Wednesday, October 24, 2012

Guest Author Post: Celsion and the Risks of Clinical Trials- By Phil Kobierowski (@philkobi)

Several weeks ago, I invited viewers of my blog/twitter-verse to submit articles representing "rational bear views" for Celsion. Some have questioned why I am doing this, and the answer is very simple and straight-forward. From my very first blog post, I made clear that this would be a forum to provide investors with as much information as possible regarding Celsion, and to share with you resources/research that have guided my own investment rationale. I have never been one to shy away from potential bear views, and have used them, in fact, to help with my own due diligence. Why have I historically brought up concerns over PFS as the endpoint in the HEAT study, intrahepatic distant spread vs local progression, competition with TACE, etc? These were entirely guided by me second guessing my own views of ThermoDox and the HEAT study, and because of it frankly, I think it has given me an even greater confidence and comfort in my investment rationale (see my bulls/bears article for more on this). Separate from the above, I am also thankful for the many tweets/feedback I have received regarding my blog, including from the likes of Adam Feuerstein (and Celsion management for that matter), for being an "informative" site, and in some cases, the site to look at for Celsion. That is truly humbling and means the most to me, primarily because I never envisioned this blog to be a tool for "pumping", never, EVER, despite my own personal, long bias. To that end, an "informative" site needs to convey all angles, and while I have made every effort on my part to do that, I wanted to open the doors for you to express your opinions as well using this blog as a platform to reach other Celsion investors/stakeholders. Transparency and objectivity mean everything in biotech investing, literally, so this is an exercise I am proud of doing.

Sorry for the long introduction, I'll jump straight into my first guest author blog post from Phil Kobierowski (@philkobi on twitter). I don't know Phil personally, but have exchanged several tweets with him over the last several months. It did not take long for me to realize that he is both an intelligent and very respectful guy, and I am pleased to share with you his "bear views" on Celsion. Note, his disclosure is listed at the bottom of the post.

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Celsion and the Risks of Clinical Trials
By: Phil Kobierowski, @philkobi (celsion.blogspot.com guest author)

As we near the results of the pivotal, long-awaited, Phase III "HEAT" clinical trial for Celsion Corp’s ThermoDox, optimistic investors might want to take a step back and consider why they are holding shares of Celsion (CLSN) and evaluate the potential risks associated with clinical trials.

The HEAT trial is Celsion’s double-blinded, placebo controlled Phase III trial for the treatment of primary liver cancer, or hepatocellular carcinoma (HCC).  Here are five reasons that would dampen my enthusiasm regarding the upcoming HEAT trial results that are expected to be announced around December 2012:
  1. The first item worth noting is that I should have been writing this almost two years ago.  What that means is that Celsion management has been notorious in missing their forecasted milestones.

    The HEAT trial seemed to start well.  On a press release issued September 24, 2008 "Celsion reports that site initiation and patient enrollment are tracking well against its most recent projections." This led to their forecast 19 months later in May 13, 2010 that predicted the trial ending a year and a half before Celsion’s current December 2012 forecast: "Celsion expects the study could be completed by the middle of 2011, and pending positive data, a New Drug Application would be submitted to the FDA before the end of 2011". September 21, 2009, is another example of HEAT trial delays, this time regarding patient enrollment completion: "We expect to complete enrollment in the spring of 2010."  Then, in an August 24, 2010 press release, we see Celsion’s expected enrollment completion pushed-back over half a year: "With nearly 70% of patients enrolled in the trial, Celsion is targeting to complete patient enrollment by year end 2010." When did full enrollment finally happen?  July 2011 for the initial target enrollment of 600, and May 2012 year for the full target of 700.

    Granted, if the HEAT results are solid, these delays are a moot point.  Delays in clinical trial completion are not rare and certainly not proof of problems with the trial.  Nonetheless, if Celsion management has significantly missed their forecasting of how the HEAT trial would progress, what other parts of the trial might they be missing or will be a surprise to investors?  For example, is the control arm of the trial significantly exceeding Celsion’s expectations when compared to the ThermoDox arm?
  2. The noticeably low market cap of Celsion has long been a mystery, for me at least.   Despite the share price tripling from June to September of this year (followed by the recent pullback), the current $145 market cap is paltry for a company with a promising, late-stage product that is a potential first-line standard of care treatment for a major cancer.

