Analyst Conference Summary

conference date: May 12, 2017 @ 8:00 AM Pacific Time
for quarter ending: March 31, 2017 (first quarter, Q1)

Forward-looking statements

Overview: Clinical-stage company has two cancer therapies in its pipeline. But low on cash and selling new shares to keep afloat.

Basic data (GAAP):

Revenue was $125 thousand, flat sequentially from $125 thousand and flat from year-earlier.

Net income was negative $5.2 million, up sequentially from negative $6.4 million, and up from negative $5.7 million year-earlier.

EPS was negative $0.12, up sequentially from negative $0.23, and up from negative $0.24 year-earlier.

Guidance:

none

Conference Highlights:

"With GEN-1, we believe there is the potential for a break-through and we look forward to reporting comprehensive clinical results and translational research data from our Phase 1B OVATION Study at the ASCO Annual Meeting in June 2017," said Michael H. Tardugno, Celsion's CEO. "Celsion continues to make major progress with respect to our ongoing global, pivotal Phase III OPTIMA Study in primary liver cancer.  This ground-breaking study continues to attract interest and support from the medical community, international regulatory agencies, and research organizations like the National Institutes of Health."

The shareholder meeting on May 16 will be important, including a vote to reverse split the stock and to raise $25 million by issuing 20% more shares for up to $25 million. Both could get Celsion to a more positive financing environment, possibly providing cash through the first data readout for OPTIMA.

The OPTIMA Phase III study of ThermoDox plus RFA for liver cancer readout won't be until 2H 2018 [previously had said Q1 2018]. Should be at full enrollment around Q2 2018. NIH opinion is the chances of success are high. Highly supportive data from the Phase III heat study was presented in August, for a subset (the trial failed to reach its endpoints as a whole.) The Chinese regulators have indicated they could approve the therapy, pending positive data, without prior approval by the FDA or EMA. Vietnam will add 5 trial sites. "Chances of success are as good as it gets in our industry." Emphasized NIH support for the Optima study. Now over 50% enrolled.

The NIH is also partly funding an investigator-sponsored Phase 1 study of ThermoDox "in combination with magnetic resonance-guided high intensity focused ultrasound to treat relapsed or refractory solid tumors in children and young adults."

An NIH-supported preclinical study supported the possible use of ThermoDox for bladder cancer.

The Dignity study in Europe for Thermodox for breast cancer is ready to start except for financing.

GEN-1 Phase 1 OVATION Study for newly diagnosed, advanced ovarian cancer is fully enrolled and data will be revealed at ASCO in June. Data from first 12 patients presented in January showed 100% disease control and 75% complete response including 1 pathologic complete response. Early stage drug combination studies also showed strong results. Remains on track for an IND for a Phase 1/2 combination trial with Avastin.

Hopes to raise more cash on more favorable terms. Expects cash use to remain under $4 million per quarter.

Cash and equivalents ended at $4.5 million, flat sequentially from $4.5 million. In February raised $5 million from a stock offering. Cash used in operations was $3.1 million. $1.5 million note payable and $6.9 million accounts payable.

Total operating expense was $4.9 million,consisting of $3.5 million for R&D and $1.5 million for general and administrative expense. Other expense was $0.3 million.

Q&A:

Increased Optima study enrollment in China and Vietnam? China has over 50% of the world's HCC patients. The addressable market would be about 30% of newly diagnosed patients. The number of patients waiting to be treated their is overwhelming doctors. We need to enroll 200 patients in China to submit an NDA, as we understand it. We have 14 sites now, soon to be more. We are now over 50 patients in China, enrolling rapidly. Investigators there are very enthusiastic.

In Vietnam, we started later, partly to make up for the late start in China. It also is a highly underserved market. We got 2 sites up and 7 or 8 patients very quickly, should enroll a substantial number of patients. If approved, it would be a core market.

Endpoint is overall survival with .05 p. Could hit that with the first interim analysis, which will be done when a set number of deaths has occurred.

IL-12 has a short half-life, so administering it itself has no effect. High doses have serious side effects, including cytokine response syndrome resulting in death. So local administration is important. We watch for systemic exposure, and that has been minimal, despite seeing activity in the tumors. The suppression of T-reg cells is known from past studies, but it leaves a positive ratio of other T cells.

All Ovation patients are followed for progression free survival, regardless of level of disease.

For GEN-1, given the translational data, the plan has been to move to Avastin plus doxil. But continuing treatment might help prevent recurrence.

HEAT study sub groups, indication of curative effects? That did not come from us, but from opinion leaders. Including a pioneer in RFA. We did follow patients for over 3 years, and the Thermodox arm did have survivors at the end of that.

Pricing thoughts? We have thought about it, have more research to do, assuming progression free survival is the primary endpoint. Even a 4 month improvement in PFS would be valuable. We have talked about this with potential licensees. Pricing could be limited in economies where the standard of living is modest, but our manufacturing should still allow for good margins in Asia. You can think of it as a billion dollar drug globally if we hit our endpoint.

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