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Biotech Stock Mailbag: Celsion Short Thesis, Hemispherx

Celsion is conducting a phase III study in which 600 patients with hepatocellular carcinoma, also known as primary liver cancer, are being treated with Thermodox plus RFA or RFA alone. The primary endpoint of the study is to determine if the addition of Thermodox to RFA can significantly delay the re-growth of liver tumors compared to treatment with RFA alone.

RFA is a procedure often used by doctors to ablate, or remove, relatively small tumors from the liver that can't otherwise be excised surgically. While RFA can be curative, liver cancer can and does recur because some cancer cells remain in the surrounding tissue and start growing again. Celsion believes the addition of Thermodox to RFA will kill enough of the cancer cells in the liver adjacent to the tumor to prevent or delay the return of the cancer.

The Thermodox study will fail, my "short Celsion" fund manager source predicts, because more often than not, tumors grow back in distant parts of the liver away from the lesion(s) that's been ablated using RFA and Thermodox.

"Thermodox is like shooting at a rhinoceros with a pellet gun," he says.

A 2008 paper published in the Journal of Gastrointestinal Surgery (Ng, et al.) followed 192 primary liver cancer patients who had successful and complete tumor ablation following RFA procedures. With a median follow-up of more than two years, only 15% of patients had local tumor recurrence, meaning the cancer returned at the same spot in the liver targeted by the RFA ablation. The majority of patients (56%) experienced liver tumor regrowth in parts of the liver that were not targeted by RFA ablation. Ten percent of patients developed cancer metastases outside the liver while 18% remained recurrence-free. [Full citation: J Gastrointest Surg (2008) 12:183-191]

If this pattern of distant liver tumor recurrence holds true in Celsion's study (and Mr. Short Celsion thinks it will), Thermodox will be unable to demonstrate a significant benefit on delayed tumor progression in the phase III study.

The use of doxorubicin as the cancer-killing payload in Thermodox is also suspect given the drug's failure to produce any positive benefit on disease-free survival in previous liver cancer trials, he says. A 2011 study published in Hepatology International (Jing-Houng, et al.) showed pegylated liposomal doxorubicin administered intravenously in conjunction with RFA had no beneficial impact on tumor progression or survival compared to RFA alone.
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