CEL-SCI: An Imminent Phase 3 Failure

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CELSCI
An Imminent Phase 3 Failure
- SEPTEMBER 2020 -
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Table of Contents

• Short Thesis Brief
  .... 4
• Corporate History
  ...... 8
• Pipeline
  ... 10
• Capital Structure
  .. 16
• Clinical Data Portends Harm
  ..........................
  19
• DMC Recommendations and FDA Clinical
  Hold..
  43
• Modeling the Survival Curve
  75
• Allovectin-7 Trial Parallels
  . 97
• L.E.A.P.S. and COVID-19
  103
• Where are the Data?...............................
  ..................................................
  ..................................................
  ...............................................
  104
• Grand Conclusion
  ..... 108
• Appendix
  . 112

4
Short Thesis Brief

• Cel-Sci (NYSEA CVM) has been developing
  Multikine (MK) since the early 1980s, or for
  nearly 40 years. Initially, the drug was based on
  the novelty (and thus, patentability) of a
  natural derivation of the cytokine IL-2 for the
  treatment of cancer. As time went on, the
  Companys language on MK shifted from IL-2
  primarily to the entire cocktail of MK and the
  potential synergy of IL-2 with other cytokines in
  the mixture. Cel-Sci has to-date conducted only
  one randomized controlled (let alone phase 3)
  trial with any sort of clinical endpoints the
  currently ongoing IT-MATTERS trial, a 928-subject
  trial testing MK (their only therapy in clinical
  development) in squamous cell carcinoma of the
  head and neck (HNSCC), or more specifically, oral
  SCC (OSCC). The trial hit 298 primary events
  (deaths) in late April of 2020, the target number
  to trigger the process towards data lock and
  final analysis. It has been ongoing since early
  2011a little over 9 years.
• Paramount to the short thesis, the DMC has on two
  separate occasions (spring 2014 w/ 150 subjects
  enrolled and spring 2016 w/ 800 enrolled) issued
  formal recommendations to halt the IT-MATTERS
  phase 3 trial for safety harm and efficacy
  futility reasons (brackets ours). CVM
  responded to the first rec with unknown data that
  assuaged the DMC and the trial continued, and it
  responded to the second rec by seeking to amend
  the protocol to allow 1,273 subjects to be
  enrolled vs the originally designed 880and,
  importantly, to increase total events from 298 to
  394. However, when the protocol amendment was
  submitted to FDA and FDA became aware of the two
  futility recs (CVM had not notified FDA of
  either), they placed a clinical hold on the IND.
  FDA even stated outright that patients enrolled
  in the study are exposed to unreasonable and
  significant risk of illness or injury and the
  study is unlikely to demonstrate superiority and
  thus should be terminated for futility. This
  hold was not lifted until CVM withdrew the
  protocol amendment and closed the trial to
  further recruitment.

4
5
Short Thesis Brief

• Cel-Sci has conveniently removed any mention of
  the clinical hold and statements from the DMC and
  FDA from its most recent 10-Ks (2018 2019). The
  only 10-K it can be found in is the SEC-filed
  2016 10-K (the 2017 10-K mentions the hold was
  imposed and then lifted, but gives no additional
  color). The absence of any mention of the hold or
  its cause from the most recent 10-Ks appears to
  be in violation of securities law, in particular
  the duty of ongoing disclosure of material
  information (e.g., https//www.sec.gov/about/offic
  es/oia/oia_corpfin/princdisclos.pdf).
• Although the P1/2 studies testing MK in HNSCC
  produced some interesting data, including a
  handful of alleged responses, these responses
  could have been the result of a variety of
  factors besides a targeted immune response (e.g.,
  inflammation causing accidental or
  unprogrammed necrosis, rather than programmed
  apoptosis/autophagy). Also, in the papers on
  these studies, the authors describe responses as
  portions of the resected lesions noted as
  fibrotic, while not meaningfully shrinking in
  size. These are clearly not valid responses by
  RECIST.
• Furthermore, the formulation of MK has differed
  across studies, and few of the studies conducted
  by Cel-Sci involve the same formulation used in
  the IT-MATTERS trial (e.g., Timar et al.,
  2003/2005who at the time was the recipient of
  monetary compensation from CVM). But importantly,
  even if MK in its current form can sometimes
  cause shrinkage of OSCC lesions, the totality of
  the mixture would likely confer
  tolerogenicity/tumorigenicity rather than
  immunogenicity, due to the overwhelming presence
  of IL-8 and significant presence of IL-6 and TXB2
  (a metabolite of TXA2 and representing COX-1
  activity, implicated in the formation of
  metastatic intravascular niches). Corroborative
  evidence strongly suggests Multikine treatment
  led to an exacerbation of progressive
  disease/time-to-death, and is almost certainly
  why the DMC overseeing IT-MATTERS stated in
  earnest that they were deeply concerned about
  patient safety based on our review of
  cumulative data.

