Analyst Conference Summary

conference date: August 14, 2018 @ 8:00 AM Pacific Time
for quarter ending: June 30, 2018 (second quarter, Q2)

Forward-looking statements

Overview: Clinical-stage company has two cancer therapies in its pipeline. ThermoDox Phase 3 trial expected to complete enrollment in Q3 2018, with interim efficacy data in Q2 2019.

Basic data (GAAP):

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

Net income was negative $8.2 million, down sequentially from negative $4.5 million, and up from negative $4.9 million year-earlier.

EPS was negative $0.46, down sequentially from negative $0.25, but up from negative $0.79 year-earlier. [but not year-earlier had far fewer shares, 6.6 million]

Ending diluted share count was 17.7 million.

Guidance:

Has cash to operate into Q3 2019. Believes will use about $4 million in cash per quarter in 2018.

Conference Highlights:

Michael H. Tardugno, Celsion's CEO, said: "Celsion continues to make significant progress with our two ongoing clinical development programs for ThermoDox® and GEN-1. We expect to complete enrollment in our 550-patient global, pivotal Phase III OPTIMA Study in primary liver cancer and initiate patient enrollment in our 130-patient Phase I/II randomized OVATION II Study in newly diagnosed patients with ovarian cancer during the third quarter,” said Michael H. Tardugno, Celsion's chairman, president and chief executive officer. “We have a strong balance sheet and are well positioned financially to continue to advance these key programs, with several important announcements for both of our clinical programs expected over the next six to 12 months, including the final progression-free survival data from our OVATION I Phase IB clinical trial of GEN-1 and the first pre-planned interim analysis of the ThermoDox® Phase III OPTIMA Study." Intends to retain a strong balance sheet to get to critical data points.

The OPTIMA Phase III study of ThermoDox plus RFA for liver cancer initial interim readout should be Q2 2019, but has a relatively high bar for success. A second interim readout is also planned, with a lower bar, then a final readout in 2020 with the lowest bar for success and submitting an NDA. Enrollment should complete in Q3 2018. NIH opinion is the chances of success are high, based on analysis of the data from the HEAT study. ThermoDox has both fast track and orphan drug designation. More analysis of the failed HEAT study was released, indicating the OPTIMA study of a sub group could succeed.

The Data Monitoring Committee recommended continuing the study in April, based on analysis of 75% of patients to be enrolled. Analysis of blinded data put PFS at 20.8 months, in line with the intent-to-treat group subgroup analysis.

In July a new Phase 1 ThermoDox study was published in The Lancet Oncology with PFS of 20.8 months, supporting the hypothesis for a successful Phase 3 outcome.

Met with China FDA, which confirmed that an NDA in China can be filed using survival rates, which should be a lower threshold for success than OS (overall survival).

GEN-1 Phase 1 OVATION study for newly diagnosed, advanced ovarian cancer final data was announced at the AACR Special Conference. Results were positive with no dose limiting toxicity. Of fourteen treated patients, 2 had a complete response, 10 a partial response, and 2 had stable disease. The highest dose cohort had PFS of over 24 months (up from 21 months at last report), compared to historical controls of about 12 months. Opening a 90-patient, randomized Phase 1/2 trial, OVATION II any time now, with the change that patients may continue receiving therapy after debulking surgery. The Phase I part of this study will be to allow for a higher dose than in the OVATION study. First data should be available towards the end of 2018. Phase 2 could start in Q2 2019.

Celsion was added to the Russell Microcap index in June.

Cash and equivalents ended at $26.1 million, up sequentially from $20.8 million. Cash used in operating activity ws $ million. Added $10 million in debt in late June, from Horizon Technology Finance, interest only for 24 months.

Total operating expense was $8.1 million,consisting of $4.6 million for R&D and $3.5 million for general and administrative expense. Other expense was $0.2 million. Includes $2.5 million in non-cash stock option expenses.

New Jersey economic development board will buy New Jersey base NOLs, which will be a non-dilutive source of cash of up to $15 million in operating cash. Also still has $11 million available in ATM from Cantor Fitzgerald.

Q&A:

Operating expense, R&D run rate? Excluding the non-cash charges, we believe should run about $4 million per quarter. Despite completion of Optima enrollment, should remain roughly flat.

PFS data, highest dose cohort? That would be the majority, but some more in the middle doses.

NIH post hoc analysis? We talked to them, they did not identify the journal, said it would be submitted shortly.

How can you be on track in Ovation 2, given the delay in starting? We are adding sites, we don't have a crystal ball. We did have sites up and running in June.

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