Don't Bank on a 190+ PFS Event Press Release

In an effort to get some clarity as to whether or not Celsion would issue a press release confirming a minimum of 190 progression-free survival (PFS) events from their Phase III HEAT trial to formally trigger the interim analysis, I decided to reach out to Celsion IR today.

After a brief (5-10 min max) conversation with Susan from Celsion IR (I would add, she is extremely helpful and knowledgeable, a great asset to Celsion), it sounds like the company is leaning towards not issuing a press release regarding confirmation of 190+ PFS events, formally initiating the approximately 8 week long interim analysis process. I know, this stands contrary to what many of us were thinking, but this also does not surprise me that much since Michael Tardugno, Celsion CEO, was hesitant to firmly say whether or not they would do so. It appears, they have chosen not to, but I want to stress, IR mentioned that they have "not heard plans of doing so" (paraphrasing), and probably thinks they won't, but the company could always turn around and do so anyways.

I countered by asking whether or not this is a material event, just like the 600th patient enrollment, that would need to be PR'd, to which Susan mentioned that companies do not ordinarily report the number of events from their trials, prior to formal data releases. I didn't bring up the fact that I have seen other companies do so ahead of interim analyses, such as Genvec, but her point is well taken. Similar to Keryx, companies often just come out with interim results, and leave it at that. So, I think it is fair enough.

More importantly, IR mentioned that since the interim will be triggered by a minimum of 190 confirmed events, if they issued a PR saying 195 or 200 events have been confirmed, it might raise confusion amongst investors as to the discrepancy between 190 and 195, or 200. In other words, they don't want to have to explain to investors via this PR the difference between when 190 events ACTUALLY happened in the patient population, and when these events were ultimately CONFIRMED. That is what it boils down to.

To tie it all together, I asked the following, "Ok, so is it fair to say the next PR we hear from Celsion regarding the HEAT trial will be the actual interim results?", to which IR responded in the affirmative. And, I would also add, IR made it a point to say September is off the table for the results, and mentioned that it would be "early Q4." I threw out October as a potential time, and IR agreed that is likely a "good guess."

Reading between the lines, here is the vibe I got (I must stress, my own impressions/opinions):

1. 190 events have happened in the population, right now it is squarely about confirmation of the number of events from the company's independent radiology CRO.  
2. In all likelihood, the interim analysis will be based on MORE than 190 events. 
3. Since the interim is expected to take 8 weeks, and since IR thought my October date was a "good guess", I am working under the assumption that the company has indeed received confirmation of 190+ events, and the interim is actively underway as we speak. In other words, we are in the nascent stages of a de facto, potential "run-up" to results.

Take it for what it's worth. For me, this makes no difference one way or another since I am long regardless, and not playing any options. However, I know this might have some implications for many of you, particularly those of you expecting the interim results by the October options expiration date. It will be a close one, in my opinion.

Best of luck, interesting times ahead.

Siavoche

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UPDATE: I spoke with another very helpful IR rep from Celsion today, and he confirmed with little ambiguity the company's intentions of not issuing a PR for the 190+ PFS event confirmation to formally trigger the interim analysis. His reasons were very similar to Susan's, namely, that companies don't often issue such PR's (instead, focusing on the very material interim itself) and that doing so could also be viewed as "celebrating the progression of disease" (I'm paraphrasing, those are my words). In other words, why issue a PR describing patient progressions as a potential milestone.

For investors worried about the company being ambiguous about this, particularly in light of CEO Michael Tardugno overtly not addressing this issue at the recent Rodman & Renshaw presentation, one should objectively ask themselves the following, particularly from the vantage point of CEO:

"What does the company gain by NOT issuing a PR about the 190+ PFS events?"

The answer...absolutely nothing that can benefit them. It does not change the data in the trial, the Q4 timing of the interim analysis, nothing, other than a bit more flexibility in terms of when they actually release the inevitable interim results...in fact, the only possible and most likely reaction would be a negative one from the public, questioning the company's transparency. Obviously, that is not what they desire or want, but they had to know that this would be an inevitable reaction from an investment community that is extremely sensitive about their investments, particularly in this choppy, what's-going-to-happen-tomorrow market. Hence, the company, in my eyes, must have a very good reason for deciding not to do this, especially since they always have been extremely open about PR'ing just about anything and everything related to the company (go ahead, check their PR history http://celsion.com/releases.cfm).

I should reiterate that this is probably one of the most sensitive and delicate periods of interaction between Celsion and their independent Data Monitoring Committee (DMC). From what I have heard from company presentations and other shareholders is that the company has great respect for the DMC, and has bent over backwards to ensure a positive relationship with their DMC throughout the HEAT trial duration. During their last quarterly conference call, the CEO clearly stated that Celsion wants the data to be "actionable" as possible for the DMC. Rather than assuming some nefarious reason for "withholding" information regarding the 190+ PFS events, it might be driven by something as simple as a request from the DMC. After all, once the 190+ clock starts, the pressure really does fall on the DMC. This 'deference for the DMC' theory also implies that if the DMC wanted the company to issue the PR, they most certainly would have done so.

My own personal belief, at this point, is that the decision not to release the PR is probably due to the fact that the company and DMC are probably still unsure exactly how many events will be officially "locked" in to the interim analysis, perhaps because more events are coming in from their CRO. So, in that sense, this is actually a good thing, as the company has a strong incentive to make sure that the data set being used for the interim is as large as possible.

Who knows...but what I think we can and should assume right now, is that the decision not to issue a PR by no means is a reflection of something negative brewing at Celsion, or a desire not to be transparent. My own interactions with the company prove to me that they are unbelievably responsive to their shareholder base, and I appreciate their transparency. As I tweeted to somebody earlier, if we don't see interim data within the Q4 timeline that the company has promised (and mind you, this is a revised data from the earlier 'September' guidance), I will be the very first to scream "red flag" at the top of my lungs. Until then, continue your DD on the company, its technology, the underlying rationale for the HEAT study, and make a firm investment decision that makes you comfortable. With the market volatility on top of the volatility biotechs typically face as they approach a binary event, this is not a period for the faint of heart to be holding the stock.