5
6
Short Thesis Brief

• The history of MK itself is sordid. The initial
  MK therapy (well call it MK1), an
  unsophisticated and antiquated product developed
  in the 1970s, featured the Companys licensed,
  natural human-cell derived IL-2 as the
  advertised active ingredient (with all other
  matter unidentified). MK1 was later shelved in
  favor of what well call MK2 sometime in the
  late 1980s/early 1990s. MK2, as it turns out, is
  indistinguishable from ImmunoRxs IRX-2 (since
  acquired by Brooklyn ImmunoTherapeutics) and
  developed by Dr. John Hadden, whom Cel-Sci sued,
  along with ImmunoRx, accusing them of copying
  Multikine, and were engaged in IP dispute from
  1996 to 1997. And perhaps because they realized
  the case was futile (it was dropped in Oct 1997
  without settlement), moved on to testing what
  well call MK3 in clinical trials.
• The MK1 patents (ca. 1980) did not disclose how
  much IL-2 (the only validated cytokine shown to
  confer a clinical benefit e.g., Proleukin) the
  mixture yielded per 1 mL dose, but in Dr.
  Haddens patents (ca. early-mid 1990s), we find
  the impetus behind developing MK2 being the need
  to yield a higher percentage of IL-2 in the
  overall formulation than MK1, and that because of
  the very low levels of IL-2 in MK1, the process
  to make MK1, and MK1 itself, were deemed
  inferior. Given that the later (ca. 2003-2005)
  Cel-Sci patents for Multikine are exclusively
  method-of-use, and not only adopt the same name
  as was used in the 1980s, but break down the
  cytokine profileincluding IL-2, which is quite
  lowand given that both the original 1980 patents
  and later patents report serum-free and
  mitogen-free IL-2 containing supernatant via
  buffy coat cells, we can safely conclude that
  MK1 and MK3 are one in the same. The later
  patents reveal the full cytokine profile of MK3
  (and thus, MK1), and the IL-2 content per 1 mL
  dose is noted as only 0.6 IU, or 0.18
  (preferably). The language in the 10-Ks also
  alters from the point it became clear Cel-Sci
  could no longer use MK2/IRX-2, in that their
  touting of IL-2 in the mixture is largely
  removed (ca. 2003 on).

6
7
Short Thesis Brief

• MK3/MK1which well now refer to simply as
  Multikine or MKconsists of a high percentage
  of IL-8 (est. 72.6), followed by IL-6 (8.2),
  TXB2 (4.3), MlP-1ß (4.0), MIP-1a (4.0), and
  lesser amounts of 14 other cytokines, including,
  as mentioned, trace levels of IL-2 (0.18). Some
  components of MK may induce tumor cell lysis,
  such as TNF-a (although TNF-a can also have a
  tolerogenic effect), but the vast majority of
  what MK isespecially IL-8is clearly tumorigenic
  (in fact, it might be more appropriate to think
  of Multikine as IL-8). These effects are apparent
  in the deleterious alteration of the CD4/CD8
  ratio, EMT induction, and increased Ki-67
  expression after MK dosing, inter alia.
• Modeling a blended event rate based on the clear
  enrollment curve provided by the Company and
  event milestones, together with a lower-risk
  subject demographic that likely make up the
  IT-MATTERS trialespecially when considering the
  ever-increasing prevalence of HPV16 OSCCfits
  well, and if anything shows the blended event
  rate should have been slower than that observed
  in IT-MATTERS. Thus, there could be no separation
  between groups, or even a better-performing
  control group, and the blended rate observed thus
  far would not be out of line.
• In sum, the DMC recommendations to halt the trial
  for futility, especially the 2nd rec in 2016 with
  800 subjects enrolled over a 5-year period the
  DMCs strong allusion to harm in the MK groups
  shutting down of recruitment by FDA, noting
  futility directly, while also noting harm in the
  MK arms a well-fitting or even underperforming
  blended event rate via lower-risk OSCC prognostic
  factors clear rationale for why MK is very
  unlikely to benefit patients (tolerogenic effects
  of prominent cytokines in mix) elevated market
  cap (500mm _at_ 13/pps) and near-term catalyst of
  80-90 immediate loss of valuation upon
  reporting the IT-MATTERS trial failed to meet its
  primary endpoint, due to no other candidates (or
  even indications for MK) in development and
  little cashmake CVM a highly compelling short
  candidate.

7
8
Corporate History

• Cel-Sci was founded in ca. 1983 by Maximilian de
  Clara, and became publicly traded soon
  thereafter.1 Maximilian (who had gotten into a
  bit of trouble with the SEC for late-reporting of
  Cel-Sci stock sales2) resigned as president for
  health reasons on Sept. 6, 2016 at the ripe age
  of 87 years.3
• The Company conducted small clinical trials with
  different versions of a vaccine, dubbed
  Multikine (MK), and worked to solve
  manufacturing issues from 1983 2004. To date,
  the only human trials that have been completed
  are small studies (30 subjects or less) that
  either used a historical control (derived
  survival endpoint), or a concurrent control to
  compare resected tumor samples with.
• The phase 3 IT-MATTERS trial, testing MK in oral
  squamous cell carcinoma (OSCC), was cleared to
  begin in 2007, but did not enroll its first
  subjects until early 2011 because of a lack of
  funding due the financial crisis (according to
  Cel-Sci). Once enrollment had ensued, it did so
  slowly over the years 2011 2013 (135 subjects
  in total from a planned 880).
• Cel-Sci filed an arbitration against its initial
  CRO, inVentiv, seeking 50 million in damages for
  breach of contract in Oct 2013,4 and eventually
  (in June 2018), won (awarded 2.9mm).5 It hired
  two new CROs to manage the IT-MATTERS trial (ICON
  and Ergomed) without further issue.

• https//cel-sci.com/history/
• https//www.sec.gov/news/digest/1992/dig050792.pdf
  
• https//www.irdirect.net/prviewer/release_only/id/
  2075129
• https//www.irdirect.net/prviewer/release_only/id/
  363491
• https//www.irdirect.net/prviewer/release_only/id/
  3171756

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9
Corporate History

• On two separate occasions (in spring of 2014 and
  spring of 2016) the DMC recommended the trial be
  halted for safety harm and efficacy futility
  reasons (brackets ours). The FDA, in response to
  a major protocol amendment submission to upsize
  the trial from 880 to 1,273 subjects and,
  importantly, total events from 298 to 394, issued
  a clinical hold in Sept. 2016, stating that,
  among other things, Patients enrolled in the
  study are exposed to unreasonable and significant
  risk of illness or injury, and The study is
  unlikely to demonstrate superiority and thus
  should be terminated for futility.
• In addition to the 135 enrolled from 2011 2013,
  a further 195 were enrolled in 2014 340 in 2015
  and 260 in 2016 (930n), reaching full enrollment
  technically concurrent with the clinical hold
  Sept. 26, 2016,6 and officially in Dec 2017.7
• Cel-Sci has displayed the unusual habit of
  reporting each DMC recommendation to continue
  based on safety/study conduct reviews (each 6
  months),8 as well as monthly updates on
  enrollment, including the number enrolled over
  the previous month (plus certain milestones9).
  Leading up to the clinical hold, trial enrollment
  was averaging 30n/month.10
• On May 4, 2020, the Company reported 298 events
  (deaths) had occurred in the IT-MATTERS trial in
  late April,11 which is the required number to
  trigger the process towards data lock for the
  final analysis, and would normally lead to
  dissemination of topline overall survival (OS)
  results in under 2 months for an international
  oncology phase 3 trial (see slide 105).
  IT-MATTERS topline data are thus long overdue,
  strongly implying excessive data-dredging under
  the direction of a firewalled steering committee
  after learning of a failed OS-result (see slides
  104 108).

