Shares of CEL-SCI Corporation (CVM) saw a sharp decline in after-hours trading on Tuesday, falling by 38.19% to $8.06. This significant drop was triggered by the cancer immunotherapy company's announcement of a $10 million public stock offering, with shares priced below the prevailing market levels. The offering involves the sale of 1,111,200 common shares at $9.00 each, which represents a substantial 30.9% reduction from Wednesday's closing price of $13.04. The transaction is expected to conclude on August 29, with ThinkEquity acting as the exclusive placement agent. This strategic financial move, disclosed through a shelf registration statement that became effective on August 12, aims to bolster the company's financial position.
The capital generated from this public offering is primarily designated for the continued advancement of Multikine, CEL-SCI's key cancer immunotherapy candidate. Multikine has previously been granted Orphan Drug designation by the Food and Drug Administration for its application in neoadjuvant therapy for patients with head and neck squamous cell carcinoma. This treatment is designed to enhance the immune system's response before patients undergo traditional therapies that might otherwise compromise their immune function. To date, over 740 patients have received Multikine in various clinical trials, underscoring its progress and potential impact. The company, a Virginia-based biotechnology firm, has seen its stock fluctuate between $1.98 and $39.30 over the past year, maintaining a market capitalization of $89.74 million and an average trading volume of 473,350 shares.
This event underscores the inherent volatility in the biotechnology sector, particularly for clinical-stage companies dependent on funding for research and development. While the immediate market reaction reflects investor apprehension regarding dilution and pricing, the company's commitment to advancing crucial immunotherapy treatments like Multikine signifies a dedication to pioneering medical breakthroughs. Such developments, though sometimes turbulent in the short term, are vital for pushing the boundaries of scientific innovation and ultimately improving global health outcomes.