    Is this a hidden opportunity, or is there a hidden, unpublicized reason for this?  Has the aforementioned timeline delay in the HEAT trial’s completion caused a lack of credibility with, or lack of interest from, investors?  After so many years of developing ThermoDox, medical conference and Wall St road show presentations, etc, it's hard to think that the low market cap is due to the market being really unaware of Celsion.  So what is the reason?  The voice in my head (one of them at least) brings to mind to adage: “if you don't know who is being set-up as the dupe at the poker game, then it's you”.  I’m just sayin’…
  3. There is a shortage of evidence supporting the efficacy of ThermoDox.  Celsion's Phase I clinical trial for ThermoDox in liver cancer showed very promising results, no doubt, with a very compelling dose-response correlation.  But with only 7 of the 20 patients enrolled in the entire trial (plus 4 who were censored from results) who were diagnosed with HCC (the HEAT trial indication), and with the lack of a Phase II trial because Celsion moved from their Phase I right to the Phase III HEAT, well, … you get the point.

    Some could argue that Celsion’s recently released DIGNITY Phase I trial results (using ThermoDox for the treatment of recurrent chest wall breast cancer – another of several indications being considered for ThermoDox) looked encouraging, and therefore, would be reconfirming of ThermoDox’s’s potential.  But, there is really no way to compare the results of the small, 11 patient group in the DIGNITY trial - who were all previously treated with harsh chemotherapy and/or radiation treatments - to those in the 700 patient HEAT trial where ThermoDox is a front-line, induction therapy.  Further, the trials are conducted on completely different indications and are evaluated by very different endpoints.  It is just 2 totally different situations.
  4. The HEAT trial is only 80% powered for its endpoint of a 33% improvement in progression free survival (PFS) over the control arm.  This means that even if ThermoDox could produce such a 33% PFS improvement if used as a global standard of care, and the HEAT clinical trial procedures, protocols, etc, have no glitches; there is still a 20% chance that the HEAT trial is not powered sufficiently to demonstrate that its primary endpoint is met.

    Granted, if ThermoDox’s actually efficacy far exceeds this 33% PFS improvement (as it very well may) then the powering of the trial becomes less of an issue.  But, there is still an unavoidable element of random luck involved and the potential of a steep drop in share price if things don’t work out.

    Further, the HEAT trial is being conducted in 79 different, globally located, clinical sites, of which only nine are in the United States.  The administration of radio frequency ablation (RFA) is a key component in both the ThermoDox arm and the control arm in all the study sites of the HEAT trial.  (Both arms use RFA to burn cancer tumors, the heat of which triggers the injected ThermoDox – which is technically a temperature sensitive liposome that encapsulates doxorubicin – a common chemotherapeutic agent, to release its chemotherapeutic payload at the tumor site.)   The effectiveness of RFA may significantly be determined by the skill and practice of the individual interventional radiologist performing the RFA in the HEAT trial, who are located in, and have been trained, from all parts of the globe.  Considering this, and that ThermoDox may have little effect on any cancer cells located away from the ablated tumor(s), it becomes evident that there are many elements that will affect the results of the HEAT trial, perhaps negatively, that have nothing to do with ThermoDox.
  5. Will the unique requirements for administering ThermoDox restrict its adoption?  ThermoDox is not a cure, but only a treatment that hopes to post-pone the recurrence of cancer by several months longer than current treatments (such as RFA alone).  As mentioned above, ThermoDox is administered in conjunction with a heat source; RFA in the case of the HEAT trail.  ThermoDox is injected intravenously (IV), then 30 minutes after the IV, the RFA procedure must be initiated.  Any period outside this 30 minute window reduces the optimal pharmacokinetics, and thus the effectiveness, of ThermoDox.

