Celsion Rises After Expanding China Partnership
From Associated Press (January 22, 2013)
NEW YORK -- Shares of Celsion Corp. climbed Tuesday after the company expanded a drug development deal with a Chinese pharmaceutical company.
THE SPARK: Celsion said Zhejiang Hisun will have the option to seek marketing approval for Celsion’s liver cancer drug ThermoDox in Hong Kong and Macau. The companies had already agreed to collaborate in China. Celsion will get $5 million upfront and said it could get "several hundred million U.S. dollars" from Hisun over the next decade. The Lawrenceville, N.J., company will support Hisun’s work on the manufacturing of ThermoDox in China, and Hisun will make and distribute the drug in those markets.
THE BIG PICTURE: ThermoDox is a version of doxorubicin, an older chemotherapy drug. Celsion said ThermoDox is heat-activated and is designed to deliver bigger doses of the doxorubicin directly to tumors.
In May 2012 the companies announced a development agreement that only applied to China. Celsion agreed to supply the drug to Hisun, while Hisun would help secure marketing approval for ThermoDox.
Celsion does not have any approved drugs, but it expects to report results from a late-stage clinical trial of ThermoDox before the end of January.
Hisun will have an option to pay Celsion another $5 million in the next few months. That payment will give it the right to market ThermoDox in Hong Kong and Macau, and will be part of a total payment to Celsion worth $25 million. Celsion said it could get a total of $55 million in upfront and regulatory milestone payments over the next 18 months, and $45 million more if ThermoDox drug reaches sales targets. It will also receive royalty payments of more than 10 percent on sales in the region.
THE ANALYSIS: Roth Capital Partners analyst Joseph Pantginis said the deal is a major expansion of Celsion’s previous agreement with Hisun, and said he is "impressed" with the new agreement. He said the partnership could help speed up marketing approval for ThermoDox. Pantginis maintained a "Buy" rating on Celsion shares, with a price target of $10.
SHARE ACTION: Shares of Celsion gained 75 cents, or 10.7
percent, to $7.75 in afternoon trading. The shares have quadrupled
in value over the last year, as they closed at $1.69 on Jan. 23,
Posted: January 2013