Celsion Corporation (NASDAQ: CLSN)

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Celsion Corporation (NASDAQ: CLSN) is an oncology drug development company focusing on the development of therapeutics for those suffering with difficult to treat forms of cancer. In our opinion, with a market cap of only $30 million, CLSN is undervalued when compared to its peers. Not only is the stock undervalued, but we believe CLSN could trade into the upper end of its trading range, and possibly make new 52 week highs, as the Company gains investor notoriety from results of its clinical trials.

If you perform your due diligence, you will see from CLSN’s past SEC filings and press releases there are numerous near-term milestones that could cause the stock to appear on the radar screens of many large investors. With only 14 million shares outstanding, and several near term milestones, we believe the time has come for developments in CLSN’s drug research that should propel the company into the limelight. We believe this increased exposure will generate significant investor interest, which will result in huge profits for existing shareholders. With only 13 million shares in the float, CLSN provides an opportunity for investors to ride along with a management team that has been putting their money where there mouth is by investing their own money in the stock.

The Business

CLSN is working to develop and commercialize more efficient, effective, targeted chemotherapeutic oncology drugs based on its proprietary heat-activated liposomal technology. The promise of this drug technology is to maximize efficacy while minimizing side effects common to cancer treatments. CLSN’s lead product, ThermoDox, is being evaluated in a Phase III clinical trial for primary liver cancer and a Phase I/II study for recurrent chest wall breast cancer. CLSN refers to these Phase III clinical trials as the HEAT study. ThermoDox is a liposomal encapsulation of doxorubicin, which is an FDA approved, and frequently used, oncology drug for the treatment of a wide range of cancers. ThermoDox in combination with localized mild hyperthermia releases encapsulated doxorubicin from the liposome enabling high concentrations of doxorubicin to be deposited preferentially in the region of the tumor target. Keep in mind this is hyperthermia and not hypothermia. The temperature is above 104 degrees Fahrenheit.

CLSN also has a product pipeline of cancer drugs employing its heat activated liposomal technology in combination with known chemotherapeutics, including docetaxel and carboplatin. In our opinion, this technology can improve efficacy and safety of anticancer agents and the approach CLSN is taking provides a cost effective, low risk approval pathway. CLSN has a joint research agreement with Phillips Healthcare to evaluate the combination of Phillips’ high intensity focused ultrasound (HIFU) with ThermoDox to determine the potential of this combination to treat a broad range of cancers.

CLSN’s proprietary heat-activated liposome technology enables delivery of significantly higher concentrations of proven chemotherapy drugs directly to the tumor, which stops the progression of cancer and minimizes systemic toxicities. Liposomes are small membrane-enclosed sacks that can store or transport substances. CLSN’s heat-activated liposomes circulate within the tumor tissue. When heat is added locally, it causes the rapid release of the encapsulated chemotherapeutic agent directly within the targeted tumor. CLSN has completed animal studies that demonstrated intravenous administration of ThermoDox, in combination with targeted heat to the tumor, can produce doxorubicin drug concentrations in tumor tissue that are much greater than existing approved liposomal formulations of doxorubicin on the market today. The number of lives that could be saved each year from this breakthrough technology is in the tens of thousands.

See Celsion's heat-activated liposomal technology in action

Liposomes containing a chemotherapy agent circulate in solution throughout the bloodstream and pass into tumors through leaks in the vasculatureUpon application of focused heat.
vasculature leakage increases and the unique heat-sensitive liposome membrane dissipates, releasing chemotherapeutic drug directly into the tumor.
After drug is released into the tumor, the tumor shrinks and dies.

View a video of how Celsion's technology works.

Liver Cancer

Primary liver cancer is one of the most common and deadliest forms of cancer worldwide. It ranks as the fifth most common solid tumor cancers. Sadly enough, it is estimated that up to 90% of liver cancer patients will die within five years of diagnosis. The incidence of primary liver cancer is growing rapidly worldwide with approximately 750,000 new cases per year. Approximately 20,000 new cases are diagnosed each year in the US and approximately 40,000 new cases are diagnosed each year in Europe. Primary liver cancer has the fastest rate of growth of all cancers and is projected to be the most prevalent form of cancer by 2020.

At an early stage, the standard first line treatment for liver cancer is to surgically remove the tumor. Unfortunately, 80% of patients are ineligible for surgery at time of diagnosis as early stage liver cancer generally has few symptoms. When it is finally detected, the tumor frequently is too large for surgery. There are few alternative treatments, since radiation therapy and chemotherapy are largely ineffective.

