Executive Summary / Key Takeaways

• CEL-SCI Corporation is a late clinical-stage biotech focused on using immunotherapy, with lead candidate Multikine targeting a specific, underserved population in advanced primary head and neck cancer.
• Phase III data in the target population (no lymph node involvement, low PD-L1) showed a significant 5-year survival benefit (73% vs. 45% control) and a favorable hazard ratio (0.35), supporting the potential of its unique pre-surgical approach.
• The company has received FDA indication to proceed with a focused 212-patient confirmatory registration study, estimated to cost $30 million, with a goal of seeking early approval after full enrollment (~15 months).
• CEL-SCI operates with recurring losses and a significant cash burn ($8.51M used in operations in the six months ended March 31, 2025), necessitating frequent equity financings and raising substantial doubt about its ability to continue as a going concern without securing significant additional capital.
• The investment thesis hinges on the successful execution and positive outcome of the confirmatory study and the company's ability to secure the necessary funding to reach regulatory approval and potential commercialization in a market dominated by larger players with different therapeutic approaches.

A Unique Approach in the Immunotherapy Landscape

CEL-SCI Corporation is a biotechnology company dedicated to harnessing the power of the immune system to combat cancer and other diseases. Unlike many immunotherapies that are administered after standard treatments like surgery, chemotherapy, or radiation, CEL-SCI's lead investigational therapy, Multikine (Leukocyte Interleukin, Injection), is designed to be given first. This foundational strategic difference positions Multikine as a potential pre-surgical treatment for newly diagnosed advanced primary head and neck cancer patients.

The rationale behind this approach is to stimulate a localized immune response against the tumor before the patient's immune system is potentially compromised by the debilitating effects of standard-of-care treatments. Multikine is comprised of a mixture of natural cytokines and small biological molecules, injected directly around the tumor and adjacent lymph nodes for three weeks prior to surgery. This targeted, locoregional delivery aims to activate the immune system at the site of the disease during a period when the patient is generally healthier and their immune system is more robust.

CEL-SCI's research has identified a specific target population within advanced primary head and neck cancer patients who appear to benefit most from Multikine: those with no lymph node involvement (determined via PET imaging) and low PD-L1 tumor expression (TPS≤10 via biopsy). This focus on low PD-L1 is a key technological differentiator, as many currently approved checkpoint inhibitors, such as Merck (MRK)'s Keytruda (pembrolizumab), Bristol-Myers Squibb (BMY)'s Opdivo (nivolumab), and AstraZeneca (AZN)'s Imfinzi (durvalumab), appear to be most effective in patients with high PD-L1 expression. CEL-SCI estimates this low PD-L1 population represents approximately 70% of locally advanced primary head and neck cancer patients, a segment the company believes is currently underserved by existing therapies.

Beyond Multikine, CEL-SCI is also developing product candidates under its Ligand Epitope Antigen Presentation System (LEAPS) technology, primarily for rheumatoid arthritis. While LEAPS represents another facet of the company's immune system-focused R&D, Multikine remains the primary focus and driver of operational expenses, accounting for the vast majority of the $8.44 million in R&D spending during the six months ended March 31, 2025.

Competitive Positioning: Carving Out a Niche

The immuno-oncology market is dominated by large pharmaceutical companies with significant resources and established product portfolios. Companies like Merck, Bristol-Myers Squibb, and AstraZeneca have substantial market share (estimated 15-20% for Merck, 10-15% for BMY, 8-12% for AZN in immuno-oncology) and robust financial performance, characterized by strong revenue growth, high profitability margins (gross margins typically exceeding 70%), and significant cash flow generation. Their flagship products, like Keytruda and Opdivo, have demonstrated considerable efficacy in various cancer types, including head and neck cancer, often showing improved overall or progression-free survival in clinical trials.

CEL-SCI operates on a vastly different scale. As a late clinical-stage company with no approved products, it has negligible market share and generates no significant revenue. Its financial profile is marked by recurring losses and reliance on external financing, a stark contrast to the profitability and cash generation of its larger potential competitors. For the six months ended March 31, 2025, CEL-SCI reported a net loss of $13.65 million and used $8.51 million in cash for operating activities.

However, CEL-SCI's competitive strategy is not to directly compete head-to-head across the entire head and neck cancer market, but rather to target a specific, underserved niche: the pre-surgical treatment of low PD-L1, non-lymph node involved advanced primary head and neck cancer. This focus leverages Multikine's unique mechanism of action and timing of administration. While larger competitors' therapies are typically given after surgery or in cases where surgery is not indicated, Multikine aims to improve outcomes before the standard of care begins.

The company's Phase III data in this specific target population suggests a quantifiable advantage: a 73% 5-year survival rate compared to 45% in the control group who did not receive Multikine. This 28.6% absolute survival benefit, coupled with a hazard ratio of 0.35 (indicating a halving of the risk of death), is the core of CEL-SCI's value proposition and its potential competitive moat within this niche. The company also points to statistically significant pre-surgical responses (tumor reductions and downstaging) observed in the Phase III trial as evidence of Multikine's biological activity.

