BALTIMORE, MD / ACCESSWIRE / March 12, 2015 / Cancer immunotherapy has become today's word for treating patients with death-causing diseases, but progress and valuations within companies run a broad course. In this article, I will explain to investors how Cel-Sci Corp. (NYSE MKT:CVM) with its top drug, Multikine, now in Phase III studies for head and neck cancer, deserves to command a much higher share price than currently afforded.

Multikine is a biochemical combination of two vital components of our body's immune system that defend against diseases. Cel-Sci's drug is in pivotal trials - randomized and placebo controlled with a sufficient number of patients to power it for statistical significance. The goal of the company is to release to the medical market a "first-line" treatment before patients have had immune systems worn down by radiation and chemotherapy.

Clinical trial enrollment had been a stumbling block for Cel-Sci, but not due to lack of subjects. Two years ago, the company fired its contract research organization (CRO) after its merger with another entity stalled progress with encruitment. The market reacted badly, and Cel-Sci's stock price has been maligned as a result. My conversations with CEO Geert Kersten verified this fact, but the addition of a new world-class CRO, Ergomed Plc, publicly-traded on London's AIM exchange, changed things with an inflow of cash and a profit-sharing deal on commercialized products.

Since signing on, Ergomed effected rapid enrollment, recently surpassing a key milestone - 21 countries have agreed to conduct its Phase IIIs, including the US. Cel-Sci further announced last week a total of 377 patients have entered its head and neck trials, breaking the company's January record.

Increase in Patient Enrollment for Cel-Sci Corp.

Image: https://www.accesswire.com/images/1038/chartcelsci.jpg

Cel-Sci detractors may point to slow patient admission here, but my talks with an official at Covance, provider of CRO services in the Princeton, NJ area and recently purchased by Laboratory Corp. of America Holdings (NYSE:LH) for $6.1 billion, confirmed this is true. My source also states that Eastern Europe is renowned for faster patient recruitment, and these geographies are where Cel-Sci has been focused. Mr. Kersten, encouraged by the attentiveness of his new CRO, may even increase the number of country sites, further speeding up enrollment and hastening the progress of the trial. It is also possible that as more researchers become familiar with treatment protocol, patients can be enrolled at a progressively and significantly faster rate.

Good clinical progress notwithstanding, Cel-Sci's market value lags other cancer immunotherapy firms, especially when compared to those much earlier in steps of the regulatory pathway. For example, Kite Pharma (NASDAQ:KITE), working on a drug for head and neck, should be a fair comparable to Cel-Sci; however, trials are only in Phase I/II, yet the stock carries a market valuation of $2.78 billion. Another close peer, Inovio Pharmaceuticals, Inc. (NASDAQ:INO), conducting studies in head and neck cancer caused by human papilloma virus (HPV), is in Phase I/IIa and boasts a valuation of $445.3 million. Celldex Therapeutics (NASDAQ:CLDX) in Phase III for glioblastoma (brain cancer) is trying to enter a market much smaller than Cel-Sci - globally, glioblastoma affects 240,000 people each year for a projected industry size of $2.1 billion in 2017 while there are approximately 600,000 cases of head and neck cancer around the world annually for a medical market of $3.2 billion. Celldex is currently valued at $2.6 billion; Cel-Sci at $97 million.

The list continues: ImmunoGen, Inc. (NASDAQ:IMGN) is early with an immunotherapy for head and neck - Phase I - yet investors are willing to pay nearly $8 for shares, bidding the company up to a market valuation of $656 million. Paris, France-based Transgene SA (OTC:TRGNF) (Paris:TNG.PA) now enrolls for Phase II in HPV-induced cancer, developing a vaccine for head and neck; its capitalization is $266 million. Northwest Biotherapeutics (NASDAQ:NWBO) is in Phase III in addition to other earlier trials and commands a capitalization of $466 million. ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP) is in Phase II with immunotherapy for solid cancers with a value of $1.4 billion. Most extreme is Puma Biotechnology, Inc. (NYSE:PBYI) in various stages of clinical trials with its one drug, PB272, geared toward breast cancer, valued by investors at $7.4 billion.

A chart detailing these appears below.

