Wednesday, March 30, 2011

CVM: Cel-Sci Spikes on Teva Connection

Note:  This post is intended for VFC's Stock House only.  No repostings or reproductions are authorized. 

Shares of Cel-Sci Corp jumped higher by twenty percent during early trading on Wednesday after the company announced that the Israeli Ministry of Health had approved the initiation of enrollment for the Phase III Multikine trial.

What is significant about this announcement is not that the Israeli medical authorities have given the trial a green light - after all, Cel-Sci has announced the trial-commencement approval of each and every country along the way - but the fact that Teva is going to be conducting the Multikine trial at three locations in Israel makes this approval noteworthy.

Teva Pharmaceuticals Industries is a big player in the global pharmaceutical market and having that name attached to any clinical trial adds a certain amount of validation and credibility to a still-developing company. 

Shares of Rexahn, for example, spiked considerably after Teva purchased a few million dollars worth of RNN.

That said, the amount Teva will spend on conducting the Multikine trial in Israel is small beans in the big scheme of things, but big pharma has one thing in common with the small investor - if the risk/reward profile of an investment looks good, then jump on it.

If Multikine makes it to market, or even makes it to late stage Phase III with positive interim results along the way, then CVM will be trading for much higher prices than where the stock sits today.  For Teva, if Multikine ever makes it to market and works as advertised by Cel-Sci, then the rewards are going to be well worth the risk of an investment in this trial.

There have been some concerns expressed by investors about the legitimacy of Cel-Sci, concerns which I believe are unfounded (although the company does defend itself against Internet rumors), but nothing will add validation, legitimacy and credibility like data showing steady enrollment at multiple locations in the world wide trial.

Nearly 900 patients are due to be enrolled in this trial, an ambitious number, yet so far there have been zero enrollments, as far as we know.

Maybe a big player like Teva can get the ball rolling in Israel.

CVM retreated later in the day after an early spike.

Volume was well over four times the daily average.

Disclosure:  Long CVM.

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