Celsion (NASDAQ:CLSN) shareholders are in the final days ahead of the expected 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" in a fantastic Cinderella-like story. This is an all-or-nothing, winner-takes-all (bulls or bears) binary event. This one piece of news will likely determine if CLSN gets to go to the big oncology ball dressed in a beautiful treatment for HCC so effective it may even be a cure for many people with advanced liver cancer - or results that leave CLSN home in rags.
There's been a very highly emotional debate lately for both bulls and bears with both sides at risk of losing a substantial amount of money. With the stock trading near the highest level it has seen in years, bears so far are down significantly. There are 5.8 million short shares at last count getting squeezed. As a follow-up to my last CLSN article entitled 5 Reasons Celsion Is Going To Go Even Higher, I believe the "Celsionderella Story" will end this January 2013 with CLSN living happily ever after with Prince Big Pharma-ing. Here's 2 more reasons why:
(1) The So-Called Double "Blind" Phase III Trial
Management has been extremely optimistic and voicing it, using such phrases in their recent conference call as:
"(A) drug that will extend life and perhaps provide a cure"
"No reason to believe that the HEAT study won't be successful"
"The evidence is clearly on our side"
"It's clear that the clinical evidence for a successful HEAT trial is on our side"
"We continue to work diligently to avoid any missteps and to ensure no surprises with the clinical data set"
"(T)he goal here, as I said over and over again, is no surprises."
So that's simply just "blind" optimism, right? Not so fast. While keeping in mind CLSN's goal of "no surprises" with a "blind" data set, think about what they're trying to tell you. CLSN is analyzing everything they can outside of the blinded part of the trial. Well, what could that be?
Easy. ThermoDox contains Doxorubicin. Most people lose their hair within two weeks of getting a dose of Doxorubicin. One would have to be literally blind not to notice who is getting Thermodox and who is getting a placebo in the trials. The CC stated, "Through our clinical quality dashboard we have tracked and evaluated timelessness...and certain trends in the data set which are routinely scoured by our data management team."
Over time during the trial if ThermoDox works, it would become blatantly obvious as the overall surviving patient population would have a continually growing larger percentage of patients without hair. If it didn't work, the ratio would stay roughly the same. For management to be so optimistic, I speculate they have seen or have reports of how many of the survivors have lost their hair and are still around and those numbers blow away the statistics for patients without ThermoDox. "No surprises" indeed. And management already knows the basic number one relevant conclusion: ThermoDox works miracles.
(2) Rumors of Pfizer (NYSE:PFE) Coming On As A Partner
Rumors have been flying around about Pfizer coming on as a partner with CLSN after positive Phase III trial news. This rumor/speculation has been floating around ever since CLSN announced a supply agreement with Zhejiang Hisun Pharmaceutical in China. Hisun is partnered with Pfizer which is also mentioned in that PR as having a $295 million joint venture agreement.
Again, from the conference call:
"HCC has been a challenge for even the biggest of big pharma despite of the hundreds of millions of dollars they have spent to find a therapy to improve outcome, HCC remains a large and deadly cancer."
And what do you know? The "biggest of big pharma" just so happens to be Pfizer, and, "coincidently" Pfizer has indeed spent hundreds of millions trying to fight HCC and failed. Here's an example of a Phase III trial discontinued amid failure for the Sutent drug to treat HCC, despite 82,000 patient experience with Sutent (presumably including for other indications as well though).
PFE has been hell-bent at finding therapies to treat HCC so CLSN, post positive-data, would make a logical fit. More from PFE:
"Hepatocellular carcinoma is the most common form of liver cancer, and is the fifth most frequently diagnosed cancer worldwide. Many HCC patients are diagnosed at an advanced stage when traditional treatment options provide limited benefit. One of the most fatal cancers, the prognosis for HCC is generally poor, with a 5-year survival rate of less than 7 percent. Despite advances in treatment, effective therapy for advanced hepatocellular carcinoma remains a clinical challenge in the oncology community, and additional treatment options are critically needed to address this continuing unmet need."
More from CLSN:
"Our target population, median time to progression is 12 months with median time to death 30 months. Five year survival is in the single digits. It's clear that the clinical evidence for a successful HEAT trial is on our side. The medical world, I daresay, is watching."
Pfizer especially, no doubt.
Again, keep in mind, however, if the phase III data comes in surprisingly bad, the clock will strike midnight, Prince Hope will disappear, and the stock price will come crashing down in a terrible way. CLSN is not without risk. No matter how optimistic management may be, they are human and could be overoptimistic and making bad mistakes. It's a risk, and the risk is total. But it's a risk I'm willing to take for a potentially very large reward.
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.