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Is Now The Right Time To Catch The Celsion Corporation (NASDAQ:CLSN) Knife?

Is Now The Right Time To Catch The Celsion Corporation (NASDAQ:CLSN) Knife?
Written by
Chris Sandburg
Published on
February 23, 2017
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Celsion Corporation (NASDAQ:CLSN) has been a tough stock to hold over the last few years. Following a high profile run up, and subsequent collapse, back in early 2013, the company has basically deteriorated in value almost painfully slowly, and despite an ongoing development program in place, and serving up catalysts, continues to decline to the present point.At its most recent close, Celsion went for $0.22. To serve up some degree of perspective, ahead of the company's 2013 collapse, it traded at $36 a share. Since this collapse, it's gone from the $3 mark to the sub penny regions at which it now languishes.Don't try and catch a falling knife. That's what they say. And they say it for good reason, of course. No doubt many reading this that have had a go at entering a Celsion position have lost trying to do exactly that.At some point, however, a falling knife has to hit the ground. Sometimes, this ground is zero. For a company with a development pipeline like Celsion's, however, the floor price is not zero – at least not for a good couple of years of development pathway. Couple this with the fact that – at $0.20 a share – there's not an awful lot farther to fall (and again, we're taking the development assets into consideration when we say this) and there looks to be a reasonable value thesis on offer.For those new to this one, Celsion is developing two assets – one called ThermoDox, which is targeting the treatment of patients with primary liver cancer, and another called GEN-1, which is under development in patients with advanced ovarian cancer.The first, ThermoDox is by far the most advanced of the two, and is currently in a phase III investigation in the above mentioned indication. GEN-1, on the other hand, is just a phase I development asset. There's also a phase II study of ThermoDox in recurrent chest wall breast cancer, but we're not assigning too much value to that one right now.So, ThermoDox. Its a proprietary heat-activated liposomal encapsulation of doxorubicin, which is a well established chemotherapy agent currently used across a host of different cancer indications. With ThermoDox, Celsion is attempting to maintain (or even better, improve upon) the standard of care efficacy, while simultaneously reducing the side effects associated with doxorubicin treatment. The theory is that by incorporating a heat activation element into the treatment, the drug is far more selective (and it doesn’t need a liver pass activation, as most chemo agents do) to cancer cells, and this should reduce impact on healthy cells.So how does this play into a buy thesis?The company just raised cash (we'll come back to this) to fund the ongoing development of its two assets in the phase III and phase I studies mentioned above. An IDMC recommended completion of the phase III at the end of last year, and we should see some data hit press during the second half of this year from the investigation. Concurrently, the phase I is ongoing, and translational data from the study is set for release at some point between now and the end of the second quarter.We see both of these events as potentially serving to turn the company around long term. Even if they don’t initiate a turnaround, but they hit press as indicative of efficacy, we're going to see a spike in volume and price on release.So we said we'd come back to the recent raise.It's a $5 million raise, priced at $0.23 per share of common stock. With the company trading in and around the $0.30 mark at time of pricing, that's not great, and it is sort of indicative of the primary risk going forward. Raises will be required beyond this one, and they are going to be dilutive.If the company can maintain some degree of positive sentiment on the back of operational updates, however, and the above discussed catalysts are two prime opportunities to do just that, the dilution should be mitigated.We will be updating our subscribers as soon as we know more. For the latest updates on CLSN, sign up below!Disclosure: We have no position in CLSN and have not been compensated for this article.

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