The Life Sciences Report: What makes CEL-SCI Corporation (CVM:NYSE.MKT) immunotherapy strategy stand out compared to more conventional chemotherapeutic approaches?
Geert Kersten: It's really two things. The first relates to when to boost the immune system for greatest therapeutic effect. We believe the immune system should be boosted while it's still healthy. More conventional approaches boost the immune system after it has been weakened by interventions such as surgery, radiation and chemotherapy. Boosting a healthy immune system is our key advantage.
"Our immunotherapy is a mass-produced vaccination that becomes specific for a person's tumor after it has been administered to the patient."
The second relates to directing the immune system specifically to the cancer. Our technology makes the immune system specific inside the body, whereas other technologies provide that specificity outside the body, by either taking a piece of a patient's tumor and making a vaccine from that or by using a monoclonal antibody that focuses on a subset of patients with a certain type of antigen. Our immunotherapy is a mass-produced vaccination that becomes specific for a person's tumor after it has been administered to the patient.
TLSR: Because of this approach, does CEL-SCI face competition from other cancer immunotherapy companies?
GK: No. Cancer immunotherapy companies, in general, are focusing on recurrent cancer patients, those whose tumors have come back. Their therapeutics are not meant for people who have just been diagnosed. Our approach, with Multikine (leukocyte interleukin injection), is intended to be the very first treatment a cancer patient receives, while approaches from other companies are often the last treatments. In addition, our initial target is head-and-neck cancer—an area not targeted by other cancer immunotherapy companies.
TLSR: Is the CEL-SCI immunotherapy platform intended for use at diagnosis, and independent of the stage of the cancer?
GK: Yes. In our clinical trial, we're treating people who have been diagnosed at stages III and IV. Those are late stages. A patient could be fairly advanced, but may not yet have had surgery, radiation and chemotherapy. We put ourselves in this space because even with late-stage cancers, the immune system remains relatively intact until surgery, radiation or chemotherapeutic interventions have been administered.
TLSR: How does the Multikine platform work?
GK: Multikine is composed of 14 cytokines naturally and continually produced by a healthy person. These cytokines are responsible for regulation of a healthy immune response. Multikine represents a copy of a healthy immune system that can be efficiently manufactured adhering to all regulatory requirements.
Multikine is injected in tiny doses around tumors to activate the immune system against the tumors, specifically the micrometastases—the tiny tumor cells that surround the tumor and go into the lymph nodes. This treatment can only be done for three weeks following diagnosis because, as an experimental therapy, it may not delay the proven therapies. Our Phase 2 studies, published in the Journal of Clinical Oncology, showed that in that three-week period, Multikine therapy completely eliminated tumors in 12% of patients.
"Head-and-neck cancer represents an unmet medical need and we have orphan drug status from the FDA."
Multikine is not designed for a specific patient or a specific cancer. Because of how it works, Multikine becomes personalized to the patient and specific to the tumor. We don't know of a single competing product that can do that. Multikine is basically a mass-produced and injectable cancer vaccine.
TLSR: Conceivably, all cancers could respond to immunotherapy. Why start with head-and-neck cancer?
GK: The last approval in advanced primary head-and-neck cancer was methotrexate, in 1954. That means there have been no new approvals in this indication in 61 years, and survival has barely improved. Head-and-neck cancer represents an unmet medical need and we have orphan drug status from the U.S. Food and Drug Administration (FDA). Head-and-neck cancer also represents 6% of the world's cancer cases.
TLSR: How is the Multikine Phase 3 clinical trial progressing?
GK: Our original clinical research organization (CRO) was acquired by a CRO owned by a private equity firm in a roll-up of multiple CROs, and we essentially lost the key people working on our study. This caused patient enrollment problems and many other problems. We are now working with a new CRO, which invested $10M of its own money in the study and will only get a return on that investment from sales of the product. We are enrolling new patients every single month in record numbers. We've increased our enrollments on the order of 2,000%, and are now in 20 countries. Our target is 880 patients, to have useful data from at least 780.
While we expect to complete enrollment of patients by the end of this year, we will be following patients beyond that, to show a survival rate increase of at least 10%. This will likely take us into 2017, with a potential launch date sometime in 2018.
TLSR: Following the CRO purchase, there has been some concern regarding enrollment in the Multikine clinical trials, and speculation that the product does not work. Can you comment on the status of the related arbitration and the expected outcome?
GK: For full disclosure, I need to tell you that last year I significantly increased my position in CEL-SCI and am now a 10% holder in the company.
Cancer immunotherapy is super hot right now, with Phase 1 companies trading at up to $4B in market cap. We're a Phase 3 company with a current market cap of about $75M. I believe this is because people dropped our stock like a hot potato when they saw such slow enrollment in our clinical trial. Investors probably assumed that CEL-SCI would never finish the study and that Multikine did not work, leading to a very negative impact on our share price. But if you look at our current clinical trial enrollment, you would have to assume that Multikine does work. CEL-SCI's drug did not fail—there was only slow enrollment, which is now fixed with the new CRO.
