Thursday, January 31, 2013

Liver Cancer-Phase III HEAT trial of Thermodox Fails to Meet Goals

Investment Commentary

Celsion Liver Cancer Trial Fails to Meet Goals, Stock Plunges
Catherine Arnst1

In a major setback, Celsion (NASDAQ: CLSN), based in Lawrenceville, NJ, reported today that its lead drug candidate failed in a Phase III clinical trial for treatment of primary liver cancer. CEO Michael Tardugno told an investor conference call this morning that the result “was not even close” to meeting the trial’s goals.

Investor reaction was swift and furious, with Celsion’s share price dropping 80 percent in the first hour of trading, to $1.59 from the previous close of $8.02. Celsion’s stock had more than tripled in price over the prior year.

Celsion said that the Phase III HEAT trial of Thermodox—a proprietary reformulation of the chemo drug doxorubicin—in combination with radiation was designed to slow the cancer from spreading, a measure called progression free survival, by at least 33 percent compared with the control arm, but did not meet that goal. The trial results, Tardugno said, would not justify filing for approval in any country.

Part of the problem, Tardugno said, is that patients in the control arm did about 20 percent better on standard treatment than the company had projected. Cancer trials can sometimes take years to enroll patients and compile results from the time the trial design was approved, and during that time the standard of care continues to improve, making it more difficult for new treatments to show an advantage over existing therapies.

Celsion will continue to study the results to determine whether patients currently on Thermodox would be followed to determine whether the drug can extend overall survival.

The results were released just a week after the company announced a technology development deal for Thermodox in liver cancer with Zhejiang Hisun Pharmaceutical, a major Chinese drug company, that could have been worth up to $100 million over 10 years if the drug had succeeded. Celsion has already received an initial payment of $5 million from Hsuin, which Tardugno said the company is not required to give back the payment in light of the trial failure.

Tardugno sought to reassure investors by telling them the company has approximately $27 million in cash on hand as of today, enough money to fund its operations “well into 2014.”

Celsion’s drug technology, developed in partnership with Duke University, encases chemotherapy drugs in tiny bubbles called liposomes that are then activated by low levels of radiation to deliver their payload directly to cancer cells. Thermodox won fast-track designation from the Food & Drug Administration in August 2010 for development against primary liver cancer.

Celsion also has heat activated liposomes in Phase II clinical trials for breast cancer and a second form of liver cancer, but Tardugno said the company will have to give the latter trial “some consideration” before it decides whether or not to continue in light of the HEAT failure.

Celsion plunges 80 percent as liver cancer therapy fails trial

Jan 31, 2013 11:36am EST
(Reuters) - Celsion Corp shares plunged by more than 80 percent after a late-stage study of the company's experimental liver cancer treatment ThermoDox failed to meet the main goal of increasing patients' survival without worsening their cancer.

The stock fell to a low of $1.41 before recovering slightly to trade at $1.46 on heavy volume on the Nasdaq on Thursday.

"I don't believe the data will support (marketing) registration in any of the major markets," Celsion Chief Executive Michael Tardugno said on a conference call.

The trial, named HEAT, consisted of 701 patients across 11 countries and was designed to show a 33 percent improvement in progression-free survival.

Celsion said it was conducting additional analyses of data from the trial to assess the future value of ThermoDox.

Patients on the control arm performed about 20 percent better than expected whereas those on ThermoDox performed worse than anticipated, Roth Capital Partners analyst Joseph Pantginis said, quoting the company.

"We are disappointed by the failure of the HEAT study and we highlight the increased risk around the company's pipeline which is driven by ThermoDox," he said.

ThermoDox is also being tested in mid-stage studies as a drug-delivery method for breast and colorectal cancers.

Celsion CEO Tardugno said the company will continue enrolling patients in the mid-stage breast cancer study.

ThermoDox utilizes a liposome -- a tiny bubble composed of lipids -- as a vehicle to transport a commonly used chemotherapy drug called doxorubicin, directly to the tumor.
Localized heat releases doxorubicin, depositing it in and around the tumor, maximizing the effect of the medication.

The liver-cancer study compared the HEAT results against patients treated with a procedure where tumors are destroyed using electricity, otherwise called radiofrequency ablation.
Pantginis downgraded Celsion's rating to "neutral" from "buy" and slashed his price target on the stock to $1.70 from $10, saying the target is now based solely on the mid-stage study of ThermoDox in breast cancer.

Celsion said it had sufficient cash to cover its expenses well into 2014. It has unaudited cash and investments of about $27 million.

CEO Tardugno said the company will review its colorectal cancer trial in the context of the HEAT results and then decide on whether to continue with the study.

(Reporting By Pallavi Ail in Bangalore; Editing by Roshni Menon and Sreejiraj Eluvangal)

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