at the end of April in California.

While that’s not unimportant – since this is the strain of the virus that is currently plaguing the United States and pretty much the entire rest of the globe- the CDC and the scientific community have pointed out consistently that, as is always the case with influenza generally, this virus is inherently unstable. It mutates.

“That’s precisely why we’ve got this particular strain- one that, despite it being summer in the northern hemisphere- is still propagating and still causing significant morbidity and a fair amount of mortality, which is highly unusual,” he explained calmly.

Obviously it’s also circulating in the Southern Hemisphere, but at some point, consistent with the variations that we’ve already seen with this virus in terms of Tamiflu resistance, this virus is going to- for lack of a better word- mutate again and how it will change and how it will present itself going forward is totally unpredictable.

What is known about influenza viruses is that as they evolve and when they genetically alter through the process of resortment, natural selection principles tell us that the viruses look to alter in ways that continue to maintain their ease of transmissibility and certainly their morbidity potential.

In an ideal world, the ideal virus doesn’t try to wreak mass mortality because at some point if it’s killing its hosts, its own ability to survive is compromised, but this virus obviously has been smart enough to figure out how to survive in the summer heat when it usually survives in the winter cold. It has figured out how to transmit from human to human on a global basis faster than any influenza virus before. Part of that is a reality of the current global marketplace and its global transportation modes, but it’s also a reflection of the virus.

This guy may have been shy, but he didn’t mince any words.

There are obviously other influenza viruses on the planet that are known and some that are probably unknown and as, we look forward, all the approaches right now are focused on that California strain- which in essence is the same strain that originated down in Mexico. As we look forward, as this virus continues to circle the globe, as it interfaces in humans and more importantly in pigs, there is a significant chance that it will evolve and could soon have greater morbidity effects and far worse mortality effects on the global population, comparable to what happened in 1918 – which also involved an H1N1 virus. With the last recirculating H1N1 being in 1957, the global population’s level of natural immunity may be assumed to be low.

In looking at the approaches on the table today, scientists and pharmaceutical companies are simply trying to give us vaccines that look at building up immunity against only that original strain, and while that is all well and good, a basic problem remains.

It’s a critically-important step that must be taken but it’s still backwards looking, not forward looking, and those vaccines cannot and do not anticipate future variations that occur through natural selection, especially as a result of resortment. So in essence, we hope to have a vaccine that will protect against this virus as it was discovered in late-April and exists now, but its ability to protect against the evolution of this virus is pretty much non-existent- especially if we end up with yet another entirely new strain that has greater virulence.

That sobering, if not shocking dose of the truth led me to dig further and eventually to the doorsteps of the CEL-SCI Corporation (Amex: CVM) and its CEO, Geert Kersten.

Kersten has been with CEL-SCI from the early days of its inception in the late 80’s. And for better or worse, he’s been involved in the pioneering field of cancer immunotherapy for almost two decades, through its many challenging cycles.

“The government needs to continue doing what it’s doing, because that’s their job,” says Kersten in a calm voice layered with his thick, native German accent.

But at the same time, no one is addressing the issue of a more dangerous, yet very likely, mutated virus. What happens when it stops responding to Tamiflu or Relenza?

Good questions, indeed.

Just five years ago, Relenza- the influenza treatment developed in Australia- was headed for the drug scrapheap. Today, as the world scrambles to cope with the flu pandemic, suddenly Relenza is headed for "blockbuster" status and that’s a term which is reserved for drugs that generate over $1 billion a year in sales. Mere days ago there were news headlines that GlaxoSmithKline (NYSE:GSK) is attempting to triple its global capacity in order to produce Relenza. Those efforts are going to justify its blockbuster tag with ease, but that’s only going to work for so long.

“If something knocks out the virus’ ability to survive, it will, by definition, following ‘selfish gene’ theory, continue to evolve and figure out a way to work around that imposition,” I am reminded by my biologic informant.

In other words, it will genetically modify itself and circumvent the vaccines, as well as the Tamiflus and Relenzas.

“Since this is such a doomsday scenario, shouldn’t we be taking out some insurance?” asks CEL-SCI’s Kersten.

CEL-SCI’s preclinical studies have demonstrated that vaccines utilizing its proprietary L.E.A.P.S. (Ligand Epitope Antigen Presentation System) technology potentially induce protection against illnesses such as the swine influenza. L.E.A.P.S. helps direct the immune response to the vaccine epitope.