For tumors up to 5 cm in diameter, radio frequency ablation (RFA) is the standard treatment approach. RFA directly destroys tumor tissue through the application of high temperatures by a probe inserted into its core. Local recurrence rates after RFA are directly correlated to the size of the tumor, since the treatment becomes less effective for larger tumors. For tumors 3 cm or smaller the recurrence rate has been reported to be 10% to 20%; however, for tumors greater than 3 cm, local recurrence rates of 40% or higher have been observed. There are few non-surgical treatment options available, as radiation therapy and chemotherapy are largely ineffective in the treatment of primary liver cancer. It is important to note that CLSN is enrolling only patients with tumors greater than 3 cm in their HEAT study, thus improving its chances of trial success.

Celsion’s Approach

While RFA uses extremely high temperatures (greater than 175 degrees Fahrenheit) to destroy the tumor, it may fail to treat micro-metastases in the outer margins of the ablation zone because temperatures in the periphery may not be high enough to destroy the cancer cells. Micro-metastasis is a form of metastasis, or the spread of a cancer from its original location to other sites in the body, in which the newly formed tumors are too small to be detected. Local recurrence can be a problem especially for tumors greater than about 3 cm in diameter.

CLSN‘s ThermoDox treatment approach utilizes the ability of RFA devices to destroy the center of the tumor while thermally activating the ThermoDox liposome to release its encapsulated doxorubicin to kill remaining viable cancer cells in the heated region. This treatment delivers the drug directly to those cancer cells that survive RFA, which includes those that are too small to be detected. CLSN’s approach increases the delivery of the doxorubicin at the desired tumor site while also potentially reducing drug exposure distant to the tumor site.

Phase III Global Clinical Trial - Primary Liver Cancer (The HEAT Study)

For primary liver cancer, ThermoDox is being evaluated in a pivotal 600 patient double-blinded, placebo-controlled, global Phase III study at 76 clinical sites under a Special Protocol Assessment (SPA) agreement with the US Food and Drug Administration (FDA). This is also known as the HEAT study. The HEAT study will evaluate the efficacy of ThermoDox in combination with RFA as compared to patients receiving RFA alone as the control. The study is being conducted in the US, Canada, Italy, China, Taiwan, Hong Kong, Korea, Japan, Thailand, Malaysia and the Philippines, with over 90% of the planned 600 patients now enrolled in the study. The primary end point for the study is progression free survival (PFS) with a secondary confirmatory end point of overall survival. A pre-planned, interim efficacy analysis will be performed by an independent Data Monitoring Committee (the DMC) when enrollment in the HEAT study is complete and 190 PFS events are realized in the study population.

In February, 2011, CLSN was advised that after reviewing data from 482 randomized patients enrolled in the HEAT study, the independent DMC for the HEAT study unanimously recommended that the trial continue to enroll patients with the goal of reaching the 600 patients required to complete the study. In our opinion, this is a big positive for investors. CLSN expects to complete patient enrollment in the HEAT study in mid-2011 with the interim analysis completed approximately 6 to 8 weeks later. The March 11, 2011 earthquake and tsunami in Japan should have little effect on outcomes, since the HEAT study was fortunately designed to be completed with or without clinical data from Japan.

In 2009, the FDA granted Orphan Drug Designation for ThermoDox, which entitles CLSN to seven years of market exclusivity following FDA approval. Under the Orphan Drug Designation program, CLSN will also be entitled to FDA assistance in clinical trial design, reductions in FDA user fees, and U.S. tax credits related to development expenses. In August 2010, the FDA designated the HEAT Study of ThermoDox, in combination with RFA, as a Fast Track Development Program. The FDA's Fast Track Development Program provides for expedited regulatory review for new drugs that treat serious or life threatening diseases which are not satisfactorily treated by existing therapies, or for drugs that provide a significant advantage over existing therapies for serious diseases. This allows CLSN to submit a US New Drug Application (NDA) on a rolling basis and permits the FDA to review sections of the NDA in advance of receiving the complete submission.

In 2011, the European Commission granted Orphan Drug Designation for ThermoDox for the treatment of primary liver cancer in Europe. As established by the European Medicine Agency (EMA), Orphan Drug Designation provides for scientific advice and regulatory assistance from the EMA, direct access to centralized marketing authorization and certain financial incentives, such as reduction of fees associated with pre-authorization inspections and marketing authorization application fees. The Orphan Drug Designation in Europe provides 10 years of market exclusivity subsequent to product approval.

Recurrent Chest Wall Breast Cancer Overview

Breast cancer is the most common malignancy in women in both the US and the world. Close to 40% of the estimated 95,000 patients in the US undergoing a mastectomy as their primary treatment will develop a recurrence of breast cancer. Some of these patients will develop Recurrent Chest Wall (RCW) breast cancer. There is currently no effective chemotherapeutic standard of care for RCW breast cancer and as a result, many of these patients will die within two years of the recurrence. Patients with RCW breast cancer suffer from disfiguring tumors and other symptoms including pain, foul-smelling wounds, and a visual reminder of tumor progression.

