5 More Reasons To Be Bullish On Celsion Now

| About: Celsion Corporation (CLSN)

Celsion (NASDAQ:CLSN) has been on fire. As promised, this is a follow up to my previous article 5 Reasons To Be Bullish on Celsion Now. We are getting awfully close to January 2013 top-line release of "the Phase III HEAT Study, a multinational, double-blind, placebo-controlled, pivotal study of ThermoDox in combination with radiofrequency ablation (NYSEMKT:RFA) for the treatment of hepatocellular carcinoma (NYSE:HCC), also known as primary liver cancer" -- the following 5 reasons additional reasons to be bullish now assume positive top-line results and what it means for shareholders.

Of course, all of this completely depends and anticipates top line data early next year being positive or the CLSN stock price will take a dramatic hit. This is a binary speculative event that could make or break CLSN. Make no mistake about it -- failure on the Phase III trials would cause CLSN to take a hit. Despite this very real risk, there are many reasons to be bullish.

So without further ado, here we go:


With a market capitalization less than $300 million in size, the opportunity for share price appreciation is astounding. Many biotech companies trade at multitudes higher than Celsion and are nowhere nearly as far alone, as close to drug approval, or as well capitalized. Take Sarepta Therapeutics (NASDAQ:SRPT) as an example. As of September 30, 2012 current liabilities exceed current assets by around $10 million (whereas Celsion had over $11 million more in current assets than current liabiltiies). Yet upon release of positive data from an inferior market size drug with their phase 2 data (not even phase 3 like Celsion), the stock price shot up over 200% in a single day and got so high so fast it hit over a $1.1 billion market cap! To put in perspective, if Celsion were to merely rise to the same level on phase 3 data as Sarepta rose on Phase II data, it would put the price per share of Celsion well over $30 per share.


In an interview with Reuters, the CEO stated "Certainly this is a $1 billion drug" -- but didn't stop there. He further hinted and implied that the strength of the pending Phase III trial data could put that figure into the multiple billions. In a presentation earlier this year, Celsion estimated the figure to be over $1.8 billion in 2017 for just two indications. Celsion has been granted special protocol assessment by the FDA, fast track and orphan drug designation, and expects to receive priority review upon positive Phase III data. ThermoDox by health regulators in the United States and elsewhere which would allow them to possibly have its first drug on the market as soon as late 2013. Management has stated that this single global Phase III trial "with agreements from local regulatory agencies that give us immediate filing access to some 29 countries around the world." In short, if positive data in announced, the door busts wide open for Celsion.


Investors are often concerned, rightfully so, if a smallcap biotech has the experience and knowledge to navigate quickly and competently through the complex obstacles of achieving drug approval with the FDA. Let me make this as direct and clear as possible: this management team didn't just fall off the turnip truck. They have the resumes of an already successful large cap biotech (which begs the question why they decided to work for a small company like Celsion. Obviously they are confident the end results will be amazing success). Celsion management has successfully navigated over 27 New Drug Approval (NDA) applications.


I'll put this short, sweet, and direct -- after positive Phase III data on Thermodox, expect partnerships and licensees to begin move toward finalization and announcement. In the Q3 conference call, CEO Michael Tardugno stated "We are establishing multiple manufacturing partners in the US, an import requirement to ensure supply continuity by most pharma companies interested in a commercial license of ThermoDox."

More hints dropped from management in the same conference call:

"The level of interest for a billion dollar product with near term approval potential in the US, Europe and emerging markets such as China and Asia Pacific is high."

"Companies are looking for large new product opportunities like ThermoDox in emerging markets like Asia Pacific to replace revenues from many of their products coming off patent."


According to the most recent figures available from NASDAQ, there are a total of 52 institutions owning 4,698,405 shares. That's less than 100,000 shares on average per institution. That says to me that a lot of them have merely stuck their toes in and are waiting for positive data to truly drive in head first. Now add to that 5,451,600 shares that are short which is around an average week's worth of trading volume, and we have in front of us the very possibility of a huge short squeeze being set up as many of those shorts are potentially forced to buy in and cover while the institutions are adding aggressively to their positions and new ones are jump on board.

Of course, all of these things absolutely depend on the expectations being met of positive data release. Based on the evidence, we have every reason to believe exactly that will happen and the dominoes should fall down neatly in place accordingly with shareholders rewarded handsomely. I believe the time to be bullish is before the data is released -- because if that single event is the expected game changer, the premium to pay afterwards will be significant.

Good luck with all your trades!

Disclosure: I am long CLSN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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