    One under-publicized concern is the extra logistical effort required coordinate this: two different procedures, conducted at two different locations by two different staffs at a hospital or oncology center.  All within a very tight timeframe.  The poster presentation of the aforementioned DIGNITY trial acknowledges this challenge with ThermoDox:   "CHALLENGES - Infusion of cytotoxic agent in chemotherapy suite followed by transfer to radiologic oncology to administer hyperthermia."  Such a challenge is seemingly manageable in a clinical trial setting where there are just a few patients and where it is possible to get simultaneous coordination from all needed medical staffs. But how will this translate as a standard of care, where care centers are large, understaffed, and unexpected delays are the norm?  
For the sake of Celsion, its investors, and most importantly for the benefit of the tens of thousands of patients that could benefit from such a potentially beneficial treatment as ThermoDox, we should all hope for positive data results from the HEAT trial. And I acknowledge there are many reasons (that I have not discussed here) to believe that it may. But that should not preclude each investor from objectively assessing the risks inherent to any investment.

Disclosure: I am a long-term Celsion shareholder with no plans to initiate a net short position.

63 comments:

  1. 1) Delays and forecasts: As the author notes himself, clinical trials are often very unpredictable. This does not in any way have any effect on the results of the trial - especially in large trials such as HEAT. There could certainly be surprises - but just the fact that the trial dates have been pushed back and forth says nothing more than, well, nothing at all.

    2) Low market cap: The market is made up of people and people are prone to err. This is especially true in markets where a sheep mentality takes hold. As many wise investors have said over many years - the people who make money in the markets are those who oppose the masses AND end up being right in doing so. Low market cap may represent investor hesitation about a variety of issues. Putting it in other words: if others had bought in and market cap was high, would you believe the potential for this therapy was higher?

    3) Shortage of evidence: Here I tend to agree. However, the FDA will not allow a company to go from Phase I to Phase III (skipping phase II) without good reason. Doxycycline is a well known, widely used chemotherapeutic and it's risk profile is well studied. I don't think the lack of a phase II study makes this therapy more or less likely to work.

    4) Study power: An 80% power is normal and very commonly used in clinical trials. Power analyses are done to protect the experimenters against an erroneous null (no difference) result. One should not place too much faith in power analyses as they are all - by design - intended to be guesstimates of how many patients are needed in a trial. Yes, there's luck involved, but luck (and randomness) plays both sides equally!

    5) Logistical difficulties: No way. Not buying it at all. I have been a surgeon for over a decade and I can confidently say that if a therapy works, then clinical pathways will be developed and streamlined to allow perfect harmony. A perfect example is in breast cancer, where the patient goes to radiology first, an interventional radiologist injects the focus of cancer with a radionuclide and a lymphatic dye, then the patient goes to surgery to have the cancer excised and a sentinel lymph node dissected. This is a completely unfounded argument.

    I would urge the author and the readers of this blog to consider odds and probabilities in evaluating these types of investments. Even if the odds of success are incredibly low, the potential payoffs greatly make up for these low odds. You have to do the math - if the payoff will be 1 to 100, then even if the odds are 1 to 99, you should take the bet. In the long-term this will make you profitable.

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    1. Amir, I appreciate your thoughtful comments to my writing, especially the insights from someone practicing in the medical profession.
      To address one of your (perhaps rhetorical) questions/statements "if the market cap was high, would you believe the potential for this therapy was higher?" - actually I would consider, on average, a higher market cap to be indicative of a better chance of success, albeit with a then lowered reward potential. Though I hate to do it, I have to cite the "Feuerstein-Ratain Rule", which states that "after examining 59 phase III clinical trials of cancer drugs going back 10 years, we found companies with micro-cap market valuations (i.e market caps less than $300 million) had no chance of producing positive phase III study results." http://www.thestreet.com/story/11480247/1/keryx-lessons-from-a-drug-failure.html
      I don't blindly follow this or any such rule for my investments, but I can not ignore the realities of its findings either when assessing risk/reward. Hopefully CLSN will be an exception to this rule, which is possible since it’s just a delivery mechanism for doxorubicin, a widely used, well known drug.

