Intriguing Revelations: Deciphering CEL-SCI's H1N1 Flu Play Print
By M.E.Garza   
Wednesday, 23 September 2009 07:58

Hype versus substance. Perception versus reality. During the past week, there has been much debate regarding the work being done by CEL-SCI (NYSE AMEX:CVM).

In June, the company filed a provisional U.S. patent application covering its L.E.A.P.S.(TM) immune therapy drugs for the prevention and treatment of H1N1, swine, bird flu, Influenza A and/or evolving mutants or variants of these viruses. At the time, few people took notice. Company shares could be had for about $0.47 per share on average daily trading volume of about 1.6 million shares.

As we know now, experimental work had been initiated on these various methods of use and applications for the A influenza vaccines and government officials took special notice when they learned that these L.E.A.P.S. vaccines, when used individually or together, induced antigen specific immune responses.

Last week, in swift order, the company was granted FDA approval to proceed with human clinical trials of its H1N1 flu treatment candidate. Shares soared after rising steadily on rumors and reports during the weeks leading up to the surprise announcement.

Some published reports attributed genuine concerns about the H1N1 pandemic by the Obama administration as a catalyst for the fast moving developments and closed-door secret meetings between government agencies and company officials.

The company still can't reveal many specifics about this new treatment option, but one recent presentation by an outside investigator from the University of Hawaii at the Annual American Society for Microbiology in Philadelphia may help shed some light. His presentation dealt with new L.E.A.P.S. Tuberculosis data and interestingly, this TB data demonstrated that vaccines utilizing the L.E.A.P.S. technology, with specificity for particular Mycobacterium tuberculosis (TB) antigens, could not only elicit immune responses that could be protective against tuberculosis, it also showed evidence that the platform had potential to treat swine and other H1N1 influenzas.

The TB data showed that blood and spleen cells from immunized mice produced gamma interferon in responses when injected while the cells from mice in the various control groups did not. Other recent L.E.A.P.S. data, presented by Dr. Kenneth S. Rosenthal, Professor of Microbiology, Immunology and Biochemistry at Northeastern Ohio Universities Colleges of Medicine and Pharmacy along with colleagues at the 12th NFID meeting in Baltimore showed that CEL-SCI's L.E.A.P.S. technology can activate and cause human blood monocyte cells to become dendritic cells that secrete the IL-12 cytokine. The dendritic cells that result initiate a protective cell mediated and antibody immune response. These results were obtained for L.E.A.P.S. vaccines against herpes simplex and HIV.

"In the short term, either investors and speculators are going to buy into the idea that Cel-Sci is on to something with substance here or they're not," said one industry expert who knows the company and has worked with them on various issues, including the development of internal regulatory standards. "It doesn't really matter at this point if lay people get it or not. This is happening either way and it's good to know that those who matter do understand what's going on here and have put things in motion.

"The company has been calculating every move very carefully. They are ahead of the pack when it comes to development of this treatment that has applications well beyond the current H1N1 virus and it's future mutated forms," said the knowledgeable observer. "This isn't another vaccine play either. It goes to work against highly conserved regions essential for the virus' survival and that's only the tip of the iceberg, really. I'm not saying anything that isn't already out there, but I am saying that it doesn't matter what Wall Street types think. They've managed to build a very big ship and it's going to take a lot to sink it.

"When have you ever heard of anyone going right into human trials only five months after the [flu] virus was identified? It just doesn't happen. This is a pressing unmet medical need and the regular rules of the game don't apply. If the regular rules were in play, the FDA would not have done what it's done so far. It's illogical to think that way."

Traders, seem to lack attention span in today's markets, but Joe Duarte, M.D. who authored the book "Successful Biotech Investing," believes that an accelerated review of any drug should make investors take special notice.

"Accelerated review is not commonly granted and suggests either that the need for anything to treat the condition targeted is dire or that the drug has more than met the expectations in a shorter time than usual," observes Duarte.

In the case of the H1N1 pandemic, accompanied by recent reports of vaccine delays/shortages, expected infection and morbidity rates, etc. it's clear that government officials are concerned enough to take immediate action.

