CEL-SCI is Knocking On the Door, in More Ways Than One (GILD, CVM, ABBV)

Look out AbbVie Inc. (NYSE:ABBV), and Gilead Sciences, Inc. (NASDAQ:GILD), you may want to look over your shoulder as well. There's a new immunology player coming to town, and its name is CEL-SCI Corporation (NYSEMKT:CVM). Yes, AbbVie may be the name behind blockbuster drug Humira - with nearly $10 billion in sales in 2012 - while Gilead Sciences is saving HIV patients' lives with immunological therapies Stribild and Complera. But, small cap company CEL-SCI may be closer to launching its own immunology drug sooner than most investors realize.

If the name CEL-SCI rings a bell, it may be because the SmallCap Network was a big fan of the company's work several years ago, introducing it to readers way back in 2002, and keeping tabs on it and CVM shares all the way through 2009. That's when its flagship drug, head and neck cancer therapy Multikine, fell off the radar due to a lengthening gap between the end of Phase 2 trials and the beginning of Phase 3 trials.

Phase 3 started in the meantime in several foreign markets, but as of last week, those trials are right in U.S. investors' faces - the immunology drug's first United States trials are now gathering candidates. Now that traders can see it happening first hand, there's no way of denying the legitimacy or the opportunity of the company.

Oh, it will still be at least a couple of years before CEL-SCI Corporation becomes a real threat to names like AbbVie and Gilead Sciences, and initially, it won't even be a direct threat; CEL-SCI's Multikine is initially just taking aim at head and neck tumors. However, given the nature of the underlying technology behind Multikine and all immunological drugs (immunology induces a patient's own immune system to create a stronger response to disease), Multikine is expected to be an effective way to fight a variety of conditions, ranging from the common cold to other forms of cancer, and perhaps many more things in between. 

That's not the core of the reason the CVM shares have perked up since the beginning of this year, however. No, the reason the market is suddenly so keen on CEL-SCI again is most likely a set of details that hasn't been mentioned much - if at all - in the company's recent press releases. Nevertheless, they're important details that the SmallCap Network discussed way back in 2006, explaining:

Statistically speaking, about 2/3 of Phase III drug trials get ultimate approval.

In late 2006 we learned:

The goal of Multikine is to make the first cancer treatment more successful. This means that Multikine would cure more patients with the first treatment. The Phase II clinical trial with Multikine showed about a 40% improvement in survival from Multikine... Multikine cured 12% of head & neck cancer patients in 3 weeks, with no toxicity. Anyone who has ever seen the effects of radiation and chemotherapy can tell you how very amazing that is. On average Multikine killed 50% of the tumor cells in just a few weeks.

Then in 2007 we noted:

Specifically, 12% of patients had no tumor remaining after only a three week treatment. And, 3.5 years after the whole cancer treatment was finished, survival with Multikine appeared to be much higher. In Phase II testing CEL-SCI saw a 65% - 70% chance of survival with Multikine, versus only a 50% chance without it.

You put it all together, and what you get is a drug that would be difficult for the FDA to find a reason no to approve. Immunology is non-toxic, as it enhances an individual's own biology... the immune system to be specific. Better still, considering many forms of chemo and almost all radiation treatments damage a cancer patient's immune system (sometimes making a bad problem worse), a safe and effective alternative like Multikine could be seen as a slam-dunk. That's what the newly-bullish chart of CVM is implying anyway, now that American investors can see it happening on their homeland.

With all of that being said, as firmly as shares of CVM have been forging ahead since early January, there's one last hurdle that needs to be cleared - the 200-day moving average line (green) at $1.46. CEL-SCI tested it on Friday, and thought about it today. Although the stock may actually need to peel back a little and get a running start to clear that ceiling, that's ok - the undertow is bullish no matter what. And, once the stock does pop above that long-term moving average line, there's not much else that can get in the way after that. The bulls have already exposed their hand.

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