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Third Quarter Fiscal Year 2022 Financial Results
On August 15, 2022, CEL-SCI Corporation CVM submitted its 3Q:22 Form 10-Q with the SEC concurrent with a press release announcing fiscal year 2022 third quarter results. Since our last update in June, CEL-SCI announced the appointment of Dr. Gail Naughton, a founder and expert in the field of regenerative medicine, to its Board of Directors. CEL-SCI has been analyzing data for its completed Phase III clinical trial for Multikine designated IT-MATTERS and submitted it to clinicaltrials.gov. The data was made available on the site on August 19th. Beyond the posting of the IT-MATTERS results, the highlight for the company's third quarter was the presentation of abstracts at the American Society of Clinical Oncology (ASCO) meeting held in early June.
CEL-SCI released some morsels of data in its third quarter earnings press release including the observation that tumors in five patients in the Multikine arm of the IT-MATTERS trial had disappeared before surgery compared with no patients in the control arm. The release also noted that 8.5% of the patients in the intent to treat (ITT) Multikine arm showed a tumor response before surgery whereas no patients in the ITT control group demonstrated a tumor response prior to surgery. The p-value of the statistical significance between these two events was < 1 x 10-11.
CEL-SCI recognized no revenues in the third quarter and incurred operating expenses totaling $8.7 million during the quarter. This resulted in a net loss available to common shareholders of ($9.9) million, or ($0.23) per share.
For the third quarter ending June 30, 2022 versus the same ended June 30, 2021:
➢ Expenses for research and development fell by 12% to $6.3 million from $7.2 million. The primary component of the decline is attributed to less cost related to the IT MATTERS trial. This element was partially offset by higher depreciation and other research and development spend;
➢ General and administrative expenses decreased by 26% to $2.4 million from $3.3 million on a reduction in employee stock compensation expense partially offset by an increase in other net general and administrative expense;
➢ Other non-operating gains were an expense of ($0.3) million compared to a gain of $1.9 million largely related to fluctuations in the fair value of derivative liabilities and other non-operating gains in the prior year;
➢ Net interest expense was ($0.9) million compared with ($0.3) million;
➢ Net loss totaled ($9.9) million versus ($8.9) million or ($0.23) and ($0.22) per share, respectively.
As of June 30, 2022, cash and equivalents totaled $28.1 million. Cash burn for the quarter amounted to approximately ($5.9) million versus ($7.2) million in the prior year period. CEL-SCI holds no debt on its balance sheet.
Highlights From the Clinicaltrials.gov Results
CEL-SCI's long awaited results from the IT-MATTERS trial were made available on Friday, August 19th on the clinicaltrials.gov website. The excruciating detail presented examined all of the trial's arms, analyses and serious adverse events. The data confirmed what had already been released in the topline announcement in June 2021 and later ASCO abstract and poster releases. New supportive information in the results included a summary of patients that exhibited a complete response and partial response prior to surgery in each of the three arms of the trial.
Our attention now turns to the next steps required for regulatory submission which include meetings with the agency, development and presentation of papers to scientific journals and conferences and ultimately, submission of the BLA to the FDA and other regulatory authorities.
ASCO Abstract and Poster
In late April of this year, CEL-SCI emerged from its cocoon and announced that multiple abstracts had been accepted by American Society of Clinical Oncology (ASCO) for presentation during the organization's 2022 meeting from June 3 to 7 in Chicago, IL. On June sixth CEL-SCI presented the data as described in a press release. During the event, the presentations were accompanied by a poster entitled: Leukocyte Interleukin Injection (LI) immunotherapy extends overall survival (OS) in treatment naïve low risk (LR) locally advanced primary squamous cell carcinoma of the head & neck: the IT-MATTERS Study.
The poster summarized the IT MATTERS Phase III clinical trial highlighting the key elements of the 923 subject study. It enrolled previously untreated advanced primary squamous cell carcinoma of the head and neck (SCCHN) patients having met inclusion/exclusion criteria as described in the study record (NCT01265849). Enrollees were then randomized 3:1:3 into one of the following treatment arms:
➢ Group 1 – LI Multikine (MK) + cyclophosphamide (CIZ) + standard of care (SOC); n=395
➢ Group 2 – LI (MK) + SOC; n=134
➢ Group 3 – SOC alone (Control); n=394
The primary goal of IT MATTERS was to assess OS superiority of LI (MK) + CIZ + SOC compared with SOC alone. Secondary objectives were to determine the rate of progression free survival (PFS) and local regional control (LRC) failure, quality of life, histopathological nature of cellular tumor infiltrate, and tumor response to Multikine.