9
10
Pipeline

• MK is a cocktail of cytokines and other cellular
  byproducts (see Appendix I), but overwhelmingly
  IL-8.
• The compositional breakdown of MK has been
  disclosed in various patents, which also reveal
  that IL-2 is only found in trace amounts
• 14 In other specific applications, the
  serum-free and mitogen-free cytokine preparation
  or pharmaceutical composition has further
  different cytokines and other small biologically
  active molecules in Leukocyte Interleukin
  Injection (LI) or Multikine wherein the ratio of
  each of the small biologically active molecules
  to IL- 2 is as follows

10
Source Company presentation https//cel-sci.com/
corporate-presentations/
11
Pipeline

• IL-3 to IL-2 in a ratio range of 0.38 - 0.68,
  preferably at 0.53/- 0.15, IL-6 to IL-2 in a
  ratio range of 37.2 - 53.8, preferably at 46/-
  5.9, IL-8 to IL-2 in a ratio range of 261 -
  561.5, preferably at 411/- 10.6, IL-la to IL-2
  in a ratio range of 0.56 - 0.94, preferably at
  0.75/- 0.19, IL-10 to IL-2 in a ratio range of
  2.82 - 3.22, preferably at 3.0/- 0.18, IL-16 to
  IL-2 in a ratio range of 1.16 - 2.84, preferably
  at 1.84/-0.68, G-CSF to IL-2 in a ratio range of
  2.16 - 3.78, preferably at 2.97/- 0.81, TNF-ß to
  IL-2 in a ratio range of 1.17 - 2.43, preferably
  at 1.8/- 0.63, MIP-1a to IL- 2 in a ratio range
  of 15.7 - 37.16, preferably at 22.7/- 7.0,
  MlP-1ß to IL-2 in a ratio range of 17.1 - 28.5,
  preferably at 22.8/- 5.7, a RANTES to IL-2 in a
  ratio range of 2.3 - 2.7, preferably at 2.5/-
  0.13, a EGF to IL-2 in a ratio range of 0.267 -
  0.283, preferably at 0.275/- 0.008, PGE2 to IL-2
  in a ratio range of 3.63 - 5.42, preferably at
  4.5/- 0.87 and TxB2 to IL-2 in a ratio range of
  23.47 - 25.13, preferably at 24.3/- 0.83.12
• Another patent currently assigned to Cel-Sci with
  a priority date of 2004 provides further color,
  listing all components of MK13
• Multikine or Leukocyte-Interleukin Injection
  (LI), is a serum-free, mitogen-free,
  antibiotic-free preparation produced from human
  peripheral blood mononuclear cells that include
  T-cells, B cells and macrophages. There are three
  "families" of cytokines in Leukocyte Interleukin
  Injection (LI) or Multikine that together impart
  the unique biological activity of Leukocyte
  Interleukin Injection (LI) or Multikine. They
  include direct cytotoxic/cytostatic and
  virocidal/virostatic cytokines such as TNF-a, and
  IFN-y, lympho-proliferative cytokines such as
  IL-1, and IL-2 and chemotactic cytokines such as
  IL-6, IL-8 and MIP-la. Furthermore, the different
  cytokine and small biological molecules that
  constitute Leulcocyte Interleukin Injection (LI)
  or Multikine are all derived from the lectin
  (e.g. PHA) in vitro stimulation of human
  peripheral blood mononuclear cells that include T
  cells, B cells, and macrophages. Centrifugation
  on a Ficoll-Paque gradient separates the white
  blood cells (including T cells, B cells, and
  macrophages) from donor whole blood, and a series
  of washes (in physiologically buffered media)
  facilitates the isolation of lymphocytes, and the
  removal of red blood cells, cellular debris and
  other unwanted cellular components from the
  isolated white cell component of the whole donor
  blood.

