CEL-SCI Announces Closing of $5 Million Offering

Rhea-AI Summary

CEL-SCI (NYSE American: CVM) has closed its previously announced best-efforts offering, raising approximately $5 million in gross proceeds through the sale of 16,130,000 shares of common stock (or pre-funded warrants) at $0.31 per share. The proceeds will fund the development of Multikine, a first-line cancer therapy that has received FDA Orphan Drug designation for head and neck cancer treatment, along with general corporate purposes and working capital. ThinkEquity served as the sole placement agent. The offering was conducted under the company's effective shelf registration statement. The company is preparing for a confirmatory Registration Study of 212 patients focusing on newly diagnosed head and neck cancer patients with specific criteria.

Positive

• Secured $5 million in funding through stock offering
• FDA approved confirmatory Registration Study for Multikine
• Maintains Orphan Drug designation for head and neck cancer therapy

Negative

• Significant shareholder dilution through 16.13 million new shares
• Low share price of $0.31 indicates market weakness
• Additional capital may be needed for future operations

Insights

Financial Analyst

The $5 million offering at $0.31 per share represents significant dilution for existing shareholders, as the company issued 16.13 million new shares, substantially increasing the share count. With a market cap of only $25.7 million, this financing dilutes existing shareholders by approximately 20%. While the capital raise provides essential working capital for Multikine development, the pricing at a considerable discount to recent trading levels signals weak institutional demand and market skepticism.

The offering's structure using pre-funded warrants suggests institutional investors wanted downside protection, indicating cautious sentiment about near-term prospects. The use of ThinkEquity as the sole placement agent, rather than a larger investment bank, also reflects institutional interest. The primary concern is whether this capital will be sufficient for meaningful clinical progress, given the company's historical burn rate and the costs associated with the planned 212-patient registration study.

Medical Research Analyst

The funding secured will support the confirmatory Registration Study for Multikine in head and neck cancer, targeting a highly specific patient population: newly diagnosed, locally advanced, treatment-naïve patients with no lymph node involvement and low PD-L1 expression. This precise patient selection, endorsed by the FDA, represents a strategic pivot to focus on approximately 100,000 annual cases where Multikine may demonstrate optimal efficacy.

The regulatory pathway appears derisked with FDA's concurrence on patient selection criteria, though the narrow patient population could impact commercial potential. The immunotherapy approach of boosting the immune system before it's compromised by standard treatments is mechanistically sound, but previous clinical setbacks have created market skepticism. The 212-patient study size is relatively modest for a registration trial, suggesting efficient capital deployment, but also highlighting the need for compelling efficacy data to overcome historical challenges.

VIENNA, Va.--(BUSINESS WIRE)-- CEL-SCI Corporation (“CEL-SCI” or the “Company”) (NYSE American: CVM), a cancer immunotherapy company, today announced the closing of its previously announced best-efforts offering of 16,130,000 shares of its common stock (or pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof). Each share of common stock (or Pre-Funded Warrant) was sold at an offering price of $0.31 per share (inclusive of the Pre-Funded Warrant exercise price), for gross proceeds of approximately $5,000,000, before deducting placement agent fees and other offering expenses. All the shares and Pre-Funded Warrants in the offering were offered by the Company.

The Company intends to use the net proceeds from the offering to fund the continued development of Multikine, general corporate purposes, and working capital.

ThinkEquity acted as sole placement agent for the offering.

The securities were offered and sold pursuant to the Company’s currently effective shelf registration statement on Form S-3 (File No. 333-265995), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the “SEC”) on July 1, 2022 and declared effective on July 15, 2022. The offering was made by means of a prospectus supplement and prospectus which have been filed with the SEC and available on the SEC’s website at www.sec.gov. You should read the applicable prospectus supplement and prospectus for more complete information about the Company and the offering. You may obtain these documents free of charge by visiting the SEC website at www.sec.gov. Alternatively, you may obtain copies by contacting ThinkEquity, 17 State Street, 41st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About CEL-SCI Corporation

CEL-SCI believes that boosting a patient’s immune system while it is still intact should provide the greatest possible impact on survival. Multikine is designed to help the immune system "target" the tumor at a time when the immune system is still relatively intact and thereby thought to be better able to mount an attack on the tumor.

Multikine (Leukocyte Interleukin, Injection), a true first-line cancer therapy, has been dosed in over 740 patients and received Orphan Drug designation from the FDA for neoadjuvant therapy in patients with squamous cell carcinoma (cancer) of the head and neck. Based on the data from the completed randomized controlled Phase 3 study, the FDA concurred with CEL-SCI’s target patient selection criteria and gave the go-ahead to conduct a confirmatory Registration Study which will enroll 212 patients. CEL-SCI will enroll newly diagnosed locally advanced primary treatment naïve resectable head and neck cancer patients with no lymph node involvement (determined via PET scan) and with low PD-L1 tumor expression (determined via biopsy), representing about 100,000 patients annually.

The Company has operations in Vienna, Virginia, and near/in Baltimore, Maryland.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "intends," "believes," "anticipated," "plans" and "expects," and similar expressions, are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Such statements include, but are not limited to, statements about the use of proceeds of the offering. 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's filings with the Securities and Exchange Commission, including but not limited to its report on Form 10-K for the year ended September 30, 2023. 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.

* Multikine (Leukocyte Interleukin, Injection) is the trademark that CEL-SCI has registered for this investigational therapy. This proprietary name is subject to FDA review in connection with the Company's future anticipated regulatory submission for approval. Multikine has not been licensed or approved for sale, barter or exchange by the FDA or any other regulatory agency. Similarly, its safety or efficacy has not been established for any use.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241231432429/en/

Gavin de Windt

CEL-SCI Corporation

(703) 506-9460

Source: CEL-SCI Corporation

FAQ

How much did CEL-SCI (CVM) raise in its latest stock offering?

CEL-SCI raised approximately $5 million in gross proceeds through the sale of 16,130,000 shares at $0.31 per share.

What is the purpose of CEL-SCI's (CVM) $5 million funding round?

The funding will be used to develop Multikine, their cancer therapy, and for general corporate purposes and working capital.

How many patients will be enrolled in CEL-SCI's (CVM) new Registration Study?

The confirmatory Registration Study will enroll 212 patients with newly diagnosed locally advanced primary treatment naïve resectable head and neck cancer.

What is the current offering price for CVM's new share issuance?

The offering price is $0.31 per share of common stock or pre-funded warrant.

What regulatory designations has CEL-SCI's Multikine received from the FDA?

Multikine has received Orphan Drug designation from the FDA for neoadjuvant therapy in patients with squamous cell carcinoma of the head and neck.