Celsion: Still Waiting For Godot

Summary

• Today, we revisit biotech concern Celsion Corporation for the first time in over a half-decade.
• The stock still trades right near the $2 level just like it did when we last took a look at this small-cap name in 2015.
• News flow in 2021 has picked up, so it's time to circle back on Celsion. A full analysis is provided in the paragraphs below.
• I do much more than just articles at The Biotech Forum: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Today, we revisit a $2 biotech stock we last took a full look at in 2015. Despite the company's small size and lack of providing shareholder value over the years, the equity comes up occasionally over at The Biotech Forum as a Live Chat topic. Given how much time has elapsed since we last took more than a cursory glance at Celsion, we circle back on this small-cap name in the paragraphs below.

Company Overview:

Celsion Corporation (CLSN) is still a 'Tier 4' biotech concern based just outside of Philadelphia. The company remains focused on development of directed chemotherapies, DNA-mediated immunotherapy, and RNA-based therapies for the treatment of cancer. The shares trade right at two bucks a share and sport an approximate $130 million market cap.

ThermoDox® is Celsion’s lead product candidate. This compound is a proprietary heat-activated liposomal encapsulation of doxorubicin. ThermaDox is currently being evaluated in a global phase 3 clinical trial called OPTIMA evaluating it the treatment of primary liver cancer. Here is how the company describes ThermoDox is more granularity on its website.

ThermoDox leverages 2 facets of tumor biology:(1) tumors have leaky vasculature, which is permeable to liposomes and enables their accumulation within tumors, and (2) when heated, blood vessels in tumors become even more permeable, further increasing the accumulation of liposomes in tumors before releasing the doxorubicin. In animal models, ThermoDox has been shown to deliver 25 times more doxorubicin into tumors than does intravenous (IV) infusion alone, and 5 times more doxorubicin than standard liposomal formulations of the drug."

Celsion also has an earlier stage compound in pipeline called GEN-1. This produce candidate incorporates a DNA plasmid encoding IL-12 into a unique nanoparticle delivery system. GEN-1 immunotherapy is currently being evaluated in a phase I/II study named OVATION 2, in combination with chemotherapy, for newly diagnosed ovarian cancer patients. The primary endpoint of this study won't be announced in the fourth quarter of next year. As of last week, approximately one third of this trial's patient pool had been enrolled.

Finally, the company is also developing a next-generation vaccine targeting COVID-19, using its platform it has dubbed PLACCINE. Given scores of companies are targeting COVID-19 vaccines and treatments and Celsion's effort is in early stage development, it will not be germane at this time to our analysis around the company.

Recent Developments:

It has been a busy start to the year for Celsion. It did a significant capital raise (see section below) on January 22nd. On February 11th, management issued a letter with a pipeline update to its shareholders and also announced the formation of a Vaccine Advisory Board. Finally, last week GEN-1 garnered Fast Track designation from the FDA to treat advanced ovarian cancer.

Analyst Commentary & Balance Sheet:

Not surprisingly, the analyst commentary is mixed on Celsion's prospects. Over the past nine months or so, both Dawson James and Oppenheimer have reissued Hold ratings. The only support from the analyst community comes from JonesTrading who reiterated its Buy rating and $8.00 price target on CLSN in mid-May of last year and Brookline Capital Markets who maintained their Buy rating and $4.00 price target on the equity last week.

The company ended the third quarter of 2020 with just over $18 million in cash and marketable securities on its balance sheet after posting a just over $8 million net loss during the quarter. Late in January the company executed a secondary offer at $1.35 a share and raised gross proceeds of $35 million. The company now believes it has a cash runway of nearly three years. In addition, Celsion restructured its venture debt facility with Horizon Technology Finance and its outstanding debt obligation in half with that entity to $5 million during the third quarter.

Verdict:

Celsion has several pots in the fire and appears well-funded for the next few years. However, it is hard to have much, if any faith in this company given the pace of its pipeline development. It reminds a bit of the famous play 'Waiting For Godot'.

The company has been public for over 20 years and still hasn't gotten any candidate over the 'finish line'. The OPTIMA study was underway when we last looked at this name in 2015. There are no notable trial milestones that are apparent in 2021. And, given how much shareholder value Celsion has destroyed over the past two decades, I see no real reason to own the shares at this moment in time.

Bret Jensen is the Founder of and authors articles for the Biotech Forum, Busted IPO Forum, and Insiders Forum.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

Comments

[VIPstock]

Thanks for your article on Celsion. In fact, your article is helping lot to future investors / new investors. I show insider buying in CLSN so started looking this Company and found your article and it helped me lot. So, please keep on writing these kind of articles.

[Bret Jensen]

@vipstock Thanks for the kind words. Best.

[cboe77]

Certainly worth a hail mary trade here, new respectable board member, off loaded Thermodox, active options on occasion (they are being given away actually) Jan 2.5s, mercy mercy. Been buying more of all 2.5's most weeks as a spec, should the meme'ers get ahold of it, heavens to Betsy.

[Addy1992]

I don’t know why are you mostly writing about scam stocks
Nearly every stock you writ about will become scam

[Bret Jensen]

@Addy1992 Yep, I am a pump and dumper....what part of the conclusion of article was too difficult to understand?

"There are no notable trial milestones that are apparent in 2021. And, given how much shareholder value Celsion has destroyed over the past two decades, I see no real reason to own the shares at this moment in time."

[docstox 12]

Thanks for your article to focus people on this stock.Traded it from .71 to over 2.70 on the basis of a saucer shaped bottom from Aug. 2020 to Feb 2021.Taking another position today as it is near the 50 day MA with the 50 ready to cross the 200.Very tight stop, though, with the good points you brought up.This is a sentiment driven stock like NAK in the gold sector.News drives the price.Anyway, CLSN has had some high volume spikes the last few months, hoping for another.

[fffgp]

Bret, agree totally with your thinking, but.... I managed to snag a few shares near a bottom (admitted years ago, now) and am up somewhat. Recently started selling calls so this position is starting to turn into a nice little (VERY LITTLE) gold mine. My Mar5C expires soon, so I am looking at the Jul5C. Pretty juicy premium. Rinse/repeat. Thanks again for turning me on to the CC/BW strategy.

[Bret Jensen]

@fffgp YW....whatever works....sometimes a stock that trades sideways for years (EX, AGEN) can be an investors best friend with that strategy.

[Jon Jegglie]

@fffgp you didn't buy this years ago and are sitting on anything other than a huge loss. Stop lying.

[kjmwestcliffe]

I've held a small position for years and I rode it to the bottom. I think my break even is $55.00 a share now. I can't remember how many times they split it to keep up the value. It's a joke.

[Jon Jegglie]

Not the same $2 stock as 2015. Down 98% since 2015.

[xXgodFatherXx]

Keep waiting while Biocryst is printing

[Nodelusionist1]

@xXgodFatherXx I asked before in anotgr comments section-- Did Bret miss that one and you are unhapoy about it? You give no explanation for the snarkiness. L
Can you let us all in on your apparent anger as to why?

[tammer]

Wondering why the companies you follow are more suited to the "pink sheets."

[Bret Jensen]

@tammer Really? Did I recommend this stock? Were not my last two articles on SUPN and KDMN? Are these 'pink sheet' stocks?

[alidariusali]

@tammer that's a funny way to say "thanks for the free analysis and short suggestion."

[aaronr89]

They announced failure of optima in July of last year.

[Jon Jegglie]

@aaronr89 And again 3 weeks ago