11
12
Pipeline

• Leukocyte Interleukin Injection (LI) or Multikine
  contains different cytokines present at specific
  ratios of each cytokine to Interleukin 2 (IL-2)
  as follows
• IL-1ß to IL-2 at a ratio range of 0.4 - 1.5, and
  preferably at 0.7/- 0.1 (IL-1ß/IL-2), TNF-a to
  IL-2 at a ratio range of 3.2 - 11.3, and
  preferably at 9.5/- 1.8 (TNF-a/IL-2), IFN-y to
  IL-2 at a ratio range of 1.5 - 10.9, and
  preferably at 6.0/- 1.1 (IFN-7/IL-2), and GM-CSF
  to IL-2 at a ratio range of 2.2 - 4.8, and
  preferably at 4.0/- 0.5 (GM-CSF/IL-2).
• The remainder of the different cytokines and
  other small biologically active molecules in
  Leukocyte Interleukin Injection (LI) or Multikine
  are also present within each preparation of the
  small biologically active molecule to IL-2 is as
  follows
• IL-3 to IL-2 in a ratio range of 0.38 - 0.68,
  preferably at 0.53/- 0.15, IL-6 to IL-2 in a
  ratio range of 37.2 - 53.8, preferably at 46/-
  5.9, IL-8 to IL-2 in a ratio range of 261 -
  561.5, preferably at 411/- 10.6, IL-1a to IL-2
  in a ratio range of 0.56 -0.94, preferably at
  0.75/- 0.19, IL-10 to IL-2 in a ratio range of
  2.82 - 3.22, preferably at 3.0/- 0.18, IL-16 to
  IL-2 in a ratio range of 1.16 - 2.84, preferably
  at 1.84/-0.68, G-CSF to IL-2 in a ratio range of
  2.16 - 3.78, preferably at 2.97/- 0.81, TNF-ß to
  IL-2 in a ratio range of 1.17 - 2.43, preferably
  at 1.8/- 0.63, MIP-1a to IL-2 in a ratio range
  of 15.7 - 37.16, preferably at 22.7/- 7.0,
  MIP-1ß to IL-2 in a ratio range of 17.1 - 28.5,
  preferably at 22.8/- 5.7, a RANTES to IL-2 in a
  ratio range of 2.3 - 2.7, preferably at 2.5/-
  0.13, a EGF to IL-2 in a ratio range of 0.267 -
  0.283, preferably at 0.275/- 0.008, PGE2 to IL-2
  in a ratio range of 3.63 - 5.42, preferably at
  4.51- 0.87 and TxB2 to IL-2 in a ratio range of
  23.47 - 25.13, preferably at 24.3/-0.83.
• Leukocyte Interleukin Injection (LI) or Multikine
  was tested using a characterization protocol and
  does not contain the following cytokines and
  other small biologically active molecules IL-4,
  IL-7, and IL-15, Tflt, sICAM, PDGF-AB, IFN-a,
  EPO, LTC 4, TGF-02, FGF basic, Angiogenin,
  sE-selectin, SCF, and LIF. Leukocyte Interleukin
  Injection (LI) or Multikine ( contains only
  trace quantities just above the level of
  detection of the assay) of IL-12, and LTB 4.

12
13
Pipeline

• From this we can derive the following breakdown
  by weight as a percentage of each listed
  component in MK (preferably)

• TNF-ß.0.32
• IL-2..0.18
• IL-1a......0.14
• IL-1ß...0.12
• IL-3..0.09
• EGF......0.05

• PGE2 ..0.79
• GM-CSF...0.70
• IL-10...0.53
• G-CSF.0.52
• RANTES....0.44
• IL-160.32

• IL-872.60
• IL-6......8.12
• TxB2.....4.29
• MlP-lß ......4.02
• MIP-la......4.00
• TNF-a.1.68
• IFN-y1.06

It is essential that the actual breakdown of a
composition for which the assignee is seeking
protection be very accurately elucidated within
patents, as there is no patent protection for a
formulation materially different. Although there
are 19 total components listed above from the
main patents, and 14 on the graphic to the right
(and in context in Appendix I), the word choice
Major in the graphic provides enough ambiguity
to legally allow omission of some components.
Source Company presentation https//cel-sci.com/
corporate-presentations/
13
14
Pipeline

• Thus, MK is predominantly the chemokine IL-8
  (est. 72.6), with a lesser amount of IL-6
  (8.12), TxB2 (4.29), MIP-1ß (4.02), and
  MIP-1a (4.00) in the mixture, and lesser
  amounts still of 14 other components (e.g., 1.68
  TNF-a, 0.18 IL-2, etc.) that make up the
  remining 7.
• We can further derive, from total administered
  units of 400 (based on IL-2 standardization
  equivalent), given in two 200 IU doses (one
  peritumoral, the other perilymphaticsee graphic
  on right), that subjects receive 300 units of
  IL-8 total, 35 units of IL-6, 18 units each of
  TxB2/MIP-1ß/MIP-1a, and less than 2 units of the
  remining cytokines (e.g., 0.6 units of IL-2).
• IL-2 is the only cytokine in MK proven to confer
  clinical benefit, both parenterally administered
  (Proleukin)14 and perilymphatically15 (although
  w/ monthly boostersby contrast, MK is
  administered for 3 weeks pre-surgery and then
  never again). Whereas IL-8 and IL-6 (as well as
  other MK-components) are implicated in promoting
  tumor growth and malignant stem cell
  immunosurveillance escape.16, 17

Source Company presentation https//cel-sci.com/
corporate-presentations/
14
15
Pipeline

• The Companys L.E.A.P.S. platform18 has been in a
  state of preclinical development for an
  inordinate amount of time. The origination date
  of the platform can be found in the Companys
  1997 10-K, over 22 years ago19
• T-CELL MODULATION PROCESS
• In January 1997, the Company acquired a new
  patented T-cell Modulation Process which uses
  "heteroconjugates" to direct the body to choose
  a specific immune response. The
  heteroconjugate technology, also known as
  L.E.A.P.S. (Ligand Epitope Antigen
  Presentation System), is intended to
  selectively stimulate the human immune system to
  more effectively fight bacterial, viral and
  parasitic infections and cancer, when it cannot
  do so on its own. Administered like vaccines,
  heteroconjugates combine T-cell binding
  ligands with small, disease associated, peptide
  antigens and may provide a new method to treat
  and prevent certain diseases.
• Clearly, any compositional patent protection for
  this tech is now gone, and the only IP protection
  available would be less sticky method-of-use
  patenting. Though it may be difficult to
  patent-protect certain uses, given the
  telegraphing and various tries they have already
  made with the platform over the years (HIV,
  etc.)as is also clearly the case with Multikine
  (although MK has 7 yr exclusivity via orphan
  status in the US and 10 yrs in the EU for HNSCC).
• Currently under LEAPS, there is CEL-2000 and
  CEL-4000, potential rheumatoid arthritis vaccine
  candidates with some preclinical data,20 as well
  as a severe H1N1 infection treatment with
  preclinical dataand now they are also working on
  a potential candidate to treat severe COVID-19
  infection under LEAPS.21, 22 At this time, there
  are no INDs filed for any LEAPS candidate, and
  very little information on HPV/HIV (Multikine) or
  breast cancer (LEAPS), as enumerated in their
  aforementioned pipeline slide, besides the odd
  preclinical study or two. More color on their
  experimental COVID-19 treatment is given later in
  this presentation.

