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Celsion Corp. Message Board

  • daniel.schneeberger84 daniel.schneeberger84 Jan 7, 2013 6:21 PM Flag

    Peak Sales - Why CLSN is priced for perfection already

    A lot has been written about the probability of success regarding the thermodox p3 trial. I personally think that the chance of success is about 20%.

    But, I would like to go one step further. How much could CLSN possibly earn IF the results are positive?

    My hypothesis is that Thermodox peak sales in HCC would be very low. To prove my hypothesis, I would like to look at the two components of revenue, quantity and price. I will that to calculate peak US sales. As a rule of thumb, you can multiply US sales by 2 and get global sales.

    1. Let's start with quantity:
    I have data for 2008. Guess how many surgical procedures have been performed for HCC for the whole year of 2008 in the US? 6769. 17.3% of those have been ablations (i.e. radioablation, cryoablation). So that are 1171 ablation procedures. That number has important implications for Thermadox sales, as Thermadox will be ONLY sold together with the procedure. That (and the fact that it will be only sold once to most consumers) is the reason, why it will be a drug with VERY limited commercial potential.

    I estimate that you have to do about 20 procedures/year as a center to have enough experience to offer RFA of HCC. That would mean that there are maximum about 60 centres in the US that offer the procedure. This will be the single most important limiting factor for the growth of RFA+Thermadox as a lot of patients probably won't get the treatment, if they don't live near a center. Unfortunately, that's the harsh reality. A lot of patients don't receive the treatment that would be best for them because they are not being referred to a center.

    I think that Thermadox could be applied in two current patient populations: In those that are currently treated with standart RFA and have tumors 3cm and patients that have localised disease and currently don't get a surgical treatment at all. I would not expect, that RFA+Thermadox will be applied in patients that are candidates for transplant or resection.

    Most RFA are performed in tumors 3cm of diameter. So I expect, that Thermadox would be able to catch some market share from the "standart RFA" market. Let's say that 40% of the 1171 ablation procedures were in tumors 3cm and that Thermadox would be able to catch a 60% market share in that population. That would be about 280 patients/year.

    Now, we know that about 1.5/100'000 patients have localised HCC and are not getting any surgical treatment at all. That are about 4'500 patients/year. I would expect that about 1/2 of those patients would be candidates for RFA+Thermadox (an optimistic assumption) and that RFA+Thermadox would gain a market share of 40% (again, very optimistic - a lot of patients don't want treatment, are not referred to centres, ...). So, if we do the math, we end up with 900 patients/year.

    In total we have about 1180 patients per year, that using optimistic assumptions. Most of those patients would probably only get one infusion. But let's say, that 10% of them will get a second treatment ("repeat customer"). We end up with 1'300 doses/year that Celsion will be able to sell in the US.

    By the way, 1180 patients is not an unrealistic number if we use a top down approach. We know that HCC incidence in the US is about 4/100'000. So, we should have about 12'000 cases of hcc/year and Celsion would have about 10% market share (of all hcc patients). By the way, I know that Celsion uses the number of 28'000 hcc cases/year in their presentation. I don't know where they took that number from. That would equal an incidence of about 10/100'000 - I haven't found a number that high anyway in the scientific literature.

    2. Let’s talk about price
    It is clear that the definitive price would be dependent on the extend of benefit found in the trial. However, we only need a rough idea of how it could be priced.
    It might be interesting to know how much a RFA or TACE-Procedure costs. The cost of a RFA-Procedure is 18’386$, the cost of TACE is 24’303$. When looking at that numbers, it is clear, that it would be very difficult to price the drug for much more than 10’000$ or 20’000$. Especially since it’s sold as a single dose only. You can collect significantly more money from your “consumers” with many chemotherapeutic agents – but those are sold numerous times for each cycle…
    Another problem is the very special patient population that develops hcc. Most cases develop due to alcoholic liver cirrhosis or hepatitis b/c infection and the hcc incidence rises significantly with age. That means that many patients will be under Medicare or Medicaid and the company might have to offer substantial discounts.
    3. Let’s do the math
    If we multiply 1’300 doses x 15’000$ we end up with… 19.5 Million $ US peak sales.
    Double that for worldwide peak sales … 40 Million $.

