CEL SCI CORP
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 14, 2025
CVM$1.45+5.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001654954-24-010651
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001654954-25-001578
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 58 previous paragraphs and 58 current paragraphs.
34 unchanged; 16 reworded; 8 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Company Overview
Current report
During the three months ended December 31, 2024 and 2023, there was no change in the research and development expenses as it remained constant at approximately $4.4 million. The major components of research and development expenses include an approximate $0.2 million increase over the prior period in clinical studies costs as a result of preparing the confirmatory study for enrollment, costs incurred for supplies and materials used which increased by $0.2 million compared to the prior period and an increase over the prior period in other research and development expenses of $0.1 million, offset by a decrease of $0.5 million of employee stock compensation expense compared to the prior period.
Current report
CEL-SCI's significant accounting estimates are more fully described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended September 30, 2024. However, certain accounting estimates are particularly important to the portrayal of CEL-SCI’s financial position and results of operations and require the application of significant judgments by management. As a result, the financial statements are subject to an inherent degree of uncertainty. In applying those estimates, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. These estimates are based on CEL-SCI's historical experience, terms of existing contracts, observance of trends in the industry and information available from outside sources, as appropriate.
Current report
Management believes that the following critical accounting estimates require the most significant judgments and estimates with respect to the preparation of CEL-SCI’s financial statements.
Current report
Share-based Compensation– Compensation cost for all share-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718,Compensation – Stock Compensation (“ASC 718”). The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires five input variables: the strike price of an option, the current stock price, the time to expiration, the risk-free rate and the volatility. The share-based compensation cost is recognized using the straight-line method as expense over the requisite service or vesting period.
Current report
CEL-SCI has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Compensation Plans, Stock Bonus Plans and an Incentive Stock Bonus Plan. These Plans are collectively referred to as the “Plans”. All Plans have been approved by CEL-SCI’s stockholders.
Current report
CEL-SCI’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. For options issued with service conditions only, CEL-SCI has based its assumption for stock price volatility on the variance of daily closing prices of CEL-SCI’s stock. The risk-free interest rate assumption is based on the U.S. Treasury rate at the date of grant with the term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, share-based compensation expense for new awards may differ materially in the future from that recorded in the current period.
Current report
Restricted stock granted under the Incentive Stock Bonus Plan and options granted under the Non-Qualified Stock Option Plans are subject to service, performance and market conditions and meet the classification of equity awards. These awards were measured at fair value on the grant dates using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.
Removed paragraphs (8)
Previous report
Company Overview and Product Candidates
Previous report
Under a co-development agreement, Ergomed agreed to contribute up to $12 million towards the completed Phase 3 study where it performed clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specified maximum amount. Approximately $11.9 million of the committed $12 million contribution has been realized as of June 30, 2024.
Previous report
During the nine months ended June 30, 2024, research and development expenses decreased by approximately $3.5 million, or 20%, compared to the nine months ended June 30 , 2023. Major components of this decrease include an approximately $2.4 million decrease in expenses related to the Phase 3 study, a decrease of approximately $1.1 million of employee stock compensation expense and an approximately $0.1 million decrease in other research and development costs which is offset by $0.1 million increase in costs incurred to prepare for the potential commercial sale of Multikine.
Previous report
During the three months ended June 30, 2024, research and development expenses decreased by approximately $1.0 million, or 18%, compared to the three months ended June 30 , 2023. Major components of this decrease include an approximately $0.9 million decrease in expenses related to the Phase 3 study, a decrease of approximately $0.5 million of employee stock compensation expense which is offset by $0.4 million increase in costs incurred to prepare for the confirmatory Registration Study and potential commercial sale of Multikine.
Previous report
During the nine months ended June 30, 2024, general and administrative expenses decreased by approximately $0.3 million, or 4%, compared to the nine months ended June 30 , 2023. This decrease is primarily due to an approximately $0.5 million decrease in consulting fees and a decrease of approximately $0.4 million of employee stock compensation expense, which is offset by increase of approximately $0.6 million in other general and administrative costs.
Previous report
Management’s discussion and analysis of the Company’s financial condition and results of operations is based on its unaudited condensed financial statements. The preparation of these financial statements is based on the selection of accounting policies and the application of significant accounting estimates, some of which require management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and notes.
Previous report
The Company believes some of the more critical estimates that affect its financial condition and results of operations are in the areas of leases and share-based compensation.
Previous report
For more information regarding the Company’s critical accounting estimates, see Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended September 30, 2023. The application of these critical accounting estimates has been discussed with the Audit Committee of the Company’s Board of Directors.
