Tuesday, September 25, 2012

The Importance of the Phase II ABLATE Study for Understanding ThermoDox's Market Potential

Let me just make one quick point before I even begin discussing the Phase II ABLATE study for patients with colorectal liver metastases (CRLM): Celsion is banking everything on the Phase III HEAT study, so all of this goes out the window in the (dare I say unlikely) event that the HEAT study fails to hit its PFS endpoint. Rightly so, the focus should be on the HEAT study, and every investor should focus their attention on the impending Q4 PIII data coming out of it. I think its important to preface the article this way, as it should tell you how high the stakes really are for Celsion as we come down home stretch.

Now, on to the article.

Celsion initiated the Phase II ABLATE study in February, with Dr. Steven Libutti as principal lead investigator. As of right now, I am not sure how many patients have been enrolled in the study, but we do know that management has made clear they have been deliberately slow in recruiting patients/expanding sites to conserve resources for in anticipation of a successful HEAT trial and commercial preparations. The study, randomized and double-blind in the same manner as the HEAT study, seeks to enroll up to 88 patients with colorectal metastases to the liver (CRLM). That said, this study does have some salient distinctions (clinicaltrials.gov link here):
  1. The primary endpoint is local recurrence within 1 cm of the ablation site at 1 year (the ideal endpoint for ThermoDox)
  2. The inclusion criteria allows for patients to have tumors as small as 2 cm. Some of you might recall I questioned the company on this decision on a prior conference call, since local recurrence from what I have read is not a significant problem in patients with lesions under 3 cm. Dr. Borys responded that physician input during the design phase of the study lead to this, as clinicians are still not satisfied with local recurrence outcomes in CRLM patients even for lesions as low as 2 cm, suggesting that the literature might over-estimate clinician ability to control smaller CRLM. Either way, the good news is that this means a larger patient pool to enroll from, and presumably, faster enrollment. 
I have said it before and will say it again, initiation of this trial before HEAT results was a very precocious move by management for several reasons. Firstly and most importantly, it is an indirect signal of the confidence that management has in the ongoing HEAT study, since the effect ThermoDox will have in this setting is very similar to that in HCC (more to come on this below). Secondly, it leverages the experience the company has from the Phase I study, in which more than half had metastases to the liver rather than HCC (8 with CRLM). Thirdly, from a timing perspective, date from the ABLATE study is expected around the time ThermoDox hopefully receives FDA approval, so the medical community will have yet additional data supporting the product's broad potential in indications outside of HCC right when the product is expected to hit the marketplace.

I will boldly say that the analysts who have covered Celsion, with the exception of Keith Markey from Griffin, are significantly undervaluing the company by excluding the colorectal metastases indication (yes, only Griffin has included off-label CRLM in their valuation of Celsion). I have characterized the off-label potential in CRLM before as an "inevitable reality" assuming the HEAT study shows success. So, why am I so excited over this market for Celsion?
  • Big market, VERY big market: Yes, the colorectal liver metastases population is a very large one, but one that needs to be carefully examined in order to identify real-world patients who would be candidates for ThermoDox. Let's start from the top looking at all colorectal cancer patients. In the US, the incidence is 141K cases, Europe 436K cases, and 811K cases rest of world, so ~1.4M cases globally.

    From that, we have to be very careful how we arrive at the number of patients who would be eligible for local treatment for liver metastases. As I have mentioned before, the key is to arrive at patients who have confined liver metastases. While a significant number of patients will eventually develop metastases to the liver (50-75% in total, 25% at diagnosis), local treatment will likely not be used to treat the liver if the disease has metastasized to other parts of the body. However, in total, we can confidently say that ~25-30% of patients will have confined liver mets (refer to the articles below).

    The next step is to squarely identify the proportion of these patients who would receive the gold standard treatment, surgery. Recent advances have allowed a solid ~25% of this population to be eligible for surgery to remove their hepatic tumors, leaving us with ~18-23% eligible for some form of non-surgical treatment such as RFA, microwave ablation, cryoablation, etc.
     You can do the math on 18-23% of 1.4M global cases. Just looking at the US and EU, that is ~120K patients who realistically (not pie in the sky numbers) are eligible for RFA every year.