15
16
Capital Structure

• Cel-Sci finished Q3 (its Q3 ends June 3023a) with
  20.1 mm in cash on the books,23b which included
  proceeds from a 7.7mm financing that closed on
  March 26.24
• On June 23, Cel-Sci notified the market that
  during the 2nd quarter it received 10mm from
  the exercise of warrants,25 included in the above
  cash position.
• Using the average of the last two Qs burn rate at
  7.2mm/Q would derive an end-of-July cash
  balance of 17.7mm, and estimated end-of-August
  and end-of-September balances of 15.3mm and
  12.9mm, respectively.
• The float has increased to 38.5mn shares (as of
  June 30). The current market cap at 13/pps is
  thus 500mm, with a mere 3 of its value in
  cash end-of-August.

23a. https//www.irdirect.net/prviewer/release_onl
y/id/4417879 23b. https//www.sec.gov/ix?doc/Arch
ives/edgar/data/725363/000165495420008746/cvm_10qa
.htm 24. https//www.irdirect.net/prviewer/relea
se_only/id/4272863 25. https//www.irdirect.net/
prviewer/release_only/id/4369853
16
17
Capital Structure
17
18
Capital Structure
18
19
Clinical Data Portends Harm

• Multikine (MK) has been studied in the clinical
  setting in two forms the original (developed ca.
  1970s) and later reintroduced form, and the
  high IL-2 form. We refer to these as MK and
  MK2, respectively.
• MK was an innovative (in its day) attempt at
  increasing the yield of IL-2 from PBMC, using
  what are called buffy coat (BC) cells. It was
  even referred to as BC-IL for a time.26a Later,
  it became understood that this process was
  inferior, and that actual yields of IL-2 by this
  method were much lower than presumed.
• MK2 was developed by Dr. John Hadden of the
  University of South Florida and was licensed to
  Cel-Sci, but it remained assigned to the
  University and rights to the therapy were never
  transferred to CVM. Dr. Hadden moved on with the
  technology once certain licensing arrangements
  expired, and began testing the therapy under his
  co-founded company, ImmunoRx (since acquired by
  Brooklyn ImmunoTherapeutics26b). After a brief
  dispute, Cel-Sci relinquished any rights to MK2,
  and MK2 continued (and still continues) its
  development as IRX-2, now under Brooklyn
  ImmunoTher.
• Numerous phase 1 and 2 studies had been conducted
  with MK2, and Cel-Sci used these data to tout its
  Multikine lead therapy (both MK and MK2
  formulations were referred to singularly, and
  misleadingly, as Multikine). After losing MK2,
  Cel-Sci had no choice but to return to their
  original, antiquated tech, and advance it into
  new P1/2 studies, while seeking to develop
  method-of-use IP around these data. It applied
  for numerous such patents in the mid 2000s.

19
26a. https//adisinsight.springer.com/drugs/800006
695 26b. http//brooklynitx.com/brooklyn-immunothe
rapeutics-acquires-irx-therapeutics/
20
Clinical Data Portends Harm

• Cel-Sci has been developing its Multikine (MK)
  therapy, in one form or other, since its
  inception ca. 1983.
• From its 1997 10-K
• CEL-SCI Corporation (the "Company") was
  formed as a Colorado corporation in 1983. The
  Company is involved in the research and
  development of certain drugs and vaccines.
  The Company's first product, MULTIKINE,
  manufactured using the Company's proprietary
  cell culture technologies, is a combination,
  or "cocktail", of natural human interleukin-2
  ("IL-2") and certain lymphokines and cytokines.
  MULTIKINE is being tested to determine if it
  is effective in improving the immune response
  of cancer patients. The Company's second
  product, HGP-30, is being tested to determine
  if it is an effective treatment/vaccine against
  the AIDS virus.
• The founder of Cel-Sci, Maximilian de Clara of
  Germany, piggybacked off the development of IL-2
  as an at the time (ca. 1970s) novel and exciting
  approach to treating cancerand even, later,
  HIV/AIDS. Max de Clara found a niche in the space
  via an invention by Dr. Hans-Ake Fabricius,
  another citizen of West Germany (incidentally,
  the long-time CEO of Cel-Sci, Geert Kersten, is
  also a native of Germany27a). Dr. Fabricius
  developed a method of isolating and increasing
  the concentration of T-cell growth factor,
  which was assumed (incorrectly) to be
  predominately IL-2.27b, 28 Hooper Trading Company
  was assigned the patent, and Max de Clara, under
  his newly founded companynamed Interleukin-2
  Inc.was licensed the tech for clinical
  development.29
• Not long afterwards, in 1988, Interleukin 2,
  Inc., was renamed Cel-Sci, and became a
  publicly traded company. Testing of the product,
  dubbed Lymphocyte Interleukin and Multikine,
  began. Although initially, the Companys primary
  focus was on HIV/AIDS using a different therapy,
  called HGP-3030 (development since suspended)
  by way of its wholly owned subsidiary, Viral
  Technologies, Inc.31 once this path proved to be
  a dead end, Cel-Sci shifted its main focus back
  to MK for the treatment of cancer.

20
21
Clinical Data Portends Harm

• The development of MK zeroed-in on HNSCC (see
  next slide). However, as mentioned, there were
  two different versions of MK tested, and nearly
  all of the studies conducted pre-1997 utilized
  what we have dubbed MK2 (now known as IRX-234).
  
