Geert Day To You!


The "Value" Investor Club: Some Value!

On June 3, 2019, The "Value" Investor Club issued their Short Thesis.  Before we go into any details, lets discuss the obvious.

On June 3, 2019, when the stock price was at $4.02, they recommended "now is the time to short the stock" as "results (are) imminent"

Fast forward to February 2020.

Stock has reached into the $15s and results are NOW, 8 months later, imminent.  

If the shorts knew anything about the trial and done any real statistical analysis, they would have known that the trial was projected to end in early 2020, not June 2019.  Where was their Statistical Analysis?  Their proof? 

There was none.

It shows their incompetence and lack of real due diligence.  This was some real "Value" the hack sabordesoledad provided to the Investor Club!  I can't stop laughing as some of these Club members are underwater by as much as $10!



It gets better! 

The Shorts say that the CRO, Ergomed, is selling shares provided to them from CEL-SCI because they have no faith in the trial.

This is full of lies and misrepresentations.


The Multikine trial has two CROs, but did they mention that?

· Ergomed manages the trial, execution and patient follow-ups. They are 100% blinded to the results.

**You catch that LIE?  Shorts say Ergomed is unblinded to the data! Wrong!**


ICON manages the data and THEY see all unblinded data.

But they are correct that Ergomed receives payment via stock issuance.  The reason this is done is to manage cash flow for CEL-SCI.  It's smart!  However, Ergomed has a few restrictions:

  • Because Ergomed is 100% blinded to the results, there is no “insider trading” or “conflict of interest” issues.
  • They can NOT profit on the sale of the stock. I REPEAT. They can NOT profit on the sale of this stock.
  • They can only sell enough shares to pay down the Payables CEL-SCI owes them and that is it! No more!
  • ALL unsold shares MUST be returned to CEL-SCI.  Read that one more time Shorts!
  • They “shall not sell more than 2% of that day’s trading volume on any single day”.


While we have your attention, remember Ergomed will contribute up to $12 million towards the study in the form of offering discounted clinical services in exchange for a single digit percentage of milestone and royalty payments.

Their CEO, Miroslav Reljanovic, said this in 2015 after increasing their investment from $10M to $12M:

“At this point in the clinical trial we have decided to increase our investment in the development of Multikine, as we believe that it holds the potential to treat head and neck cancer in a new way. Our potential returns from this agreement will increase in line with our investment.”

CEL-SCI Doesn't Own Multikine?





First off, Bagholders?  Really? Stock was sub $1 not too long ago...but be that as it may.

This Short, claims that CEL-SCI doesn't own the rights to Multikine.  If it was still 1996, he'd be right!





This dimwit provided redacted documents claiming "any commercial products developed by CEL-SCI belong to *redacted*."

Wow.  This is concerning.  Right? Why was anything redacted in the first place?

I was concerned for all of  5 minutes until I did a simple internet search.


CEL-SCI Purchased the Rights in March 1997

A simple internet search was all that was needed to discredit this misrepresentation.  You see, this is what Shorts do!  "Fake News" generally has a kernel of truth.  It was true that CEL-SCI didn't own all of the rights prior to March of 1997.

However, in March of 1997, CEL-SCI purchased the rights for Multikine from Sittona (this was the redacted name btw).

The takeaway:

If you can't independently verify something a Short or Long says, be skeptical.  Confirm it yourself!

The Trial Has Already Failed!

 This is still my favorite!

The original CRO, Inventiv, did not perform; in fact, it was negligent in its duties. CEL-SCI “sued” Inventiv, and Inventiv was found guilty of material breach of contract - a first in the biotech industry.  From the PR :

"This is a final and binding decision and to CEL-SCI’s knowledge, marks the first ever decision in favor of a biomedical company against a CRO for breach of contract"

Inventiv really messed up the first few years of the trial. This had serious ramifications and effected many things, as well as the length of this study. We will discuss some of these ramifications below. 

CEL-SCI has had a bumpy journey, to say the least. There was a brief clinical hold in 2016. The FDA reviewed the study and then released the hold with no changes to the protocol. It was lifted as it had a "likelihood of meeting the statutory requirements for marketing approval".

This is no small thing. Remember, the FDA is responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices. The FDA doesn’t release holds without a very good reason.

However, the "shorts" will decry that the hold was released because CEL-SCI would no longer dose patients with Multikine due to safety concerns. This is categorically wrong.

This is our take: This CRO transition was likely messy due to the multiple clinical sites across the globe and the lack of incentive for the first CRO to make a smooth hand-off. The Independent Data Monitoring Committee ("IDMC") has a regulatory and professional responsibility to monitor the integrity of the trial and safety of the participants. During one of the early IDMC reviews, they were provided data that indicated that the first CRO (Inventiv) deviated from protocols that the new CRO (Ergomed) was in the process of cleaning up.

The result of Inventiv's mismanagement was that the IDMC may have seen some adverse events and protocol deviations. Due to the potential that the data may have been unreliable, they were unable to confidently discriminate the causal factor of the adverse events, and therefore recommended to halt the trial out of an understandable abundance of caution.

The IDMC made their recommendations and the FDA got involved.

