At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." Today, we'll show you whether those bigwigs actually know what they're talking about. To help, we've enlisted Motley Fool CAPS to track the long-term performance of Wall Street's best and worst.

Former buyer Brean says: "Sell Celsion!"
In a downgrade that some might call dramatic, others downright "theatrical," and pretty much anyone can agree is long overdue after the stock's run-up, analysts at Brean Murray have just declared Celsion (CLSN -2.53%) a "sell."

For those not familiar with the story, Celsion is a cancer researcher, currently awaiting results from a phase 3 study of its ThermoDox liver cancer drug. These results are said to be due out "in January," and seeing as the month is starting to get a bit long in the tooth, this basically means that any day now, the market could receive make-or-break news on Celsion's future.

And that's why Brean thinks now is an excellent time to get out of the stock.

Why the sudden reversal of opinion? After all, up until just earlier this week, Brean had a "buy" rating on the stock -- so what made it pull a quick 180 and scream "sell" all of a sudden? Well, according to Brean, Celsion deserves a downgrade from "buy" to "sell" basically for the simple reason that it's enjoyed "robust share price strength." Shares have doubled in price since November, and are up an astounding 368% over the past year.

Promise ... and peril
Problem is, according to Brean, the anticipated ThermoDox announcement will be a "highly binary event." If the news is good, Celsion shares will prosper. But if the news is bad, the company may not even be "viable" anymore.

Celsion's not profitable, you see. (In fact, it has no revenues, so hardly could be profitable without a drug to sell). The company only had $17 million or so in cash net-of-debt at last report, and with a cash burn rate in excess of $21 million annually, it probably can't survive another year without a cash infusion -- regardless of whether Thermodox is a success.

According to Brean, therefore, the valuation on Celsion today -- about 22 times book value -- creates "more downside from negative results than sustainable upside from positive results." Basically, it all boils down to the fact that while good results could spark a small rally, and make an already expensive stock slightly more expensive, bad results could basically wipe Celsion out.

Pish-posh
Not everyone feels this way, of course. Deriding Brean's reversal as a "bear raid," analysts at Roth Capital analogize the stock's steep drop yesterday to the drop that Dendreon (NASDAQ: DNDN) experienced ahead of its phase 3 IMPACT trial results. Worries about Dendreon ultimately proved prescient, of course, when in July of last year, the company confirmed that despite having a successful drug in Provenge, sales weren't stacking up as quickly as hoped, and the company had to ratchet back growth expectations.

In contrast, Roth says there's nothing behind the Celsion selling, other than a nervous analyst who's cutting bait when he should be still fishing for profits. No data about the trial results have leaked out, and Celsion's still as likely to report banner results, as much as bummer results. In short, if you liked Celsion's chances on Wednesday, you should like them still today.

Foolish takeaway
As for me... I just don't know. Like Roth says, no one knows what the data will reveal when they ultimately come out later this month. What I do know is that even if ThermoDox turns out to be an effective and safe drug ... well, Provenge was an effective and safe drug, too. And look how that turned out for Dendreon shareholders!

Seems to me, investors who buy Celsion today are taking a pretty big risk that 22 times book value, infinity time nonexistent revenues, and negative profits are reasonable prices to pay for "just another cancer drug."

My advice: If you want to invest in cancer research, go with an established, profitable megapharmaceutical firm like Pfizer (PFE -0.19%) or Eli Lilly (LLY -1.86%). With P/E ratios of 21 and 14.5, respectively, neither stock is anywhere near as expensive as Celsion. More importantly, because their numbers are positive, it's easier to wrap your head around the valuations and decide if the prices are cheap enough to be worth paying for low-to-no growth.

On the other hand, if you want to gamble with your money, just go to Vegas. You'll have more fun, the drinks are on the house, and I can't imagine your odds of losing money are any worse than what you'll get by investing in unprofitable Celsion.