Friday, November 9, 2012

UPDATED- Celsion Pleasantly Surprises Investors with 380+ PFS Event Confirmation, Final Data Targeted for January. Griffin Securities Reiterates $18 PT

Needless to say, today's PR was quite a surprise and I think the market liked what they heard. I don't have much to say here other than to re-post the PR and highlight some key areas for investors. This is significant since I was under the strong impression that management had no intentions of PR'ing the 380+, exactly as they did prior to the interim analysis last November. You can bet the final number of events will be well over 380 just to be extra safe, I would count on 400 events or so being the final count.

My own takeaways from the PR:
  1. Management listens to investors, I have said this before as well. I can bet this is not necessarily what they wanted to do (who knows, maybe they had intentions of under-promising and over-delivering on this topic as well, as they have been doing for much of 2012 to be honest), but they knew it would be received well by the investor community. 
  2. The company absolutely will not be raising money, period. For a development stage biotech facing life and death here, this is a major, MAJOR sign of confidence. HEAT failure means bankruptcy before the end of 2013. If they wanted to, management could have easily issued 10M shares when the stock was 5 or 6, and had plenty of cushion for several years to come. The fact that they did not, in my humble opinion, speaks volumes about their own sense of confidence in the HEAT study, and reaffirms that they are actively keeping in mind delivering maximum value to shareholders.
  3. Data will be out in January, plain and simple. It's very possible data could be out before opex (10 weeks from now takes us right to op ex), but that is pushing it given the holidays, etc. Of note, the PR did say that they "project" that 380+ has been realized, so it is very likely this has not yet been confirmed per se, but that is likely a formality at this point. 
From today's PR (emphasis, colors mine):

LAWRENCEVILLE, NJ--(Marketwire - Nov 9, 2012) - Celsion Corporation ( NASDAQ : CLSN ), a leading oncology drug development company, today announced that it projects that a minimum of 380 events of progression have been realized in the Company's pivotal, Phase III HEAT Study, a multinational, double-blind, placebo-controlled, pivotal study of ThermoDox® in combination with radiofrequency ablation (RFA) for the treatment of hepatocellular carcinoma (HCC), also known as primary liver cancer. According to protocol, 380 events of progression, subject to confirmation by the Study's independent Data Monitoring Committee (DMC), trigger the data collection process, unblinding and final analysis of the results by the DMC. Progression Free Survival (PFS) is the HEAT Study's primary endpoint. The HEAT Study has been granted Special Protocol Assessment by the FDA. Following DMC review, the Company plans to disclose top line results, an announcement that is expected to occur in January 2013.

"The HEAT Study addresses a significant and growing global unmet medical need in oncology, primary liver cancer. With a positive outcome, ThermoDox® will become the most important 1st line therapy for patients with non-resectable disease," said Michael H. Tardugno, Celsion's President and Chief Executive Officer. "The positive implications of this study, for patients and their families, the healthcare community, our investors and employees, cannot be overestimated."

Mr. Tardugno added: "We enter this transformative period from a position of financial strength, having taken ThermoDox® through to pivotal data while maintaining full worldwide rights outside of Japan, a minimal number of shares outstanding and a strong balance sheet." The Company ended the second quarter of 2012 with $24 million in cash, subsequently supplemented by $4.7 million in option and warrant exercises. Celsion also has available to draw an additional $5 million from a $10 million loan facility with Oxford Finance LLC and Horizon Technology Finance Corporation, pending positive data from the Phase III HEAT Study. "Consistent with our previous guidance, we have no plans to raise additional capital before disclosing top line data from the HEAT Study which, if positive, will vastly expand the Company's strategic and financing options."

Just moments after this PR, a note was issued by Keith Markey from Griffin Securities re-affirming their $18 price target on the stock. Now, I have brought this up before, but even though Griffin has the highest price target on the stock, I will boldly say they are most accurately capturing ThermoDox' true valuation compared to the other analysts from Rodman (formerly I suppose at this point), Brean Murray, and Roth Capital. Keep in mind this valuation from Dr. Markey STILL does NOT include any revenue from the RCW indication, but it does include off-label colorectal liver mets revenue. As I have mentioned here, it is my strong belief that off-label use for colorectal liver mets will be a given if the HEAT trial succeeds. Another factor to be aware of, Dr. Markey is being conservative by only assuming one treatment per patient based on an incidence model, and does not reflect that many patients will receive as many as 5 RFAs potentially through their course of treatment (more likely, between 2-3). So, again, while his target price is high, it is still a very realistic one. I thank Keith again for allowing me to post his note here for my blog viewers.

I am excited, and looking forward to Monday's Q3 conference call and the Lazard Conference presentation as well. As mentioned, I will be updating my list of questions for management ahead of the Monday call as well.



  1. Excellent info, esp regarding off-label use potential and the Griffin note. Thanks for this.

    But I must ask, what the heck does Celsion mean when they say they "project" that the 380 events occurred? Does that mean they are really estimating? Or do they know anything for sure? Could their "projection" be off by, say, 2 months?

  2. Phil, thanks for the comments and question. I think what they mean is 380+ unconfirmed (probably more like 400 or 410) has been realized (they get these unconfirmed counts regularly), and they are ASSUMING that once they press the magic button and ask their independent radiology CRO to confirm, they will land at somewhere >380. Its a minor point, they would not have put out this PR if they were not 100% sure that we have the necessary number of events needed to lock the database with certainty in the next few days.

  3. Sia,

    When I first read this PR my assumption was that they are very close to sealing a partnership agreement. Committing to not raising cash before data is "almost" stupid.... if we spike to $8 or 9 on excitement/runup I don't think too many serious investors would mind a 2-to-3M share raise.

    I too don't think this will happen - especially after the cc comments on partering efforts after results. But I concur it is extremely odd and noteworthy that they have stated no-raise multiple times now.


    p.s. Thanks for the kind comments about my question.
    I did not think they would really address it, but the thought of a patient getting two Tdox treatments within 4 weeks or so got me wondering about the possible AEs and how the double dose might positively affect distant micromets via the residual dox after RFA.
    The other question was directed towards the Feuerstein-Rattan (sp?) rule. Just because CLSN is a micro-cap, the mgmt experience in NDAs should count for something, and I really wanted MT to have a chance to brag up his staff.

    1. No problem, Trond ;-) Thanks for posting here.

      Yeah, I mean, talk about balls of steel lol...they could announce a deal pre-data, pocket upfront money and another big milestone payment upon positive data ($30M now, $30M on good data would be nice!). But I, too, don't see that happening. It is definitely interesting since they will be betting their livelihood on positive data, I like that kind of skin in the game!

      As regards the multiple RFA/Tdox treatments, I wouldnt worry about the AE's too much, as recall, the RCW population is receiving 4-6 cycles of ThermoDox. There will be side effects, very clear ones, and as an aside, this is what bears will likely point to following positive data ("well look at all the side effects!") Its a given that the ThermoDox arm will have worse safety profile than the RFA only arm, an absolute given. I am more interested in what kind of compounding effect a second dose of ThermoDox would bring from an efficacy perspective ;-)

      Also, I would estimate that 10-15% and 20-30% of patients in the 3-5 and 5-7cm lesion strata respectively of the ThermoDox arm will receive 2 ablations in the initial month and half (to ultimately land at a ~96-97% and ~87-90% complete ablation after both attempts in each strata). I can't wait to see what the complete ablation rates within the 1st and 2nd attempts will be for both arms, again, so much data I want to see from this damn study! It may very well turn out that the complete ablation rates are the same in both groups, with ThermoDox flexing its muscle in preventing downstream recurrences only. I don't expect that, but its possible.