It is no secret that I was an outspoken bull on Celsion for the last three years.
While I have quite a lot of sympathy for current shareholders, I personally am 100% out of the stock right now. I had a good exchange with a current bull, and thought it would make the basis for an interesting post.
---
Most important, first:
>>did you flip around and go short?
Nope - I never short.
At the absolute most if I am quite certain of a decline I'll buy puts. Don't *like* the idea or process of shorting - too many problems/games that can be played but I guess this is not the time or place for that. [TH - I have PLENTY of posts here over the years to illustrate my issues with shorting]
>>Did you ever consider that PFS in the control group as a whole was 14.4, BUT what if it is less in other subsets? Such as China's 200 patients? What if PFS in the China subset is only 12?
I considered it, and here's my take:
We had very convincing arguments that we'd be golden if PFS came in anywhere under 17 months or so. (Perhaps you'll recall that although I was extremely bullish my own continued mantra was we should expect around a 14:24 PFS. My control arm projection was almost spot on - but with "not even close" we obviously made some kind of dreadful miscalculation of the hazard ratio.)
So given that 14.4 wasn't close, I hold out very diminishing hopes that even a clear subset at 12 would have been stat-sig.
Add to that, that for a 200 patient subset to achieve 12 when the overall was 14.4, the ex-Chinese group would have been even worse than 14.4.
And the DMC at interim did not halt for failure, which if we weren't close at 14.4, with a subset of ~500 out of 600 at the time showing a 15+ PFS ... I propose that such a situation simply couldn't have happened.
And finally:
>>They will not go bankrupt. They have a lot of cash now, 2 ongoing trials, RCW is VERY promising, and probably what they should have focused on in the first place.....
You are right, BK is not going to happen. But massive dilution has happened, and that cash will disappear faster that you might think. ABLATE is only 80?? patients but they were slow to enroll to conserve cash for HEAT results. Gearing up now cost $. And that is ph2, which they were depending on good HEAT results to allow off-label. By itself ABLATE is not registrational. More money needed! And if you'll recall, even the BS BiotechSage admitted HCC ph1 looked decent and it was MLC and distant mets that posed the problem.
I agree that RCW may be the best shot. But they took ... so ... long ... to enroll even the ph1, I don't see the larger ph2 finishing with results anytime before 2016.
I put a HUGE amount of time, attention, and DD into the bull case. But I am always cogent about what might happen and once the "unthinkable" happened then I have to put credence in the bear case until proved wrong (again). The reward is definitely there, at this price, but the risk is, in my opinion, much worse.
GLTY
Trond
---
So there you go. I followed my principles and took my basis out in the $7s and $8s, but for three years, and the time and effort I put into this, I am not sure I "got my money's worth" here. Another lesson in the minefield called biotech.
Best,
Trond Hildahl
** This is presented for educational and informational purposes only, and should not be construed as personalized legal, tax, investment, or financial advice. My own resources, risk tolerance, and personal situation have been taken into consideration for any trades mentioned and should not be used as a basis for someone else's trades. Stocks may lose value and this is not recommendation to buy or sell this particular issue.
Showing posts with label Thermodox. Show all posts
Showing posts with label Thermodox. Show all posts
Friday, February 22, 2013
Wednesday, December 19, 2012
Celsion and Oncothyreon
Celsion still is a good investment thesis.
If you have not heard, Oncothyreon had a failed trial this morning and had the share price cut by more than 50%. As a disclosure, I had no position in ONTY but was in it a couple years ago for the continue at the first interim. I do have a lot of friends and colleagues who were in it, some quite heavily, and they are hurting quite a bit this morning.
Celsion has had a number of people who are bullish because of models showing the trial “is running longer than it should, thus it must be doing well.” ONTY, as numerous trials have before this, should serve as a wake-up call to these investors. Fortunately, Celsion’s Thermodox has a plethora of features that allow me to be “watchfully bullish.”
For one, the method of action (MOA) is pretty clear.
Reviewing the concept in extremely basic language, Thermodox is the chemo doxorubicin, covered by a fatty layer. That fatty layer is engineered to be attracted to the “leaky” blood vessels that are found most prominently in tumors. So after Thermodox is infused into the patient, these entities congregate around tumors. When radio-frequency ablation (RFA) occurs, burning away the cancerous tissues, that fatty layers cracks open (it has been compared to a hexagonal soccer ball) and releases the doxorubicin, bathing the tumor and surrounding tissue in the chemotherapeutic agent.
