Celsion's ThermoDox May Be Back In Play

Mar.18.13 | About: Celsion Corporation (CLSN)


From Celsion's (NASDAQ:CLSN) website:

Celsion is a late-stage biopharmaceutical company dedicated to the development of innovative, targeted therapies that address unmet medical needs in oncology. By applying our unique heat-activated liposomal drug delivery system to proven anti-cancer agents, we can deliver high concentrations of chemotherapeutics directly to the tumor site, with the ultimate goal of improving patient outcomes.

I've been covering Celsion for a little while now, and my most recent article made the case for the company to have serious upside potential going forward. In that article, you can read the whole story on Celsion since I've been covering it.

I wrote:

I started covering Celsion leading up to Phase III data for its product ThermoDox for use in liver cancer. Preliminary trials looked great and the idea behind ThermoDox was one that made sense: delivering a concentration of an often-used cancer drug to the site of the tumor by its Liposomal transport system, and using heat to activate it en masse.

That time has come and gone, and although ThermoDox failed to meet its primary endpoints in its Phase III study, the company continues to study it. Subsequently, the stock was punished, and I recently argued that it'd be a good time to buy back into Celsion.

I argued that technical indicators, a strong balance sheet, and possibility of sub-group success and other pipeline trial success could turn the stock into a multi-bagger:

Not interested in ThermoDox anymore? Consider these facts regarding Celsion's trial pipeline:

  • It is working to identify how sub-groups responded to the Phase III trials for liver cancer. If it can salvage something from these results (i.e., it showed progress in a certain type of person), that could be a catalyst.

  • It is working through trials for other types of cancer. As we heard on the conference call the morning of the HEAT results, the delivery of the drugs was perfect. It wasn't the manner in which they were delivered, it was some other factor. So now it's a matter of finding a use for the flawless delivery method it has developed with ThermoDox.

  • Pancreatic and liver cancer are two of the toughest to treat.

Today's Conference Call

I stated in my last article that we'd know more about Celsion after it reported earnings today. The two major things I was looking for updates on were effectiveness of ThermoDox in certain subgroups and an update on corporate strategy in relation to their failed trial with ThermoDox.

No sooner did the call start than CEO Michael Tardugno introduces what I see as a potential haymaker:

I'll start by saying, as you can imagine, we have been extremely busy since the announcement on January 31 of top line results from the HEAT study. But not only were we surprised and frankly extremely disappointed, so were virtually all of the study's principal investigators with whom we spoke.

That said, our analysis of the data has been intense and rigorous. It is being conducted in conjunction with two separate, independent statistician groups, and with the oversight and input from our lead principal investigators, and other medical experts in HCC. So with an abundance of caution, here's what I can say so far.

It appears that there is a large subgroup, approximately 575 patients, with smaller lesions, smaller meaning 3 cm to 5 cm, that has demonstrated clinically meaningful benefit, although not with statistical significance. Number two, it is then also apparent that patients with larger lesions, 5 cm to 7 cm, have had a correspondingly poorer clinical outcome. Number three, evaluation of the control group does not suggest that regional variation in the RFA procedure had a significant impact on the study.

Number four, the strength of the small lesion outcomes supports our interest in following this large patient group to determine the overall survival benefit. Number five, we intend to share this information and our plans with FDA and EMA as soon as we have fully vetted and better understand the small versus large lesion phenomenon and its overall impact on this study.

The message I want to leave you with that we are cautiously encouraged. The [LTSL] science appears to be sound. ThermoDox appears to provide activity in this very difficult tumor model. We will continue to tease out the data. We will keep you informed as our analysis progresses. So stand by. There's more to come.

What does this mean? It means its preliminary results are showing that people with smaller lesions were having some clinical benefit. This is a huge difference from the massive disappointment of its conference call earlier this year, where the sentiment was basically, "it doesn't work, it didn't come close, we have no idea what the hell just happened."

As I've stated and as it said in its previous conference call to discuss the HEAT results, the delivery method worked. Now, it's up to the company to find a subgroup and combination of usage for the delivery to be successful. I see this as promising news for Celsion investors.

I also noted that the usage of ThermoDox for their other pipeline trials can still show more promise than it did for HCC. Tardugno continued:

Separately, Dr. Borys presented the HEAT study results to the principal investigators involved with our Phase II DIGNITY study and the Phase II ABLATE study and our HIFU, high-intensity focused ultrasound, collaborators at Oxford University and at the [CTMN] in Utrecht, in the Netherlands, and I can say without equivocation all of our research partners continue to be fully supportive of the LTSL technology. Their premise is that heat plus ThermoDox approach in difficult cancers shows important evidence of benefit. All wish to continue their clinical programs.

Nicholas Borys goes on to state:

While primary liver cancer has been a priority for Celsion, ThermoDox's unique properties support its potential use beyond first line treatment in HCC. As Mike mentioned, we've announced several important new collaborations recently that underscore not just our belief in this potential, but support for it with academia and industry.

Another point worth making is that when asked about its partnership with Hisun that everyone has figured to have deteriorated for good by now, Michael Tardugno said:

We can say this, as Hisun continues to remain very interested in our technology, both the heat-sensitive liposome generally, and ThermoDox specifically, they attended our conference here in Princeton. I don't want to speak for them, but I think they came away believing that their investment in this technology development is not being wasted.

Tardugno finished the call by stating:

For those of you on the phone, I hope our remarks make clear that the company is focused and moving forward. We will complete our analyses of the HEAT study and prudently determine next steps. We have strengthened our balance sheet, and now have the flexibility to consider a number of strategic options. Our partnerships remain strong.


I am reaffirming my speculative buy recommendation on the heels of the fact that I still believe the company to be undervalued after its recent 85% plummet. What I heard today touched on a lot of points that I was looking for. The facts are:

  • ThermoDox delivery method appears effective
  • Hisun is not out of the game as a partner
  • There seems to be reasonable belief that certain subgroups responded well enough to the HEAT trial for there to be "clinical" use
  • Celsion still has a strong balance sheet
  • Dr. Borys made some "almost bullish" comments about ThermoDox working better in some cancers than in others. As I previously pointed out, liver cancer has traditionally been one of the toughest to fight. Should Celsion find steady results in another form of cancer, we could be looking at a significant investing gain.

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. I have CLSN calls.