What his company’s technology proposes is the ability to attack what comes out of those mutations the moment it shows up, as opposed to what we have now.

“The idea is very simple, if I’m looking for a bad guy and I know that bad guy is going to undergo facial reconstruction or hair color changes, the only way I’m going to be able to capture that bad guy is by focusing on parts of that person that cannot be changed,” explains Kersten.

While he can wear colored contact lenses on his eyes, he can’t actually change his eyes. So if I have a biometric measurement machine that checks for eyes as he walks past it, then no matter what he’s done, he cannot escape from me. Much like that analogy, there are various parts of the virus that are central to its survival. The virus mutates in order to defend itself and those regions which mutate are actually the easiest target for vaccine development. They ‘stand out.’ It’s almost like a ruse that the virus creates to divert you from parts of itself that are important to survival, so the current vaccine development focuses on the easy targets and you get strong immune responses to them, but then the virus mutates and the vaccine doesn’t work anymore.

Our work is different. We focus on parts of the virus that may not make for targets that are as easy as the current ones but they cannot change because if they change the virus simply dies. So if you now make a combination of these parts and you take them from the current swine flu, you move forward knowing that the mutated swine flu will have the same parts that will remain unchanged. Then you add to that some parts from, say, the current avian flu. And you take another from the Spanish flu [the 1918 pandemic also was caused by an H1N1]. You end up with several peptides mixed to form one vaccine which should provide at least partial protection and treatment against a mutated virus which itself has taken different pieces from different viruses and put them together.

The key focus of the L.E.A.P.S. technology approach is that it’s selecting common regions across a range of viruses that through the course of time have shown high virulence, high morbidity, and high mortality and then helps the immune system process these regions in a manner that will lead to clinical benefit, whether that is prevention or treatment. It uses non changing parts of the viruses as a base for constructing a treatment paradigm or a preventative paradigm.

The technology could potentially be used in either or both contexts. By having those common foundational elements, there is a much greater likelihood to be able to catch up, stay current with and even at some levels stay ahead of the virus as it goes through both global circulation and a resortment process, especially in the context of H5N1 or any of the other influenzas that we know about, or more importantly that we don’t know about.

That work is not that expensive. It involves peptides and other technologies that, for a little bit of money, could potentially forestall an apocalyptic type of disaster.

“One of the fascinating things that the media and most everyone else pays no attention to is that early on, very early on, the CDC knew that there were problems growing this strain of virus used for the conventional vaccine approach now being ramped up for swine flu,” says my informant.

The low yields and long time to production should not be news to anyone in the know. The current vaccine manufacturers have come out and said, ‘hey we’re getting low yields and its taking us a long time to produce that low-yielding vaccine,’ but insiders have known this since last April.

This gets back to just how smart a virus we’re dealing with. To boil it down to simplistic almost cartoonish terms, this thing has figured out how to survive the environmental conditions in which influenza viruses have never survived, namely heat and humidity.

It is contrary to all of influenza history to see a virus surviving the way this one is. It knows enough that vaccines- ever since we started creating vaccines- are produced in eggs and it’s genetic code knows enough not to allow a vaccine to be produced in eggs quickly. This is not by chance that we’ve got this problem. This all gets back to a virus that has been around for hundreds of years and through hundreds of years of experience has morphed itself into something that is wary of being trapped or deceived.

It has figured out a way to continue its propagation almost unimpeded and that would suggest that off the record, in a deep conversation in a dark bar, a government scientist researching pandemic flu would say that they’re scared to death because they see just how intelligent this virus is, they see what it’s done already and they know its potential. It’s ability to have done what it’s already done suggests a genetic intelligence- a genetic code internal to the virus- that will allow it to adapt in ways in which we have not seen influenza adapt before.

In short, while some companies like Gilead Sciences (NASDAQ:GILD), Roche (OTCQX:RHHBY), Novartis AG (NYSE:NVS), Sanofi-Aventis SA (NYSE:SNY), and others are stockpiling vaccines and other treatments, that may not be enough.

There are many more reasons to like CEL-SCI for the work they’re doing in the influenza space and beyond. In the coming days I’ll continue to explore those reasons with you.

In the meantime, stay tuned and informed, and if you can help it at all - stay protected.

Disclosure: No positions