CEL-SCI Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

CEL-SCI (NYSE American: CVM), a clinical stage cancer immunotherapy company, has announced its intention to conduct a best efforts public offering of common stock and/or pre-funded warrants. The company plans to use the net proceeds to fund the continued development of Multikine, general corporate purposes, and working capital. ThinkEquity is serving as the sole placement agent for the offering. The securities will be offered through a shelf registration statement on Form S-3 filed with the SEC. The completion, size, and terms of the offering are subject to market conditions and are not guaranteed.

Positive

• Potential capital raise to fund Multikine development
• Secured ThinkEquity as placement agent
• Already has effective shelf registration statement

Negative

• Potential shareholder dilution from new stock issuance
• Best efforts offering indicates uncertainty in completion
• Suggests possible cash constraints requiring immediate funding

Insights

Investment Banker

This public offering announcement represents a significant capital raising event for CEL-SCI, but comes with notable dilution concerns. The company is pursuing a best efforts offering structure, which typically indicates challenging market conditions and suggests less certainty in execution compared to a firm commitment offering. The lack of disclosed pricing and size raises uncertainty flags. With a current market cap of only $45 million, any substantial offering could significantly impact existing shareholders through dilution. The use of pre-funded warrants alongside common stock adds complexity to the capital structure and could create additional future dilution pressure. The stated use of proceeds for Multikine development and working capital implies ongoing cash burn concerns that necessitated this financing. ThinkEquity's involvement as sole placement agent, rather than a larger banking syndicate, may reflect institutional interest.

For context, biotech companies often require substantial capital for clinical development and this offering follows a common pattern of smaller cap companies needing to tap public markets. However, the best efforts structure and current market environment could make pricing challenging.

Biotech Analyst

The financing announcement suggests CEL-SCI requires additional capital to advance Multikine, their lead cancer immunotherapy candidate. This reflects the capital-intensive nature of late-stage clinical development in oncology.

While raising capital is necessary for clinical-stage biotechs, the timing and structure raise some concerns about the company's current position. The best efforts format typically indicates lower confidence in demand compared to traditional underwritten offerings. The inclusion of pre-funded warrants, often used when straight equity is difficult to sell, could signal challenges in attracting traditional institutional investors.

In simpler terms: Think of this like a company selling additional pieces of itself to fund important research, but doing it in a way that suggests they're not in the strongest negotiating position. This could make the stock price volatile in the near term as the market digests both the dilution impact and what this says about the company's financial health.

VIENNA, Va.--(BUSINESS WIRE)-- CEL-SCI Corporation (“CEL-SCI” or the “Company”) (NYSE American: CVM), a clinical stage cancer immunotherapy company, today announced that it intends to offer to sell shares of its common stock (and/or pre-funded warrants in lieu thereof) in a best efforts public offering. The offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

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

ThinkEquity is acting as sole placement agent for the offering.

The securities will be offered and sold pursuant to a 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 will be made only by means of a written prospectus. A preliminary prospectus supplement and accompanying base prospectus describing the terms of the offering has been or will be filed with the SEC on its website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying base prospectus relating to the offering may also be obtained from the offices of ThinkEquity, 17 State Street, 41st Floor, New York, New York 10004. Before investing in this offering, interested parties should read in their entirety the preliminary prospectus supplement and the accompanying base prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such preliminary prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such 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 proposed 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 annual 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, except as may be required under applicable securities law.

* 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/20241226952151/en/

Gavin de Windt

CEL-SCI Corporation

(703) 506-9460

Source: CEL-SCI Corporation

FAQ

What is the purpose of CEL-SCI's (CVM) proposed public offering?

The offering aims to raise funds for Multikine development, general corporate purposes, and working capital.

How will CEL-SCI's (CVM) public offering affect existing shareholders?

The offering may result in dilution of existing shareholders' ownership as new shares will be issued.

What type of securities is CEL-SCI (CVM) offering in this public offering?

CEL-SCI is offering shares of common stock and/or pre-funded warrants in a best efforts public offering.

When was CEL-SCI's (CVM) shelf registration statement declared effective?

The shelf registration statement was declared effective by the SEC on July 15, 2022.

Who is the placement agent for CEL-SCI's (CVM) public offering?

ThinkEquity is acting as the sole placement agent for the offering.