VIENNA, Va. ( TheStreet) -- The company picked by Cel-Sci Corp. ( CVM) to market its cancer drug Multikine in South Africa was incorporated just days before the deal was announced in March and appears to have no business address or history of engaging in drug development or marketing.

On March 6, Cel-Sci granted an exclusive license to Byron Biopharma to market and distribute Multikine -- an experimental drug that has yet to begin a pivotal, phase III clinical trial -- in South Africa.

As part of this marketing partnership, Byron Biopharma was allowed to defer a license payment for Multikine. Cel-Sci also sold deeply discounted stock to Byron that has already net the latter company more than $7 million in investment profits on paper.

"This agreement is consistent with our strategy to license Multikine in the emerging markets to share the expenses of bringing Multikine to market. We are working on additional agreements around the world," said Cel-Sci CEO Geert Kersten, in a statement that highlighted the agreement at that time.

Cel-Sci did not respond to questions for this article.

Multikine is a cancer immunotherapy, or cancer "vaccine," that Cel-Sci has been developing since the late 1980s. The company recently raised money from investors to help fund a phase III study in head and neck cancer patients, although the company has not provided a specific start date for the trial.

Cel-Sci issued a press release on March 9 to announce the Multikine deal with Byron Biopharma for South Africa, but the release didn't provide any details about Byron, didn't recount the company's experience selling drugs, especially overseas, and didn't include a quote from a Byron executive.

An investigation by TheStreet.com has failed to uncover any evidence that Byron Biopharma is a real operating company. Instead, Byron appears to exist only on paper.

According to records maintained by Delaware's Division of Corporations, Byron Biopharma was incorporated as a limited liability company on March 2, or four days before Cel-Sci and Byron entered into a marketing agreement on March 6.

Delaware records do not include a permanent address or a phone number for Byron Biopharma, nor do the records list the company's executives or directors. The company does not have a Web site, and a Google search only brings up links or references to Cel-Sci's March 9 press release.

Byron Biopharma's president is listed as Edward Smith on a copy of the marketing agreement between the company and Cel-Sci, filed with the Securities and Exchange Commission on April 4 by Cel-Sci. No other information about Byron or Smith is included in that document.

The Biotechnology Industry Organization (BIO), the U.S. biotech industry's chief lobbying organization, has no record of Byron Biopharma in its databases of privately held or publicly traded companies.

The South African government has no record of Byron Biopharma registered to conduct business there, according to Christa Klokow, an official with South Africa's Companies and Intellectual Properties Registration Office, based on Pretoria.

What is known about Byron Biopharma is that Cel-Sci entered into a sweetheart stock deal with the entity, according to SEC filings.

As part of the South Africa partnership, Cel-Sci sold to Byron 3.75 million stock units at 20 cents a unit, or a total purchase price of $750,000. Each unit consisted of one share of Cel-Sci common stock and two warrants with an exercise price of 25 cents a share, according to SEC filings.

On March 30, Cel-Sci shares were trading in the open market for 25 cents a share.

Since the purchase, Cel-Sci has registered Byron's 7.5 million warrants, and they are now exercisable. Combined with the 3.75 million shares of common stock, Byron's holding of Cel-Sci stock and warrants are worth more than $10 million today -- a handsome return from the entity's initial $750,000 investment.

Byron owes a $125,000 license payment for Multikine rights to Cel-Sci, but even with that obligation, Byron's partnership deal has already paid off handsomely.

Cel-Sci's SEC documents do not specify wither Byron sold its stock and warrants, although the company said on Oct. 26 that certain investors had exercised previously granted warrants. The company's SEC filings list Ed Smith as Byron's "controlling person."

Cel-Sci has announced two other partnerships tied to Multikine. Teva Pharmaceuticals has rights to Multikine in Israel and Turkey, while Orient Europharma owns the drug's rights in Taiwan, Singapore, Hong Kong and Malaysia.

A Teva spokesperson refused to corroborate or provide any further details about its relationship with Cel-Sci and commitment to Multikine.

-- Reported by Adam Feuerstein in Boston
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; click here to send him an email.

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