      As far as your comments on the logistical challenge - I am glad to hear someone in the medical world refute it. Although that challenge was directly cited from Dr Rugo who presented the DIGNITY study results. So I can’t ignore it either. Perhaps we can agree that it is a challenge, but one that can be overcome if the therapy works sufficiently well over alternative therapies to justify any added requirements to administer?

      I sense from the context of your comments that you feel ThermoDox has significant potential. Would you care to expand on your thoughts about it from a medical perspective?

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  2. Phil, I just want to say thanks again for taking the time to make your views available to my blog visitors. Now, here are my responses to the issues you raised, which are all valid to some extent...
    1) As, Amir pointed out as well, and as you did too, Phil, indeed, trials can and often do run over what management often projects, as a rule across the industry. Now, the speed of enrollment has always been a hot button issue for Celsion investors. Here are the reasons for the delay as we know them from management:
    -The 10 or so Japanese sites coming off-line undoubtedly slowed things down.
    -Several OTHER competing trials are ongoing in HCC for intermediate staged disease. The recruitment pool has been tapped heavily by other companies as well.
    -Celsion has a relatively stringent inclusion/exclusion criteria, let's not forget that, 3-7cm, no ascites, relatively healthy liver function, treatment naive, etc (this point was NOT raised by management, but I am!)
    -The need for equal distribution of patients in various geographies to increase the external validity of the trial as a whole. Management has made clear on a few occasions that if they wanted to be reckless, they could have allowed a few sites enroll a boatload of patients, particularly in some Chinese sites, but they kept a close check on that to ensure high data quality in the end.
    Finally, on this point, could the delays mean the control arm is doing much better than expected? That would be a different point, one is enrollment, the other is rate of progressions amongst enrolled patients. God knows how many times management has been harassed about the "12 months" expected PFS in the control arm, and they STRONGLY stand by it still. I say control arm will be in the 15-16 month range, and I too am extremely confident that it wont be any higher than that. 12 is definitely believable though.

    2)I do kind of agree with you here...I am a big "market knows best" guy, and am a fan of index funds in general, and not trying to beat the market. That said, I think Celsion's low market cap has to do with your point #3 combined with a general lack of understanding of the level of risk ThermoDox should actually have. Yes, data is limited, but this is a known, WIDELY USED, chemotherapeutic, and a mechanism of release that is MECHANICAL via heat-releasing the drug payload. This mechanical versus underlying BIOLOGICAL mechanism of action used in the liposomes itself gives me great confidence that the concentrations of drug release shown in rat/mouse studies will undoubtedly carry over and be reflected in humans. Bottom line, I think Wall Street is missing this information and simply sees an "untested" drug with limited data. They are in for a big surprise if you are asking me.

    3) I already spoke to this in #2, and what reinforces my point #2 above a bit further is the FDA's strong support for the company to move from a Phase 1 to Phase 3. More than that, the NCI designation of the HEAT study as a priority trial in HCC (1 of 8 I believe, I forget) speaks volumes, and this can't be re-stated enough.

    4) Agree completely with Amir above on powering. I would add, that your point regarding distant intrahepatic spread here is entirely valid, I have no counter-argument to that at all. THAT BY FAR is the biggest risk facing the study given the PFS endpoint, hands down.

    5) Logistical challenges, I agree with you here. This is more of a commercialization execution question than one we need to be concerned about heading into data, and ultimately, affecting valuation in the short-term. But, I added that as a list of my questions for management, because contrary to what Amir said, I also think this could have some impact in terms of commercialization. Sure, guidelines will be developed and protocols established, but how long could that take? Can that affect the time to peak share? Good questions to ask them as they get ready to commercialize.

    Thanks again, I will add more commentary here as thoughts arise.

    Best,
    Siavoche

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  3. Excellent comments. I'm was very excited when I first found this site and am happy to see such educated and thoughtful comments. I must first start by saying that you both are much more educated about the history of this company and management. I have only been following for the past 4-6 months and so I am less versed on the history (haven't lived through it and only know it from articles etc.) So there's plenty that I can learn from you both.

