Thursday, August 16, 2012

Celsion Energizes Investor Community with Q2 Update, Griffin Securities Raises Price Target to $18

Well, here we are again with the stock back to near $4. I think it is safe to say the Q2 quarterly call was one of the best calls the company has hosted to date, with management providing a clear and enthusiastic update to investors. Many of the questions I submitted were also incorporated into the company's prepared remarks (thank you management). At a high-level, here were the takeaways:
  • Reiteration that 380 PFS events are projected in Q4, with data to follow. The company continues to use 380 PFS and final data interchangeably, nevertheless, I personally expect DATA by the end of 2012.
  • DMC is meeting mid-September, at which point, they will provide an update to management regarding confirmed PFS and OS events. If the timeline for 380 PFS events changes following this, the company will let the investment community know. My guess is that we will get an update on events in the PR the company will issue after the DMC outcome. 
  • Twice, and firmly, the company said they have no plans for equity financing before final HEAT data. This was significant given the recent $75M shelf filed that got investors nervous. The company added that the timing of the shelf was done to avoid potential review by the SEC if done near the time of final data. I know we have to take company comments with a grain of salt, but I absolutely did get the sense that they truly have zero plans to do a raise pre-data.
  • Company alluded to additional partnerships for conducting clinical research with HIFU. Outside of Philips, the other big name in this space is Israel-based Insightec (20% owned by GE). 
  • Assuming positive data, NDA in the US and MAA for Europe are expected to be filed around the same time (my guess, by May/June of next year)
  • Celsion CEO reiterated that outcomes data for the population being studied in the HEAT study have remained the same, again reiterating an expectation for a 12 month PFS median in the control arm, and median OS of 30 months. (My personal guess is that the HEAT control arm will come in at ~16 months median PFS)
  • Company does not anticipate being in competition with Nexavar, even if STORM trial shows positive data as an adjuvant therapy
  • When data is presented (from analyst question, seemingly taken right off of my list of questions!), company will present PFS data for sure, but other data (such as complete ablation rates, local/distant recurrence, etc.) is likely to be preserved for publication. OS trends may be highlighted in the final data PR as well. 
  • Celsion CEO noted that a key Chinese KOL in ablative techniques will be updating her publication to include data from the HEAT study. Per the CEO, this individual is a global authority on RFA. 
There was a lot more, but these are the highlights that come to mind. I absolutely recommend anybody with an interest in the company to listen to this call, and I have embedded it here for your convenience:

Outside of the conference call, today, the investment community woke up to a boosted price target from Griffin Securities analyst Keith Markey. The upgrade from a $10 target to $18 seemed to open a lot of eyes. From the second I heard of this in the morning, I suspected the primary change in the valuation was pricing, and indeed, Keith assumed a $20K per patient per year for the US, up from $9K (Keith kindly sent me the report, thank you Keith). The RCW indication was removed entirely, but colorectal liver mets revenue from off-label use is assumed. Outside of the $20K price per patient per year assumed for China (I think pricing in China will be no more than half of what it is in the US to be honest), his assumptions (share capture, etc.) are quite conservative.

Moreover, I confirmed with him via email that he is only assuming 1 RFA per patient per year, which itself is a conservative number. Why? At a minimum, I can almost guarantee that roughly 15% of patients will require a second ablation within the first month to achieve a "complete" ablation, or technical success. Also, if ThermoDox is working as good as I suspect it is, patients hopefully won't require another RFA until progression well beyond 1 year, but still, some patients will recur within the first year and remain eligible for RFA. Thus, for modeling purposes, taken together, I would assume 1.5 RFAs per patient per year. That said, it certainly does not hurt to err on the side of conservatism. 

See below for a link to the report (again, thank you Keith):

With September right around the corner, and Q4 looming, we approach the outcome of the HEAT study, something I have personally looked forward to for a very, very long time (and, having come across a recent report by Dr. Lencioni highlighting that distant recurrences occurring within the first 2 years may be more closely related to the original lesion than I originally suspected, I am now even more confident in a positive trial outcome). Bull or bear, place your "bets", this binary event is well within reach now.


