CEL-SCI WINS BREACH OF CONTRACT RULING AGAINST CLINICAL RESEARCH ORGANIZATION INVENTIV, NOW KNOWN AS SYNEOS HEALTH

In a final and binding decision the arbitrator concluded that inVentiv materially breached its contract with CEL-SCI, knowingly misled CEL-SCI with respect to enrollment projections, which in the arbitrator's opinion was "fraudulent," used "scorched earth" litigation tactics, and denied inVentiv all but one of its counterclaims against CEL-SCI; CEL-SCI's position is vindicated by the arbitrator

Vienna, VA, June 27, 2018 -- CEL-SCI Corporation (NYSE American: CVM) announced today that after a four and a half year battle a decision has been delivered by the arbitrator in CEL-SCI's arbitration suit against clinical development giant inVentiv, now part of Syneos Health (NASDAQ:SYNH). The arbitrator ruled that inVentiv materially breached its contract with CEL-SCI. inVentiv was the Clinical Research Organization (CRO) that CEL-SCI had hired to manage the Company's global Phase 3 head and neck cancer study from 2011 to 2013. This is a final and binding decision and to CEL-SCI's knowledge, marks the first ever decision in favor of a pharmaceutical/biomedical company against a CRO for breach of contract.

The arbitration and its findings are subject to certain confidentiality requirements and CEL-SCI is able to disclose only certain information at this time. Most importantly, the arbitrator concluded as follows:

  • The arbitrator found that inVentiv materially breached its contract with CEL-SCI;
  • The arbitrator found that inVentiv knowingly misled CEL-SCI with respect to "enrollment projections," which, in the arbitrator's opinion, was "fraudulent," but the arbitrator denied CEL-SCI's fraud claim as a result of certain legal "roadblocks";
  • The arbitrator assessed inVentiv for the entirety of the arbitrator's fees for the arbitration as a result of inVentiv's "scorched earth litigation tactics"; and
  • The arbitrator denied all but one of inVentiv's counterclaims against CEL-SCI.

"With this ruling against inVentiv, we have been vindicated. inVentiv's actions slowed down the clinical development process of our Phase 3 cancer immunotherapy Multikine. The delays in the study caused by inVentiv not only delayed the potential approval of this investigational cancer drug by years, but it caused investors to wonder about the utility of the drug. This affected the reputation and share price of the Company. Usually small companies do not win long legal battles against multi-billion dollar opponents, but we persevered and won our claim for breach of contract. We now move forward with a clean slate and an almost completed Phase 3 cancer study, knowing CEL-SCI has prevailed," stated Geert Kersten, CEO of CEL-SCI.

The arbitration ruling in favor of CEL-SCI was for breach of contract by inVentiv on CEL-SCI's Phase 3 cancer trial for its investigational product Multikine* (Leukocyte Interleukin Injection). inVentiv, which had enrolled fewer than 100 patients during its time as CRO, was replaced on the Phase 3 study in March 2013 with two new CROs, Ergomed and ICON. Working with Ergomed and ICON, CEL-SCI successfully completed enrollment of 928 patients in the world's largest Phase 3 study in head and neck cancer. The last patient was enrolled in the trial in September 2016 and the Company is currently waiting for the required number of events to occur to determine survival outcomes, the Phase 3 study's primary goal.

"The arbitrator's decision against inVentiv provides further vindication of our long-standing contention that we were not dealt with in good faith and fairly, and that inVentiv improperly managed our Phase 3 clinical trial that resulted in crippling delays in recruiting patients. The CROs that CEL-SCI hired to replace inVentiv and who have completed enrollment in our study demonstrated that there is a great amount of interest in our investigational product and that when properly managed our Phase 3 trial could be enrolled and completed in a reasonable period of time," stated John Cipriano, Senior VP of Regulatory Affairs, CEL-SCI.

"As of September 2016 our pivotal global Phase 3 cancer study was fully enrolled. The patient volunteers in the Study have all been treated and we are now in the follow-up phase of this study. Based on overall survival data available in the scientific literature for the study's patient population, CEL-SCI believes that the end of the Phase 3 trial is approaching at which time the company will be able to assess efficacy data on the Study's primary endpoint. The primary endpoint of the Phase 3 Study is a 10% improvement in overall survival in patients treated with the Multikine treatment regimen plus SOC vs. patients treated with SOC alone," said Dr. Eyal Talor, Chief Scientific Officer of CEL-SCI.

"The bottom line is as follows. Our idea and aim is to help cancer patients by boosting their immune system BEFORE the ravages of surgery, radiation and chemotherapy. This is a logical concept and one that made sense to 24 regulatory agencies, including the FDA, when we applied for conducting this global Phase 3 study. If the Phase 3 study achieves its primary endpoint we have the chance to become the first newly approved treatment in 60 years for advanced primary (not yet treated) squamous cell carcinoma of the head and neck. Head and neck cancer represents about 6% of all cancers," said Geert Kersten, CEO of CEL-SCI.

About the Phase 3 Cancer Study

CEL-SCI's Phase 3 study is the largest Phase 3 study in the world for the treatment of head and neck cancer. Per the study's protocol, newly diagnosed patients with advanced primary squamous cell carcinoma are treated with the Multikine treatment regimen for 3 weeks prior to the Standard of Care (SOC) which involves surgery, chemotherapy and/or radiation. Multikine investigational immunotherapy is designed to help the immune system "see" the tumor at a time when the immune system is still relatively intact and thereby better able to mount an attack on the tumor. The aim of treatment with Multikine is to boost the body's immune system prior to SOC treatment.

