CLSN: Intraday Drama but All is Status Quo
for HEAT Outcome Soon
from the Roth Analysis Posted
Celsion has seen some intraday drama with a sharp drop in stock price
followed by a significant rebound. We spoke to management indicating that all
is "status quo" and data from the Phase III HEAT study is still expected by the
end of the month.
Celsion saw a precipitous intraday drop (down>30%) today, only to be followed
by a significant rebound. While this trading activity takes us back to the intraday
"bear raid" seen by Dendreon (DNDN-Neutral-$6.65) just ahead of its Phase III
IMPACT data, we believe things are different here. We spoke to management
as well as Nasdaq in assessing today's drama. In short, management has
indicated that all is status quo in finalizing the HEAT data readout and that
nothing has leaked out. Nasdaq has indicated its belief that the intraday drop
was driven primarily by retail and some short interest pressure coming through.
Recall that the stock performance has been strong and sustainable as of late
as investors have been making bets on HEAT. Other feedback we received
from investors was that if it was a leak or institutional selling, the negative
stock pressure would have been sustained. HEAT has been run at 79 sites
in 11 countries and the "clinical quality dashboard" is set to ensure that any
questions regarding patient data are resolved back at the local site prior to
database lockup, data analysis and submission to the DMC.
Impact
We continue to anticipate a potential positive outcome for the HEAT study
which could be potentially followed by extensive presentation in a peer
reviewed forum (medical meeting/scientific journal). We expect a PFS readout,
as well as topline view on survival trends. Recall that the HEAT study is
conducted under SPA, supporting FDA guidance that ThermoDox is eligible
for approval based on successfully achieving the PFS endpoint. Furthermore,
HEAT is powered to show statistically significant OS improvement, and a
potential OS benefit may enhance the company's pricing power.
Action
We maintain our Buy rating and $10 price target. We believe our valuation to be
considered conservative based on two key factors; 1) conservative projections
for ThermoDox in HCC 2) ThermoDox is in Phase II studie.