    1) I am familiar with the Feuerstein-Ratain rule. As you point out, those are all studies that looked at cancer drugs - and this is not a cancer drug; it's a delivery system of a well-known cancer therapeutic. While I believe that odds of success are low - I think they are higher than that article would suggest. Moreover, that 59 number is a perfect example of low sample size (and power) to detect a potentially small frequency.

    2) About the logistical challenges - I realize that Dr. Rugo mentioned this but I do think that the logistical challenges of infusing the medication in the chemotherapy suite and then doing the IR guided RFA will not be as difficult as they sound. I have never infused chemotherapy but the reason they do it in a suite is because it's a convenient location for the infusion for outpatients. Inpatients get chemotherapy in their hospital rooms - so it's not a location-limited issue. I don't see any reason why they can't get the chemotherapy in the interventional radiology pre-procedure suite - as long as a well-qualified oncology nurse is around to monitor the patient. It's an infusion of medication - it's not a complicated procedure.

    3) Distant intrahepatic metastases: I see your point about Tdox missing intrahepatic mets that are distant and cannot be easily visualized by conventional imaging such as CT scans. But the study is assessing the difference between two randomized groups that are having RFA alone versus RFA + Tdox. Since they are randomized, the frequency of distant intrahepatic mets in the two groups should be the same. So, I don't see a particular disadvantage in the Tdox group. I do see your concern about potential 'progression' of a small (undetectable) lesion in a Tdox treated patient. But won't the trial look at progression of previously treated lesions only? It makes much more sense to look at lesions that have been treated in each individual patient than to look at the entire liver. If new lesions show up, that doesn't imply 'progression'. Progression would mean increase in size of a previously treated lesion. Am I wrong here? Let me know.

    4) Lastly, to answer Phil's question - to me, this company's drug delivery system passes the 'makes sense' test. It's similar to drug-eluting stents used in cardiology and other modalities where a drug or therapy is directed towards the problem rather than a systemic approach. It's also very simple and straightforward.

    I do like looking at biotech and picking out companies that have high potential with low valuation. Even if the odds are very low, if the 'payoff' is very high, it's worthwhile to take the bet. I think this company is way undervalued given the potential for revolutionizing care of hepatic mets and primary tumors. There's a huge, underserved population in the Asian countries that could really use this therapy. Unlike many other cancer therapeutics, I do think this also has wider application (say breast cancer and other tumors which are easily accessed with RFA). If all goes well, there's a high pay off - perhaps seeing the stock around the 100 dollar mark (market cap 2B) or even higher. With a 20:1 payoff, if the chances are greater than 1/20 (5%) that this trial will be successful, then one should take the bet. I think the chances are low, but greater than 5%.

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    1. There is a documented evidence that Dox has shown to be effectve for distant recurrence. I am citing the article below albet for a different indication. While no means I am an expert or even medically qualified, the dox carrying blood flow from ablated zone to these distant lesions should have some effect.

      http://summaries.cochrane.org/CD001419/doxorubicin-after-initial-treatment-for-sarcoma-reduces-risk-of-recurrence

      Lastly I am not sure what to make of Amir T's comments that chances are low but great than 5%. Sounds like a poor vote of confidence on the outcome of the trial. I would respectfully disagree. Dr. Poon's recent presentation (slide 12 in partiular) is a very good representation on how TDOX is expected to act

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  4. Great comments from all so far. I am a long-term long, so am biased as a disclosure.

    I'd add to the enrollment difficulties issue: not only was Japan an issue(they enrolled 18 patients where they'd intended 90, thus having to make up 72 patients elsewhere) but China was a tough nut at the beginning. The head of the sFDA was executed right around the time they got everything squared away and thus had to "start over" there.

    Japan probably should have made the bear list also. I'm comfortable about the "standards of care" differences, but it needs to be known. What other countries have standards more similar to Japan than to the US?

    The low-market cap does concern me, but I give weight to the argument that Big Pharma is more risk-averse than most people think. They'd rather pay up for a sure thing than take a chance early. And the lck of a BP partnership (and yes, Yakult in my mind is "small" all things considered) contributes to retail not being as enthused. This, the enrollment delays, perceived mgmt flaws, the eternal low-on-cash issues of a pre-approval biotech, the leap from ph1 to ph3 - all of these combine to make retail more skittish.