• In Dr. Haddens patents on a proprietary cytokine
  mixture32, 33 that was licensed to Cel-Sci, he
  cites the older Cel-Sci patents as describing an
  inferior method due to low yields of IL-2
  produced, with other media as unidentified
• United States Patent No. 4,448,879 to Fabricius
  et al . also teaches a cell culture process to
  produce a natural serum-free and mitogen-free
  IL-2. The method used buffy coat cells in a
  roller culture system, or in a system that
  mechanically recirculates the media. However, the
  method still requires a step in which the cells
  are washed free of the mitogen and serum and then
  recultured in a serum-free, mitogen-free media.
  Importantly, the methods described are only
  poorly effective to stimulate the cells and
  produce low yields of IL-2. The large volumes
  necessary are expensive and require extensive
  skilled handling and must be concentrated prior
  to use resulting in loss of activity
  (approximately 50).
• The process Dr. Hadden developed yielded much
  higher levels of IL-2 in the presence of a
  4-aminoquinolone antibiotic (e.g.,
  ciprofloxacin), and was more efficiently produced
  (lower starting volumes required)
• The media also contains a 4- aminoquinolone
  antibiotic. In the preferred embodiment, the
  antibiotic is ciprofloxacin. The antibiotic is
  used to maintain sterility and to hyperproduce
  lymphokines. Ciprofloxacin and related
  antibiotics have been reported to increase IL-2
  and other cytokines in the presence of soluble
  mitogen and serum. (Riesenbeck et al . , 1994)
  They have not been reported to be effective in
  the absence of serum. Their use with immobilized
  mitogens is also novel. Ciprofloxacin is used in
  the preferred embodiment at a concentration of
  from about 20 to about 200 µg/ml and more
  preferably, at a concentration of about 80
  µg/ml... In the preferred embodiment of the
  present invention, utilizing continuous exposure
  to the mitogen by immobilization and the presence
  of a 4-aminoquinolone antibiotic, the NCM which
  is generated generally contains IL-2 at 100-353
  units/mL.

21
22
Clinical Data Portends Harm35
There were not 224 patients treated with the same
(antiquated) version of MK used in IT-MATTERS
Source Company Presentation, our Emphasis
22
23
Clinical Data Portends Harm

• Dr. Haddens authored patents were assigned to
  the University of South Florida, and once the
  licensing term had expired (and perhaps due to
  some internal conflict or othersee separation
  agreement below), Dr. Hadden began testing the
  candidate under the sponsorship of the company he
  co-founded, ImmunoRx, with the new moniker,
  IRX-2. This caused a legal response from
  Cel-Sci,36 but in 1997 it was dropped.37 No
  settlement or other mention of the dispute is
  stated anywhere in Cel-Scis subsequent SEC
  filings. Unfortunately for Cel-Sci, they had
  already conducted numerous studies with the now
  lost candidate, MK2/IRX-2.

23
24
Clinical Data Portends Harm

• The only recourse for Cel-Sci was to resurrected
  the old, wholly-owned (though the composition is
  no longer patentable) buffy-coat interleukin
  (BC-IL), developed by Dr. Fabricius in the 1970s.
  One of the problems with this vaccine, of course,
  was the low levels of IL-2 present. But rather
  than decide to shelve it and focus their energies
  elsewhere, they misleadingly kept both names
  Leukocyte Interleukin and Multikine, and
  began studies testing the old vaccine with the
  clearly inferior profile.
• They also conducted modern quantitative analysis
  on the substance. From this they were able to
  specify a breakdown of the components in the old
  vaccine (see slide 26), and thereafter developed
  a narrative to fit each of the listed components,
  stating (erroneously) that each worked together
  to produce an anti-tumor effect (see Appx I).
  This is the same mix that formerly was touted for
  its incorrectly presumed high-amounts of
  naturally derived (i.e., not recombinant)
  IL-2the only cytokine with any veracity
  surrounding its use.
• Not able to any longer rely on the former data
  with MK2, they ran new studies testing MK
  (Feinmesser et al, 200338 and Timar et al, 200339
  and 200540), though none of these studies had
  survival (PFS/OS) or even valid ORR endpoints.
  They then moved directly into the phase 3 (P3)
  IT-MATTERS trial with the antiquated MK
  formulation.
• The language in the 10-Ks also shifted from
  focusing on the therapeutic qualities of IL-2
  primarily, and secondarily its potential
  beneficial interplay with other components of the
  vaccine, as well as IL-2 being in its natural
  formto losing much of the language on IL-2 and
  focusing on the totality of the components of the
  vaccine instead (see next slide).

24
25
Clinical Data Portends Harm
Pre-2003
Post-2003
25
26
Clinical Data Portends Harm

• Disparities between the two MK formulations are
  enumerated herein (please note that 1.1mg of IL-2
  equals 18 million IU, and there are 1.1 billion
  pg in 1.1 mg thus, 100-500 units IL-2 6,116
  30,580 pg/mL). As can be seen, MK2 and MK are
  quite different

26
27
Clinical Data Portends Harm

• Results from the only three clinical trials
  testing MK (after MK2 was lost), namely
  Feinmesser et al (2003),43 Timar et al (2003)44
  and (2005),45 showed varied activity.
• Feinmesser et al (2003), an uncontrolled study
  using the same treatment regimen as in
  IT-MATTERS, noted
• Background  There is cumulative evidence
  suggesting that cells of the immune system
  recognize and may participate in eradicating
  neoplastic cells. As a result, immune modulation,
  first with interleukin 2 and later with other
  cytokines, has been tried in the clinical setting
  as part of antitumor therapy.
• Methods  Twelve previously untreated patients
  with various head and neck cancers were treated
  by peritumoral injection of a combination of
  cytokines (Multikine), in addition to zinc
  sulfate, indomethacin, and a single dose of
  cyclophosphamide, which were administered
  systemically. Response was evaluated clinically
  and histopathologically. T-lymphocyte
  determinants were studied by fluorescence-activate
  d cell sorter analysis (against controls).
• Results  Two patients showed complete regression
  and another 2 showed partial regression. There
  were no serious adverse effects of treatment.
  Pathological study results showed tumor
  fragmentation and the appearance of
  multinucleated macrophages. Fluorescence-activated
  cell sorter analysis showed lymphocyte
  activation, reflected by an unusually high number
  of cytotoxic T-lymphocyte activation 4 cells and
  natural killer cells.

