First Berlin Equity Research has published a research update on CEL-SCI Corporation (ISIN: US1508376076). Analyst Christian Orquera reiterated his BUY rating and decreased the price target from USD 8.40 to USD 6.20.

CEL-SCI announced a positive outcome of the type B meeting with the US FDA for Multikine, its lead drug candidate for advanced primary (newly diagnosed) head and neck squamous cell carcinoma (HNSCC). The FDA accepted CEL-SCI’s new criteria for the selection of the target population among HNSCC patients (No lymph node involvement – N0 –, and low PD-L1 tumour expression) and the proposed study design for a confirmatory study in 212 patients. The company now needs to incorporate comments from the FDA to finalise and submit the final registration protocol (management guidance: this summer). Enrolment of patients for the confirmatory study could begin shortly thereafter if the necessary funding is secured. We believe CEL-SCI has achieved an important milestone with the FDA, considering that the agency is usually very strict with new therapies targeting patients with newly-diagnosed cancer (vs terminal cancer patients). Despite recent positive pipeline news flow, the share price has declined by >50% over the last five months. This drop will lead to higher dilution in upcoming financing rounds. We have therefore adjusted our share price assumptions regarding future financing accordingly. Given the positive feedback from the FDA, we expect that the company will focus all of its clinical resources on finalising the protocol for submission to the FDA and starting the confirmatory study as soon as possible. We have now shifted our assumptions for the potential market launch timeline in the smaller markets of Canada and the UK to 2026 (previously: 2025). Based on an updated sum-of-the-parts valuation model, we have lowered our price target to USD6.20 (previously: USD8.40). But in view of the >380% upside to our price target, we stick to our Buy recommendation.