Celsion Corp (NASDAQ:CLSN)

Q4.5 WS4.5 MOMOA- EPS-A

I just updated my Celsion database and I was surprised to see the company with a positive enterprise value. They had 14M cash and 6M debt as of the end of March, and they burn around 6M per quarter. They'll run out of cash around October if they don't raise. The OPTIMA phase III trial of ThermoDox for liver cancer isn't projected to complete enrollment until the end of 2017, at the earliest. Euro-DIGNITY is projected to begin enrollment in H2 2016, a year and a half behind the original schedule. The wild card is GEN-1 DNA-based immunotherapy, which Celsion acquired for peanuts with the EGEN acquisition in 2014. I'm dubious about the long-term prospects for GEN-1, but once the company is desperate to dilute they could certainly foment GEN-1 into a short-term price spike.

Celsion has a colorful history as a trader's football. Lots of us clearly remember the ThermoDox cult of late 2012 and its charismatic leader who claimed to be buying more ahead of the binary, then bragged after the crash about having sold the bulk of his position at the top. I made a nice profit on puts when the stock crashed, although given the high premium it probably wasn't worth the risk. Since then I've taken a couple of stabs at a rebound, trying to time Celsion's need to manipulate their share price, but those didn't work out so well. Over the past few years I've come to realize that trying to time rebounds in bioturrds doesn't work well. The rebound rarely comes in a predictable time frame, and by the time it arrives it isn't enough to make the trade profitable. Even worse, the trader doesn't want to take a loss and fails to close the position on the spike, then ends up riding the position back down again.

The alternative trade is to look at Celsion's pipeline and financials and conclude that the stock has a high probability of losing 90% or more of its remaining value within a couple of years and shorting it. The downside here is that it leaves the trader open to the possibility of going down 100%, 200%, or even more in the short-term if the company happens to foment a spike after the short is opened. That's the position I'm in now with Nymox. However, I'm holding fast on that position and waiting for the inevitable crash. However, being subject to the whims of management on these low grade, scammy stocks is a little unnerving.

I think I've convinced myself not to short Celsion now, but I might think about doing it a little closer to the next earnings call of there hasn't been any significant change. Once people see the cash reserves under 10M they may be a little less willing to spot the company a positive enterprise value.