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Celsion (CLSN) is very close to its top-line release of its Phase III study, called the HEAT trial, designed to show that ThermoDox + RFA treatment improves the time to progression of HCC liver cancer by at least 33% for patients with large tumors versus RFA alone. In my previous Part 1 to this article I presented what I believe is a mathematical proof that Celsion's ThermoDox has worked based on valuable data already in front of you over the course of the trial to 380 PFS events. Now I will show more interesting, more pronounced data midway through the trial along with further analysis. My data and analysis will show a reasonable mathematical expectation of:

ThermoDox has delayed the progression of the disease over the control arm by at least 111%.

THE PROOF:

The two most likely causes cited by the FDA that constitute a progression-free survival event are quoted as "local recurrence" or "Any new distant intrahepatic HCC tumor." I'm going to go even more conservative than my previous article and ignore the distant intrahepatic HCC tumor chances and focus only on local recurrence.

Combining the enrollment data with known averages ( including the company cited 12 month median) for local recurrence for RFA-only it's very easy to then calculate what the trial population would be expected to show for RFA-only (if ThermoDox had no effect). The data and conclusions are all below and haven't been revealed or even hinted at in any other article that I can find.

 PR Date Total Incre. Months to PFS 190 Total Prob. Of local Expected Source Enrollment Enrollment (est. 9/1/11) Months tumor recurr.-free PFS Events 09/30/08 20 20 35 700 0.50 10.00 08/05/09 151 131 25 3275 0.50 65.50 11/10/09 196 45 22 990 0.50 22.50 01/20/10 250 54 20 1080 0.50 27.00 05/04/10 331 81 16 1296 0.50 40.50 08/03/10 405 74 13 962 0.50 37.00 09/30/10 450 45 11 495 0.50 22.50 11/11/10 474 24 10 240 0.58 10.00 02/11/11 516 42 7 294 0.71 12.25 03/25/11 534 18 5 90 0.79 3.75 05/12/11 558 24 4 96 0.83 4.00 07/11/11 588 30 2 60 0.92 2.50 08/03/11 600 12 1 12 0.96 0.50 TOTAL 600 171 9590 258.00 Avg. 16.0

OBSERVATIONS AND CALCULATIONS:

(1) Using the enrollment data, the reflected mean time patients have been in the trial is at least 16 months. Please note: in an effort to remain conservative and account for potential lag in enrollment versus day of medication, I used the enrollment data announcement as the starting dates. Using an even distribution of enrollees between announcement dates, the mean is around 18 months instead of 16 months. 16 months, however, yields more conservative results and would counter up to 2 months on average lag, if there is any, between enrollment and medication.
(2) Using the above enrollment data and breaking down the expectations into the 13 mini groups yields a more accurate expectation of at least 258 patients or 43% should have reached PFS event status.
(3) Instead, only 190 patients or 31.7% of the trial population had reached PFS event status.
(4) Using the 43% on the control arm of 300 patients, 129 patients are expected to have reached a PFS event.
(6) 190 PFS total minus the 129 from the control arm leaves only 61 expected ThermoDox patients who reached a PFS event.
(7) 129 control arm patients is 211% (or more) than in the 61 ThermoDox arm expected to have had PFS event.
(8) 61 out of 300 ThermoDox arm patient is only 20.3% vs. 50% of the control arm.
(9) This suggests after 16 months that the overwhelming majority (79.7%) of ThermoDox patients have yet to reach a PFS event. This is unheard of.
(10) A 111% gain suggests possibly a 1+ year average delay in disease progression.

Conclusion: The phase III data will show that ThermoDox works for the majority of patients showing a very significant delay, if not cure, in their HCC liver cancer even when doing the most conservative of calculations imaginable.

With all this in mind, there are several risks for CLSN stock:

(1) I could be missing something or my data is wrong. It happens sometimes, despite having several check on my work on this.
(2) There could be some unknown, unexpected side effects that are unacceptable and only came to be realized with final analysis of the data
(3) I could be correct in my analysis, but the stock could have already priced in a positive data reaction in the short term and the stock could sell off on the news (buy the rumor, sell the fact).
(4) New more superior competition could emerge.
(5) The company itself could stumble, make an error, something could happen to a key man in the company, there could some sort of internal power struggle drama within the company that develops, etc. Things such as this happen sometimes, especially with tiny companies.

Mathematically speaking, though, ThermoDox has to work. There's no other plausible explanation, and I believe not only will the world realize this when the Phase III data is released, but the world should have seen it coming from a mile away. After all, there's been enough as I have revealed that's been sitting right underneath everybody's nose already.

Disclosure: I am long CLSN. (More...)