    As a point of comparison, looking at HCC just in the US and EU, there are ~65K patients, of which 25% are initially eligible for RFA (underestimates the true number of RFA patients though, since patients who undergo surgery very often undergo RFA at some point in their prognosis as well, but lets be conservative), leaving us with 15K eligible HCC patients. As you can see, in the Western world, there are 8x more (120K vs 15K) CRLM patients than HCC patients who are squarely candidates for RFA treatment.
  • Unlike HCC, CRLM market is in geographies where Celsion is expected to have greatest pricing power for ThermoDox: The focus above on the US and EU was done on purpose, again, mainly because these will be regions in which Celsion will have the most pricing power for ThermoDox. The population of HCC patients in China is significant, but pricing and reimbursement  there is the wild card, whereas in the US and EU, this is relatively straightforward (assuming Celsion and their future partners can successfully navigate the health economic "exercises" necessary in the EU, up to $30K per administration would not be out of question depending on the strength of the data). From a commercial perspective, make no mistake that potential license partners are keenly aware of this "favorable" patient distribution reality in the CRLM indication.
  • Should the HEAT trial show positive data, savvy investors will know immediately that the ABLATE study, too, will be poised for success: I've alluded to this a few times before, but if ThermoDox can improve PFS in HCC (likely mainly be reducing local and related distant recurrence), you can be fairly certain ThermoDox will have similar activity in colorectal liver metastases. Actually, scratch that, you can be 99% certain that ThermoDox would hit its endpoint focused entirely on local progression in the CRLM population.

    From all the different papers I have seen and amassed on my blog, it is crystal clear to me that the approach and process for treatment of an HCC lesion versus a CRLM lesion are identical. In fact, many papers simply lump these two populations together for the purposes of determining local control using RFA. Of course, treatment of the originating colon cancer necessitates an entirely different approach, so again, I am only talking about the treatment of the liver tumor burden.
  • Experience with 700 patient HEAT trial plus 88 patient ABLATE study will preclude the need for a registrational PIII CRLM trial: My suspicion is that Celsion management has zero plans to conduct a registrational PIII CRLM trial, simply because the value-add of doing so would be minimal. As outlined above, treatment of localized CRLM and HCC via RFA are very similar. And successful completion of both the HEAT and ABLATE trials will mean 788 total liver cancer patients, treated in a robust, randomized and double-blind manner. The only other liver-focused trials we are likely to see will be those focused on other heating modalities (such as HIFU) or those eventually focused on the 4 lipid platform combined with an imaging agent, further down the road.
  • ABLATE trial is more than enough to drive inevitable off-label use (at least in the US): In part related to the above point, it is obvious to all familiar with pharma and the US health care system that off-label use can be more than secured with PII data. In fact, 50-75% of all chemotherapy utilization is prescribed off-label. In addition to cancer-specific state mandates to cover off-label drugs which are present in most states, Medicare reimburses for off-label use if peer-reviewed data supports its use (inevitable for positive ABLATE data by itself, specific journals are listed in the JOP article below) or as long as the drug is listed in one of four compendia:
  1. The American Hospital Formulary Service – Drug Information (AHFS-DI) 
  2. Elsevier Gold Standard’s Clinical Pharmacology 
  3. The National Comprehensive Cancer Networks’ Drug Information & Biologics Compendium NCCN 
  4. Thomson Micromedex’s DrugDex

    Granted, it is not automatic that a drug gets compendia listing, but I think it is very safe to say the trial design of the ABLATE study will quickly translate into compendia listing, assuming positive data of course. See the below references, the one from Formulary is a great read on this topic.
  • Same physician targets as for HCC, interventional radiologists: This may be one of the most important reasons why off-label use in CRLM will be inevitable for ThermoDox. Aside from the fact that an RFA treatment session is nearly identical for an HCC and CRLM patient, remember, we are dealing with the exact same physician target audience: interventional radiologists. So, while the referral source of patients are likely to be different (hepatologists versus gastroenterologists), the same interventional radiologist will be conducting the RFA and injecting the ThermoDox. So, this is not like other drugs where off-label use is being driven by an entirely different prescribing physician base. From the perspective of "marketing" and physician education, you can see how straight-forward this will be for Celsion, especially given all of the above. 
Again, investors' focus should be on the HEAT study, but I maintain that this small 88 patient trial in CRLM patients will go a very long way for Celsion valuation. You can bet the company will significantly ramp enrollment in the trial once positive HEAT data is collected, and a robust CRLM data set along with positive HEAT data gives potential big pharma the best of both worlds: A vast HCC market in emerging market China, and an equal number of off-label patient candidates between the US and EU. Like I said, the stakes are very high with the impending HEAT data.


