CEL-SCI Corporation (NYSEMKT:CVM) has had a noteworthy run year to date. The company started out 2017 at around $0.07 a share, and has since gained to trade above $0.11 – a 60% gain across the period. The gains, however, haven’t really come on the back of anything that justifies them.

No major news has hit press since the company closed a public offering mid December, and no filings have been logged with the SEC. That CEL-SCI should be gaining seems a little counterintuitive given the action to date.

We’ve seen this sort of action in the past, however. Often, a company that has been beaten into uncertainty across a period will run up ahead of some major news. Don’t ask us why – sometimes the news is leaked, sometimes someone knows something and is acting on it (even if they shouldn’t), there’s a raft of potential reasons – but we’ve seen it happen, and chances are that many of those reading (especially our regular readers) will have seen it happen too.

With this in mind, it’s worth checking out what’s happened recently, in an attempt to speculate what might be just around the corner. It’s speculation, sure, but if it sets us up as prepared for something that moves markets ahead of the crowd, it’s worthwhile speculation.

So, here goes.

To bring newer readers up to speed, CEL-SCI is working on a host of oncology therapies, but the one that matters right now is called Multikine, and the company is targeting head and neck cancer as a primary indication. It’s in a phase III, which kicked off way back in 2011, but then basically fell apart in 2013, when CEL-SCI ditched the CRO conducting the study. A new CRO, Ergomed, came in to play, but the damage was already done. Enrollment was down, and despite Ergomed pushing to boost recruitment, the FDA put a partial clinical hold on the study in October, and nothing much has happened since then. The company submitted what it thought might be an answer to the problems that the FDA raised, but the answer didn’t suffice, and the hold is still in place. CEL-SCI now wants to sit down with the FDA to discuss the issues.

Three things could happen – the FDA decides that the trial can continue, which would be the optimal resolution for CEL-SCI; the FDA decides not to lift the hold, and the company needs to conduct a new pivotal, which would be (basically) terminal for CEL-SCI; or, the FDA allows the current trial to continue, but requests some follow up data, which would be tough on shareholders (it will inevitably necessitate some degree of dilution, even in light of the latest hold) but likely not terminal for the company.

A possible reason for the recent gains, therefore, could be that a decision is pending, and that it favors CEL-SCI. That’s unlikely, however, as the company (as yet) has not satisfied the agency’s requirements for a hold lift. What’s far more likely (although still somewhat speculative) is that the FDA has agreed to sit down with management and the CRO, while the company discusses a path forward. If the FDA points to specific solutions to the problems it has posed (of which there are four primary, and readers can find them mid way through this 8-K) then CEL-SCI would be a big step ahead of where it currently sits, as far as getting its pipeline back on track is concerned.

It’s worth noting that an entry at this point is a risky one. There’s a real concern that the company won’t be able to keep going, and it’s a major unknown right now. Cash on hand, even in light of the latest offering, isn’t enough to run a fresh pivotal, and even a smaller, supplementary trial would likely necessitate dilution. With that said, price is telling us something right now, and that something could be just what CEL-SCI and its shareholders need.

We will be updating our subscribers as soon as we know more. For the latest updates on CVM, sign up below!

Sign up for next microcap runner ahead of the crowd.

Close this popup

Disclosure: We have no position in CVM and have not been compensated for this article.