CEL-SCI's Multikine Trial: Learning From Bristol-Myers' Ipilimumab

About: CEL-SCI Corporation (CVM), Includes: BMY
by: North Shore Research

The world's largest head and neck cancer study should have ended in late 2018, but patients appear to be living longer.

Event-Driven studies pose different challenges compared to Time-Driven studies.

It is now acknowledged by researchers that immunotherapies induce a "delayed clinical effect".

Geert Kersten, CEO, provided a corporate update recently and noted they are still waiting on the 298 event.

CEL-SCI's third-party analysis has determined that head and neck cancer OS has decreased.

Editor's note: Seeking Alpha is proud to welcome North Shore Research as a new contributor. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Essential. Click here to find out more »


CEL-SCI Corporation (CVM) is a small-cap (~$300 million), clinical-stage cancer bio-pharmaceutical company. Multikine, a cocktail combination of cytokines and chemokines, is a prospective neoadjuvant treatment and an investigational drug candidate in clinical development for newly diagnosed advanced primary head and neck cancer. It has also received orphan status.

The goal of treatment with Multikine is to boost the body's immune system prior to standard of care. The Phase III study is fully enrolled with 928 patients, and the last patient was treated in September 2016.

On September 10th, the CEO, Geert Kersten, presented at the Rodman & Renshaw 21st Annual Global Investment Conference. The presentation can be found here.

We were intrigued by the new details of this presentation and have some key takeaways, which we will discuss here.

Why the "delay"?

It's now September 2019. Nearly nine years after the start of the world's largest head and neck cancer study and three years after the last patient was dosed. To prove an overall survival benefit, the study requires CEL-SCI to wait until 298 events (deaths) have occurred among the two main comparator groups. Per the recent presentation, on September 10, 2019, we are still waiting on 298 events to occur. What's taking so long? What is the reason for the "delay" in the trial coming to an end?

Bristol-Myers Squibb (BMY) faced a similar "delay" in its Phase III trial for the blockbuster cancer immunotherapy drug, Ipilimumab.

Ipilimumab works by stimulating certain immune cells called T-cells. These cells help to fight cancer and other diseases. T-cells have a protein on their surface called CTLA-4. This protein tells the cell when to switch off. Ipilimumab blocks the CTLA-4 protein so that the T-cells stay switched on and active to attack cancer cells.

So, while Ipilimumab is an entirely different immunotherapy and indication from Multikine, BMY became keenly aware of the challenges associated with Event-Driven studies.

In February 2016, Tai-Tsang Chen, PhD Executive Director of Global Biometrics Sciences at Bristol-Myers Squibb, gave a keynote presentation.

In the presentation (slide 10 above), Dr. Chen made the following observations:

  • BMY anticipated that all the events were to have occurred within three years.
  • Three years into its study, only 85% of the events had occurred.
  • However, what is most telling is that it took two additional years for the remaining 15% events.

This is what we believe is happening with Multikine: a decreasing event rate due to the “delayed clinical effect”. After nearly nine years, and based on our analysis, we are waiting for just a few more events.

Thus this "delay" of the Multikine trial completion is not unique. This has now become an understood phenomenon in immunology.

Has Standard of Care Improved?

Many readers might say that the reason for this "delay" is because Standard of Care ("SOC") overall survival for head and neck cancer has improved over the years. This is categorically wrong.

An important factor in overall survival ("OS") analysis is to understand the inclusion/exclusion criteria in terms of tumor size and location. Inclusion criteria for this trial is untreated SCCHN of oral cavity/soft palate, categories T1N1-2M0, T2N1-2M0, T3N0-2M0, T4N0-2M0 (T4 allowed only if invasion of mandible is negligible). It is critical to exclude Base of the Tongue ("BoT") because cancer of the BoT has a lot of occurrences in the US. BoT cancer is highly curable, and if you do not exclude it, the whole overall survival numbers will be skewed and exaggerated.

Basic internet searches will not provide the exclusion/inclusion criteria that are needed to compare OS. One must dig deep into the SEER database. This is why the 9/10/19 presentation is important. There was a new slide (see below) that documents the estimated OS using the exact study population. What is also noteworthy is that this analysis was done by an "External Statistical Group", thus there was some independence.


The biggest takeaways here are the "terrible" OS statistics for the study population: Three (3) Year OS - ~47% and Five (5) Year OS - ~37%. As you will recall, the trial assumed a survival rate of about 55% at Year 3. This actual OS is 8% lower than what was estimated.

This is consistent with the American Cancer Society's comment from 1/8/19:

In contrast to declines for the most common cancers, death rates rose from 2012 through 2016 for... sites within the oral cavity and pharynx."

Therefore, survival for the patient population has decreased, not increased, and can't be the reason for the "delay".

The Delayed Clinical Effect

What has been consistent and is now acknowledged by researchers is that immunotherapy can cause an immediate response, like quick tumor shrinkage. We saw that demonstrated in the Phase II Multikine trial. However, what is important to note is that most immunotherapies produce what is referred to as a "delayed clinical effect". This is an observation that was not observed or understood by researchers ten years ago.

