Dear CEL-SCI Shareholders:
Our Phase 3 study in advanced primary (untreated) head and neck cancer patients with the investigational drug Multikine* (Leukocyte Interleukin Inj.), which remains on partial clinical hold, has 928 patients enrolled. It is a very large study, and it took us many years to reach this enrollment. Last year we reached the recruitment target of 880 patients, but, based on pertinent data evaluated at that time, we observed that the death rate of the enrolled patients was lower than had been expected at the time the study originally was designed. Therefore, in the summer of 2016, we filed a study protocol amendment seeking the FDA’s permission to add a substantial number of patients to the study because the observed death rate suggested that it would not be possible for the study to reach its primary endpoint of an increase of 10% in overall survival in a realistic period of time. Approximately 2 months after the amendment was submitted, on September 26, 2016, the FDA put the study on partial clinical hold. The FDA stipulated that no further patients should be enrolled, while patients currently receiving study treatments in this Phase 3 trial were still able to continue to receive treatment at the discretion of their physicians and with the patients’ consent, and patients already enrolled in the study will continue to be followed.
We are diligently continuing to work with the FDA to have the partial clinical hold lifted. We have been in a continuing dialogue with them to address their questions and to supply them with supplemental information. On February 8, 2017 we had a Type A meeting with the FDA. The Action Items for CEL-SCI to pursue per the minutes from the FDA meeting were the following:
- Provide an updated Investigator's Brochure and current procedures for compliance with requirements under 21 CFR 312 Subpart D to address the partial clinical hold.
- Provide a list of major protocol deviations, which CEL-SCI believes will affect study results, and provide a plan to identify major protocol deviations across all patients enrolled in the Phase 3 protocol.
We have supplied our response to those Action Items to the FDA. In accordance with the partial clinical hold, we are continuing to follow the 928 patients enrolled in the study, and this includes following patients until the targeted 298 deaths between the 2 comparison groups is observed. This number of deaths is required to evaluate if the study’s primary endpoint is achieved.
In light of new information we have recently decided to withdraw the study protocol amendment for additional patients that we had submitted to the FDA last summer. It is now possible that we may not need to add more patients to the study or that only a smaller number of patients need to be added to the study to complete it in a reasonable period of time. Should additional patients be needed, we will submit a future study amendment to the FDA to seek their clearance to proceed.
Another very important issue for our Company is the arbitration against the former CRO that originally ran the Phase 3 study. CEL-SCI initiated the proceedings against the former CRO in October 2013 and is seeking payment for damages related to the former CRO’s prior involvement in the Phase 3 clinical trial of Multikine. The arbitration claim, initiated under the Commercial Rules of the American Arbitration Association, alleges (i) breach of contract, (ii) fraud in the inducement, and (iii) common law fraud. Currently, the Company is seeking at least $50 million in damages in its amended statement of claim.
This arbitration has been going on longer than expected, but it is finally nearing its end. The hearing (the “trial”) started on September 26, 2016 and was originally scheduled to end in November/December of last year. Instead it is still ongoing, but we expect it to end during the second quarter of this year. This arbitration does not currently cost the Company any legal fees since it is funded by Lake Whillans, Litigation Finance, LLC, a firm specializing in funding litigation expenses. Lake Whillans will only be repaid from damages awarded to CEL-SCI.
We are working extremely hard to bring our Phase 3 trial to a successful conclusion, to have the FDA’s partial clinical hold lifted, and to win the arbitration case against the former CRO that originally ran our Phase 3 trial.
We thank you for your continued support of the Company.
Sincerely,
Geert Kersten
Chief Executive Officer