Historically speaking, no one thought much about anthrax until terrorists started sending it to people in white envelopes. Then suddenly, not long after 9/11, national attention was focused on companies whose experience with biological agents allowed them to quickly begin work with the U.S. Food and Drug Administration. The FDA's primary goal was to foster the development of vaccines, drugs and diagnostic products, safeguards for the food supply, and other measures needed to respond to a different kind of threat; bio-terrorism.

Under pressure from various government agencies, including the White House and the Department of Defense, the FDA had been instructed to enhance the expeditious development and licensure of new vaccines and biological therapeutics through research and review activities. As recently obtained documents and closed door testimony transcripts reveal, long before 9/11, high ranking officials in the government were already focusing on enhancing the timeliness of application reviews of new drugs and biological products with those scenarios in mind.

The FDA was participating with an inter-agency group whose job was to prepare for a response in a civilian emergency involving biological terrorism. This group included representatives of the Department of Defense; the Veterans Administration; and components of the Department of Health and Human Services (DHHS), such as the Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH), and Office of Emergency Preparedness. In addition, the FDA proposed standards for the use of animal efficacy data in approving new products to counter chemical and biological agents. They also participated in setting a broad-based federal research agenda to facilitate and identify facilities and activities which could be used in product development, review, and testing; all in accordance with regulations.

As a result of these efforts, the FDA propelled an inhaled Anthrax Vaccine through their customarily slow approval process in record time.

So quickly in fact, that the vaccine later became the focus of a congressional investigation given concerns that were raised about the Department of Defense's (DOD) anthrax immunization program. For example, some Gulf War veterans had begun suffering from unexplained illnesses that they believe had been caused by anthrax vaccines that they received during the war. Also, some active duty military personnel expressed concerns regarding the safety and efficacy of the anthrax vaccine after the FDA found problems during the inspection of the facility that was manufacturing it.

In the end, as transcripts from a 1999 testimony to a congressional subcommittee point out, the safety and efficacy of the anthrax vaccine was cleared because FDA and government regulations state that "safety" means relative freedom from harmful effects to persons affected directly or indirectly by a product that has been prudently administered, taking into considerations the character of the product in relation to the condition of the recipient at the time.

While studies had identified varying rates of adverse reactions, they did not question the safety of the vaccine. The long-term safety of the vaccine had not yet been studied. There simply was no time.

The DOD testified that as of March 16, 1999, more than 223,000 service members had been immunized. There had been 42 reports on adverse effects submitted to the FDA and CDC. Only seven service members required hospitalization or experienced loss of duty for more than 24 hours.

In the end, different rules applied, just as they did when the FDA granted Fast Track designation for Emergent BioSolutions Inc.'s (NYSE: EBS) BioThrax(R) (Anthrax Vaccine Adsorbed) as a post-exposure prophylaxis against anthrax infection in 2007.

Who can forget the work of prominent AIDS researcher David W. Barry, M.D., a co-developer of AZT, the first drug developed to treat the AIDS virus? Working with the FDA at Burroughs Wellcome (which later merged with Glaxo Holdings plc), his team pushed the drug through clinical and review stages in record time. That decision was controversial as well.

There are strong parallels and clear historical precedents here.

One could argue that the civilian emergency of a pandemic may have already triggered the same type of response that a civilian emergency involving biological weapons once did.

Whether via corporate culture or strict direction, it appears scientists at Cel-Sci have always set their sights towards curing the incurable disease rather than focusing on therapies for common ailments, - much like the late David W. Barry set out to do against AIDS.

Whether CEL-SCI can succeed remains to be seen, but it is increasingly clear that applications for their work beyond the urgency of the current pandemic may open up incredibly lucrative markets.  A L.E.A.P.S. treatment in the field of rheumatoid arthritis (RA) alone can open up another billion dollar market for the company.

The significance of Dendreon Corporation's (NASDAQ:DNDN) recent developments to a company like CEL-SCI are  far reaching as well when one consider's the company's Multikine(r) cancer therapy- which finally got the financial green light for it's transition into long awaited Phase III studies last week. For years most investors had shunned the cancer immunotherapy space altogether because of the many failures involving in the space.

The tens of millions of shares trading on ever increasing daily volume is further validation that investors are paying closer attention than they were back in June.

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