    4. Bottom line
    Celsion is not worth investing in. Even if the P3 study IS successful, Celsion might end up as the next Dendreon – not even selling enough Thermodox to break even. If you keep in mind that Celsion will have to raise a substantial amount of money to bring Thermodox to market, you will probably come up with the conclusion that Celsion is worth less than 8$, EVEN IF the Phase 3 study for Thermodox is successful.

    Hepatocellular Carcinoma Confirmation, Treatment, and Survival in Surveillance, Epidemiology, and End Results Registries, 1992-2008
    Survival and Cost-Effectiveness Analysis of Competing Strategies in the Management of Small Hepatocellular Carcinoma

    Sentiment: Strong Sell

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    • I'll defer to Sia on this, but I think that the price in the US is likely to be $30-35k, and could be as high as $60K. Personally I hope that it's nearer to $30k, as you don't want the disparity between US and China pricing to be too extreme. I also think that those crazy DNDN style prices affects take up. On the other side, you forgot that CLSN will most likely only see 40% of this with 60% going to the partner. My pricing guesses, in EU/Japan/S. Korea/Tiwan around $18-25K, China $7-10K.

      See BWatson's excellent post for market potential.


      Sentiment: Strong Buy

    • your major error is that you assume, that RFA+Thermodox will only be applied for PRIMARY HCC where the yearly world wide incidence is about 500,000+ cases and about 25,000+ cases in US, further inceasing.

      The big potential of RFA+TDox is secondary and unresectable cancer in the liver, which is about tenfold of primary HCC.

      As example I would quote the number of primary colon cancer spreading to the liver (secondary liver cancer). In the US there are about 140,000 colon cancer cases each year - about half of them appear and end as secondary liver cancer (50,000 cases/year) which are suitable candidates for palliative RFA+TDox treatment of the liver mets.

      I am sure, that this group is the first in which we will see off label use of RFA+TDox, once RFA+TDox is approved based on the HEAT study.

      So, the "billion dollar" statement of Celsions CEO is no pipe dream as you try to suggest.

      The RFA+TDOX adoption will happen fast as there is no limiting change to todays protocoll. Its only one infusion and can be easily handled within the RFA setting.


      Sentiment: Strong Buy

    • I guess your just looking out for my "best" interest? with a 20% chance why in the world would you go to the extent of calculating earnings? Would it be 20% of your calculated earnings?

      Sentiment: Buy

    • This is your original abstract of your cited source:
      Approaches to the diagnosis and management of hepatocellular carcinoma (HCC) are improving survival. In the Surveillance, Epidemiology, and End Results-13 registries, HCC stage, histological confirmation, and first-course surgery were examined. Among 21,390 HCC cases diagnosed with follow-up of vital status during 1998-2008, there were 4,727 (22%) with reported first-course invasive liver surgery, local tumor destruction, or both. The proportion with reported liver surgery or ablation was 39% among localized stage cases and only 4% among distant/unstaged cases. Though 70% of cases had histologically confirmed diagnoses, the proportion with confirmed diagnoses was higher among cases with reported invasive surgery (99%), compared to cases receiving ablation (81%) or no reported therapy (65%). Incidence rates of histologically unconfirmed HCC increased faster than those of confirmed HCC from 1992 to 2008 (8% versus 3% per year). Two encouraging findings were that incidence rates of localized-stage HCC increased faster than rates of regional- and distant-stage HCC combined (8% versus 4% per year), and that incidence rates of reported first-course surgery or tumor destruction increased faster than incidence rates of HCC without such therapy (11% versus 7%). Between 1975-1977 and 1998-2007, 5-year cause-specific HCC survival increased from just 3% to 18%. Survival was 84% among transplant recipients, 53% among cases receiving radiofrequency ablation at early stage, 47% among cases undergoing resection, and 35% among cases receiving local tumor destruction. Asian or Pacific Islander cases had significantly better 5-year survival (23%) than white (18%), Hispanic (15%), or black cases (12%). CONCLUSION: HCC survival is improving, because more cases are diagnosed and treated at early stages. Additional progress may be possible with continued use of clinical surveillance to follow individuals at risk for HCC, enabling early intervention.