Reworded paragraphs (16)
Previous wording
Immunotherapy is a large, high growth market. Immunotherapies use the patient’s own immune system to fight disease. These “targeted therapies” are at the forefront of modern cancer research. A recent Bloomberg report from January 2023 asserted that:
Current wording
Immunotherapy is a large, high growth market. Immunotherapies use the patient’s own immune system to fight disease. These “targeted therapies” are at the forefront of modern cancer research. A Bloomberg report from January 2023 asserted that:
Previous wording
CEL-SCI applied to the FDA for a 212-patient randomized controlled confirmatory registration study focusing only on those patients in the target population, this accounts for approximately 100,000 patients worldwide per year. In May 2024, CEL-SCI announced that the FDA indicated CEL-SCI may move forward with a confirmatory registration study of Multikine in the target population.
Current wording
CEL-SCI applied to the FDA for a 212-patient randomized controlled confirmatory registration study focusing only on those patients in the target population, which accounts for approximately 100,000 patients worldwide per year. In May 2024, CEL-SCI announced that the FDA indicated CEL-SCI may move forward with a confirmatory registration study of Multikine in the target population.
Previous wording
Targeting low PD-L1 also differentiates Multikine from other immunotherapies. For example, checkpoint inhibitors like Keytruda and Opdivo appear to best serve patients having high PD-L1, because these drugs work by blocking PD1/PD-L1 receptors interaction; when this interaction (PD1/PD-L1) happens it leads to inactivation/death of the immune cells attacking the tumor. These checkpoint inhibitors appear to act best when tumors express high levels of PD-L1 receptors (usually TPS >20 to TPS >50). While none of these drugs are currently approved as a first-line treatment before surgery, even if such approvals were to come in the future, we believe the large majority of patients in this group having low PD-L1 would still be expected to need Multikine.
Current wording
Targeting low PD-L1 also differentiates Multikine from other immunotherapies. For example, checkpoint inhibitors like Keytruda and Opdivo appear to best serve patients having high PD-L1, because these drugs work by blocking PD1/PD-L1 receptors interaction; when this interaction (PD1/PD-L1) happens it leads to inactivation/death of the immune cells attacking the tumor. These checkpoint inhibitors appear to act best when tumors express high levels of PD-L1 receptors (usually TPS >20 to TPS >50). While none of these drugs are currently approved as a first-line treatment before surgery, even if such approvals were to come in the future, CEL-SCI believes the large majority of patients having low PD-L1 would still be expected to need Multikine.
Previous wording
CEL-SCI published its data as abstracts and posters at the annual conferences for the 2022 American Society of Clinical Oncology (ASCO), 2022 and 2023 European Society for Medical Oncology (ESMO), and the 2023 European Head and Neck Society’s (EHNS’s) annual European Conference On Head And Neck Oncology (ECHNO) and the 2023 European Society for Therapeutic Radiology and Oncology (ESTRO) and 2023 American Head and Neck Society (AHNS). These publications can be accessed athttp://www.cel-sci.com.
Current wording
CEL-SCI published its data as abstracts and posters at the annual conferences for the 2022 American Society of Clinical Oncology (ASCO), 2022 and 2023 European Society for Medical Oncology (ESMO), the 2023 European Head and Neck Society’s (EHNS’s) annual European Conference on Head and Neck Oncology (ECHNO), the 2023 European Society for Therapeutic Radiology and Oncology (ESTRO) and the 2023 American Head and Neck Society (AHNS). These publications can be accessed at http://www.cel-sci.com.
Previous wording
Another measure of survival benefit is called the “hazard ratio,” which compares the rate of an event (chances) of dying between two different groups. Here, in the Multikine target population, the hazard ratio was 0.35, which means that deaths occurred in the Multikine group about one-third as frequently as in the control group. It is also important to note that the hazard ratio’s 95% confidence interval remained far below 1.0 (which would mean parity between the compared groups). In the case of Multikine, statistically speaking, there is a 95% chance that the hazard ratio would fall between 0.18 and 0.66 if Multikine were tested in the target population in another study. A hazard ratio of 0.66 as the “so called worst case scenario” (the upper limit of the 95% confidence interval - for the hazard ration - in this case) is still below (better) than the hazard ratio required for most drug approvals.
Current wording
Another measure of survival benefit is called the “hazard ratio,” which compares the rate of an event (chances) of dying between two different groups. Here, in the Multikine target population, the hazard ratio was 0.35, which means that deaths occurred in the Multikine group about one-third as frequently as in the control group. It is also important to note that the hazard ratio’s 95% confidence interval remained far below 1.0 (which would mean parity between the compared groups). In the case of Multikine, statistically speaking, there is a 95% chance that the hazard ratio would fall between 0.18 and 0.66 if Multikine were tested in the target population in another study. A hazard ratio of 0.66 as the “so called worst case scenario” (the upper limit of the 95% confidence interval – for the hazard ratio – in this case) is still below (better) than the hazard ratio required for most drug approvals.