Thursday, August 9, 2012

Upcoming Q2 Conference Call: Questions for Celsion Management

As we near the Q2 conference call next week, in what has become a ritual it seems, I have devised some questions to relay to Celsion management ahead of the call, both for them to address during their prepared remarks, or for shareholders to follow-up on during the Q&A session. It is worth mentioning again that Celsion management, coming from the CEO directly, has invited such questions ahead of conference calls. As I also mentioned before, I maintain frequent communication with other Celsion shareholders who I deeply respect, and the questions below represent our collective thoughts (thank you fellow shareholders, you know who you are):

  • With Q4 right around the corner, and event rate projections relatively clear at this point, can the company still confirm DATA, not 380 PFS events, will be due by end of 2012?
  • Although it has been asked before, it still bears asking again: have any new studies or data come up that make you question the historical guidance for 11-12 months median PFS for the RFA-only arm?
  • What level of detail can we expect in terms of data when top-line results are finally revealed? In addition to median PFS times and hazard ratios for the whole trial, can we expect:
    • Average tumor size for the trial?
    • Complete ablation rates for both arms?
    • Rates of local versus distant recurrence (MOST interesting for me personally)?
    • OS events and trends to date?
    • Side effects/Adverse events?
    • Break-out of data for 3-5 versus 5-7 cm groups?
  • Is the next DMC meeting still scheduled for mid-September?
    • Is it the company’s expectation that 380+ confirmed PFS events will have been reached by the time this meeting occurs?
  • I have asked before about the average lesion size in the HEAT study, and I know the company did not want to yet report this data. Can you at the least give us a sense for the % proportion of patients in the 3-5 cohort versus 5-7 cohort? Is it safe to say the vast majority are in the 3-5 group, or are they evenly split?
  • What timeline can the company provide for when the full 372+ OS data would be made available?
  • Do you believe Yakult will be able to work on a new Japanese trial with the data available from top-line?  Or will they need to wait until all (including greater-matured OS) data is available?
  • Ongoing Phase II colorectal liver metastases ABLATE study:  Can the company report current enrollment in this trial (and number treated, if different)?
  • The company will eventually have 3 ongoing HIFU studies with ThermoDox, one in Pancreatic cancer at University of Washington, one for liver metastases at Oxford, and the PII w/Philips for bone metastases.
    • Pancreatic HIFU trial: As I understood from the press release, this will start with preclinical work in animal models, not human patients. Can you provide additional color on the types of questions that will be explored during these studies? Is it possible that future trials in humans involve ThermoDox plus other agents, such as gemcitabine?
    • Liver metastases HIFU trial: What phase study will this be, how many patients, will this look at metastases from any primary site or specified sites (colorectal, melanoma, etc.), expected timeline for completion and what primary endpoint? Will this have the same primary/secondary endpoints as the ongoing ABLATE study in CRLM?
  • Have there been any updates from potential licensing partners? Is the company still leaning towards keeping rights to the US market?
  • Does the company have any updated views on potential pricing of ThermoDox®?
  • Does the company expect cash burn to increase following top-line data due to NDA preparation?
  • Will an MAA in Europe be pursued concurrently to the NDA in the US, or after the NDA?
  • As the company is likely well aware, obtaining European marketing authorization is one thing, but reimbursement is a local, country by country game. A common theme throughout Europe is having health economic data to support reimbursement. Has the company proactively thought about/started developing such data for ThermoDox®?
  • I have assumed that upon NDA submission and acceptance, a priority review of 6 months is essentially guaranteed from the FDA as a function of fast-track status. Can the company confirm that this is the case?
  • Per Onyx’ recent conference call, it appears data from the adjuvant Nexavar trial following resection or ablation won’t be available until 2014. What competitive threat does the company perceive from early line use of Nexavar in the adjuvant setting?
I look forward to what should be a very interesting call, as there have been new developments on a couple fronts (Philips HIFU PII, RCW abstract acceptance at ESMO, etc.), and I expect we will get some more color on the HEAT study. As a reminder, it is scheduled for this coming Tuesday, the 14th, at 11AM ET/8AM PT.