27
28
Clinical Data Portends Harm

• 4/12 ORR (assumed), with two CRs and partial
  response noted as at least 50 shrinkageon its
  face a good result. However, the description of
  these responses reveals that necrosis and
  fibrosis occur, rather than a systematic removal
  of tumor mass via apoptosis/autophagy (leading to
  clear shrinkage). Thus, these are not validated
  responses by RECIST, neither the original nor
  version 1.1.46a
• The tumors in our sample were not homogeneous,
  making it difficult for us to draw statistically
  sound conclusions. One patient with retromolar
  cavity cancer (patient 4) had complete regression
  of the primary tumor by clinical and pathological
  criteria. Two other patients with oral cavity
  tongue cancers (patients 2 and 11) had a partial
  response by clinical and pathological criteria
  (50 of the tumor was replaced by fibrosis). The
  2 patients with skin cancers showed no real
  response to treatment. The single patient with a
  neck metastasis of unknown origin (patient 12),
  treated by perilymphatic injection, also showed
  complete regression (ie, resolution of the
  metastatic neck node). Although the node was not
  palpable after Multikine treatment and before
  surgery, the patient underwent supraomohyoid neck
  dissection, and a subsequent histological
  analysis revealed a 1.5 1.5-cm node with
  multinucleated macrophages engulfing and eating
  keratin debrisevidence of the past presence of
  epithelial tumor cells.
• Apparently in this study, 50 of a lesion noted
  as fibrotic on examination of the resected mass,
  with no stated change in its overall size,
  constituted a partial response, and the clear
  presence of a 1.5 x 1.5 cm node post-resection
  can also be deemed a complete response so long as
  multinucleated macrophages are observed eating
  keratin debris. These are anything but valid
  responses.
• Furthermore, fibrosis within tumor lesions or
  stroma is problematic, and not a beneficial
  sign46b
• Intratumoral fibrosis results from the
  deposition of a cross-linked collagen matrix by
  cancer-associated fibroblasts (CAFs). This type
  of fibrosis has been shown to exert mechanical
  forces and create a biochemical milieu that,
  together, shape intratumoral immunity and
  influence tumor cell metastatic behavior

28
29
Clinical Data Portends Harm

• (cont.) Over the past two centuries, numerous
  clinical and pathological observations have
  established a clear relationship between chronic
  inflammation, fibrosis, and cancer (1). Skin
  fibrosis associated with recessive dystrophic
  epidermolysis bullosa leads to highly metastatic
  skin carcinomas (2). Progressive lung scarring
  associated with idiopathic pulmonary fibrosis is
  a risk factor for lung cancer development (3).
  Moreover, human pancreatic adenocarcinomas can be
  highly fibrotic, and experimental evidence in
  animals supports an etiologic role for fibrosis
  in pancreatic cancer progression (4, 5). Thus,
  fibrosis can precede or follow cancer development
  and may participate in multiple stages of
  tumorigenesis and metastasis. 
• In the context of fibrosis and cancer, the
  provisional matrix can provide initial
  instructions to resident and invading immune and
  inflammatory cells and stromal cell populations
  (i.e., perivascular cells, resident
  stem/progenitor cells, and quiescent fibroblasts)
  that activate them toward a pro-wound repair
  state (9) and, in certain cases, provide cues
  that stimulate epithelial-to-mesenchymal
  transition (EMT) and endothelial-to-mesenchymal
  transition (refs. 10, 11, and Figure 1). Although
  reparative during normal wound healing processes,
  the provisional matrix loses reparative capacity
  in the tumor stroma owing to physical and
  posttranslational modifications that occur during
  myofibroblast remodeling.
• EMT is an independent prognostic marker for
  worsened survival, even though occurring along
  with immune infiltration
• Epithelial-mesenchymal transition (EMT) refers
  to a process whereby the adhesive polarity of
  epithelial cancer cells dissipates and changes to
  mesenchymal cells. This occurs in conjunction
  with increased cell migration and invasiveness
  and is also known to play an important role in
  cytoskeletal remodeling and resistance to
  apoptosis1. Several studies have reported the
  association of EMT activation with cancer
  metastasis, resistance to anticancer drugs, and
  thus a poor prognosis2,3,4
• In this study we assessed the clinical
  significance of an epithelial-mesenchymal
  transition (EMT) gene signature and explored its
  association with the tumor microenvironment
  related to immunotherapy in patients with head
  and neck squamous cell carcinoma (HNSCC). Genes
  were selected when mRNA levels were positively or
  negatively correlated with at least one
  well-known EMT marker. We developed an EMT gene
  signature consisting of 82 genes...

29
30
Clinical Data Portends Harm

• (cont.) The patients were classified into
  epithelial or mesenchymal subgroups according to
  EMT signature. The clinical significance of the
  EMT signature was validated in three independent
  cohorts and its association with several
  immunotherapy-related signatures was
  investigated. The mesenchymal subgroup showed
  worse prognosis than the epithelial subgroup, and
  significantly elevated PD-1, PD-L1, and CTLA-4
  levels, and increased interferon-gamma,
  cytolytic, T cell infiltration, overall immune
  infiltration, and immune signature scores. The
  relationship between PD-L1 expression and EMT
  status in HNSCC after treatment with TGF-ß was
  validated in vitro. In conclusion, the EMT gene
  signature was associated with prognosis in HNSCC.
  Additionally, our results suggest that EMT is
  related to immune activity of the tumor
  microenvironment with elevated immune checkpoint
  molecules.
• The above lines-up with the activity observed in
  Feinmesser et al (2003), with this particular
  immune infiltration causing necrosis and
  fibrosis, and potentially exacerbating metastatic
  spread. Similar observations (and spurious
  response criteria) were noted in Timar et al 2003
  and 2005, both of which utilized concurrent
  control groups (resected lesion analysis only)48
• In two of 19 LI-treated patients it was not
  possible to detect any cancer tissue in the
  surgically resected tumor mass, these patients
  were considered to be complete responders.
• In patients treated with high dose of LI we
  obtained objective response in 42.1 of the
  cases, which was better detectable with
  pathological examination and quantification of
  tumor cell nests and tumor stroma proportion than
  with imaging techniques.
• How can there be a complete response where
  there is also substantial resected tumor?
  Answer there cant be. It is also unclear
  whether the entire lesion was examined for live
  cellsan immensely arduous and perhaps even
  impossible taskor just portions or even a small
  biopsy of it, assumed to signify the whole (far
  more likely).
• Furthermore, and as admitted by the authors
  above, one apparently cannot determine a
  response to Multikine by CT or MRI scan
  (imaging techniques) and must rely on
  pathological examination instead. By definition,
  these cannot be valid responses.