Doxorubicin does two extra things germane to this process:
Its cell-killing activity is heightened by heat. Thus it’s even more effective than normal.
It lowers the temperature of the surrounding tissue. This means heat-activated ablation is more effective, especially in the margin areas that otherwise would not be completely ablated.
Importantly, both RFA and doxorubicin are known processes and drugs, with a familiarity by doctors and the FDA.
I question the models that show the trial is “going long.” We are actually on the schedule put out by management in the prior year. Enrollment took a heck of a lot longer than anyone initially thought. And HCC is a wide-open kind of cancer, where many issues interact and no patient can be said to be “average.” The size and number of tumors, where they are located, and general health (otherwise to the cancer!) all have a lot to do with their prognosis. While generally speaking the median progression-free survival (PFS) should be around 12 months for the RFA-only group in the trial, the clinical sites are at some of the most skilled RFA-practitioners in the world. Patients who are in clinical trials tend to have better outcomes, due partially to the placebo effect, to the improved follow-up care and also simply by the desire to live as evidenced by being willing to enter a clinical trial. I will not be surprised to see PFS for the placebo arm come in higher than 12 months.
The Japanese firm Yakult partnered with Celsion a couple years ago, and before partnering you can be sure they got a peek at the preclinical and other available Thermodox data. At the beginning of 2011 Yakult elected to pay an extra couple million dollars upfront in order to receive a lower-than agreed royalty rate going forward. I cannot imagine how that can be spun as anything but positive. Philips Healthcare has partnered with us using their high-frequency ultrasound (HIFU) technology at the heating mechanism in lieu of RFA. They are paying trial costs, which is a reasonable (and bullish) commitment, also having seen private company data. I think it fair to propose that preclinical and ph1 data are reasonably strong.
The most “squishy” factor to consider is the insider buying. Several officers and directors have recently bought shares on the open market or exercised options or warrants. As a reminder, this takes real money, either straight up or as “income” defined by the IRS, and so it is coming out of these folks’ disposable income. As the old saw goes, insiders can sell for many reasons, but there is only one reason for them to buy.
Alongside that, we need to look at the company’s refusal to do a financing prior to data, and in fact their reiterated commitment NOT to do so very recently. This is pretty much unheard of, and very bullish. Let me be explicit here – the insider buying and no-raise factors are bullish but these people do NOT have much more insight into the trial than investors do. They do not have unblinded info from the interim look, they don’t get “winks and nudges” from the Data Monitoring Committee (DMC), and they cannot trade if they did know such things. But they are the closest to the data and such actions should at least be acknowledged.
In sum, I feel Celsion at a sub $300M market cap is undervalued and eminently tradable. I think the HEAT trial has a very reasonable chance of success and have a 2-month target price of $20.
Disclosure and disclaimer:
I own shares and option of Celsion at the time of this writing and while my positions may change, I have no intention of doing so within three days of this article. My own resources, risk tolerance, and personal situation have been taken into consideration for any trades mentioned and should not be used as a basis for someone else's trades. Stocks may lose value and this is not recommendation to buy or sell this particular issue.
This is presented for educational and informational purposes only, and should not be construed as personalized legal, tax, investment, or financial advice.
If you have not heard, Oncothyreon had a failed trial this morning and had the share price cut by more than 50%. As a disclosure, I had no position in ONTY but was in it a couple years ago for the continue at the first interim. I do have a lot of friends and colleagues who were in it, some quite heavily, and they are hurting quite a bit this morning.
Celsion has had a number of people who are bullish because of models showing the trial “is running longer than it should, thus it must be doing well.” ONTY, as numerous trials have before this, should serve as a wake-up call to these investors. Fortunately, Celsion’s Thermodox has a plethora of features that allow me to be “watchfully bullish.”
For one, the method of action (MOA) is pretty clear.
Reviewing the concept in extremely basic language, Thermodox is the chemo doxorubicin, covered by a fatty layer. That fatty layer is engineered to be attracted to the “leaky” blood vessels that are found most prominently in tumors. So after Thermodox is infused into the patient, these entities congregate around tumors. When radio-frequency ablation (RFA) occurs, burning away the cancerous tissues, that fatty layers cracks open (it has been compared to a hexagonal soccer ball) and releases the doxorubicin, bathing the tumor and surrounding tissue in the chemotherapeutic agent.
