Celsion Strengthens Balance Sheet Ahead of Interim Phase 3 Clinical Data

| About: Celsion Corporation (CLSN)
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Celsion (NASDAQ:CLSN) is a development-stage biotech focused on the treatment of cancer and has a pair of ongoing clinical trials for its lead product candidate, ThermoDox (doxorubicin encapsulated in a heat-activated liposome), that includes a Phase 3 trial for primary liver cancer (hepatocellular carcinoma or HCC) and a Phase 1 / 2 trial for breast cancer.
CLSN has licensed the liposomal, heat-activated technology utilized in ThermoDox and plans to use this in conjunction with available focused-heat treatments such as radio frequency ablation (RFA) and high-intensity focused ultrasound (HIFU) to achieve targeted release and higher concentrations of the anti-cancer drug doxorubicin at the tumor site.
1. Pivotal Phase 3 (HEAT) Clinical Trial under SPA – ThermoDox (ClinicalTrials.gov ID NCT00617981).
On Feb. 11, a data monitoring committee gave its okay to continue the trial after review of data from 482 patients for treatment of primary liver cancer (HCC). CLSN has enrolled about 90% of the 600 patients for this trial and expects to complete enrlomment in mid-2011 along with a pre-planned interim efficacy analysis (after 190 progression-free survival or PFS events occur) six to eight weeks later (3Q11 estimate), with top-line results expected in 2012 (1Q12 estimate).
CLSN has received FDA Fast Track status for ThermoDox in combination with the FDA, which allows the company to begin a potential rolling 505(b)(2) NDA submission in 2011, pending interim results in the ongoing Phase 3 HEAT clinical trial. ThermoDox also has received FDA (and the European equivalent) Orphan Drug status for the treatment of HCC.
2. Phase I / II Open-Label (DIGNITY) Clinical Trial – ThermoDox (ClinicalTrials.gov ID NCT00826085).
Estimated completion of the Phase I / II portion of this trial (109 pts) is mid-2011 (2-3Q11) for recurrent chest wall (RCW) breast cancer.
In late March, CLSN reported its 4Q10 and full-year 2010 financial results, including:
  • As of March 25, it had 13.9 million shares of common stock outstanding.
  • At year-end 2010, it had $1.5M in cash / equivalents + short-term investments and $0.2M in debt (notes payable) plus subsequent financing and accelerated milestone payments results in an additional $7.7M in cash along with the potential for $2M after patient enrollment resumes in Japan for the ongoing Phase 3 HEAT trial. Total cash / equivalents + investments including the recent cash influx is $9.2M.
  • A full-year net loss of ($18.8M) in 2010 vs. ($15.2M) in 2009 with a projected cash burn rate of $4M per quarter over the next year; net cash used in operations during 2010 of ($13.4M).
In June 2010, CLSN entered into a Committed Equity Financing Facility (CEFF) with Small Cap Biotech Value, Ltd. (SCBV), whereby SCBV is committed to purchase up to $15M of the CLSN common stock over the 24-month term, subject to conditions and limitations outlined in the agreement. As of March 16, four sales have been completed for 1.3M shares of common stock and net proceeds to CLSN of about $3.1M.
In January, CLSN completed a $5.1M convertible preferred stock offering along with warrants to purchase up to 2.1M shares of common stock at $3.25 per share. The preferred stock converts into common shares at an initial price of $2.40 per share with an 8% annual accrued dividend rate that is payable on a quarterly basis. Also in January, CLSN amended its agreement with Japan-based Yakult Honsha (OTC:YKLTF) in order to receive accelerated payment up to $4M (including $2M paid to CLSN in January) in exchange for a 40% reduction in future potential product approval milestone payments.
CLSN has strengthened its balance sheet and expects that existing cash, plus agreements in place such as the CEFF, are sufficient to fund operations through potential value-creating catalyst events such as the interim Phase 3 HEAT clinical trial data and expected rolling NDA submission. With a low share count / price, I believe shares of CLSN could make a move higher to the $4-5 level (back near the high end of its 52-week stock price range) going into the interim results, which are expected six to eight weeks following completion of enrollment in the trial that could serve to increase investor and trader interest while providing a more definitive timeline for reporting the interim data.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.