Cloak and Dagger Developments at CEL-SCI (Amex:CVM) Print E-mail
By M.E.Garza   
Monday, 14 September 2009 20:00

“The Obama administration is very worried that this could turn into a double dip (double bottom) recession,” said one person familiar with this situation. “They are doing everything they can to ensure that the H1N1 pandemic is not the catalyst for just such an event.”

As I reported in my last article
about CEL-SCI Corporation (AMEX:CVM) the company’s latest filing with the SEC confirms that scientists there have created one (and perhaps even several) potential peptide vaccines and treatments against the H1N1 swine flu using their L.E.A.P.S.™ technology- a patented, T-cell modulation, peptide epitope delivery technology.

The platform has enabled CEL-SCI to begin pre-clinical evaluation and testing of the new applications of its H1N1 vaccine and treatments, which will allow the targeting of "mutated" versions of H1N1 swine and other influenza viruses.

What got me on the latest trail of these developments was the company's unusual absence at last week’s Rodman and Renshaw Health Conference in New York City.  There were hundreds of other biotech companies with far less newsworthy developments in attendance, but CEL-SCI representatives were nowhere to be found. One organizer told me that the company had been invited to participate on several occasions, but they had politely declined.

As it turned out, they had more pressing matters to attend to.

While I was able to track down CEO Geert Kersten directly, he would not confirm (or deny) many of the questions I had for him regarding rumors of multiple meetings that had taken place with high ranking government officials near Washington at the company’s facilities last week (during the same time that the conference was taking place in New York city).

Sources had told me that the company had been in discussions over several days with multiple government groups interested in expediting CEL-SCI’s H1N1 efforts- “particularly since no other company has offered a possible treatment option.” 

And what is that treatment option?

“It’s all about prompting an immune response to the virus,” said the insider on condition of anonymity.  “What makes you a great runner, versus the guy who comes in second? Sometimes a simple fraction of a second. That’s the only difference. What the company is trying to do is give that very sick person who may be on a respirator that extra fraction of a second.  That’s what their efforts are about when it comes to both very sick patients and the possible virus mutations…Tipping the scales towards survival. ”

So that’s what these government groups have taken an interest in?

“CEL-SCI has gotten some attention for what they have been very quietly working on for some time. These are some very important people.  As a matter of fact, most of the time when there are meetings with government groups, those groups are always accountable to someone else, whether it be the White House or members of Congress or even the voters. From what I’ve seen, some of these people aren’t accountable to anyone.”

What does that mean? They are working undercover or as part of some black budget?

“All I can say is that there are some very worried people at the highest levels because all the current vaccine studies are late and most of the supplies may not even be available until after the current flu season.  All you have to do is look at the numbers and they don’t add up.  There will not be enough vaccine to go around. That has many people terrified. You know we still haven’t vaccinated the first responders- the emergency workers and doctors. You know that, right?”
I was just reading something along those lines. Some of my friends who are law enforcement have yet to be vaccinated although I know that at least one federal department has been sending various alerts in regards to campus populations getting infected more quickly around the country than ever before.

“Everything has been designed to make people feel comfortable. So they’ve shipped things like Tamiflu to the states, so we can say ‘Oh there’s Tamiflu available.’ They said in June at the White House summit: ‘We’ll have one hundred million school children vaccinated by October.’  But they knew full well that they wouldn’t have enough vaccine because early in April we had word that the vaccine was not growing well in eggs.”

So you’re saying that we have a government that is just waking up to the fact that this situation may get a lot worse than originally thought?

“Tamiflu is starting to show resistance.  Already there are published reports from the Middle East that the virus has mutated there. It is now fact that there are people in Egypt infected with both Avian Flu and Swine Flu. What happens when Muslim populations from those countries start their famous yearly pilgrimage to Mecca, Islam's holiest city? Imagine all of those people praying in extremely close proximity to each other in one place. Do I have to say more? There are plenty of very smart people who have already started to connect the dots here. “

Under gag orders, penalty of law or otherwise personal choice, CEL-SCI’s CEO, Geert Kersten was not able to comment on the nature or scope of any of these meetings when contacted by BioMedReports via his cell phone. One thing he was able to confirm was that the company’s small circle of suppliers was working overtime to turn special orders around as quickly as possible. He also confirmed that the company was hiring more staff in order to help with certain H1N1 efforts.

When asked who had come up with the idea to work on not only the vaccines using their L.E.A.P.S.™ technology, but also some treatment options, Kersten was clear:

“Everything here is done by collaboration. That’s the idea of the team.  It may have been someone’s comment leading to the input of others and that took us down the road of the mutated virus and then we said ‘well, if we can work on the mutated virus, who is actually addressing the issue of all those people lying in an ICU today, fighting for their lives for a week or ten days?’ And then we figured out that using the same approach we ought to be able to help them improve their chances of survival."

How long ago did you start that process?

“Somewhere along the way, it was like a Eureka moment,” says Kersten. “We’ve got to help these people. Everybody’s focus is on vaccines and they’re having all kinds of problems with the vaccines, but there has to be someone working to help these patients who have a high likelihood of death. That’s how we got to that.
“With L.E.A.P.S.™ we can control in advance and determine, almost by design,  how the immune system will process the epitope and therefore we know what kind of immune response we will get- whether cellular or humoral. By doing that, you can- we feel- have significant impact on these people’s chances of survival."

Pressed in whether he felt the company had been approached by the government because of these developments, Kersten would only say: “We’re going to need some resources that probably only the government has and I’m not just talking about money.  That’s going to need to happen for things to accelerate quickly.”

While he was not comfortable talking much more about the alleged developments which are taking place behind the scenes, Kersten was able to more easily address my questions about the company’s recent elimination of $8.3 million worth of debt via its Series K convertible notes.

“I love to see a simple balance sheet,” said Kersten. “ We have a very simple balance sheet now. There were also some preferential terms for the holder of these shares and I wasn’t sure that they were incentivized like the rest of the share holders, so now everybody is incentivized the same way, and I think that’s a good thing for all the share holders. “

So basically we’re left to look at this as a journey into the unknown. A potentially severe pandemic type of situation like this has not existed since 1917, and from an investor’s standpoint, we are left with only one clear map. If we know that historically “flu stocks” trade four to five times higher on Wall Street during the North American winter months, what might happen this year?  Especially given all of these interesting revelations?

I'm reminded what that insider told me about this entire game of cloak and dagger in the space of H1N1:

“When investors find out how quickly this is all happening, their heads are going to shake with disbelief.”

Shares of CEL-SCI shot up over 20% near the end of the trading day on "no news."

Stay tuned.

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