Doxorubicin does two extra things germane to this process:
Its cell-killing activity is heightened by heat. Thus it’s even more effective than normal.
It lowers the temperature of the surrounding tissue. This means heat-activated ablation is more effective, especially in the margin areas that otherwise would not be completely ablated.
Importantly, both RFA and doxorubicin are known processes and drugs, with a familiarity by doctors and the FDA.
I question the models that show the trial is “going long.” We are actually on the schedule put out by management in the prior year. Enrollment took a heck of a lot longer than anyone initially thought. And HCC is a wide-open kind of cancer, where many issues interact and no patient can be said to be “average.” The size and number of tumors, where they are located, and general health (otherwise to the cancer!) all have a lot to do with their prognosis. While generally speaking the median progression-free survival (PFS) should be around 12 months for the RFA-only group in the trial, the clinical sites are at some of the most skilled RFA-practitioners in the world. Patients who are in clinical trials tend to have better outcomes, due partially to the placebo effect, to the improved follow-up care and also simply by the desire to live as evidenced by being willing to enter a clinical trial. I will not be surprised to see PFS for the placebo arm come in higher than 12 months.
The Japanese firm Yakult partnered with Celsion a couple years ago, and before partnering you can be sure they got a peek at the preclinical and other available Thermodox data. At the beginning of 2011 Yakult elected to pay an extra couple million dollars upfront in order to receive a lower-than agreed royalty rate going forward. I cannot imagine how that can be spun as anything but positive. Philips Healthcare has partnered with us using their high-frequency ultrasound (HIFU) technology at the heating mechanism in lieu of RFA. They are paying trial costs, which is a reasonable (and bullish) commitment, also having seen private company data. I think it fair to propose that preclinical and ph1 data are reasonably strong.
The most “squishy” factor to consider is the insider buying. Several officers and directors have recently bought shares on the open market or exercised options or warrants. As a reminder, this takes real money, either straight up or as “income” defined by the IRS, and so it is coming out of these folks’ disposable income. As the old saw goes, insiders can sell for many reasons, but there is only one reason for them to buy.
Alongside that, we need to look at the company’s refusal to do a financing prior to data, and in fact their reiterated commitment NOT to do so very recently. This is pretty much unheard of, and very bullish. Let me be explicit here – the insider buying and no-raise factors are bullish but these people do NOT have much more insight into the trial than investors do. They do not have unblinded info from the interim look, they don’t get “winks and nudges” from the Data Monitoring Committee (DMC), and they cannot trade if they did know such things. But they are the closest to the data and such actions should at least be acknowledged.
In sum, I feel Celsion at a sub $300M market cap is undervalued and eminently tradable. I think the HEAT trial has a very reasonable chance of success and have a 2-month target price of $20.
Disclosure and disclaimer:
I own shares and option of Celsion at the time of this writing and while my positions may change, I have no intention of doing so within three days of this article. My own resources, risk tolerance, and personal situation have been taken into consideration for any trades mentioned and should not be used as a basis for someone else's trades. Stocks may lose value and this is not recommendation to buy or sell this particular issue.
This is presented for educational and informational purposes only, and should not be construed as personalized legal, tax, investment, or financial advice.
Saturday, March 10, 2012
Celsion thoughts
I was asked the following question about Celsion raising more money prior to getting results from their HEAT trial....
>>Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?
I was blindsided by the raise immediately after the interim results. That one-two punch really killed us, and only the specter of the 2nd intermi look was what was keeping us above $1.75.
It kind of blows my mind that we're this low - even if we're 7-9 months out. But it is what it is.
I feel fairly confident that as the summer draws nigh, we'll pick up some analyst coverage - and while they may be positive or negative, we're almost sure to add some, "IF they get good results, then my target is $XX" statements. Keep in mind the three targets we have, ($6, 7, and 10 IIRC) all were assuming a continue at interim. So we are so far below those targets it's not even funny (or at least my accounts are not laughing). We do have target reiterations to look forward to, as well as China completing enrollment, DIGNITY/ph2 starting, more ABLATE news, the mysterious product #4, Yakult news in Japan, the ever-present chance of a partnership or buyout, and the clock is always winding down towards Q4 and the 380th event. Today may not be the lowest price we'll see, but odds are in our favor to start a climb upwards - you just need to be patient.
All that does not answer the question, "Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?"
