Celsion Liver Cancer Trial Fails to Meet Goals, Stock Plunges

1/31/13Follow @cathyarnst

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.

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