Image: https://www.accesswire.com/images/1038/sharonpic2.jpg

Source: Yahoo! Finance and Company websites

Pharma deals that involve cancer immunotherapy are coming fast and furious, with big dollars thrown around. Bristol-Myers Squibb (NYSE:BMY) announced last month its intent to pay $800 million for privately-held Flexus Biosciences, a deal inked to lead up to $1.25 billion, including milestones. Bristol-Myers, best known for its diabetes and cardiovascular medicines, has been expanding its pipeline with immunotherapy drugs, and also in February, struck a deal with Rigel Pharmaceuticals (NASDAQ:RIGL) for exclusive rights to develop such drugs based on Rigel's technology to inhibit tumor growth, costing the larger company around $340 million.

Giant multinational Pfizer, Inc. (NYSE:PFE) appears to be taking a similar strategy. Best known for consumer products like Robitussin and Advil, the company told the public late last year it plans to cut research and development jobs in several facilities and devote resources to immuno-oncology in conjunction with Paris, France-based Cellectis (Euronext:ALCLS) (CMVLF) in a deal upwards of $185 million. More recently, AbbVie Inc. (NYSE:ABBV), spun off from Abbott Laboratories (NYSE:ABT), agreed to buy Pharmacyclics, Inc. (NASDAQ:PCYC) for a stake in its new cancer immunotherapy drug Imbruvica at an astounding $21 billion, which, as widely-read and highly-esteemed fellow journalist Adam Feuerstein notes, "Big Pharma seems willing to pay any price necessary to acquire biotech assets?to plug revenue holes and fuel potential future growth". Mr. Feuerstein is not sanguine about drug companies getting their money's worth and he may be right, but checks are being written.

A special on HBO television by VICE, investigating journalists, aired last month to explain work being done using measles and HIV virus as a vaccine for certain cancers with an eye toward eliminating toxic treatments with what could be a good therapeutic alternative, something revolutionary. Scientists at the Mayo Clinic have genetically engineered high dosages of both viruses to treat patients with aggressive cancers whose sufferers would rather die than continue chemotherapy. Patients describe treatment being very "rough", with bone pain and nausea. Would this be more efficacious than Multikine? I doubt it; besides, Cel-Sci is in Phase III. What's transpiring at Mayo is only an idea.

Cel-Sci shares have risen considerably since the end of trading in 2014. A nice uptrend recently recognized by Zacks Equity Research Investors will note that Cel-Sci is also in clinical trials with Multikine for cervical dysplasia in HIV/HPV co-infected women and in studies of perianal warts in HIV/HPV co-infected men and women. Both are in early phase trials and the latter indication is done with the US Navy under a Cooperative Research and Development Agreement (CRADA). If data on either of the studies is made public, in addition to what appears to be strong Phase III enrollment, value should benefit.

For this company, much still remains to be seen despite its movement forward. Cel-Sci is conducting the largest clinical trial in head and neck cancer, an expensive proposition. Cash, as of December 31, 2014, was $9.5 million, there is no debt, with a quarterly operating loss that runs equal to its bank balance. The company, however, is adept at raising money. Given the years of devotion Mr. Kersten has committed to Cel-Sci, I am confident he will succeed. If the Phase III study endpoint of a 10% improvement in overall survival is satisfied regulatory agencies should respond positively.

I believe the company has a good chance of positioning itself well in cancer immunotherapy. Better drugs are needed for head and neck cancer, a disfiguring and fatal condition where surgery is not a good option. The company is ahead of many competitors, but not appreciated for its scientific and clinical work, presenting a strong opportunity to pick up shares at a very low price.

About Sharon di Stefano/Small Cap Forecasting, Inc.

Sharon di Stefano has spent 20 years as an analyst, beginning her career at Smith Barney, Harris Upham & Co. specializing in medical devices, pharmaceuticals, healthcare information technology, and bio-pharmacology. Ms. di Stefano had also served as Senior Venture Officer for the Edison Innovation Fund, implemented through the New Jersey Economic Development Authority that provided funding for early-stage life sciences companies. Industry experience includes laboratory research for Johns Hopkins Hospital and the Department of Defense.

Ms. di Stefano received a Master's of Science degree, in Business, from Johns Hopkins University in 1986, and a Bachelor of Arts from the University of Delaware in 1984 with a minor in biology.

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SOURCE: Small Cap Forecasting, Inc.