VIENNA, Va., Feb. 17 The following letter is being released by CEL-SCI Corporation (NYSE AMEX: CVM) to its shareholders:
Dear Fellow Shareholders:
We are pleased to report to you that the past 12 months have put CEL-SCI in the best position ever. During this difficult time we were able to complete and validate the manufacturing facility for our cancer drug Multikine, a critical step before being able to manufacture Multikine for the Phase III clinical trial. We are developing a novel investigational treatment for H1N1 hospitalized patients and were able to take this investigational treatment into a clinical trial at Johns Hopkins University in record time. At the same time we also raised over $40 million in new capital and added a new marketing partner for Multikine in South Africa. Unlike the existing partners, Teva Pharmaceuticals and Orient Europharma, who will be participating in the Phase III study in Israel and parts of Asia, Byron Pharma will only be focused on marketing and will not participate in the Phase III trial. With the manufacturing facility completed and $36 million in the bank, we are now able to start our Phase III trial for Multikine in advanced primary head and neck cancer.
The Phase III study seeks to build on the excellent data we derived from our Phase II study of Multikine. The data were published in several leading peer-reviewed cancer journals. What is so impressive is that the data were derived from a well-controlled, blinded pathology study which used tumor samples from patients treated with Multikine in the last Phase II head and neck cancer study, as well as matched tumor samples from head and neck cancer patients not treated with Multikine. The pathologists who participated in this study were blinded to the study and to the patients' clinical outcome. The results were so impressive that we were able to present the pathology tumor data at ASCO (American Society of Clinical Oncology) and have them published in the very prestigious peer-reviewed Journal of Clinical Oncology. The promising overall survival data were presented in an oral presentation at the International Conference of Oral Oncology, Amsterdam, 2007 and were published in the peer-reviewed Journal of Oral Oncology.
The pathology data showed clear clinical benefit to the Multikine-treated patients and suggested that overall patient survival should be improved with Multikine administration. The longer-term follow-up of the Multikine-treated patients showed that overall survival indeed was improved in these patients. To avoid any bias, the Multikine survival data in the Phase II trial was compared to the results of all peer reviewed published data available at that time (39 publications). As time progressed and more publications became available, we updated this comparison and included all of the more recently published peer-reviewed data from these publications (a total of 55 publications). Our findings of the impact of Multikine administration on the overall survival benefit for these patients still held true.
The safety and efficacy data for Multikine were reviewed by different regulatory agencies, including the US Food and Drug Administration (FDA), prior to giving CEL-SCI clearance to proceed with a global Phase III for Multikine in head and neck cancer. The open-label, randomized, controlled Phase III study of Multikine in patients with head and neck cancer is designed to demonstrate that Multikine administration to these patients yields an overall survival benefit. The study will enroll about 800 patients worldwide.
While we already showed a 33% improvement in overall survival in Phase II, we only need 10% in the Phase III study to meet our primary endpoint. We have added multiple years to the development process of Multikine in order to build a Multikine dedicated manufacturing facility near Baltimore. This was done at the advice of the regulatory agencies and as an additional step of risk mitigation since the use of a contract manufacturer adds a great deal of risk in maintaining quality control. We have taken every conceivable risk mitigation step to increase the probability of a favorable outcome for this breakthrough product.
On the other hand, recognizing that every drug development carries risk, we have attempted to set the study up to become a huge financial success for the shareholders. Assuming we are right, Multikine will become the first treatment to be used in the treatment of nearly all newly diagnosed head and neck cancer patients (about 650,000 patients worldwide). It will become part of the new standard of care. That means that doctors will be advised to use Multikine as the first treatment for head and neck cancer patients. Insurance companies and governments should reimburse the use of Multikine because it will be cost effective and because they pay for the current standard of care treatments, surgery, radiation and chemotherapy. This would translate into billions of dollars in sales while at the same time helping to save lives. Usually such successes are shared with a big pharmaceutical partner and the upside for the small company's shareholders is limited. In the case of CEL-SCI, shareholders still control most of the upside as CEL-SCI still owns all of the major marketing rights. Very few companies find themselves in this advantageous position as they enter Phase III. A major drug for a large unmet medical need, unencumbered by a partnership in the biggest markets!
We feel that we have created a great situation and opportunity for our shareholders with the development of Multikine as a first-line treatment for cancer. We have a great team and, for the first time, the funds to execute our plans.
We have also advanced with the very rapid development of our investigational treatment for H1N1 hospitalized patients. This treatment is based on our LEAPS technology which allows us to direct an immune response outcome. During the height of the H1N1 wave in the fall of 2009 we worked as fast as possible to move into clinical trials for this new investigational treatment of hospitalized H1N1 patients, as these patients are at serious risk of dying. We started a study at the Johns Hopkins University School of Medicine in November 2009. This study needs to enroll 20 H1N1 hospitalized patients and 20 healthy individuals as the control group. We are waiting for Johns Hopkins to complete the study. Patient enrollment is completely dependent on patient availability of H1N1 hospitalized patients at Johns Hopkins.
Currently H1N1 does not appear to be a big problem in the US. However, it continues to infect and kill patients in other places around the world. Some people think that H1N1 is gone, like Avian Flu and SARS appear to be gone. H1N1 is different though. H1N1 has already infected different populations all over the world. It is the first flu virus that can infect humans throughout all four seasons. As a flu virus it undergoes rapid mutations. As such, similar to the normal seasonal flu, we are likely to see H1N1 reappear in a mutated form. Our greatest fear is that it might pick up pieces of genetic information from the more deadly Avian flu or the Spanish flu and become an easy to transmit life threatening virus. To address this possibility, CEL-SCI scientists have included in the LEAPS-H1N1 investigational treatment non-changing parts of the H1N1 virus, as well as non-changing parts of the Avian flu and Spanish flu viruses. We will continue with the development of this investigational treatment because we expect it to become increasingly important in the future.
As we are now entering the home stretch for Multikine, many people will have opinions about its prospects, favorable and unfavorable. While many lives could depend on the success of the Multikine Phase III study, a significant amount of money is at stake as well. You may ask us to respond to articles written about CEL-SCI on the internet. We believe it is important to set the record straight, and will try to respond, where practical, to credible providers of information in order to ensure that shareholders have the correct information. However, we will not respond to writers of dubious credibility, people who clearly have an agenda of bashing and who attempt to distort or obfuscate the facts. We hope that shareholders will make their decision on the merits of the drugs and the many peer reviewed scientific publications, not on what is said by bloggers with an agenda, bashers and other dubious characters. Remember, many of them have an agenda quite different from yours and ours.
While success is never a certainty, we believe that we have already overcome many obstacles. We have positioned CEL-SCI and its investors to benefit from an opportunity that few small biotechnology companies ever get. The ability to conduct a pivotal clinical study in an area which represents a large unmet medical need, where the company maintains a substantial upside! A chance to develop a non-toxic cancer therapy! As always, we thank you for your support.
Chief Executive Officer
Maximilian de Clara
When used in this report, the words "intends," "believes," "anticipated" and "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Factors that could cause or contribute to such differences include, an inability to duplicate the clinical results demonstrated in clinical studies, timely development of any potential products that can be shown to be safe and effective, receiving necessary regulatory approvals, difficulties in manufacturing any of the Company's potential products, inability to raise the necessary capital and the risk factors set forth from time to time in CEL-SCI Corporation's SEC filings, including but not limited to its report on Form 10- K for the year ended September 30, 2009. The Company undertakes no obligation to publicly release the result of any revision to these forward-looking statements which may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For more information, please visit www.cel-sci.com.
SOURCE CEL-SCI Corporation