Because of the impact on our reputation, our stock price fell from $8/share to $0.60/share, at a time when other cancer immunotherapy stocks increased by hundreds of percent. This resulted in our need to issue more shares and absorb more dilution. However, if successful with our arbitration, we expect that our reputation will be repaired and that Wall Street will respond accordingly. If our reputation is repaired, I think our valuation will be closer to $1–2B.
The current arbitration is the result of damage to our reputation and market cap due to the very slow enrollment in our Phase 3 clinical trial. We took five months to prepare this arbitration and the CRO filed a motion to dismiss it. As the arbitrator rejected the motion to dismiss, our investors can be confident that the arbitration has merit. We have a trial date coming up very soon, and I believe that CEL-SCI will be able to show the world that the drug was not the problem.
TLSR: What's next on your agenda, after head-and-neck cancer?
GK: If head-and-neck cancer is all we ever succeed with, we will be a multibillion-dollar company. If we succeed in this Phase 3 trial, one might expect that Multikine will become part of the new standard of care. Reimbursement and use should be no problem. If we capture 25% of the total annual patient population of 600,000 (600K), CEL-SCI will treat 150K patients at an assumed price of $100K each. Even with 25% of the annual diagnoses, Multikine can capture $15 billion ($15B) in market share without addressing any other disease or indication.
But we have other potential targets. Right now, as a second indication, we're looking at human papilloma virus (HPV) in HIV-infected people. Like head-and-neck cancer, this is an unmet medical need with a $0.5–1B market.
With today's medications, HIV-infected people don't die from AIDS, but their immune systems continue to be weak. Consequently, if they pick up HPV, the No. 1 sexually transmitted disease, the HPV cannot be eliminated and all kinds of problems develop. Using Multikine in HIV-infected women, we demonstrated the ability to kill the majority of HPV strains, and also made HPV-related cervical lesions go away. As far as we know, no one has ever done that before in an HIV-infected patient.
"The L.E.A.P.S. technology allows you to control the type of immune response the body makes to an antigen."
Because of the HPV results, we entered into a cooperative research and development agreement with the U.S. Navy, allowing the navy to develop our product. Multikine is now being used at the San Diego Naval Base in HIV-infected people with anal warts—currently a big problem in the HIV-infected population. This demonstrates the potential broad utility of Multikine.
Someday, down the road, Multikine may have applications that we cannot even dream of today. We just have to make sure it gets to market.
TLSR: CEL-SCI is also developing a novel treatment for influenza. Is there underlying biology relating to cancer and influenza that makes both of these targets interesting to a single company?
GK: Quite honestly, Multikine may have applications against both cancer and viruses. However, L.E.A.P.S. (Ligand Epitope Antigen Presentation System) is currently being developed to combat rheumatoid arthritis (RA). This is being done in collaboration with Rush University Medical Center in Chicago. Using the L.E.A.P.S. technology, we have produced extensive animal data showing protection against many diseases, including H1N1, malaria, tuberculosis, breast cancer, etc.
TLSR: How does flu mechanistically relate to RA? One is an infectious virus, and the other is an autoimmune disease.
GK: The L.E.A.P.S. technology allows you to control the type of immune response the body makes to an antigen. When you introduce an antigen into the body, it can induce the right kind of immune response or the wrong kind of immune response. If it makes the wrong kind, it can make a disease worse. With the L.E.A.P.S. technology, a peptide "rudder" is used to direct the immune system in the desired direction. If the rudder peptide induces a T-cell response, we can treat infectious diseases.
L.E.A.P.S. is essentially a disease-specific "antigen" peptide attached to a rudder peptide. The rudder peptide directs the way the antigen peptide is presented to the immune system to achieve the desired immune response. My hope is that L.E.A.P.S. will continue to show good results, allowing us to take it into the clinic and help people.
What people don't often understand is that it is not a weak immune system that makes you sick, it's the immune system making faulty responses. Think RA. Think lupus. Think Crohn's disease. Many diseases are caused by an immune system that's gone haywire. We think the L.E.A.P.S. technology is an opportunity to redirect the immune system from a faulty to a correct response.
TLSR: Anything else you'd like investors to know about CEL-SCI?
GK: I believe that Multikine will be the first nontoxic cancer therapy that actually works with the body. If successful against head-and-neck cancer, Multikine could potentially be used to treat breast cancer, melanoma, cervical cancer and many other cancers and diseases that we can't even think of today. That is our vision.
TLSR: Thank you for your time.
Geert Kersten, chairman and CEO of CEL-SCI Corporation, has served in his current leadership role since 1995. He has been with CEL-SCI since its inception in 1987, and has been involved in the pioneering field of cancer immunotherapy for almost two decades. Mr. Kersten also provides CEL-SCI with significant expertise in the fields of finance and law, and has a unique vision of how the company's Multikine product will change the way cancer is treated. Prior to CEL-SCI, Mr. Kersten worked at the law firm of Finley & Kumble, and at Source Capital, an investment banking firm. He is a native of Germany, graduated from Millfield School in England and completed his studies in the U.S. His undergraduate degree is in accounting. He also received a master's degree in business administration from George Washington University, and a law degree from American University in Washington, D.C.
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1) Daniel E. Levy conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He or his family owns shares of the company mentioned in this interview: None.
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