    Best,
    Trond Hildahl

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  5. Great bear blog & follow-up comments. Thanks.

    I am curious about Amir Taghinia's comment, "I think the chances are low, but greater than 5%." Did I read that right in that Dr. Taghinia thinks the chances of success of the Phase 3 trial are low? If so, I'd love to hear his opinion as to why. Is it because of the reasons already discussed in the bear blog, or other thoughts/opinions?

    Alternatively, that line could be read that the probability of such HUGE success is low.

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    1. Hi Rob and Rajuusha:

      I was running out of space on the blog and so I truncated my explanation about the probabilities - and I think it came across a bit fuzzy. What I meant to say was that the baseline rate of success is low. I recently read an article by DiMasi et. al. (DiMasi, Feldman, Seckler, and Wilson. Trends in Risks Associated with New Drug Development: Success Rates for Investigational Drugs. Clin Pharmacol Ther. 2010 Mar;87(3):272-7.) which noted that baseline rates of success for investigational drugs (from phase 1 to fda approval) was around 13-19%. Now this study looked at mostly big biopharma - so we'd have to assume that the baseline frequency of approval in small companies is much lower.

      Celsion has not done a phase II trial and so the a priori likelihood of a successful phase III is a bit more difficult to guesstimate. It's also got a therapy that's not exactly a drug - rather a targeted mode of delivery. However, as an astute investor, one cannot exactly ignore baseline rates of success, no matter how compelling the story sounds.

      So just looking at baseline rates, I think the likelihood that this trial will succeed is low. I don't know how low. But the key point here is that one should not make an investment decision exclusively based on whether the likelihood is low or high. Suppose the likelihood of an event happening is 1:1000 but the payoff is 1:10,000. It is logical to take this bet, right?

      The way i look at it is by starting like this:

      probability of failure multiplied by amount of dollars to be lost = probability of success multiplied by amount of dollars to be won

      Currently the stock is trading around $4.50. If the trial is successful etc, I made a rough (perhaps aggressive) estimate of market cap 2B which would put the stock price at $100. If the trial fails, can guess that the stock will plummet to around $1.50. I picked round numbers to make things simpler. So, let's call X the probability of success that would create an even trade (probability of failure will be 1 - X:

      ($100 - $4.5) times X = ($4.5 - $1.5) times (1-X)

      Solve for X and you get that X = 0.03 (or X = 3%).

      So, if the payoff number and loss number are correct (note that they are guesstimates - you should pick your own numbers and play with this equation), then if the probability of success is greater than 3%, you should take this bet.

      Now, here's what's interesting - the probability of success by shear randomness in this trial is at least 5% - why? Because a p value of less than 0.05 is used (meaning that in a positive clinical trial, there's a 5% chance that the results are explained just by pure randomness). So lady luck is on your side to start with.

      Now about the true chances of this trial being successful, I have not the slightest clue. I think it's low (looking at baseline rates), but it's higher than 5%. But what I really think is not relevant here. If the payoff and loss numbers are right, this is a logical bet. It may not pay off this time - but over many many bets, if your calculations are right, it will.

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    2. Dr. Taghinia,

      Thanks for the clarification! I did think you were indiciating your (lack of) confidence level in this particular trial, but your explanation makes it very clear you were talking in general terms of trial probability. I appreciate you taking the time to explain this.

      As it happens, I'm an Actuary, where calculating present (expected) values, based on probability and discounting, is what I do for a living! So maybe I should now explain surgery to you :)

      Just kidding, of course. Thanks again!

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    3. Rob:

      Sorry to offend. Not intentional. Also, other readers may be less comfortable with this stuff - so hopefully will find it useful.

      BTW - I do my best to consider criticism or advice from anyone. So if you have any ideas, feel free!

