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 (NAS: 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.
1-Year Stock Return
Return on Investment
Estimated 5-Year EPS Growth
Dividend and Yield
No. of Analysts
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 (NAS: BSDM) , for example, has been pushing the use of microwave thermal ablation technology as the best means of cooking cancer, while others like AngioDynamics (NAS: ANGO) uses radio frequency ablation, or RFA.
There are also a wide variety of uses for thermal ablation such as Boston Scientific's (NYS: BSX) hydrothermal ablation therapy to treat premenopausal women with menorrhagia, or excessive bleeding from the uterus. Covidien (NYS: COV) uses RFA to treat liver lesions, while C.R. Bard's (NYS: 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
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The article Wall Street Loves Celsion. Should You? originally appeared on Fool.com.
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.
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