April 24, 2012, 2:05 p.m. EDT
looks like a double form here
Apr 24, 2012 (ACCESSWIRE-TNW via COMTEX) -- Minor delays are viewed as a regular course of business ... or at the least, a nuisance. Major delays are viewed with disdain, anger, apprehension, and skepticism regarding outcomes. It is just human nature.
In the biotech world, delays in development are expected, especially for those firms designing cures and treatments for major diseases or chronic ailments. Every once in a while, these delays can take a really long time. I mean a really long time.
I have been following Cel-Sci Corporation (nyseamex:CVM - $0.45) since the early 1990s. Before I describe the company's innovative therapy, allow me to play the devil's advocate.
The company has been developing a cancer treatment for around 20 years, and they still haven't broken through. I remember back in the day that this stock - along with one that I covered that went belly up - was mocked for its "business model." Big investors used to say that CVM's business model had less to do with developing cancer treatments and more to do with raising money. They just flat-out did not believe the drug would ever get far development-wise, or even get to the plate to be considered for approval.
In my view, the fact that CVM has had such staying power is remarkable in and of itself. Since inception, the company has raised $200 million from investors for drug development and establishing a state-of-the-art manufacturing facility not far from my home, in anticipation of eventual drug approval for its lead candidate. Obviously there is something there.
So why after all these years, with a cancer therapy in Phase III clinical trials, is the stock valued at a paltry $110M? It is a victim of "taking too long" to develop, which is ridiculous. It also presents an opportunity.
CVM has developed a novel, out-of-the-box approach to treating head and neck cancers. Currently in Phase III trials, its lead product - Multikine® - is the first investigational combination immunotherapy thought to have both passive and active immune properties. The genesis behind the therapy is to simulate the activities of a healthy person's immune system, which battles cancer every day. Although representing a relatively small segment of all cancer patients, the size of the market is in the billions just in the U.S. and Europe.
CVM is conducting its Phase III trials in eight countries with a targeted 880 patients. Importantly, CVM is partnered with Teva Pharmaceutical TEVA +0.33% , which is managing and footing the bill for the trial in Israel, along with a major Taiwanese firm that is doing the same in Taiwan. Clearly, these relationships add significant credibility. Dozens of sites are currently enrolling patients and management is targeting 50 centers running the Multikine® trial by year-end 2012.
Despite the huge potential of Multikine®, we should note that CVM is not a one-trick pony. The current CVM product portfolio includes treatments in Phase I for cervical cancer as well as the enhancement of chemotherapy/radiation therapy, and an infectious diseases platform technology (known as L.E.A.P.S.) in preclinical trials that could treat H1N1, rheumatoid arthritis and other ailments. The market for L.E.A.P.S. could be huge, given that these early indications could offer treatments that represent billions in annual sales.
From a valuation perspective, most companies in Phase III clinical trials with a cancer therapy trade at much higher market capitalizations. In CVM's case, it is being punished due to the time factor mentioned above. As news regarding site signups and patient enrollment occurs, these milestone events will be catalysts to move the stock higher. In our view, considering there is little to no apples-to-apples treatment comparison due to the drug's properties, it should trade at a premium to typical valuations rather than a discount. When one factors in the entire product portfolio it is easy to see why we think CVM is easily a double by year-end.
[Author Rob Goldman is an analyst with over 25 years experience on Wall Street. He covers emerging companies in various sectors for various publications including the recently launched newsletter PennyStockJunction.Com]
Copyright 2012 ACCESSWIRE-TNW
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