Wall Street Loves Celsion. Should You?

Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?

Not so fast! With help from Motley Fool CAPS, the 180,000 member-driven investor community that translates informed opinion into stock ratings of one to five stars, we'll see whether these high-flying favorites deserve analysts' unwavering support.

Today, we'll take a look at biotech Celsion (Nasdaq: CLSN  ) , which is developing a targeted cancer-killing therapy that's activated through heat applied to the area. Among the analysts that CAPS tracks, three have weighed in on Celsion, and though the investor community isn't unanimously supportive, 91% of the 85 members registering their opinion agree it will go on to outperform the broad market averages.

Celsion snapshot

Market Cap

$143 million

Revenues (TTM)

$0.0 million

1-Year Stock Return

37.3%

Return on Investment

(229.7%)

Estimated 5-Year EPS Growth

N/A

Dividend and Yield

N/A

Recent Price

$4.31

No. of Analysts

3

CAPS Rating (out of 5)

***

Source: FinViz.com. N/A = not available; Celsion doesn't pay a dividend. TTM = trailing 12 months.

But just because Wall Street loves 'em doesn't mean you have to. Analyst sentiment is only just the jumping-off place for your own research.

Hot to trot
Thermal ablation, or hyperthermia, is the process of heating up tumors to such a degree that the cancer cells are essentially cooked and die. At the other end of the spectrum are cryogenic treatments, or the freezing of cancer cells to kill them. There are various methods used to achieve the effect. In cryogenics, liquid nitrogen or argon gas is delivered to the tumor, which freezes the cell to a temperature of 120 degrees below zero and it's ultimately absorbed by the body.

For hyperthermia treatments, there are a variety of ways to heat the tumor.  BSD Medical (Nasdaq: BSDM  ) , for example, has been pushing the use of microwave thermal ablation technology as the best means of cooking cancer, while others like AngioDynamics (Nasdaq: ANGO  ) uses radio frequency ablation, or RFA.

There are also a wide variety of uses for thermal ablation such as Boston Scientific's   (NYSE: BSX  ) hydrothermal ablation therapy to treat premenopausal women with menorrhagia, or excessive bleeding from the uterus. Covidien (NYSE: COV  ) uses RFA to treat liver lesions, while C.R. Bard's (NYSE: BCR  ) equipment treats a number of conditions, such as those for prostate health.

Pick up or delivery?
But when it comes to cancer treatment, Celsion has an advantage: It uses heat-sensitive nano-particles to deliver a hot "payload" of drug within tumors. When the tumor is heated through RF ablation, the drugs are activated, and the tumor is killed from within. Some cancers are difficult to otherwise kill or even reach with drugs. The combination of the drug-delivery system and the application of RFA provides a potential winning combination.

This past summer, Celsion's CEO said its proprietary liver cancer drug ThermoDox could be a $1 billion blockbuster opportunity. It's in the midst of a progression-free survival study and needs 380 PFS events to move forward. Celsion expects that to occur by the end of the year, so it can unblind the study and analyze the results. ThermoDox already has authorization from European regulators to submit a marketing plan based on prior results, and it's been given orphan drug status both in Europe and the U.S.

Biotech investing always carries a risk that outcomes won't be as expected, but because Celsion's technology seems unique and holds the potential for success, I'm going to rate the biotech to outperform the broad market averages on CAPS as a means of holding myself accountable for these bullish sentiments, but also with the understanding it might pull back should results underwhelm the market. Tell me in the comments box below if you think Celsion is just getting ready to heat up or whether its stock will end up in some cryogenic chamber.

Agree to disagree
While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. In our free report "
3 Stocks That Will Help You Retire Rich," we name stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Fool contributor Rich Duprey owns shares of Boston Scientific. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Covidien Ltd.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 02, 2012, at 11:22 AM, Odaat12 wrote:

    Celsion's CEO has not exactly had the best track record for meeting management-projected timelines, but since the arrival of Jeff Church that has clearly changed. As such, if Celsion meets or beats its public forward-looking statement of Phase III data being made public before year's end, it won't be long before we all see the strength of the data, and exactly how much better using Celsion's proprietary " Cels " delivery technology is than RFA alone.

    I don't shy away at all from any "accusation" that I may be Celsion's greatest cheerleader. I believe the improvement in PFS is going to be stellar...a resounding proof of this brilliant delivery model...finally something that brutalizes the cancer, not the patient. Targeted, localized, concentrated, non-systemic, non-invasive....and actually relatively inexpensive and easy to administer. The holy grail of oncology. My opinion, as many of you know, is I believe this to be the most significant development in oncology arguably in the last 18 to 26 years...if not a paradigm shift in all medicine an an historic level for drug delivery.

    With still a fairly small number of shares, and this being not one drug, but rather a huge pipeline within a nano-product, I believe OUTPERFORM will be an understatement. But the real statement that matters is not the one you get from your broker, but the one you hear from the oncologist..."You are now free of evidence of disease."

    This approach works....period.

    Disclosure: Long CLSN, PHG, PFE, BSDM

  • Report this Comment On November 02, 2012, at 10:33 PM, DAG1996MF wrote:

    Yes.

  • Report this Comment On November 03, 2012, at 5:11 PM, Ariodante7 wrote:

    It takes 8-12 weeks to scrub and analyse the data so I am expecting top line data in the New Year.

    I think that data will be good and am a long term holder. My main issue is the quality of tumour localisation for RFA in the non US sites.

  • Report this Comment On November 07, 2012, at 11:12 PM, 101charley wrote:

    This is a 5 star stock. I believe there is a very high probability that PFS data will be very positive.

  • Report this Comment On November 20, 2012, at 2:49 PM, bjm1000 wrote:

    I was late to the party and bought CLSN in August at $4. That said, it is hard to complain about a 50+% gain in three months. The stock is also incredibly volatile; a positive article on SA last night has the stock up over 5% today, so you have to accept the roller coaster ride.

    What is most appalling to me about this company is that it is not a drug or treatment play, it is a methodology. If the results in January are positive, it opens the door to a host of possibilities with huge upside potential for the stock and, more importantly, for cancer patients.

  • Report this Comment On November 20, 2012, at 2:50 PM, bjm1000 wrote:

    Sorry, I meant appealing not appalling. Thank you Apple word completion.

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