Insider Activity: Celsion Corporation
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Celsion Corporation (NASDAQ: CLSN) is an innovative oncology drug development company singularly focused on improving treatment for those suffering from highly difficult to treat forms of cancer. It is working to develop and market more efficient, effective, and targeted chemotherapeutic treatments based on its unique heat-activated liposomal technology. Celsion has seen some intense insider activity in recent days, which is why I want to take a look at the company and its next catalyst.
A Glimpse Into Its Clinical Developments
Thermodox "HEAT" Study: The Nearest Opportunity
Thermodox encapsulates doxorubicin in a liposome, a type of fat bubble or vessel, that naturally makes its way to the liver after being introduced intravenously and can destroy 2-3 cm tumors. A low level of heat is then applied directly to the cancerous lesion using a process called radio frequency ablation, which has destroyed cancer cells in previous phase I or phase II studies. Thermodox is not a drug study, but a treatment application system for cancer disease. If Thermodox obtain positive results, it will not have any competitor. However, there are two companies that could be negatively affected by the launch of Thermodox.
The first company could be Dendreon Corporation (NASDAQ: DNDN). It is a biotechnology company that engages in the discovery, development, and commercialization of novel therapeutics to enhance cancer treatment options for patients. Its star medication is Provenge (Sipuleucel-T,) with $77.94 million in quarter sales (Q3 2012). Provenge was approved by the FDA on April 29, 2010, to treat asymptomatic or minimally symptomatic metastatic (HRPC).
The second company could be Novartis AG (NYSE: NVS). This company engages in the research, development, manufacture, and marketing of health care products worldwide. Its star medication is Gleeve, with $1.17 billion in quarterly sales (Q3 2012). Gleevec was approved by the FDA on 2011, to treat ten different cancers.
Possible Financial Impact on Celsion
Celsion has the first important catalyst in January 2013. Following Data Monitoring Committee (DMC) review, Celsion plans to disclose top line results, an announcement that is expected to occur in January 2013. Michael H. Tardugno, Celsion's President and Chief Executive Officer, recently said:
The HEAT Study addresses a significant and growing global unmet medical need in oncology, primary liver cancer. With a positive outcome, ThermoDox® will become the most important 1st line therapy for patients with non-resectable disease. The positive implications of this study, for patients and their families, the health care community, our investors and employees, cannot be overestimated. We enter this transformative period from a position of financial strength, having taken ThermoDox® through to pivotal data while maintaining full worldwide rights outside of Japan, a minimal number of shares outstanding and a strong balance sheet. Consistent with our previous guidance, we have no plans to raise additional capital before disclosing top line data from the HEAT Study which, if positive, will vastly expand the Company's strategic and financing options.
Fundamental Basic Review
Celsion has a market cap of $224.73 million and an enterprise value of $207.32 million. This stock trades at a expensive valuation without considering its clinical developments. Its trailing P/E is incalculable, and its forward P/E is as well. Celsion's estimated growth rate for this year is 26.99%. It has a total cash position of just $22.55 million, and its total debt is at $5.09 million. For the nine months ended September 2012, Celsion's revenue was at zero. Celsion is trading at $6.61 per share (as of Nov. 23, 2012) and the basic share count is 35.01 million.
The last time insiders bought shares was in 2011, but in 2012 insiders have started to buy more shares in Celsion. The total number of purchased shares in 2012 is 47,120.
- Robert W. Hooper, Director, has just bought 11,600 shares, or $60,320 worth of stock, at $5.20 per share.
- Michael H. Tardugo, President of Celsion, has just bought 5,000 shares, or $25,150 worth of stock, at $5.03 per share.
On the one hand, the most important risk is Celsion's failure in its Thermodox's study. If this happened the company would need additional cash in the near future. On the other hand, Thermodox could drastically alter all the market for cancer treatments as we know it. The insiders know this, and for this reason they are buying shares.
TraderUsa has no positions in the stocks mentioned above. The Motley Fool owns shares of Dendreon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!