Cel-Sci Drops Mystery Partner: BioBuzz

Byron Biopharma was removed from a list of Cel-Sci partners during an investor talk Tuesday.
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VIENNA, Va. (

TheStreet

) --

Cel-Sci

(CVM) - Get Report

CEO Geert Kersten made a rare appearance Tuesday at an investor conference in New York City but noticeably absent from his presentation was any mention of

Byron Biopharma

.

Byron Biopharma is supposed to be Cel-Sci's marketing partner in South Africa for the company's experimental cancer drug Multikine, according to a deal announced last March. Yet as I reported in November,

Byron Biopharma

has no known business address or history of engaging in drug development or marketing. Byron seems to exist only on paper, even though it was granted

South African commercial rights to Multikine

as part of a sweetheart stock deal with Cel-Sci.

Cel-Sci has long refused to provide any evidence that Byron is a real company or a legitimate Multikine partner. On Tuesday, Cel-Sci went further by making Byron disappear.

During Kersten's brief investor pitch at the BIO CEO & Investor Conference, Byron's name was conspicuously missing from a slide listing Cel-Sci's Multikine marketing partners. The Israeli drug maker

Teva Pharmaceuticals

(TEVA) - Get Report

was listed, as was Taiwan's

Orient Europharma

, but Byron was AWOL.

Kersten provided no explanation for why Byron no longer ranks a mention as a Multikine partner. Was it simply an oversight? A mistake? Perhaps, but that seems unlikely since Kersten's presentation included a slide that focused solely on the company's Multikine partnerships. Surely, someone would have noticed that one of the drug's three partners was left off.

Cel-Sci's annual report for the company's 2009 fiscal year filed with the Securities and Exchange Commission on Jan. 13 still lists Byron as the South African marketing partner for Multikine. To maintain that license, Byron must pay Cel-Sci $125,000 by March 15. Cel-Sci expects to begin a phase III study of Multikine in head-and-neck cancer during the summer.

If Kersten's presentation Tuesday was Cel-Sci's way of tacitly acknowledging that Byron isn't a real company or Multikine partner, then the company still needs to explain who purchased the 3.75 million shares of Cel-Sci common stock and 7.5 million warrants for the oh-so-cheap price of $750,000 last March in exchange for the South African rights to Multikine.

It's an important question since whoever bought the Cel-Sci stock and warrants -- at a cost basis of 20 cents a share and 25 cents a share, respectively -- is sitting on millions of dollars in profits. The stock and warrants are registered and freely tradeable, but Cel-Sci has never disclosed whether Byron, or the person(s) pretending to be Byron, sold the stock and warrants.

One group that has a definite interest in getting to the bottom of the Byron mystery is a group of Cel-Sci shareholders led by Iroquois Capital Management. The Iroquois group is suing Cel-Sci for breach of contract and other charges, alleging that Cel-Sci fabricated Byron because the company wanted to raise money without triggering anti-dilution clauses in a previous financing.

Cel-Sci denies the allegations and the lawsuit is still working its way through the courts, but Tuesday's presentation with the Byron omission seemingly gives the Iroquois group a juicy piece of evidence in which to pursue its case.

Cel-Sci didn't respond to an email message seeking comment.

Cel-Sci shares closed Tuesday down a penny to 65 cents a share. The stock has lost almost 70% of its value since last September.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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