Friday, September 21, 2012

Invitation for Guest Authors Regarding Celsion, Seeking Rational Bear Views

For those of you who follow me on twitter (@magicsia), you may have seen earlier today the following tweets:

I meant every word in this series of tweets, and I would like to formally "open up" my blog to those of you who would like to "guest author" thoughts or ideas around Celsion. I am not necessarily seeking "positive" articles on Celsion, to the contrary, I want my blog to serve as a forum to communicate well-articulated, researched, and thought-provoking "bearish" views on Celsion. No name calling or ad hominem attacks, but rather, rational views on ThermoDox, the HEAT study, or anything else Celsion-related. Perhaps you want to reference articles listed on the blog as well, that would be all the more better.

As you have seen before, I have laid out bull and bear views on the company several different times, and have reminded you that my DD is guided by trying to prove myself wrong. Hence, the bear view is always on my mind.

The blog has continued to attract new visitors and interested stakeholders in the company, and for that, I thank you. If this site will continue to be a source of DD for new investors, then I have an obligation make sure both sides are heard as loudly and clearly as possible. And for that, the doors are open to you. Please either tweet me, email me or reply on a comment below if you would like to guest author a post. This won't be the wild west, so there will be a quick editorial "process", if you will. Hopefully, between now and final HEAT data, we can have a couple "bear" views posted for myself, and viewers, to react to. I encourage it, and I envision forwarding such views on to management for their reaction as well. 

As always, let me know your thoughts, have a great weekend.


Friday, September 14, 2012

Final HEAT DMC Meeting Results in Expected Unanimous Recommendation to Continue, 380 PFS Still Projected for Q4

This morning, investors woke up to a highly anticipated press release from Celsion in regards to the outcome of their regularly planned, independent Data Monitoring Committee (DMC) routine safety review for patients in the HEAT study. This was one of 7 (maybe 8, I lost count to be honest) such reviews conducted by the DMC throughout the duration of the trial, so what made this one so important? Management has mentioned in prior calls that they would update the investor community if the timing for 380 PFS events, originally estimated for "Q4" with data to follow (also in Q4) changed significantly following this DMC review.

So, what did we get in the press release?

"Celsion reconfirmed that 380 PFS events are projected to occur in the fourth quarter of 2012, with top line results announced following DMC review and confirmation."

Couple things to note about this wording from the PR:
  1. The guidance has NOT changed, this is the same thing we have heard for some time now. I take that as being status quo. Celsion CEO has stated numerous times that the company's "best guess" for top-line data is in Q4, so my assumption is they are expecting 380 PFS to be confirmed early to mid Q4, just enough time for the 8-12 week process of compiling and tabulating the data.
  2. Some might suggest the wording "opens the door" for data to bleed into 2013. It certainly IS possible, especially if 380 PFS is not confirmed until late December, as an example. 
Beyond this DMC PR, I know many (voiced loudly by many I interact with on twitter) WILL want to know exactly when 380 PFS is eventually confirmed in Q4. Perhaps this will be something the company speaks to during the Q3 quarterly call (likely in early November) and reiterates in upcoming SEC filings. Not for myself (still long my original shares, holding thru data, makes no difference to me), but for the sake of traders who want to plan and execute their trading strategies leading up to final data, I also do hope the company gives some more clarity on when the 380 has been confirmed. Not to worry, all of this really is a "timing" game. Worst case scenario, 380 PFS occurs on New Year's eve, and we get data in February.
The outcome of the HEAT study looms, and as Adam Feuerstein points out today in his latest mailbag, Celsion is either "uncared" for or "unknown" to Wall Street. As I have said before (one of several reasons Celsion was attractive to me in the first place), I suspect the latter, but we will ultimately have to wait for final data to make that determination.