Heisenberg Prin...'s  Instablog

Heisenberg Principle
Send Message
Heisenberg Principle is a full time private individual investor and trader.
  • Celsion: Does ThermoDox Actually Make Liver Cancer WORSE? 2 comments
    Feb 4, 2013 8:51 AM | about stocks: CLSN

    Celsion (NASDAQ:CLSN) announced its Phase III HEAT failed to meet its primary endpoint of showing a 33% improvement in patients using ThermoDox + RFA versus patients using a placebo + RFA alone. Quoth the Raven penned a fantastic article explaining in brilliant detail some "tells" that us longs missed as we continued to hold CLSN through Phase III data. As I sit here with near worthless call options, I'm left pondering if there's any hope for them, and more importantly, how to go about trading CLSN stock going forward or if I should trade it at all. Subgroup data analysis from CLSN management is still forthcoming and could show drug benefit for some. More importantly, if ThermoDox could show any benefit whatsoever for any subgroup against the Rhinoceros-tough advanced liver cancer hepatocellular carcinoma (NYSE:HCC), then perhaps the drug would work better with other, slightly less challenging forms of cancer such as breast cancer and bone cancer. The long thesis currently is "all the bad news" is already priced in, can't get any worse, and CLSN has found a short term bottom with very little risk holding for final data analysis as only good news could come from it. I confessed to being wrong about being convinced that CLSN success was a sure thing based on various data points given by management. While using the benefit of hindsight, I attempted to figure out where the hole in my model came to be and why the model failed (especially since it was so similar to other models), and came to the most probable conclusion was my (and others) faulty assumption of only 380 patients met the progression-free survival (NYSE:PFS) criteria when it was likely far more since 380 was only a projection by management rather than a declared fact. With a number much higher than 380, the validity of my model falls apart. Now taking it a step further: what if ThermoDox actually makes HCC liver cancer WORSE by causing the acceleration of new tumors?

    I disagree. While it is certainly possible that there could be good news could emerge out of the data, there still stands terrible risk of far worse bad news than what is already known: that is, ThermoDox may actually make liver cancer worse. In my last article entitled Celsion Phase III Failure: What Went Wrong?

    While I obviously can't prove yet that ThermoDox makes cancer worse, it's a real risk that should considered when being long with (what's left of) the stock and one I wish I had considered before the Phase III data was revealed. If ThermoDox is actually shown to make cancer worse, then that would be a final and immediate death blow to the company and the stock.

    1. Unlike the 380 PFS event assumption numbers, we do have the exact interim numbers which showed 613 enrollees with 219 of them showing realizing PFS events. At this stage ThermoDox was clearly working, as my model showed which didn't depend on any numerical assumptions (unlike my final model which did contain the apparently faulty assumptions). There was little question ThermoDox was working in the short run (and no wonder management wanted it stopped early, because the reverse may be true over a greater period of time as explained below).

    2. We do know that ThermoDox increases the zone of ablation killing a much wider area of cells than RFA alone, and with it, killing a lot more tumor cells including micro-tumor cells outside of the RFA-only ablation zone. This area is where 50% of distant-recurrence (new tumors) originates.

    3. We do know that the active ingredient with ThermoDox is doxorubicin, which we know in less concentrated doses given through IV is active in liver cancer. So the thesis by many longs including myself was that by delivering a 25 times higher-concentration of the drug that shows a mild benefit through conventional delivery would automatically mean a higher benefit right? Not so fast. Three problems:

    4. First, ThermoDox delivers what many have described as "an atomic bomb" to the tumor and surrounding site. The potential problem with that? You're not only killing a concentrated collection of cancer cells, but you're also killing a concentrated collection of healthy cells, in far greater number around the outside of the original tumor and beyond. Studies have shown such at this one that damage to healthy cells "by chemotherapy treatments produced an abundance of a protein called WNT16B, which acts almost like a fuel for cancer cells, promoting their growth and survival. It also acts as armor for cancer cells, protecting them from subsequent treatment." And that's for regular chemotherapy that merely occasionally kills some health cells, never mind a direct concentration of "fuel" for to any surviving micro-cancer cells in the area. ThermoDox, in essence, may be feeding the surviving cancer cells helping them to grow faster and stronger. Longs were so fixated on the lack of seen obvious side effects that they (myself included) neglected to consider the long-term side potential side effects of ThermoDox which is perhaps making cancer worse, a long-term side effect that would only become obvious through further data analysis of subgroups (forthcoming soon by CLSN management) specifically of the earlier enrolled patients in the trial.

    5. Second, expanding on this theory, precancerous liver cells in the area may get fed and protected just the same, accelerating their grow and transformation to becoming full blown HCC cancer tumors. According to this recent article, precancerous formations can be significant in size.

    6. Third, and to make matters worse, liver cancer cells already are known to be resistant to doxorubicin (which is part of the reason new ways to fight liver cancer need to be found). It is thought that there is a gene within the liver cancer cell that produces a protein called STAT3 that protects the cancer cell from destruction from doxorubicin. TheremoDox's powerful concentrated dose make work against killing many of the weak HCC cancer cells leaving only the strong ones to survive, much in the way certain pathogenic bacteria become resistant to antibiotics and leave the patient worse off.

    7. Remember the key with chemotherapy normally is that it tends to attach and kill cancer cells more often than healthy. With ThermoDox's direct potency, the chemotherapy drug doxorubicin doesn't have a choice. It kills everything in its immediate warpath, potentially delivering an unintended concentrated dose of fuel just outside of its killing zone to some of the cancer and precancerous cells it missed while leaving nothing but strong and well fed HCC liver cancer cells.

    8. If this is all true, it wouldn't be the first time a cancer treatment has been accused of causing short term progress but long term worsening. As an example, according to this article, "while a radiation treatment may initially regress a tumor's volume/mass, it may actually be selecting out the more radiation-resistant and aggressive subpopulation of tumor cells which ultimately lead to higher malignancy. This promotion of self-initiating cancer cells is also true for chemotherapy, of course."

    All of this fits and would explain a lot. The interim data would show great results. It's short term. It killed a lot of cells. It would explain the company's massive unbridled confidence, happily buying in the open market and refusing to raise even a dime before final results. They knew the interim results were a smash hit. And they were. But what they didn't show was the long-term consequences of the ThermoDox that would only rear their ugly head after another full year of the study where distant recurrence (new tumors) would pop up with a vengeance, far greater and faster than the control arm. With this theory, I predict the data will show an overall small but misleading mean benefit purely due to the mixed enrollment time frames of the patient population with the therapeutic arm among the group in the study maybe 18 months or less greatly outperforming the control arm, but among the population 18 months or more the control group outperformed the thereunto arm due to long term consequences of ThermoDox actually strengthening the cancer cells and even accelerating the state of precancerous cells to full blown HCC tumors. This would easily explain why the interim (short-term) model showed great benefit but final data (long-term) showed the opposite. We will know shortly. I could most certainly be wrong, but due to the chances I am right and it wouldn't be the first time a cancer treatment behaved this way, CLSN remains a highly risky stock even in the very short term as any moment final data could come out and destroy any hope left for ThermoDox.

    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.

    Stocks: CLSN
Back To Heisenberg Principle's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • okkwood
    , contributor
    Comment (1) | Send Message
    Hi Alex, interesting reading your articles. I just want to make sure I got the testing set-up right: thermodox was tested against a placebo group that did not receive any chemo treatment at all, just RFA? That would be really bitter for the drug as well as the placebo group.. or as you pointed out maybe even better for them.
    5 Feb 2013, 06:58 AM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (378) | Send Message
    Author’s reply » Yes.
    5 Feb 2013, 09:48 AM Reply Like
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.