Date: Thu, 18 Dec 1997 18:10:12 GMT Server: Stronghold/1.3.4 Ben-SSL/1.3 Apache/1.1.3 Content-type: text/html Content-length: 19833 Last-modified: Mon, 06 Oct 1997 14:20:28 GMT Shareholder Letter
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Dear Shareholder:

We would like to give you an update on some of the important developments at CEL-SCI in the past year.  During this time, we have reached a number of important milestones:

  • Initiation of prostate cancer study with Multikine™
  • Initiation of head and neck cancer study with Multikine
  • FDA clearance for a study with HIV infected patients using Multikine
  • Purchase of all rights to Multikine technology
  • Repurchase of HGP-30 HIV vaccine royalty rights from Nippon Zeon Co., Ltd. of Japan
  • Interim report on study with HIV infected individuals using the HGP-30 AIDS vaccine
  • Oral presentation at the XI International Conference on AIDS of important HGP-30           vaccine data showing high level of protection against HIV challenge
  • Presentation and publication of important tuberculosis vaccine data
  • Agreement with U.S. Navy for malaria vaccine research collaboration
  • Agreement with Northeastern Ohio Universities College of Medicine for herpes vaccine     research collaboration
  • Presentation of important data in regard to second generation HGP-30
  • Issuance of Japanese patent on Multikine
  • Issuance of Japanese patent on AIDS diagnostic kit
  • State of Maryland award to develop a tuberculosis diagnostic kit
  • Extended warrants (“HIV WS”) until February 6, 1998

MULTIKINE - CANCER

In May 1996, doctors at Thomas Jefferson University Hospital in Philadelphia started a prostate cancer study with Multikine.  The study involves up to fifteen (15) prostate cancer patients who have failed on hormonal therapy.  Prostate cancer strikes over 300,000 men annually in the U.S. alone. 

In July of 1996, doctors at a Canadian hospital in Montreal, Quebec initiated a head and neck cancer study with Multikine. Three additional centers in Canada, one in Montreal, Quebec, another in Hamilton, Ontario, and a third in Calgary, Alberta and one U.S. center in Detroit, have since joined as study sites.  Multikine will be tested in up to thirty (30) advanced head and neck cancer patients who have previously failed treatment.  The study is designed to confirm positive findings made in an earlier study.

In early January of 1997, we announced that the Food and Drug Administration (FDA) cleared a new study with Multikine. The purpose of the study is to evaluate safety and monitor immune responses in HIV infected individuals.

In March of 1997, we announced that we purchased from Sittona Company, B.V., Netherlands, all rights to the Multikine technology, including all patents and trade secrets.  The previous agreement with Sittona required CEL-SCI to pay a 10% royalty on sales and a 15% royalty on sublicenses for the use of technology, know-how and trade secrets.

HGP-30 HIV VACCINE

There have been many significant developments with our AIDS vaccine since we took complete control over its development in the Fall of 1995.  We started an HIV infected patient study; we had excellent results with HGP-30 as a protective vaccine; and we received money from the State of Maryland to develop a potential diagnostic kit.  In addition, to ensure that the full benefit of our success flows to our shareholders, we repurchased the royalty rights to HGP-30 held by Nippon Zeon Co., Ltd. in July of 1996.  At the right time, and hopefully after having added more value to HGP-30, we will bring in new partners to help us develop and commercialize the AIDS vaccine/treatment.  The need for a successful AIDS vaccine becomes greater every year.

In July of 1996, Dr. James Kahn of San Francisco General Hospital, a leading AIDS clinical researcher, reported the most recent results with the HGP-30 AIDS vaccine.  The results showed that significant protection was conferred by CEL-SCI’s HGP-30 AIDS vaccine against challenge with the AIDS virus.  This was one of the most important scientific presentations ever made on behalf of CEL-SCI because it demonstrates that our HGP-30 technology is at the forefront of AIDS vaccine research.

Dr. Kahn presented the results in a “Late Breaker” oral presentation at the XI International Conference on AIDS.  “Late Breaker” sessions are reserved for recent results of critical importance.  The title of the presentation was:  “Immune responses in peripheral blood lymphocytes induced by immunizations with HIV p17 vaccine (HGP-30) protect SCID mice from HIV-1 infection.”

As a way of measuring the ability of the human peripheral blood lymphocytes to resist HIV infection, white blood cells from five (5) vaccinated volunteers and from three (3) normal donors were injected into groups of SCID (severe combined immunodeficient) mice.  These mice represent the best available animal model for HIV, because they lack their own immune system and therefore, permit human cell growth.  The SCID mice, after having received the human blood cells, were then challenged with 10,000 infectious doses of a different strain of the HIV virus than the one from which the HGP-30 vaccine is derived.  Infection of the human cells by virus was determined and confirmed by two (2) different assays, p24 antigen, a component of the virus core, and reverse transcriptase activity, an enzyme critical to HIV replication.  Overall, thirty-nine (39) of fifty (50) or 78% of the SCID mice receiving blood from the five (5) vaccinated volunteers were protected from HIV infection compared to four (4) of thirty (30) or 13% of the SCID mice that received non-vaccinated control blood.  All groups of SCID mice receiving cells from the five (5) vaccinated donors showed increased protection when compared to any of the three (3) control groups.

