Thursday, June 4, 2009

As the Cancer Stocks Rally, Cel-Sci (CVM) is Flying Below the Radar

Since the conclusion of the American Society of Clinical Oncology (ASCO) in Orlando, Florida on Sunday, it's been a week of rallying for cancer immunotherapy stocks.

Shares of Antigenics (AGEN), producer of the world's first approved cancer vaccine, soared to over three dollars from sixty cents before closing Thursday at $2.67. Dendreon(DNDN) also continued it's steady rise to close Thursday at over twenty five dollars.

Meanwhile, as those stocks rallied, shares of Cel-Sci Corp (CVM) have continued to fly below the radar, and while still trading for below forty cents, the stock is as good a risk-reward play as any.

Cel Sci is currently preparing to launch a Phase III clinical trial for it's promising head and neck cancer immunotherapy treatment, Multikine. Multikine is the first immunotherapeutic agent being developed as a first-line standard of care for cancer treatment, according to Cel Sci's website. Based on that fact and on the promise of an already completed Phase II trial, Multikine has already been labeled as a potential billion dollar blockbuster by Med Ad News, a respected medical journal spotlighting the biotech and pharmaceutical markets.

Multikine's pending Phase III trial has been put on hold since the global economic meltdown put a squeeze on the credit markets, but in the meantime Cel Sci has been able to secure multiple marketing and distribution partners in various countries around the world. Should Multikine make it to market, the infrastructure being put in place globally will make the launch a smooth process.

With a newly built manufacturing facility standing by in Baltimore, Maryland, Cel Sci will most likely commence the Phase III trial later this year.

In addition to Multikine, Cel Sci is developing LEAPS technology, another immunotherapeutic agent that treats various infectious diseases. Although LEAPS is still in the pre-clinical stages of development, it was highlighted in a well timed press release at the height of the swine flu scare declaring that the LEAPS technology had the potential to treat the Swine Flu. While it was a slick PR move by the company to release that news at such an opportune time, LEAPS, although loaded with potential, is far too early in the developmental stages to place much faith in as an investment.

Also in early stages of development is a process being developed by Cel Sci that could extend the shelf life of drugs that were developed using stem cells and other biological products. This process, according to a company press release, is intended to allow the drugs to maintain their potency and shelf life. Again, while this process has potential, it's still too early in the developmental phases to warrant an investment. However, it made for another well timed PR by Cel Sci to address the hot topic of the day; which was, at that time, stem cell research.

CVM is loaded with potential for a thirty cent stock. The risk-reward based on Multikine alone is immense and for the cost of a few nights out on the town, an investor can set themselves up very well to take advantage of the gains should Multikine make it to market and, considering the stock is just a thirty cent investment, the downside is minimal.

It could still take years for Multikine to pay off, but with the mood on cancer immunotherapies improving and speculative money pouring back into the market, CVM could be due for a pop.

Accumulate while you can.

Disclosure: VFC is long CVM

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