Immunotherapies can produce an immediate response and also a delayed beneficial effect which does not show up until years later. Researchers are now acknowledging that the OS data from immunotherapies must be looked at differently. If we just use the standard Time-Driven method, then we miss the real benefit of the immunotherapy which can happen "years" after a trial is designed to end.

For example, imagine a three-year Time-Driven trial that utilizes a traditional six-month IDMC review for efficacy and futility. The IDMC may review the trial's early two- to three-year data and determine that there is significant tumor reduction. However, at that time, the data does not show any significant differences in the deaths occurring between the treated and the standard of care group.

Thus, it is conceivable that an IDMC could conclude "prematurely" that the trial is futile and end the trial. However, with the understanding of the "delayed clinical effect", the IDMC allows the trial to continue. The patients are continued to be followed beyond the initial study time for an additional one to two years. Then, the gap between the deaths occurring between the treated and the standard of care group widens significantly in favor of the treated group.

Patients who survive past the "inflection point" on the Kaplan-Meier curve experience an extended survival benefit compared to the standard of care group and could potentially be cured.

I believe this is what we are seeing with Multikine. I also believe that the fact that the trial has been ongoing for almost nine years will actually be a statistical advantage. The staggered patient enrollment over the years might be a blessing in disguise. Informed oncologist, doctors, IDMC and researchers ‎are all now fully aware of the "delayed clinical effect" of immunotherapy and will allow trials to continue when taking this "delay" phenomenon into consideration.

We are now nearing the end of the ninth year of the trial. We believe the described "delayed clinical effect" is occurring in this Multikine trial: a decreasing event rate due to the “delayed clinical effect”. After nearly 9 years, and based on our analysis, we should only be waiting for just a few more events.

IDMC Meeting Is Any Day Now

With the IDMC meeting any day now, they will have access to almost 95% of the data. Thus, they will know if the study is futile or not. We expect that the study will be allowed to continue to the final event. By allowing it to continue, it will allow for 1) the "delayed clinical effect" and 2) provide the "exact" efficacy of Multikine.

If the IDMC allows the trial to continue, it is our belief that it means the trial has met the 10% minimum endpoint and the study will subsequently be deemed successful.

Surprise Coming?

Could the IDMC unblind the data in September with just a few events left to go? Yes. That is exactly what happened with Ipilimumab. Ipilimumab quickly became a blockbuster drug!

The IDMC could potential unblind the study early. However, the question is, should they unblind and stop the study early? No! I believe they should let the study continue until the appropriate number of 298 is reached. Why?

Because the secondary study measure is Progression-Free Survival ("PFS"). PFS is the length of time that the patient does not get worse during and after treatment. If the last death occurs on a patient who was in the Multikine-treated sample for three years, the results are different than if that last death patient had been in the Multikine-treated sample for eight years. That difference in time for that one patient makes a significant statistical % difference in the numeric evaluation of the difference of the Multikine and SOC curves.

Insider Transactions

Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

There have been some recent insider stock purchases in the past few months and as recently as 9/4, when the CEO and two other senior managers bought another $57K worth of CEL-SCI stock.

On 6/3, the CEO purchased another $25K worth of stock at full market price.

On 5/7, the CEO and several others from the senior management team purchased another $210K worth of CEL-SCI stock directly from the company at the full market price.

For the record, the CEO has over 1 million shares...

Any time key insiders buy shares, it's very positive news. If we are days away from IDMC news, then these recent buys are very telling!

Institutional Ownership

As noted in the new presentation, institutional ownership is way up in the second quarter, now at 17%. The two largest holders are BlackRock and Vanguard.



The last 10-Q shed some light on the company's cash position, and it looks bright! CEL-SCI has been benefiting from the recent uptick in warrant conversions, having received nearly $11 million in the last four months.

As of 6/30/19, CVM had over $9.5 million cash on hand plus $2.5 million from warrants converted 7/1/19 to 8/14/2019. These conversions were not reflected on the balance sheet as of 6/30/19, but you must include them for a complete picture. Thus, the company has a total of $12 million in cash to "work with".

It has a cash burn rate of $1.4 million per month. This means the company will have enough cash until at least April 2020. Assuming no additional warrant conversions (not likely), it likely will not need a cash raise until February/March 2020. If there are material warrant conversions, this date gets pushed back even further!


There are 165K new head and neck cancer cases each year in the U.S., Canada and Europe. Of these, 110K are "advanced" Stage III or IV and are Multikine-eligible.

The average new oncology drug cost is between $200K and $400K. Let us assume a market penetration between 20K and 50K a year and Multikine only receives $50K per treatment. Annual sales would be between $1 billion and $2.5 billion.

Assume a multiple of 4x sales, which is extremely conservative, the value of the company would be between $4 billion and $10 billion. Fully diluted by all possible shares plus future potential dilutions (50 million shares), this equals around $80-200 per share.

We are suggesting a fair valuation between $80 and $200 per share, if Multikine is successful. We believe this drug will be a blockbuster.

Given this is a binary event trial, if the trial is not successful, we believe the share price will be around $1.

As the primary endpoint is the open door to approval by the FDA, we believe there is a very high probability of success for this drug and that CEL-SCI is currently deeply undervalued given the potential of the drug and the probability of success.

This could be a September to remember!

Disclosure: I am/we are long CVM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.