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    4. Dr. Taghinia,

      Thanks for clarifying in such detail. If one considers the PI results to be a good representation of what can be expected out of HEAT trial, the science is compelling enough to make the odds of success high. The big question truly is, would adding dox to RFA improve results better than 33% ? Using RFA alone especially for 5 to 7 cm lesion is known to have poor outcome. With trial randomized across so many patients, the treamtment arm already has an advantage over control arm. My reasoning is if majority of patients are in 3 to 5% (say 60%) and you divide the remaining (5 to 7 cm group) 40% evenly between the two arms, you have 20% chance of success for the treatment arm already. I think the odds of getting another 13% to make to 33% is favorable.

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    5. Dr. Taghinia,

      No offense taken whatsoever. On the contrary, I appreciated your post. I responded as I did because I thought you may have found it ironic that you were basically explaining risk analysis to a so called expert. It's sometimes difficult to convey the light tone one intends on postings - especially for an Actuary. As they say, Actuaries wanted to be Accountants, but didn't have enough personality.

      I do agree with your thinking that in this particular case the potential for an extreme gain combined with the risk makes for a positive expected value, so I'm investing. (Probably more than I should given the risk.)

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    6. Rajuusha,

      Your reasoning makes sense. This therapy passes the 'makes sense' test to me, especially in bigger tumors where the current RFA technique has less 'penetration'.

      I'm still a bit puzzled about the issue of nondetectable intrahepatic lesions? Can anyone answer my question about why this is a concern? Wouldn't 'progression' look at treated lesions instead of new ones?

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    7. Rob,

      No worries. All good. Since you do this for a living, please feel free to give any additional advice about risk/benefit. I'm sure we all can learn more from you.

      Delete
    8. Amir, just to clarify, the HEAT study's primary endpoint is progression free survival (PFS), and as such, ANY new lesions appearing, whether they are at the original site, distant from the original site elsewhere in the liver, or distant and reappearing somewhere else in the body, ALL count as PFS events. I expect VERY FEW "progressions" to occur outside the liver, there might be some extrahepatic PFS-triggering events, but not that many. Similarly, DEATH BEFORE any kind of progression would also count as an event, and similarly, I expect maybe 5-8% of all events to come from death before any form of progression (i.e. heart attack or something else entirely, like getting hit by a car!).

      Sia

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  6. Great discussion. I want to thank each one for your time in contributing to it. It is much appreciated. I am long CLSN and believe the chance of success to be high for the following 1) we are dealing with known therapeutics here and looking for a synergistic impact, we know these treatments work, the question becomes how much better... in this case 33% target 2) the timeline to results favors efficacy in the treatment arm imo 3) finally, the behavior, not so much their words, but the behavior of management has been utterly consistent with an anticipated winner here and they do have contact with trial PIs... even with data being blinded, I suspect there are some impressions picked up along the way...


    Now I have a question for this group of knowledgeable investors. What if Tdox success is 15-25% more effective? It misses the 33% endpoint to be sure, but what does this do regarding the CLSN pipeline and the possibility of FDA approval. My own thoughts are that efficacy at a lesser level is still efficacy and thus does not completely invalidate the pipeline. Re: FDA... an improved efficacy of less that 33% with a delivery system that reduces toxicity and thus increases safety... does the FDA say "no" to that? Would appreciate any responses. Thanks.

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    1. Macnqueso,

      Thanks for the comments, agreed the discussion all around has been fantastic. Your 3 points above are spot on to be honest, we do know these treatments generally, the timeline is "reasonably consistent" with what management forecasted when designing the trial per the CEO letter (http://investor.celsion.com/letter.cfm), and beyond that, the statisticians I have talked to ALL say the median PFS for the entire trial has to be over 20 months, which itself means something is going on, either a great control arm or stellar treatment arm. On point #3, management's involvement and interactions with the FDA, regulatory agencies outside the US, and their investigators who are all KOLs, has been spotless.

      Now, as to your question...I am afraid to say if the trial falls short of hitting the 33% PFS threshold (which per my statistical buddies in reality means at least an OBSERVED hazard ratio of .82), there is ZERO chance of success with the FDA. Why? Remember, the real outcome is overall survival, and I find it very, very unlikely that a trial that does not hit its PFS endpoint will ultimately have any impact on OS. BUT, that would be the only way, if somehow the data shows PFS was not meaningful, but through retreatment with ThermoDox, somehow there is a downstream OS impact, potentially the FDA could entertain that. But, just on the basis of a failed PFS endpoint alone would the agency care? Probably not, and most importantly, neither would the academic community and physician base at large give much credence to that argument.

