Stocks go up, stocks go down, you can’t explain that…
Or maybe you can, if the stock happen to be a biotech that just flunked a clinical trial. Which leads us nicely to Celsion Corporation (CLSN). Or not so nicely if you happen to be an investor.
Shares cratered by a dispiriting 68% this week after the company announced that the independent Data Monitoring Committee (DMC) recommended it prematurely bring to an end its Phase 3 OPTIMA study evaluating ThermoDox in patients with primary liver cancer.
Based on an interim safety and efficacy analysis, the DMC concluded the study was unlikely to achieve the primary endpoint after exceeding a futility threshold value.
With Celsion still assessing the data, management have outlined 3 possible paths forward: “1) continuation of the study through final analysis, 2) discontinuation of the study for futility, and lastly 3) assessment of the study following some additional events (n=8–10).”
For Oppenheimer analyst Hartag Singh, the well-designed study’s results were obviously “disappointing.”
Although the analyst points out that Celsion management has indicated “a potential preference for the (inexpensive) third option,” it is doubtful the outcome will be any different.
With ThermoDox likely to be discarded, attention will now turn to GEN-1, the biotech’s treatment for ovarian cancer – a notoriously hard to treat disease. GEN-1 has shown promise in the first part of a phase 1/2 trial and has been given the go ahead to continue with the second portion, which will be initiated in August. While it is still early days, Singh is piqued by the reaction to the initial data.
The 5-star analyst said, “While we expect to see more on GEN-1, particularly as the Phase 2 program initiates in August, work may lay ahead on the manufacturing front, and we await a broader data set. Nonetheless, initial results have been intriguing: a 2x higher R0 resection rate in newly-diagnosed Stage III/IV ovarian cancer (over historical) generating significant physician enthusiasm for the approach.”
However, for now, along with removing ThermoDox from his Celsion model, Singh drops his rating from Outperform (i.e. Buy) to Perform (i.e. Hold) and takes his price target off the table. (To watch Singh’s track record, click here)
Overall, two other analysts recently reviewed Celsion’s prospects, one saying Buy, while the other suggesting Hold. (See Celsion stock analysis on TipRanks)
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