The poster addressed elements of both safety and efficacy. Multikine features include relative ease of administration, localized treatment emergent adverse events (TEAEs), self-resolving TEAEs, and absence of TEAEs after surgery. The five serious adverse events (SAEs) observed included edema, bleeding, osteoradionecrosis, atrial fibrillation and delirium, with two cases in edema and pyrexia that led to discontinuation. Furthermore, Multikine did not delay or interfere with surgery, did not contribute to any differences in the observation of adverse events between the study groups after treatment and led to no deaths or withdrawals. The poster examined two groups for OS: the intent to treat (ITT) group which has an N of 923 and the lower risk population with an N of 380. The ITT group did not distinguish itself relative to control; however, in the low-risk population,2 which includes patients receiving radiotherapy only, there was a statistically significant OS benefit from using Multikine. The low-risk group consisted of 380 subjects and demonstrated a 14.1% improvement in OS for the LI (MK) + CIZ + SOC group vs. the SOC group at 60 months.
The hazard ratio4 for the low-risk treatment vs. control group was favorable with a value of 0.68 and a confidence interval of 0.48 and 0.95. Median survival for the low-risk LI + CIZ + SOC group was 101.7 months vs. SOC at 55.2 months.
The presentation identified an incidence of approximately 890,000 head and neck cancer diagnoses per year with about 60,000 in the United States and 105,000 in Europe. 90% of SCCHN are squamous cell carcinomas, two-thirds are advanced primary and of this group, about 40% receive radiotherapy following surgery.
In summary, safety results did not differ significantly between treatment groups; however, there was a statistically significant survival benefit in the low-risk treatment group. The ITT lower risk LI + CIZ + SOC arm achieved a 14.1% advantage for OS compared with SOC at five years. The 0.68 hazard ratio corresponds to a 47% improvement in median survival for the treatment group compared to SOC alone.
Summary of key efficacy results:
➢ 14.1% absolute overall survival benefit in the lower-risk treatment cohort;
➢ 101.7 months median overall survival in the lower risk Multikine treatment cohort vs. 55.2 months for standard of care;
➢ 16.0% early response rate for Multikine vs. 0% for standard of care;
➢ 17.6% death rate for early responders in the lower-risk treatment cohort vs. 42.7% for non-responders;
➢ Progression free survival presents a 0.76 hazard ratio;
➢ Overall survival presents a 0.68 hazard ratio.
Regulatory Submission
Now that the company has completed the IT-MATTERS trial and reported details of the trial outcome at a major conference, attention turns to the next steps in the regulatory process and submission of a Biologic License Application (BLA). Key drivers for valuation include the FDA's willingness to accept the data available for a BLA and whether or not additional data and information is required prior to acceptance. The company has reached out to the FDA and contacted representatives from both the offices of oncology products and rare disease; however, it has not shared the agency's response if indeed the meetings have yet taken place. We will update investors on these meetings, their outcomes and impact on valuation when details are made available.
CEL-SCI Milestones
➢ Submission of data of clinicaltrials.gov – May 2022
➢ Presentation of abstract at ASCO – June 2022
➢ Appointment of Gail Naughton to Board of Directors – August 2022
➢ Development of clinical study report – 2022
➢ Request meeting with FDA to determine path forward – 2022
➢ Development of paper(s) for publication in peer reviewed journal – 2022
➢ Presentation of data package to review with FDA – 2022
➢ Address FDA Comments – 2022
➢ Submission of BLA to FDA – 2022
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1. Data compiled by Zacks analyst from IT-MATTERS results posted on clinicaltrials.gov
2. The high-risk population is defined as those that were prescribed both chemotherapy and radiotherapy.
3. Source: CEL-SCI Poster: Leukocyte Interleukin Injection (LI) immunotherapy extends overall survival (OS) in treatment naïve low risk (LR) locally advanced primary squamous cell carcinoma of the head & neck: the IT-MATTERS Study.
4. Hazard ratio (HR) is a measure of an effect of an intervention on an outcome of interest over time. Hazard ratio is reported most commonly in time-to-event analysis or survival analysis. Calculated as: hazard (risk of death) in the intervention group / hazard in the control group.
5. Source: CEL-SCI Poster: Leukocyte Interleukin Injection (LI) immunotherapy extends overall survival (OS) in treatment naïve low risk (LR) locally advanced primary squamous cell carcinoma of the head & neck: the IT-MATTERS Study
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