CVM: No Free Samples on Facility Tour

By John Vandermosten, CFA

NYSE:CVM

In late May 2019, Zacks was treated to an onsite tour of CEL-SCI’s (NYSE:CVM) 73,000 square foot manufacturing facility in Elkridge, Maryland. As we drove to the industrial park southwest of Baltimore, we came upon CEL-SCI’s facility, nestled among warehouses and light manufacturing enterprises. With multiple delivery bays and administrative offices up front, we entered to meet with Chief Scientific Officer Dr. Eyal Talor who introduced us to the staff and provided background on the facility in preparation for our walk through.


View Exhibit I – Facility Exterior1

We began our visit in a conference room and were shown floor plans highlighting both open and built-out space along with the various cleanroom classifications within the clean manufacturing envelope. Dr. Talor provided a description of the various areas in the building and reviewed high level details of the manufacturing process with us. After the 45 minute introduction and review, we prepared to enter the manufacturing area. Our initial entry was into the first clean-unclassified area, a corridor that surrounds the manufacturing classified areas. We were required to step on a sticky mat and don elastic shoe covers in a positive pressure airlock. Thus began our walk around the outer perimeter of the manufacturing area. While we did not enter into the restricted cleaner areas, EU regulations require that personnel step up in stages of cleanliness as they move in (example: ISO-8 to ISO-7 to ISO-6 and ISO-5) and then step-down in cleanliness as they move out (ISO, 5, 6, 7 and 8) from areas with different requirements. Entry into these cleaner spaces requires the addition of gloves, gowns, hoods, facemasks, coveralls and other protective items. Entry into classed areas requires one to be “Gown-Certified”.

The genesis of the project to build a dedicated manufacturing facility for Multikine began during CEL-SCI’s Phase II trials, when management realized that they needed to have strict control over the manufacturing process. The need was brought into relief during the end of Phase II meeting with the FDA when the agency emphasized the benefits of a dedicated facility for a biological product. Not only would a facility under the control of CEL-SCI enable the company to maintain its trade secrets, it would allow the company to have control of the process and employ the strict requirements for biologics that were not widely available at the time.

Ground was first broken in 2007 and the build out was completed in 2008. Following the build out, CEL-SCI took possession of the facility and began the validation of both the facility and the manufacturing processes.

The European Medicines Agency (EMA) requires that processes and facilities that manufacture product for use in human clinical trials be inspected. To address this requirement, CEL-SCI prepared for a visit from a qualified person (QP). The QP performed an onsite inspection in 2010 and subsequently every two year thereafter to ensure the facility was in compliance and to approve the lots to be used in the Phase III trial.

Prior to the availability of manufacturing at CEL-SCI’s own facility, Multikine was produced by CEL-SCI staff at Chesapeake Bio Lab (CBL) and later at Cambrex Bioscience while fill and finish was performed at CBL, in Baltimore. With the completion of the manufacturing facility, all work can now be performed in one location under one roof, and the option exists to double the capacity of the facility into the undeveloped space inside the same building.


View Exhibit II – Interior of the Facility (RO/DI Water)2

The facility has at four different cleanroom classifications corresponding to ISO Class 5, 6, 7 and 8 which is roughly equivalent to EU Grades A, B, C and D. Below we provide an exhibit comparing the particulate size allowed for each classification.


View Exhibit III – ISO Maximum Concentration Limits

We were impressed with the facility, detailed protocols, security requirements and the cleanroom procedures. The strict rules limit the likelihood of cross contamination and allow only authorized access by qualified personnel. While we were not permitted to enter beyond the clean unclassified area into the classified spaces where the production takes place, strategically placed windows allowed us to see into these areas and the machinery used in the manufacturing process.


View Exhibit IV – Interior View of Facility (Manufacturing Staging Area)3

The entirety of the second floor of the facility is devoted to climate control, air filtration, air conditioning and other utilities. The system enables the facility to maintain the temperature in some areas of the facility as low as 4° Celsius and filter extremely small particulate matter from the air.


View Exhibit V – Facility HVAC and Ventilation System Machinery

The maintenance of cold temperatures in the process limits deterioration of the biologic produced, which occurs when it is exposed to higher temperatures. This process maintains the highest level possible of biologic activity in the manufactured treatment. It allows for the least volume, but same amount of active biologic, to be used per treatment, as it has maintained its initial level of biological activity. Cold production provides for greater potential production capacity as product deterioration during manufacture is limited and minimizes the amount of biologic that needs to be injected.

We provide a rudimentary outline of the manufacturing process for Multikine below:

‣ Source leukocytes (an FDA approved product for the further manufacture of biologics) obtained only from US-based and FDA certified sources, is the source of peripheral blood mononuclear cells (PBMCs)
◦ PBMCs used in process must conform to higher standard than that for blood transfusion
‣ PBMCs are evaluated and tested against specifications in the facility and only then are released for use in a proprietary tissue culture
‣ The tissue culture is harvested and then undergo various purification steps
◦ Virus removal4
◦ Testing for other contaminants
‣ Multiple additional purification steps
‣ Proprietary formulation
‣ Aseptic fill and finish

Management estimates that current capacity is approximately 10,000 treatments per year; however, only half the available space is currently built out. A further build out could at least double the capacity and create redundancies that can eliminate bottlenecks if part of the manufacturing process is down for maintenance or repair.

The manufacturing area is isolated from the rest of the building by creating a divide in the slab foundation. This is important as it limits vibrations that can affect the precise measurements that take place during manufacture. The pillars that support the building have materials that isolate vibrations as well. The manufacturing envelope is thus vibration isolated from the HVAC and other equipment protecting the ability to make precise measurements and maintaining the calibration of sensitive machinery. Auxiliary power is also available from a generator which can maintain operations if the power goes out.


View Exhibit VI – Satellite View of CEL-SCI Manufacturing Facility5

We gained an additional measure of respect for the work that CEL-SCI has done after visiting their manufacturing facility. Based on our observations, management has been very attentive to detail regarding the design of the facility and ensuring that its capabilities are able to be optimized in a variety of circumstances. Following a successful Phase III trial result, approval by the FDA and the hiring of additional staff, we see no obstacles in the way of a quick ramp up of production and commercialization. As a companion to this discussion of the manufacturing facility, see our initiation, which provides an in-depth review of CEL-SCI, Multikine and the indication the company is pursuing.

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1. Source: Google maps
2. Source: CEL-SCI
3. Source: CEL-SCI
4. This is the second viral removal process as source leukocytes are tested and must be negative for a FDA mandated panel of known viruses, before the source leukocytes can be used to extract PBMCs which are then used in the manufacture process.
5. Source: Google Maps

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