CEL-SCI believes that boosting a patient's immune system while it is still intact should provide the greatest possible impact on survival. Therefore, in the Phase 3 study CEL-SCI treats patients who are newly diagnosed with advanced primary squamous cell carcinoma of the head and neck with Multikine first, BEFORE they receive surgery, radiation and/or chemotherapy. This approach is unique. Most other cancer immunotherapies are administered only after conventional therapies have been tried and/or failed. Multikine (Leukocyte Interleukin, Injection), has received Orphan Drug designation from the FDA for the neoadjuvant therapy in patients with squamous cell carcinoma (cancer) of the head and neck.

Arbitration Background

In 2010 CEL-SCI signed an agreement with the CRO Pharmanet, which was later acquired by inVentiv, to run its pivotal Phase 3 clinical trial in advanced primary (not yet treated) head and neck cancer. Per the agreement, the Phase 3 clinical trial of 880 head and neck cancer patients was to be enrolled within 15-18 months from the start of the clinical trial and was to end in late 2015. Enrollment was started in January 2011. In the summer of 2011, Pharmanet was acquired by inVentiv. inVentiv had been a CRO purchased by the private equity firm Thomas H. Lee in 2010 to conduct a roll-up of several CROs to create a "super-sized" CRO. In April 2013, CEL-SCI replaced inVentiv because enrollment in the study was far behind what been agreed to in its contract. During the two year time period between January 2011 and April 2013 a total of only 117 patients were enrolled in the trial. This total of 117 patients also included the patients enrolled by CEL-SCI's partners Teva and Orient Europharma, which for the purposes of activities associated with the Phase 3 clinical trial, were managed by inVentiv.

In October 2013, CEL-SCI filed an arbitration suit against inVentiv Health Clinical, LLC (f/k/a PharmaNet LLC) and PharmaNet GmbH (f/k/a PharmaNet AG). In July 2017, inVentiv Health, Inc., the ultimate parent company of the respondents in the arbitration, merged with INC Research Holdings, Inc., a company of about equal size. The combined entity was named INC Research. In January 2018 INC Research changed its name to Syneos Health.

Arbitration Timeline

April 2013 -> CEL-SCI terminates inVentiv. Per the contract the study was expected to be fully enrolled by 15-18 months from its initiation in early 2011. Only 117 patients were enrolled by April 2013. CEL-SCI hired two new CROs, Ergomed and ICON, to help manage and run the study.

October 2013 -> CEL-SCI hires the New York law firm Wilk Auslander and files arbitration against inVentiv.

September 2016 -> Arbitration hearing ("trial") begins.

November 2017 -> Last witness called in arbitration hearing.

April 25, 2018 -> Closing arguments concluded.

June 25, 2018 -> The arbitrator ruled that inVentiv materially breached its contract with CEL-SCI and denied inVentiv all but one of its counterclaims ($429,649 for certain unpaid invoices ) against CEL-SCI. He awarded CEL-SCI $2,917,834 in damages.

About CEL-SCI Corporation

CEL-SCI believes that boosting a patient's immune system while it is still intact should provide the greatest possible impact on survival. Therefore, in the Phase 3 study CEL-SCI treats patients who are newly diagnosed with advanced primary squamous cell carcinoma of the head and neck with Multikine first, BEFORE they receive surgery, radiation and/or chemotherapy. This approach is unique. Most other cancer immunotherapies are administered only after conventional therapies have been tried and/or failed. Multikine (Leukocyte Interleukin, Injection), has received Orphan Drug designation from the FDA for the neoadjuvant therapy in patients with squamous cell carcinoma (cancer) of the head and neck.

CEL-SCI's Phase 3 study is the largest Phase 3 study in the world for the treatment of head and neck cancer. Per the study's protocol, newly diagnosed patients with advanced primary squamous cell carcinoma are treated with the Multikine treatment regimen for 3 weeks prior to the Standard of Care (SOC) which involves surgery, chemotherapy and/or radiation. Multikine is designed to help the immune system "see" the tumor at a time when the immune system is still relatively intact and thereby better able to mount an attack on the tumor. The aim of treatment with Multikine is to boost the body's immune system prior to SOC.

The Company's LEAPS technology is currently being developed as a therapeutic vaccine for rheumatoid arthritis and is supported by grants from the National Institutes of Health. The Company has operations in Vienna, Virginia, and in/near Baltimore, Maryland.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "intends," "believes," "anticipated," "plans" and "expects," and similar expressions, are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that 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 clinical results demonstrated in clinical 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, inability to raise the necessary capital and the risk factors set forth from time to time in CEL-SCI's filings with the Securities and Exchange Commission, including but not limited to its report on Form 10-K for the year ended September 30, 2017. 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.

* Multikine (Leukocyte Interleukin, Injection) is the trademark that CEL-SCI has registered for this investigational therapy, and this proprietary name is subject to FDA review in connection with the Company's future anticipated regulatory submission for approval. Multikine has not been licensed or approved for sale, barter or exchange by the FDA or any other regulatory agency. Similarly, its safety or efficacy has not been established for any use. Moreover, no definitive conclusions can be drawn from the early-phase, clinical-trials data involving the investigational therapy Multikine. Further research is required, and early-phase clinical trial results must be confirmed in the Phase 3 clinical trial of this investigational therapy that is in progress.