Previous wording
CEL-SCI relies on all of these data together to support its plan to request accelerated/conditional approval in the new target population without waiting until the completion of another clinical trial. CEL-SCI’s regulatory strategy going forward is to seek approval of Multikine following full enrollment of our confirmatory study wherever possible.
Current wording
CEL-SCI relies on all of these data together to support its plan to request accelerated/conditional approval in the new target population without waiting until the completion of another clinical trial. CEL-SCI’s regulatory strategy going forward is to seek approval of Multikine following full enrollment of its confirmatory study wherever possible.
Previous wording
CEL-SCI applied to the FDA for a 212-patient randomized controlled confirmatory registration study focusing only on those patients in the target population, this accounts for approximately 100,000 patients worldwide per year. In May 2024, CEL-SCI announced that the FDA indicated CEL-SCI may move forward with a confirmatory registration study of Multikine in the target population.
Current wording
CEL-SCI applied to the FDA for a 212-patient randomized controlled confirmatory registration study focusing only on those patients in the target population, which accounts for approximately 100,000 patients worldwide per year. In May 2024, CEL-SCI announced that the FDA indicated CEL-SCI may move forward with a confirmatory registration study of Multikine in the target population.
Previous wording
An “unmet need” is a factor for approval considered by all major regulatory bodies worldwide. In the Multikine target population, there is also a great unmet need for improved survival. The current standard of care provides only about a 50/50 chance of surviving five years, whereas Multikine could increase that survival rate to over 70% in the target population based on the Phase III data. Chemotherapy (in addition to radiotherapy following surgery) has improved survival outcome for some head and neck patients, but chemotherapy is only indicated for high-risk patients, who are not likely to fall within the Multikine target population. Currently available immunotherapies are given after surgery or where surgery is not indicated, in contrast to Multikine, which is given before surgery to patients with resectable tumors. Available checkpoint inhibitors work best on tumors with high PD-L1 expression, whereas Multikine works best in tumors with low PD-L1 expression. Therefore, Multikine’s target population is underserved, and will continue to be underserved, by current therapies, but Multikine can meet the need for improved survival.
Current wording
An “unmet need” is a factor for approval considered by all major regulatory bodies worldwide. In the Multikine target population, there is also a great unmet need for improved survival. The current standard of care provides only about a 50/50 chance of surviving five years, whereas Multikine could increase that survival rate to over 70% in the target population based on the Phase III data. Chemotherapy (in addition to radiotherapy following surgery) has improved survival outcome for some head and neck patients, but chemotherapy is only indicated for high-risk patients, who are not likely to fall within the Multikine target population. Currently available immunotherapies are given after surgery or where surgery is not indicated, in contrast to Multikine, which is given before surgery to patients with resectable tumors. Available checkpoint inhibitors work best on tumors with high PD-L1 expression, whereas Multikine works best in tumors with low PD-L1 expression. Therefore, Multikine’s target population is underserved, and will continue to be underserved, by current therapies.
Previous wording
The major regulatory bodies with whom we are working, U.S. FDA, Health Canada, European Medicines Agency (EMA) and the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom (UK) all have conditional approval pathways designed for situations where the target population has not been fully tested prospectively and there is strong data supporting clinical benefit for patients. The reason is that regulators understand that in many cases patients should not have to wait for additional data before being offered the chance to benefit from a new drug, especially if the drug has shown to be safe. Every situation is different and depends on the specific facts.
Current wording
The major regulatory bodies with whom we are working, U.S. FDA, Health Canada, European Medicine Agency (EMA) and the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom (UK) all have conditional approval pathways designed for situations where the target population has not been fully tested prospectively and there is strong data supporting clinical benefit for patients. The reason is that regulators understand that in many cases patients should not have to wait for additional data before being offered the chance to benefit from a new drug, especially if the drug has been shown to be safe. Every situation is different and depends on the specific facts.
Previous wording
During the nine months ended June 30, 2024, the Company’s cash decreased by approximately $3.8 million. Significant components of this decrease included cash used to fund the Company’s regular operations of approximately $13.9 million and approximately $1.3 million in payments on finance lease obligations offset by net proceeds from the November 2023 and February 2024 financing of $11.4 million.
