3 Reasons To Buy Celsion

| About: Celsion Corporation (CLSN)

Celsion (NASDAQ:CLSN) is a leading oncology company dedicated to the development and commercialization of innovative cancer drugs including tumor-targeting treatments using focused heat energy in combination with its heat-activated liposomal drug technology. Celsion has research, license or commercialization agreements with leading institutions such as the National Institutes of Health, Duke University, University of Hong Kong, the University of Pisa, and the UCLA Department of Medicine, Kyungpook National University Hospital and the Beijing Cancer Hospital.

I see at least three reasons to buy the company at current prices.

1. The HEAT Study Results Late 2012

The company's lead product, ThermoDox, is being evaluated in a Phase III clinical trial, which the company refers to as the HEAT study for primary liver cancer and a Phase I/II study for recurrent chest wall breast cancer. ThermoDox is a liposomal encapsulation of doxorubicin, an approved and frequently used oncology drug for the treatment of a wide range of cancers. Localized mild hyperthermia (greater than 40 degrees Celsius) releases the encapsulated doxorubicin from the liposome enabling high concentrations of doxorubicin to be deposited preferentially in the region of the tumor target.

The HEAT study is conducted under a Special Protocol Assessment (SPA) agreement with the U.S. Food Drug Administration (FDA). The study is designed to evaluate the efficacy of ThermoDox in combination with RFA when compared to patients who receive radio frequency ablation (RFA) alone as the control. The study is being conducted in 76 clinical sites in the United States, Canada, Italy, China, Taiwan, Hong Kong, Korea, Japan, Thailand, Malaysia and the Philippines, with approximately 90% of the planned 700 patients now enrolled in the study. The primary endpoint for the study is progression free survival (PFS) with a secondary confirmatory endpoint of overall survival.

In November 2011, Celsion announced that the independent Data Monitoring Committee (DMC) for the HEAT Study completed a pre-planned interim analysis for safety, efficacy and futility and unanimously recommended that the study continue to its final analysis as planned. The DMC evaluated data from 613 patients in its review, which was conducted following realization of 219 progression-free survival events within the study population. A total of 380 progression events are required to reach the planned final analysis of the study which the company reconfirmed was projected to occur in late 2012.

Primary liver cancer (hepatocellular carcinoma or HCC) is one of the most common and deadliest forms of cancer worldwide. It ranks as the fifth most common solid tumor cancer. It is estimated that up to 90% of liver cancer patients will die within five years of diagnosis. The incidence of primary liver cancer is approximately 20,000 cases per year in the United States, approximately 40,000 cases per year in Europe and is rapidly growing worldwide at approximately 750,000 cases per year. HCC has the fastest rate of growth of all cancers and is projected to be the most prevalent form of cancer by 2020. HCC is commonly diagnosed in patients with longstanding hepatic disease and cirrhosis (primarily due to hepatitis C in the U.S. and Europe and hepatitis B in Asia). More about liver cancer and the HEAT study can be learned via a presentation delivered at an investor event held March 12, 2012.

2. Enough Cash To Last Until 3Q 2013

The company ended the year 2011 with $30.5 million of cash and investments. Celsion is currently using cash around $1.7 million per month. Current funds are expected to last until third quarter of 2013 which was confirmed by management at the fourth quarter earnings call.

3. Insider Transactions

The insider transactions are very encouraging. There has been a constant buying interest from the insiders of the company. I can't see a single sale transaction for the last nine years. The latest buys are from December 2011.


I like this stock as a speculative play to the final readout on the company's phase III HEAT study which are expected late 2012. I believe that after positive results from this HEAT study the stock should be trading well above $4. The insider transactions of the company are a very encouraging sign. The company has enough cash to last another 18 months.

Disclosure: I am long CLSN.

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