L.E.A.P.S. HETEROCONJUGATE  IMMUNE SYSTEM  TECHNOLOGY

We have decided to give this technology a scientifically more descriptive name, L.E.A.P.S.  It stands for Ligand Epitope Antigen Presentation System.

In May of 1996, we presented data at a medical conference in New Orleans which suggests that our L.E.A.P.S. heteroconjugate (hereafter called L.E.A.P.S.) tuberculosis vaccine could be effective against multiple strains of tuberculosis, including multiple drug resistant strains.

In July of 1996, we announced the publication of two peer-reviewed scientific journal articles that discuss the L.E.A.P.S. tuberculosis vaccine and the L.E.A.P.S. technology.

In August of 1996, we signed a Cooperative Research and Development Agreement (CRADA) with the Naval Medical Research Institute of the U.S. Navy to jointly research and evaluate potential malaria vaccine candidates using our L.E.A.P.S. technology.  Currently, there is no approved malaria vaccine anywhere in the world.  Malaria affects about 300-500 million people per year and is responsible for about 2.7 million deaths annually. It is a parasitic disease that is transmitted by mosquitoes. As with tuberculosis, the number one killer ahead of malaria, the emergence of drug resistant strains is a major problem, as is the emergence of insecticide resistant strains of mosquitoes. Presently, the number of deaths and cases of malaria are not a major problem in the continental U.S.  However, there are an increased number of Americans bringing the disease home from overseas travels.

In September of 1996, we signed a collaborative research agreement with the Northeastern Ohio Universities College of Medicine to jointly research and evaluate herpes vaccine candidates using our L.E.A.P.S. technology.  The Herpes Simplex Virus affects over 50% of all Americans.  It generally causes painful oral or genital disease, but in some cases it will also kill the patient.  Unlike most other viruses, the herpes virus remains in the body and its attacks are triggered mostly by stress related factors.  Although there are antiviral drugs to prevent serious disease and lessen the symptoms, presently there is no way to prevent initial infection or eliminate the virus from an infected person.

In January of 1997, we presented data at the Fourth Conference on Retroviruses and Opportunistic Infections in Washington, D.C. which indicates that the L.E.A.P.S. technology may eliminate the need for a carrier protein.  It is anticipated that the elimination of the carrier protein will simplify and reduce the cost of the manufacturing process.

PATENTS

We have announced the issuance of two Japanese patents.  The importance of patents in our business can hardly be overemphasized.  The exclusivity afforded by patent protection significantly increases the market valuation of companies in the biotechnology business.  Patents in Japan are difficult to obtain because the Japanese Patent Office tends to review patent applications for a long time and with a great deal of caution before deciding on their issuance.  Therefore, we are very pleased and encouraged by this vote of confidence in our proprietary position.

The first Japanese patent is our key product patent on Multikine.  It covers the basic technology for the production of this immune boosting drug.  The second one is for the diagnostic use of the HGP-30 technology in Japan.  The HGP-30 diagnostic test for AIDS is currently being developed at the University of Maryland with a grant from the State of Maryland.  We hope to ultimately use the test as a routine monitoring test for disease progression in HIV infected adults and children.

TUBERCULOSIS DIAGNOSTIC  KIT

In addition to the HGP-30 AIDS diagnostic kit grant, we have also been given a Maryland Industrial Partnership (MIPS) award for the development of a “Diagnostic Test for Tuberculosis”.  The purpose of this project is to develop an ELISA based diagnostic kit for the diagnosis of tuberculosis and to monitor disease status.

There is no doubt that significant progress has been made aided by CEL-SCI’s successful financing efforts in Spring/Summer of 1996.  As per our last financial statement, CEL-SCI has cash reserves of about $8 million and no debt.  We intend to continue the development of treatments and vaccines against some of the major life threatening diseases.

We will keep you up-to-date through our news releases. You can also follow us on our World Wide Web page; http://www.cel-sci.com, where our press releases are posted shortly after release.

CEL-SCI Corporation is committed to the continued development of our products through commercialization in order to enhance stockholder value.  We thank our shareholders for their patience and their continued belief in the Company.

 

With best regards,

sincerely yours,

 

Geert Kersten         Maximilian de Clara

Chief Executive Officer      President & Chairman of the Board

 

When used in this report, the words “believes,” “anticipated” and “expects” and similar expressions are intended to identify forward-looking statements.  Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected.  Factors that could cause or contribute to such differences include, an inability to duplicate the clinic results demonstrated in preclinical studies, timely development of any potential products that can be shown to be safe and effective, receiving necessary regulatory approvals, difficulties in manufacturing any of the Company’s potential products and the risk factors set forth from time to time in CEL-SCI Corporation’s SEC filings, including but not limited to its report on Form 10-K for the year ended September 30, 1996.  The Company undertakes no obligation to publicly release the result of any revision to these forward-looking statements which may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

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