Celsion’s Approach

CLSN’s ThermoDox in conjunction with localized microwave hyperthermia is being developed to treat RCW breast cancer. Studies at Duke University have indicated that heat may improve the therapeutic action of non-temperature sensitive liposomal doxorubicin formulations in advanced loco-regional breast cancer. CLSN’s liposomal encapsulated doxorubicin is released by heat generated from an external device placed on a woman’s chest. Microwave hyperthermia heats the target to a temperature adequate to activate ThermoDox, but not to destroy the tissue like RFA. At 104 to 108 degrees Fahrenheit, a significant concentration of doxorubicin is released directly to the tumor. As in CLSN’s liver cancer program, a commercially available thermotherapy device is used to heat the target tissue and activate ThermoDox at the desired target site.

Microwave hyperthermia as a separate stand alone treatment has the ability to kill breast cancer cells. However; since breast cancer cells have higher water content than surrounding normal cells, the tumor is heated to a greater extent than normal breast tissue and is selectively destroyed. Heating cancer cells with a microwave device for sixty minutes at 109 degrees Fahrenheit has been found to be tumoricidal. CLSN expects the combination of microwave hyperthermia and ThermoDox will be more efficacious than microwave hyperthermia alone or treatment with existing non-heat activated liposomal formulations. In our opinion, if this should be the case, shareholders could see a ten-fold return on their money from this level.

Breast Cancer Clinical Phase I and II Clinical Trial

In 2009, CLSN started a Phase I/II clinical trial of ThermoDox for patients with RCW breast cancer. The study is evaluating 109 patients at ten clinical sites in the US. The primary endpoint of the trial is when the detectable chest wall tumors have disappeared for at least three months. CLSN completed enrollment of 9 patients in the Phase I portion of the study in 2010.

Duke University has concluded a Phase I dose escalating ThermoDox study of patients with RCW breast cancer. Preliminary results from the first twelve patients demonstrate ThermoDox had a beneficial clinical effect, even at lower than optimal dosages. The first eight patients all showed evidence of clinical activity, while two out of six patients treated at the 30 mg dosage had a complete local response.

Summary

CLSN has filed two patents related to the formulation and use of liposomes and entered into a license agreement with Duke University which would grant them exclusive rights to commercialize and use Duke’s thermo-liposome technology. In our opinion, this is an exciting time for CLSN and its shareholders. Not only is the prospect of saving lives very great, but CLSN is some 12 months from data in an 11 country, 600 patient, global trial evaluating its first drug, ThermoDox, in the largest unmet medical need left in oncology.

We believe now is the time to buy the stock, before the results are released.

Near-Term Milestones & Catalysts for Celsion Corporation (NASDAQ: CLSN):

Q2-2011

·          Resumption of Phase III enrollment in Japan and expansion of additional sites in China.

·          Philips/Celsion FDA meeting to discuss MRI-HIFU + ThermoDox for painful bone metastases.

·          Philips/Celsion investigational new drug (IND) application.

·          Celsion to meet with the European Medicine Agency to discuss regulatory pathway of ThermoDox in the Eastern Union.

·          Dr. Ronnie Poon will talk on "Enhancing Ablation: Synergies with Thermal Therapy for Intermediate-Size Tumors" at the World Conference on Interventional Oncology in NY June 9 – 12, 2011.

·          Possible presentations 2011 at the American Society of Clinical Oncology Annual Meeting, June 3-7.

·          Celsion Annual Shareholders Meeting (June 10).

Q2/2011 or Q3/2011

·          Phase III HEAT trial should complete the enrollment of 600 patients.

·          Initiation of Phase II colorectal liver metastases trial (Up to 92 patients).

·          Pre-planned interim efficacy and safety analysis by the Data Monitoring Committee of 190 PFS events for the HEAT trial should take place 6-8 weeks following enrollment in the HEAT study.

·          Possible 2nd licensing agreement for ThermoDox for Asia, Europe and/or the USA.

·          Initiation of Phase II trial with Philips for MRI-HIFU in painful bone metastases.

·          CMC registrational batch manufacturing.

·          Likely company press release outlining Phase I or II initiation of RCW trial or expansion of trial protocol to include other superficial cancers.

1st Half/2012

· Final Phase III HEAT Study - Clinical data of 380 PFS events.

Q2/2012 or Q3/2012

· Complete submission of rolling NDA for ThermoDox in the treatment of primary liver cancer.

· ASCO 2012 presentation of HEAT trial Phase III results.

Q4/2012 or Q1/2013

· Potential FDA approval of ThermoDox for the treatment of primary liver cancer, depending on clinical results.

· Top-line release of colorectal liver metastases data from 92 patients in Phase II trials.

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