Rodman starts Celsion at market outperform
Rodman & Renshaw has initiated coverage of Celsion (NASDAQ:CLSN) with a “market outperform/speculative risk” rating and a target price of $6, based on a discounted revenues and earnings per share valuation methodology. The stock closed at $2.75 on Tuesday.
“With approximately $25 million in cash pro forma, and an enterprise value of $47 million, we believe Celsion represents an undiscovered, and undervalued company with multiple near-term drivers poised to create shareholder value in 2012,” writes analyst Reni Benjamin.
Celsion’s most advanced product is ThermoDox, a liposomal encapsulation of doxorubicin, which is activated on exposure to mild hyperthermia. The company has completed enrollment of over 600 patients in the pivotal Phase 3 HEAT study, evaluating ThermoDox in conjunction with radiofrequency ablation, the standard of care in Stage A/B hepatocellular carcinoma (HCC).
The trial is expected to report interim results in the current quarter, with final progression free survival results expected as early as the fourth quarter of 2012. “With a projected 80% gross margin on sales, we are forecasting peak, risk-adjusted world-wide revenues of approximately $400 million by 2019,” Mr Benjamin figures.
The HEAT study is being conducted in over 11 countries, including China, and is under a special protocol assessment with the FDA. “Given the world-wide incidence of HCC and the dearth of therapeutic options, we believe Asia, in particular China, represents a key market whereby significant sales can be recorded,” Mr Benjamin noted.