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Celsion: A Great Asymmetric Trade

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  • CLSN has two products in development; GEN-1 and ThermoDox, each one targeting a billion-dollar market.
  • At CLSN's present market cap ($45 million), if you subtract its cash position, and subtract what CLSN paid for GEN-1 back in 2014, you get ThermoDox for $5 million.
  • ThermoDox is CLSN's lead candidate, a drug targeting liver cancer, currently in an international Phase III trial, with interim results expected in approximately one year.

I originally submitted this article about two weeks ago when Celsion (CLSN) was trading at $2.15 a share. At that price, I argued investors were essentially getting CLSN's lead drug, ThermoDox, for free. Since then, the share price has moved up to $2.50. The 15% move in share price was undoubtedly the result of further insider buying and a recent presentation wherein it was stated the progression free survival (PFS) rates for patients enrolled in CLSN's GEN-1 OVATION Study are now at almost twice the historical average, 21 months. Notwithstanding the increase in share price, most of which I would attribute to the various insider buys and the presentation on GEN-1, CLSN remains a great asymmetric trade, and the rationale for the article remains intact.

At $2.50, the market is valuing Celsion Corp.'s lead drug candidate ThermoDox for less than $5 million. ThermoDox is in a Phase III international trial, and if approved could produce between $300 and 500 million annually. It seems rather extraordinary, but it is true, and it is one of the reasons that Oppenheimer's analyst Hartaj Singh has an initiated coverage of the stock with a buy rating and a $9 price target, which is actually low based on the average of the three analysts currently covering the stock (the average price is $12.33). Before we get to ThermoDox, let's begin with CLSN's other assets, in particular, GEN-1, purchased from EGEN Corp. back in 2014, and CLSN's cash position. It should become apparent after reading this that the risk/reward at the present share price offers a very compelling opportunity and it's undoubtedly why insiders have begun purchasing shares.


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This article was written by

Situm profile picture
Businessman who has been active in the market for 30 years. I day trade approximately 50% of my AUM and the other 50% I invest long-term. Although I am skeptical of momentum plays I am acutely aware that is often where the alpha is.

Analyst’s Disclosure: I am/we are 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.

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