30
31
Clinical Data Portends Harm

• Both Timar et al studies (ca. 2003 and 2005)
  noted observations of necrosis, fibrosis, and
  infiltration of immune cellsespecially
  neutrophils, which are elicited by IL-8, by far
  the most prominent component of MK (est.
  73)49a
• In the Leukocyte Interleukin (LI)-treated
  group, increased intratumoral infiltration by
  neutrophils was observed exclusively in patients
  with multifocal microscopic necrosis. LI-treated
  patients exhibited increased neutrophil migration
  into the cancer nests and neutrophil density was
  also pronounced in the tumor stroma in the LI
  responder subgroup. Tumors with high eosinophil
  density were twice as numerous in the LI-treated
  group compared with the controls (47 vs. 25).
  In the LI-treated grouFp the proportion of the
  collagenous stroma in tumor tissue was
  significantly increased compared with the
  proportion in tumor tissue of control patients
  (plt0.05). Periepithelial collagenosis was similar
  in frequency in the tumors of both the control
  and LI-treated patients, whereas interstitial
  intraepithelial fibrosis was significantly more
  frequent (plt0.001) in the LI-treated group (12 of
  17 patients, 70) compared with the controls (2
  of 20 patients, 10). In the control group, 40
  of cases did not show any kind of fibrosis.
• LI-treated OSCC patients were characterized by a
  markedly altered pattern of inflammatory cells,
  suggesting that an acute inflammatory reaction
  was mediated predominantly by neutrophils and, to
  a smaller extent by eosinophils and macrophages.
  Multifocal necrosis of cancer cell nests and an
  increase in the proportion of connective tissue
  were detected in the LI-treated patients compared
  with the controls.
• However, increased neutrophil migration/infiltrati
  on is causally linked with worsened survival (see
  slide 36). And as also noted above, Multikine
  administration induced an increase in the
  proportion of collagenosis within the tumor
  stroma. But, this is yet another negative
  observation, as increased presence of
  collagenosis is used convincingly as confirmation
  of cancer-associated fibroblasts (CAF)49b
• Cancer-associated fibroblasts are specialized
  fibroblastic stroma representing the dominant
  non-hematopoietic cell type within the TME of
  many cancer types. CAFs are pivotal in
  tumorigenesis, tumor progression,
  chemoresistance, metastasis, and maintenance of
  cancer stem cells through their production of
  growth factors, chemokines, and extracellular
  matrix (ECM) (Bhowmick et al., 2004 Orimo et
  al., 2005 Turley et al., 2015 Gascard and
  Tlsty, 2016 Kalluri, 2016)

31
32
Clinical Data Portends Harm

• (cont.)Experimental evidence suggests that CAFs
  are heterogeneous populations derived from
  various cell sources, including mesenchymal stem
  cells from the bone marrow, tissue resident
  fibroblasts, epithelial cells via EMT,
  fibrocytes, and likely other unidentified sources
  (Bhowmick et al., 2004 Orimo et al., 2005 Smith
  et al., 2013 Turley et al., 2015 Gascard and
  Tlsty, 2016 Kalluri, 2016). Clinical evidence
  clearly establishes the association between an
  increased CAF abundancy and poor prognosis in
  many tumor types (Turley et al., 2015 Gascard
  and Tlsty, 2016 Kalluri, 2016).
• Within the highly heterogeneous HNSCCs, the
  existence of a MS-rich (presumably CAF-rich)
  subgroup has been revealed, which exhibits
  distinct molecular signatures and clinical
  presentation (Peng et al., 2011 Curry et al.,
  2014 De Cecco et al., 2015 Liotta et al.,
  2015 The Cancer Genome Atlas Network TCGA,
  2015 Tonella et al., 2017). Similar to the CAF
  markers used for other tumors, alpha-smooth
  muscle actin (a-SMA) was one of the commonly used
  and so far represents the most reliable marker
  for CAF-like cells in HNSCCs (Kawashiri et al.,
  2009 Lim et al., 2011 Marsh et al.,
  2011 Wheeler et al., 2014). Additionally, high
  expression levels of collagen and vimentin were
  also used for further confirmation of CAFs
  (Kawashiri et al., 2009). These HNSCC-CAFs
  expressed high levels of growth factors,
  cytokines/chemokines, and ECM (Kawashiri et al.,
  2009 Lim et al., 2011 Marsh et al.,
  2011 Wheeler et al., 2014), consistent with CAFs
  of other tumor types.
• Timar et al (2003) also revealed a significant
  increase in density of Ki-67 cancer cells in
  MK-treated subjects tumor samples vs control,
  which the study authors suggest may be
  beneficial, as it indicates an increase in
  cycling tumor cells, which are thought to be more
  susceptible to chemoradiation48
• Morphometric analysis of the density of Ki-67
  positive cancer cells indicated that LI
  Leukocyte Interleukin, aka Multikine
  treatment induced significant increase (plt0.05)
  in cycling tumor cells at the lower LI doses
  administered.