The legendary Peter Lynch once said "Never invest in any idea you can't illustrate with a crayon." When it comes to biotechs, that's often a challenge as their fundamentals are often very complex with seemingly endless data to sort through, making explaining the strong points in a short, simple illustrative summary a difficult task. But I shall attempt to do exactly that with this article, which is somewhat similar to last biotech I covered, Horizon Pharma (HZNP).
In January 2013, Celsion (CLSN) is expected to release the results of its "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 a recent company press release, "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."
(2) GOVERNMENT SUPPORT
This phase 3 is so important, so big, that the FDA granted it Fast Track Designation and Orphan Drug Designation in both the U.S. and Europe and allowed it to skip from Phase 1 to Phase 3 trials. In addition to this phase 3 trial for liver cancer, "ThermoDox® is also being evaluated in two Phase II trials for patients with recurrent chest wall breast cancer and colorectal liver metastases"
The company ended last quarter with $24 million in cash, $5 million available on their credit line with no plans to raise money until positive data from the study is released in January 2013 which, if successful, it is expected that the results will put CLSN on the map and bust the doors wide open to strategic and financing options.
According to the Q3 2012 conference call transcript, other companies have spent hundreds of millions of dollars for ThermoDox's principle indication HCC, yet HCC remains a large and deadly cancer, the world's fifth largest cancer, with "incidence is approximately 28,000 in the United States, 40,000 cases in Europe and it's rapidly growing at 5% worldwide from a base of 750,000 new cases annual." Additionally, "The World Health Organization estimates that HCC will become the number one cancer worldwide by 2020 surpassing lung cancer."
(5) INSIDER BUYING
Always nice to see insiders putting their money where their mouths are. Again, to quote the great Peter Lynch, "Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise." The following is a list of insiders who bought in the open market within the last 3 months according to SEC filings:
- On November 14, 2012, a director of the company Robert W. Hooper bought 60,320 shares at an average price of $5.20.
- On September 13, 2012, an officer of the company Michael H. Tardugno bought 25,000 shares at an average price of $5.03 - $5.04.
- On September 13, 2012, an officer of the company Jeffrey Wayne Church bought 9,860 shares at an average price of $4.93.
- On September 9, 2012, a director of the company Robert W. Hooper bought 49,000 shares at an average price of $4.92 - $4.97.
- On August 28, 2012, a director of the company Robert W. Hooper bought 11,625 shares at an average price of $4.65.
These are simple 5 reasons to be bullish on CLSN. In my next article, I plan to give 5 more reasons to be bullish on CLSN. While I could make a list of 100 or more reasons to be bullish on CLSN, I think it's important to zero in on just a handful at a time when communicating investment ideas, just as Peter Lynch recommends. And illustrate it with a crayon.
Disclosure: I am long CLSN.