      Copyright © 2011 American Association for the Study of Liver Diseases.

      Question: How can you come up with your figures if this study covers only some (I mean a subset) of all HCC cases (those which are diagnosed AND had follow up of vital status)?

      Your statements are very questionable concerning the numbers you use.


      Sentiment: Strong Buy

    • Hey Doc,

      U said the trial will fail right? then why bother about the valuation, doesn't make any sense unless u want to cover your short at lower price by scaring people to sell

      Sentiment: Hold

    • alark13 Jan 7, 2013 9:10 PM Flag

      Lies, Damn Lies and Statistics... LOL... Doc Schnee... good one...

      New England Journal of Medicine and other sources place annual global incidence of new HCC cases in excess of 500,000... and you suggest that even if Thermodox gets stellar results CLSN will only sell about 2,600 doses per year... That is roughly one half of one percent... Wish you would have told MT and the boys sooner... CLSN sure wasted a lot of time and money on a treatment indication that only about 1 out of every 200 HCC patients will want or need... bummer... and that sales number you suggest represents the peak of the T-dox sales for HCC... ever take a marketing class... I have... and even in marketing 101 your numbers just don't add up...

    • OK, so I cannot speak to your numbers as to the sales generated by Thermodox for HCC. That's your opinion, I think you are on the low side.

      HOWEVER, you have overlooked the number one reason for investing in CLSN. This is not a new drug, it's a DRUG DELIVERY PLATFORM, of which HCC will be the first of MANY MANY uses for liposomally transported heat released applications.

      If anything, HCC is one of the smallest uses this drug delivery platform will have.

      What is of paramount importance in this "HEAT" trial is proving that the delivery platform WORKS.

      Once that is proven, it can be extrapolated 100 fold into other cancers, and other diseases, and even in other therapies for things as innocous as arthritis pain...basically anything you might want to deliver a high dose of localized medication to.

      HCC is the proverbial tip of the iceberg.

      It's the delivery platform that the market wants, that big pharma wants. The holy grail of targeted treatment. HCC and Thermodox are merely the litmous test for the platform, not the end product.

      Knowing that, if the trial proves the validity of the delivery platform, sales could be, and will be, in the billions of dollars as more and more FDA approved products get delivered via the Celsion Platform.


      Sentiment: Buy

    • Shneerberger, you could write for SNL. You had me rolling in the aisle. But ask yourself--why would a company bother to develop a drug knowing that it wasn't commercially viable in the first place. Sheerbull, you are amazing.

    • K doc lets review a few things though, your right the market for HCC in the US is low, the number of incidences is growing fast, but YOUR rule of thumb of doubling by two for a world market is ridiculous. There are over 700k new cases worldwide, and 28k in the us alone, with 40% of these patients addressable with rfa. Second most patients will have more than one tumor and large tumors and may need multiple treatments. I can't understand how doubling the percentage of only 28k patients or those addressable equates to doubling world wide new indications of 700k patience, its just silly.

      Second your missing the potential of thermodox, by the time TDOX is ready for commercialization colorectal cancer trial enrolling 88 patients will/should be done, there was 1.23 million cases of CC in 2008, and 150k in the USA, with an addressable patient population of 15%, do the math, physicians will then be able to apply off label use to other indications requiring RFA.
      RCW with the results out of substantial success the company should have no trouble finishing enrollment and adding patients from this group. 13000 patients with an addressable market of 80% due to the severity. Average patient will recieve 4 therapies!!

      Im going to stop right here as I think you realize your estimates are off based to say the least.
      Im surprised for someone who's only 500 shares short and admitted to only scratching the surface of DD would take the time to estimate pricing for a successful outcome. Your DD would be better spent on reasons not to be short.

      Sentiment: Strong Buy

    • Rubbish my friend.

      Sentiment: Strong Buy

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