June 03, 2019 - 1:00am EST by
2019 2020
Price: 4.02 EPS 0 0
Shares Out. (in M): 34 P/E 0 0
Market Cap (in $M): 135 P/FCF 0 0
Net Debt (in $M): -6 EBIT 0 0
TEV (in $M): 130 TEV/EBIT 0 0
Borrow Cost: Tight 15-50% cost

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  • Biotech
  • What is dead may never die
  • Biotech GOAT is back



CEL-SCI (CVM) is small cap biotech company with 90% downside when the results of the Phase 3 study are announced later this year. Styx1003 had a very timely write-up on the long side in July of last year when the stock was sub $1.00. Now with the stock at $4 and results imminent, we believe the risk reward is very different and now is the time to short the stock.


The previous write-up does a good job explaining a lot of the background and the history of the company so we will focus on the most relevant points of the short thesis here.


The Phase 3 drug being tested, Multikine, doesn’t work, and both the government and a panel of experts charged with monitor patient safety in the study have attempted to stop the trial early because the drug is not efficacious and may be harming patients.  In addition, CVM has a history of associating with paid stock promoters, a going concern qualification, and obscuring the data and the truth to keep the stock pump alive. The catalyst of Phase 3 results being released this year means that the stock will soon reflect the true value of Multikine - zero.  



The Phase 3 IT-MATTERS trial should have been stopped years ago, but CVM managed to delay the trial so that once patients were no longer on active treatment with the drug, the trial would be allowed to "continue" so that data could be collected. This trial has the dubious distinction of receiving the following accolades:


- A partial clinical hold from the Food and Drug Administration (FDA) in September 2016 due to:

unreasonable and significant risk of illness or injury to human subjects

a misleading, erroneous, and materially incomplete investigator brochure

a clinical trial design that is deficient in its design to meet its stated objectives


- A recommendation from the Independent Data Monitoring Committee (IDMC) that that the study be closed for safety and efficacy reasons


- A follow on letter from the IDMC stating that CVM was unresponsive to their concerns and that they were deeply concerned about patient safety in the trial based on its review of cumulative data


- An SEC subpoena that is investigating among other things disclosure around the Phase 3 study


- An attempt to increase the size of the trial due to slower than expected event rates (before the FDA placed the trial on partial clinical hold and prevented this from occurring)


- Switching Contract Research Organizations (CROs) in the middle of the Phase 3 trial due to slow enrollment


- Being unable to pay their current CRO for in cash for services rendered and requiring issuance of CVM stock to provisionally forbear collection of payables

Clinical Overview and History

In reality this Phase 3 trial never should have been started. The Phase 2 data that "supports" the progression into Phase 3 appears to be have been tested in a different population than the Phase 3, and offers almost no evidence of clinical benefit.


The Phase 2 study was done mostly in T2N0M0 as you can see from the table below.

In contrast the Phase 3 trial excludes patients with T2N0M0 classification. The Phase 2 appears to be mostly done in Stage II tumors, while the Phase 3 excludes Stage II tumors and focuses on Stage III and IV. These are very different patient populations and it very surprising that they went into Phase III at all.