Meanwhile, CEL-SCI was trying to manage the Inventiv debacle, so it recruited more than the 880 in the original protocol and subsequently attempted to amend the protocol to increase recruitment further. FDA rules specify that sponsors are expected to submit protocol amendments before implementation of the changes and can only implement changes after the protocol amendment has been approved.

In addition to the other deficiencies noted in the hold letter, the FDA apparently didn’t like this protocol breach. The partial and subsequent full hold was initiated until CEL-SCI explained the protocol deviations from the approved IND and proved that the deviations do not materially affect the validity of the statistical analysis. The FDA knew that the hold would not affect the current progress of the study, rather, it simply wanted to ensure that CEL-SCI would not continue to enroll participants outside of the approved IND protocol.

In August 2017, the FDA reviewed the available data and the hold was fully lifted. A few months later, in December 2017, the IDMC saw no evidence of any significant safety questions and the IDMC recommended to continue the study. In this same month, CEL-SCI announced the study was fully enrolled and all patients have been treated with the investigational therapy and are being followed.

After 3 recent reviews (August 2018, March 2019 and October 2019), the IDMC recommended to continue the trial until the appropriate number of events have occurred.

The takeaway from this is that the IDMC and FDA appropriately investigated irregularities in the study and equally appropriately elected to allow the study to continue after the questions had been addressed.

If Multikine Is Working, Why Hasn't The Trial Been Stopped Already?

Maybe this is my favorite short lie!

This Phase III trial is an Event-Driven study. 298 (deaths) in this Event-Drive study must occur among the 2 main comparator groups to be able to assess if the primary endpoint of this pivotal Phase 3 study has been met.  This is a requirement in order for this trial to have "statistical significance"

 298 is the number that needs to be reached to statistically rule out a false positive result. If CEL-SCI stopped the study right now and tabulated the data, it would show a difference between the treatment arms, but detractors would question the results because the number needed to power (298) was not reached.   

There are other trials that will stop before the number needed to power is reached, but they are in therapy classes have several approved drugs that have validated the class. In a novel therapy, the breakthrough drug needs to rule out the possibility for a false positive result. 

Furthermore, an astute poster, przgwxl,  on iHub had this to say:

 "I found a paper that cited criteria for stopping early for trial success. It mentions O'Brien-Fleming stopping criteria of p<0.0138 and hazard ratio of < 0.739.

My computations, based on Fosco's "mixed" model, shows the p-value below 0.0138 in September, 2019 (162 events in the control arm). However, the hazard ratio is 0.84, so the early stopping criteria were not met. There is the same issue for 1 October 2019. So IMO the IDMC was correct not to stop the trial. The O'Brien-Fleming criteria were not met. Things were looking very good, but these criteria are deliberately very conservative.

Fast forward and assume the trial ended today. I get 168 events in the control arm, implying 130 events in the treatment arm. The p-value is <0.0006 and the hazard ratio is 0.774. The hazard ratio is still above the criterion.

Three points here:

1) the IDMC was probably right not to stop the trial. Although the p-value was looking pretty good(passed 5% sometime August, 2019(, the hazard ratio was not low enough to stop the trial early.

2) The hazard ratio criterion is pretty severe. A 10-20% treatment effect for OS is never going to meet this criterion.

3) If Fosco's survival numbers (very conservative/optimistic), and a 18.5% dropout rate are correct, the treatment effect is 20.5% with plenty of statistical power. Still not enough to stop the trial early, but a no-brainer in terms of satisfying the criterion for a positive trial.

Fosco's survival model is much more optimistic than the Cel-Sci SEER model, almost 25% higher at 3 years. Other boards have mentioned CVM inclusions/exclusions might make SEER pessimistic for survival, so this may be appropriate, but presumably the Cel-Sci consultants tailored the Cel-Sci model based on these factors. So Fosco's model is very optimistic about survival, even relative to the model presented by Geert."

Famed Twitter Poster AlfredENeuman Is Wrong!

Twitter poster AlfredENeuman ("AEN") isn't bright.   While he may know a few things, he lacks the education on Event-Driven studies,  Kaplan-Meier ("KM"), etc. Too many wrong statements to memorialize here.  But here are a few things: 

  • Length of the study has no bearing on the P-value or confidence interval of KM curve since the KM analysis assumes serial time rather than secular.
  • The longer the study goes, the better, as far as likelihood of statistical significance. There are a couple of reasons for this. One is that there is no reason to assume the control arm has better survival than the SEER cohort. Another reason is that the longer the study goes on, the more confident the we are in the prediction of the KM estimate. As an metaphor, look at two cancer patients, A received treatment a day ago and B five years ago; we can predict with greater certainty that B will live another year. I hope that makes sense.
  • CRO probably did not cherry pick the subjects. They most likely fit the study design and therefore will have OS similar to SEER data. If there was any cherry picking, the FDA would have found evidence of it during their investigation and would have had a big problem with it. Depending on severity, they may have shut the trial down.
  • AEN's arguments of standard deviation, length of trial, median survival, are simply not applicable in the domain of a KM survival analysis. These will not affect the P-value.
  • AEN's comments on halting the trial lacked context. While trials are indeed sometimes halted, a small percentage are due to futility or efficacy. The bar for efficacy is extremely high and only occurs in certain circumstances that are not relevant in our study. The bar for futility halt is not as high, but again, the decision is multifactorial and our study does not meet most of them.