While larger competitors benefit from established global distribution, vast R&D budgets, and regulatory experience, CEL-SCI's potential advantage lies in addressing a specific biological need (pre-surgical immune activation in low PD-L1 tumors) that may not be optimally addressed by existing post-surgical or high PD-L1-focused immunotherapies. The success of this strategy hinges entirely on demonstrating this benefit in the planned confirmatory study and securing regulatory approval.

The Path Forward: Confirmatory Study and Liquidity Challenges

Building on the Phase III results, CEL-SCI's strategic focus is squarely on gaining regulatory approval for Multikine in its identified target population. In May 2024, the company announced a significant step forward, receiving an indication from the FDA that it may proceed with a confirmatory registration study. This planned study is designed to be a randomized controlled trial enrolling 212 patients, specifically focusing on the target population that showed the greatest survival benefit in the prior Phase III trial. The study will compare Multikine treatment plus standard of care versus standard of care alone.

The company's goal is to initiate this confirmatory study as soon as the necessary capital is secured. They anticipate full enrollment approximately 15 months after the study begins, with the potential to seek early or conditional approval following full enrollment, leveraging regulatory pathways designed for unmet medical needs where strong supporting data exists. In parallel, CEL-SCI is pursuing regulatory approval in other markets, announcing in April 2025 plans to file in Saudi Arabia and seeking local partnerships for commercialization and manufacturing in the Middle East and North Africa region.

However, the path forward is heavily dependent on the company's ability to finance its operations and the estimated $30 million cost of the confirmatory study. CEL-SCI has historically funded its activities through the sale of securities and loans, and this remains the case. The company's balance sheet as of March 31, 2025, shows cash and cash equivalents of $1.92 million, down from $4.74 million at September 30, 2024. Net cash used in operating activities was $8.51 million for the six months ended March 31, 2025. While recent financing activities, including net proceeds of $6.7 million from offerings in December 2024 and March 2025, and a $350,000 loan received in May 2025, have provided some capital, the burn rate necessitates further funding.

The company explicitly states that due to recurring losses and future liquidity needs, there is substantial doubt about its ability to continue as a going concern. The ability to raise additional capital is subject to market conditions, and there is no assurance that funds will be available on acceptable terms or at all. Failure to secure sufficient funding would require the company to curtail operations, potentially delaying or halting the confirmatory study and preventing it from completing the necessary steps for regulatory approval and commercialization.

Operational details also include significant lease obligations, such as the manufacturing facility lease near Baltimore (expiring October 2028), with finance lease liabilities totaling $8.99 million (net present value) as of March 31, 2025. These fixed costs contribute to the ongoing cash requirements.

Risks and Considerations

Investing in CEL-SCI involves significant risks inherent in the biotechnology sector, particularly for a company at this stage of development. The primary risks include:

• Financing Risk: The substantial doubt about the company's ability to continue as a going concern highlights the critical need for additional funding. Failure to raise sufficient capital could lead to operational delays, inability to complete the confirmatory study, and ultimately, failure to bring Multikine to market.
• Clinical Trial Risk: While the Phase III data in the target population is promising, there is no guarantee that the confirmatory study will replicate these results or meet the endpoints required for regulatory approval. Clinical trials are complex and can fail for various reasons.
• Regulatory Risk: Obtaining FDA and other regulatory approvals is a lengthy, uncertain, and complex process. Even with positive clinical data, there is no assurance that regulatory agencies will approve Multikine for commercial sale. The company's strategy of seeking early approval after full enrollment is not guaranteed.
• Commercialization Risk: If approved, CEL-SCI would face significant challenges in manufacturing, marketing, and distributing Multikine, competing against large, established pharmaceutical companies with existing infrastructure and market presence.
• Competition: While Multikine targets a specific niche, larger competitors may develop therapies or expand indications that directly or indirectly compete with Multikine's proposed use, potentially limiting market opportunity or putting pressure on pricing.

Conclusion

CEL-SCI Corporation presents a high-risk, high-reward investment proposition centered on the potential of its lead immunotherapy candidate, Multikine, to address an unmet medical need in a specific population of head and neck cancer patients. The Phase III data showing a significant survival benefit in the identified target group provides a compelling foundation for the investment thesis. The FDA's allowance to proceed with a focused confirmatory study represents a critical step forward, offering a defined, albeit capital-intensive, pathway towards potential regulatory approval.

However, the company's precarious financial position, marked by recurring losses and a heavy reliance on external financing, casts a significant shadow over its prospects. The ability to successfully raise the estimated $30 million needed for the confirmatory study and sustain operations until potential approval is the most immediate and critical factor for investors to consider. While Multikine's unique pre-surgical approach and focus on the low PD-L1 population offer a differentiated strategy compared to larger competitors, the execution risk of clinical trials and the uncertainty of regulatory approval remain substantial hurdles. The investment story for CEL-SCI is fundamentally a race against time and capital, betting on the successful development and approval of Multikine before liquidity challenges become insurmountable.