      Best,
      Sia

      Delete
    2. I hear your point and it makes sense. OS is king as it should be and the PFS shy of 33% is not going to be meaningful by itself. So if it misses on the primary endpoint it will be a long slog back for this company and likely mean dilution just to survive... I do wonder long term though... if OS is even marginally improved, doesn't a safer, less toxic chemo treatment bear some consideration? It is the FDA, so who knows. Hoping for a homerun, such that this becomes a moot point :-) Thanks for your response...

      Delete
    3. Long-term, maybe if OS turns out fantastic, sure, the company can make a run for it. But OS data will be available mid-2014 as I understand, and the company, under a failed PFS scenario, may not be around at all, especially if they don't do a raise pre data....I hope to god they don't raise pre data, that would be the final ultimate bullish sign they could convey.

      No PFS success, and they are done IMO, done all around.

      Delete
    4. Another thing to keep in mind, should the unthinkable happen and the endpoint not be met, is to assess stratified data. For example, TDox might not have have done that well vs RFA alone for tumors < 3cm (We already know RFA is effective for these smaller tumors), but if it sufficiently outperformed RFA for tumors > 5cm, there may still be a market for TDox; albeit much more limited.

      Delete
  7. Per recentGriffin Securities report , Celsion will
    release top-line data as soon as possible after the trial ends, but it will reserve many of the details for
    presentations at scientific meetings and for publication in medical journals. The most important message
    that the Company will make public will be whether the ThermoDox-RFA treatment achieved the 33%
    improvement in progression-free survival stipulated in the Special Protocol Assessment for FDA
    conditional approval.

    ReplyDelete
    Replies
    1. Raj, that is correct. If the trial fails, I don't think we will see any data at all to be honest in the top-line PR. If it succeeds, we will get a very similar PR to the one DCTH issued when they announced successful trial results (median progression times and hazard ratio). A lot of the juicy details, including OS most importantly, will likely be reserved for future publication/presentation, but management DID say they might highlight OS trends.

      Delete
  8. I used to think that the market had considerable wisdom in valuation of companies and still do in the long run... however, the rise in momentum or trend trading, technical trading, high-frequency computerized trading has made the market a lot dumber in my opionion regarding short term evaluations of developmental phase bio-techs... of course, this is precisely why we may have some unique opportunities with a company like CLSN... or maybe I have it all wrong and will be crying in my coffee come data results... we will all know soon enough... ;-)

    ReplyDelete
  9. Would someone be kind enough to provide some insight about exactly how to go about playing the next move in CLSN. Obviously, the easiest thing is buying stock, but are there any options plays that would provide a better risk-return ratio. It goes without saying that when the stock does make a move, it will be substantial, in one direction or the other. Currently, I've positioned with some near and far out of the money calls in mid to late 2013, and a few bullish backspreads. Any other advice? Would it be wiser to buy stock? The only advantage I see of buying stock is that even if there's a negative move now, can hold on to the stock thru additional studies if they were to occur. Thoughts?

    ReplyDelete
  10. Amir,

    After assess different option strategies and prices, I'm doing an April call spread. I bought the April 4.5 calls for $2, sold the April $12 calls for $.75. My break-even price is a low $5.75, and in return I'm giving up upside beyond $12.

    Be careful if you're considering a backspread as it'll kill you if the trial results get delayed.

    ReplyDelete
  11. Amir,
    Great comments, I am a primary care physician in the UK and I played this stock- bought around 3.20 average sold around 5.20, moved the profit into april 5, 5.5 6 SP calls, no risk to my capital- I cannot see the stock trading as it is now in April 2015, definitely will be around 12-15 if not more or 0.5.

    I know you are in a slightly different sceanrio... but if I were you I would still consider April calls....

    Hope this helps.

    ReplyDelete
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