Cel-Sci dubious about $124 million offer; Vaccine developer says pursuer hasn't filed SEC documents; Biotechnology


Cel-Sci Corp., a developer of cancer and AIDS vaccines, is attempting to determine whether a $124 million offer to buy the company is legitimate, the chief executive officer of the company said yesterday.

"I'm not spending too much time worrying about it," said Cel-Sci CEO Geert R. Kersten. "Our position is: File the tender offer documents and show us the money."

Kersten said the group that made the offer has not filed required Securities and Exchange Commission documents for buying a publicly held company and has not proved to Cel-Sci that it has the ability to fulfill the offer.

Cel-Sci Acquisition Inc., which says it is an investment group based in the British Virgin Islands, made an unsolicited offer last month to buy Cel-Sci for $7.75 a share. About 16 million shares are outstanding.

That offer is a 175 percent premium over Cel-Sci's closing price of $2.8125 yesterday on the American Stock Exchange.

The shares have slid 73 percent since trading as high as $10 in October 1997.

The Vienna, Va.-based biotechnology company's research and development headquarters are in Baltimore.

William T. Hart, Cel-Sci's Denver-based corporate counsel, said yesterday that he could not comment on the offer beyond saying that he is attempting to ascertain whether it is bona fide.

Through Daniel Martino, an attorney based in Buenos Aires, Argentina, Cel-Sci Acquisition says it was formed to buy Cel-Sci.

Yesterday, a woman who identified herself as a secretary in Martino's Buenos Aires office, said the lawyer would not comment further.

Martino said in an Aug. 20 letter to Cel-Sci that the investment group is based on Tortola, in the British Virgin Islands. In the letter, Martino did not identify principals in the group or reveal why they wanted to buy Cel-Sci or what their plans were for Cel-Sci if the offer was accepted.

Martino said in the letter that the group's offer is good until 5 p.m. Sept. 30.

The offer came two months after two big institutional investors abandoned the stock. Legg Mason Wood Walker and Donaldson Lufkin & Jenrette sold their holdings in June, Securities and Exchange Commission records show.

If the purchase is approved by Cel-Sci shareholders, the investors would get a 16-year-old company that has never posted a profit and has little in the way of income.

For the six months that ended March 31, Cel-Sci posted a $3.6 million loss on revenue of $290,000. Revenue comes primarily from interest on investments and government research grants. The company reported that it had $9 million in cash and short-term investments.

Chief assets of the company include two experimental products in development: HP-30, a vaccine for AIDS, and Multikine, a vaccine to treat advanced cancers of the head and neck.

The cancer vaccine has undergone early human testing in the United States, Canada and Israel. Data from those trials indicated that the vaccine reduced some patients' tumors.

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