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Celsion Corp . (CLSN): A Cancer Biotech With "Blockbuster" Potential

 December 03, 2012 01:48 PM
 


(By Rich Bieglmeier) Celsion Corp. (CLSN) aggressively moved higher last week as investors geared up in anticipation of phase III results from the Food and Drug Admiration (FDA).  Last week, Wall Street loaded up on the stock with $4.1 million, or 1.67% of CLSN's market cap, pouring into the biotech.

Phase III data for Thermodox which is for the treatment of liver cancer. Primary liver cancer is one of the most common and deadly forms of cancer. It is estimated that up to 90% of liver cancer patients will die within five years of diagnosis. According to the World Health Organization, liver cancer may become the number one cancer worldwide, surpassing lung cancer, by 2020.

[Related -Amgen, Inc. (NASDAQ:AMGN): Can Amgen, Inc. Succeed In Its $10.4 Bln Cancer Bet?]

And liver cancer is sinister. The Mayo clinic reports, "Often people don't have symptoms until it's quite advanced," which is what makes Celson's Thermodox so attractive to Wall Street.

According to CLSN, "Although the most effective treatment for liver cancer is surgical resection of the tumor, 80% to 90% of patients are ineligible for surgery due to the progression of their tumors. Early stage liver cancer generally has few symptoms, so detection and diagnosis are often delayed. Radio frequency ablation (RFA) has increasingly become the standard of care for non-resectable liver tumors, but the treatment becomes less effective with larger tumors."

Word from the regulatory body is expected to be announced by the end of January 2013. A couple of insiders must be fairly confident in the company's prospects. Director, Robert Hooper purchased 11,600 shares at $5.20, and CEO, Michael Tardugno purchased 5,000 shares at $5.03 in the middle of November.

[Related -AVEO Pharmaceuticals, Inc. (AVEO): FDA's Flawed Call On Tivozanib]

Tardugno believes Thermodox has a chance to be a billion dollar blockbuster drug for Celsion. As of today, CLSN has a market-cap of $270 million. If the FDA gives the biotech to green light, Wall Street will advance Celsion some additional market-cap; however, for the sake of our evaluation, we'll fast forward to $1 billion in revenue from Thermodox.

The average biotech trades at 7.54 times sales. At $1 billion in sales, it would give CLSN a market-cap of $7.54 billion, or 28 times where it is today. As you can expect, a positive announcement from the FDA could send shares flying. Trying to put an initial price-tag on an OK is difficult. So, we looked back at other, small-cap oncology approvals in 2012. Onyx Pharmaceuticals, Inc. (ONXX) jumped 43% and INSYS Therapeutics, Inc. (NEOL) doubled.

We think an FDA OK would come closer to rivaling NEOL than ONXX. Perhaps, investment research firm Needham agrees as they upgraded their opinion of Celsion Corp. (CLSN) to "Buy" to "hold." With CLSN long-term upside and potential near-term catalyst, iStock tends to agree.

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