They have been both aggressive and safe at times. Last summer, they starved themselves of cash to see if they could make it through the interim, and then they also raised at the worst possible post-interim time. It would not surprise me to see a raise at any time, but my opinion is they will not do so in the next two months. Once we have a handle on DIGNITY andf ABLATE costs in the next quarters' numbers, I might change my mind! And of course, when the price does get some traction, that begs the company to raise a little.
It probably comes down to how close they really are in partnership talks. Right now, they are fine for cash. Projecting out for 5 quarters, after thinking about the trials going on, we'll definitely need some more. Does it change things that we should *know* HEAT results exactly one year from now? Uh, yeah. So final thought is again the partnership side of things. If they can sign one more regional agreement for Thermodox - only (China, or Europe) and grab a $4M up-front payment, then I think a further raise can wait until we're at the final (and the price should be above $3).
Best regards,
Trond
Disclaimer:
This is presented for educational and informational purposes only, and should
not be construed as personalized legal, tax, investment, or financial advice.
I am long shares of Celsion in my personal accounts, but my holdings are based on my own risk tolerances and situation.
>>Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?
I was blindsided by the raise immediately after the interim results. That one-two punch really killed us, and only the specter of the 2nd intermi look was what was keeping us above $1.75.
It kind of blows my mind that we're this low - even if we're 7-9 months out. But it is what it is.
I feel fairly confident that as the summer draws nigh, we'll pick up some analyst coverage - and while they may be positive or negative, we're almost sure to add some, "IF they get good results, then my target is $XX" statements. Keep in mind the three targets we have, ($6, 7, and 10 IIRC) all were assuming a continue at interim. So we are so far below those targets it's not even funny (or at least my accounts are not laughing). We do have target reiterations to look forward to, as well as China completing enrollment, DIGNITY/ph2 starting, more ABLATE news, the mysterious product #4, Yakult news in Japan, the ever-present chance of a partnership or buyout, and the clock is always winding down towards Q4 and the 380th event. Today may not be the lowest price we'll see, but odds are in our favor to start a climb upwards - you just need to be patient.
All that does not answer the question, "Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?"
They have been both aggressive and safe at times. Last summer, they starved themselves of cash to see if they could make it through the interim, and then they also raised at the worst possible post-interim time. It would not surprise me to see a raise at any time, but my opinion is they will not do so in the next two months. Once we have a handle on DIGNITY andf ABLATE costs in the next quarters' numbers, I might change my mind! And of course, when the price does get some traction, that begs the company to raise a little.
It probably comes down to how close they really are in partnership talks. Right now, they are fine for cash. Projecting out for 5 quarters, after thinking about the trials going on, we'll definitely need some more. Does it change things that we should *know* HEAT results exactly one year from now? Uh, yeah. So final thought is again the partnership side of things. If they can sign one more regional agreement for Thermodox - only (China, or Europe) and grab a $4M up-front payment, then I think a further raise can wait until we're at the final (and the price should be above $3).
Best regards,
Trond
Disclaimer:
This is presented for educational and informational purposes only, and should
not be construed as personalized legal, tax, investment, or financial advice.
I am long shares of Celsion in my personal accounts, but my holdings are based on my own risk tolerances and situation.
Tuesday, August 9, 2011
Celsion Q2 conference call
I'm most disappointed that they again missed their guidance on the interim calc - most recently in July, they said they'd have results from the interim by the end of Sept. According to the 10Q (pg 20), they now expect the 190th event "in Q3" and the interim results "in Q4". With 6-8 weeks necessary for that calc, that means the results could be anywhere from 10/1 to 11/25. I thus sold my Oct calls today, perhaps a bit hasty but Jan is now the safest. Still expect a runup, just pushed back again by a month or so.
Everything else looked okay, CRLM trial being initiated, EMA guidance for trial approval by eoy, Japan will start a separate trial from HEAT so as to take different standard of care issues into account - Yakult still responsible for 100% of that new trial costs. RCW Phase 2 trial (Dignity study) will be extended to other indications than just RCW cancer in order to speed enrollment, but that kills the registrational ability.
Please note that pushing out the 190 event was blamed on the slower than expected enrollment, but there is some reason for optimism about how well Thermodox is doing. The trial was based on assuming the placebo (RFA only) would lead to a median PFS of about 12 months and Tdox extending that by 33%. It appears to me that both arms are doing better than assumed, but Tdox by at least the same proportion. I still intend on selling 1/2 to 2/3 on the runup, but I'm getting a bit more excited about interim success.
Regards,
Trond
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