Current wording
During the three months ended December 31, 2024, the Company’s cash decreased by approximately $0.1 million. Significant components of this decrease included net proceeds from the December 2024 financing of $4.5 million offset by cash used to fund the Company’s regular operations of approximately $4.1 million and approximately $0.5 million in payments on their finance lease obligations.
Previous wording
During the nine months ended June 30 , 2023, the Company’s cash decreased by approximately $17.5 million. The significant component of this decrease included cash used to fund the Company’s regular operations of approximately $17.8 million, which includes the approximate $2.3 million deposit made to the Company’s landlord as a result of falling below certain cash requirements per the San Tomas lease. Other components of this decrease include approximately $0.4 million used to make leasehold improvements and acquire research and development equipment, and approximately $1.2 million in payments on the Company’s finance leases.
Current wording
During the three months ended December 31, 2023, the Company’s cash decreased by approximately $0.9 million. The significant component of this decrease included cash used to fund the Company’s regular operations of approximately $4.9 million, and approximately $0.4 million in payments on the Company’s finance lease obligations, offset by net proceeds from the November 2023 financing of approximately $4.5 million.
Previous wording
During the nine months ended June 30, 2024, no warrants were exercised. During the nine months ended June 30 , 2023, 217,752 warrants were exercised at a weighted average exercise price of $2.05 for total proceeds of approximately $0.5 million.
Current wording
During the three months ended December 31, 2024, 1,450,000 pre-funded warrants were exercised. No warrants were exercised during the three months ended December 31, 2023.
Previous wording
The Company incurred a net operating loss of approximately $20.2 million for the nine months ended June 30, 2024. This net operating loss consists of significant non-cash expenses including approximately $4.1 million in share-based compensation to employees and non-employees, and approximately $3.0 million in depreciation and amortization expense. The Company incurred a net operating loss of approximately $6.7 million for the three months ended June 30, 2024. This net operating loss consists of significant non-cash expenses including approximately $1.0 million in share-based compensation to employees and non-employees, and approximately $1.0 million in depreciation and amortization expense.
Current wording
The Company incurred a net operating loss of approximately $6.9 million for the three months ended December 31, 2024. This net operating loss consists of significant non-cash expenses including approximately $1.1 million in share-based compensation to employees and non-employees, and approximately $1.0 million in depreciation and amortization expense.
Previous wording
During the three months ended June 30, 2024, general and administrative expenses decreased by approximately $0.5 million, or 20%, compared to the three months ended June 30 , 2023. This decrease is primarily due to an approximately $0.3 million decrease in consulting fees, an decrease of approximately $0.4 million of employee stock compensation expense which is offset by net increase of approximately $0.2 million in other general and administrative expenses.
Current wording
During the three months ended December 31, 2024, general and administrative expenses increased by approximately $0.3 million, or 15%, compared to the three months ended December 31, 2023. This increase is primarily due to a $0.2 million increase in non-employee stock compensation and $0.2 million increase in other costs related to public relations, offset by a decrease of approximately $0.1 million of employee stock compensation expense.
Previous wording
During the nine months ended June 30, 2024, net interest expense increased by approximately $0.1 million compared to the nine months ended June 30, 2023. While the amount of interest paid on the Company’s lease liabilities are approximately $0.7 million and $0.8 million for the nine months ended June 30, 2024 and 2023, the Company earned approximately $0.2 million less in interest income during the nine months ended June 30, 2024 compared to the nine months ended June 30, 2023. Net interest expense, which consists primarily of interest paid on lease liabilities, are approximately $0.2 for both the three months ended June 30, 2024 and June 30 , 2023.
Current wording
During the three months ended December 31, 2024 and 2023, net interest expense remained constant at approximately $0.2 million, which is primarily due to the interest paid on the Company’s lease liabilities.
Previous wording
The measurement of the finance and operating lease right-of-use asset and lease liabilities requires the determination of an estimated lease term and an incremental borrowing rate, which involves complex judgment by management. Significant judgment is required by management to develop inputs and assumptions used to determine the incremental borrowing rate for lease contracts. The fair value of the stock options is calculated using the Black-Scholes option pricing model which requires various judgmental assumptions including volatility and expected option life. The compensation cost is recognized as expense over the requisite service or vesting period. Performance-based options are valued using a Monte-Carlo simulation model, which requires inputs based on estimates, including the likelihood of the occurrence of performance and market conditions, volatility and expected option life.
Current wording
Lease Accounting– The measurement of the finance and operating lease right-of-use asset and lease liabilities requires the determination of an estimated lease term and an incremental borrowing rate. The determination of the incremental borrowing rates for new and modified lease contracts is a critical accounting estimate. Significant judgment is required by management to develop inputs and assumptions used to determine the incremental borrowing rate for lease contracts.