Analyst Conference Summary

conference date: March 26, 2020 @ 8:00 AM Pacific Time
for quarter ending: December 31, 2020 (fourth quarter, Q4)

Forward-looking statements

Overview: ThermoDox Phase 3 trial completed enrollment and the second interim data readout is expected in June 2020.

Basic data (GAAP):

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

Celsion released only full year 2019 fiancial data. Revenue was $0.5 million, R&D expense $13.1 million, G&A expense $8 million, net loss $16.9 million or $0.77 per share.

Net income was negative $ million, up sequentially from negative $5.5 million, and down from negative $ million year-earlier.

EPS was negative $, up sequentially from negative $0.25, and up from negative $ year-earlier.

Guidance:

Sale of net operating losses expected to fund operations into first quarter of 2021. Expects cash use in Q1 2020 to be about $4 million.

Conference Highlights:

Michael H. Tardugno, Celsion's CEO, said: "Our pivotal 556-patient global Phase III OPTIMA Study in HCC was fully enrolled in August 2018. We are now looking forward to the second of two preplanned interim efficacy analyses, expected in June 2020. Our OVATION 2 Study has completed enrollment of the first 15 patients in the Phase I portion of this 130-patient Phase I/II randomized study. Initial data at the 100 mg/m² dose cohort are consistent with impressive results reported from our Phase Ib dose-escalating trial (the OVATION 1 Study) in ovarian cancer. Patients treated in the three highest dose cohorts demonstrated a high percent of R0 (complete) surgical outcomes associated with significant improvement in overall survival."

The OPTIMA Phase III study of ThermoDox plus RFA for liver cancer is reported its first interim efficacy analysis in early November 2019. The second interim analysis is due around the first week of July 2020, after 158 patient deaths. The hazard ratio for success at 158 events is 0.70 (p=0.022), which is below the hazard ratio of 0.65 (p=.02)observed for the 285 patients in the Prospective Subgroup treated with RFA > 45 minutes. A final readout in 2020 will have the lowest bar for success and submitting an NDA. Median PFS for the OPTIMA Study reached 17.3 months as of August 2019. These blinded data compare favorably with median PFS of 16.8 months for the Prospective Subgroup treated with RFA > 45 minutes and followed prospectively for OS. Coronavirus produced only monitoring delays, should not affect timing of results. Starting to prepare the NDA so as to be able to submit within 6 months of a positive unveiling of data.

Celsion sold its Net Operating Losses (NOLs) to the State of New Jersey for about $10.4 million in cash, before the end of 2018. anticipates it will be able to transfer this current year credit for approximately $2.0 million prior to the end of 2019.

In February 2020 Celsion raised $4.8 million through a stock sale. Believe the operating runway now goes to mid 2021. In Q4 2019 received $1.9 million through the New Jersey NOL (net operating loss) tax credit program. In Q4 2019 Celsion established a Subsidiary in China.

On March 23, 2020, Celsion announced the European Medicines Agency Committee for Orphan Medicinal Products recommended that GEN-1 be designated as an orphan medicinal product for the treatment of ovarian cancer. GEN-1 previously received orphan designation from the FDA. In March 2020, the Company announced highly encouraging initial clinical data from the first 15 patients enrolled in the ongoing Phase I/II OVATION 2 Study for patients newly diagnosed with Stage III and IV ovarian cancer. The OVATION 2 Study combines GEN-1, the Company's IL-12 gene-mediated immunotherapy, with standard-of-care neoadjuvant chemotherapy (NACT). A comparison of 1b results to matched historical data approached statistical significance despite small number of patients. Talking with FDA about possible Fast Track and Breakthrough Therapy status.

In August 2019 the Journal of Vascular and Interventional Radiology published "RFA Duration Per Tumor Volume May Correlate with Overall Survival in Solitary Hepatocellular Carcinoma Patients Treated with RFA Plus Lyso-thermosensitive Liposomal Doxorubicin," which discussed the NIH analysis of results from 437 patients in the HEAT Study (all patients with a single lesion representing 62.4% of the study population). The key finding was that increased RFA heating time per tumor volume significantly improved OS in patients with single-lesion HCC who were treated with ThermoDox plus RFA, Thus, the NIH analysis lends support to the hypothesis underpinning the OPTIMA Study.

ThermoDox plus ultrasound for breast cancer study was approved to start in the Netherlands in June 2019.

Met with Chinese authorities in Q3 2019 to discuss potential for ThermoDox there. China has the largest HCC patient population, 75% of the world total. Is considering a compassionate use program there.

Cash and equivalents ended at $14.9 million, down sequentially from $18.8 million. Debt includes $5.9 million milestone earnout liability and $9.7 million in outstanding notes. Raised an addition $6 million in Q1. Expects $1.8 million NOL cash in Q2. Has an ATM and shelf registration to raise cash if necessary.

Total operating expense was $ million,consisting of $ million for R&D and $ million for general and administrative expense. Loss from valuation of warrant liability was $ million; interest and other expense net $ million.

Celsion continues to pursue non-dilutive sources of financing.

Expects to use abut $4 million in cash per quarter for the rest of the year.

Q&A summary:

GEN-1 lower v. higher doses, response rate R0 to OR? Combination v. Chemo alone? The ORR is not consistant with the R0 rate, but we are dealing with an immunotherapy. So take ORR with a grain of salt.

GEN-1 metadata hazard ratios v. p-values? Because these are small numbers p-values are not significant. We are looking for strong trends, which we do see in Hazard ratios. In the larger Phase 2 study we should see more consistant results. Other small studies have the same problem with not enough N to show statistical confidence.

Second interim, if positive? Does not see the COVID virus having an impact on timeline if results are positive. Will request a pre-NDA meeting with FDA. Hopes to take no more than 6 months from unblinding to NDA submission. Has Fast Track. Has been contacted by larger pharma companies about commercial opportunity.

OVATION2 enrollment timeline? Hospitals are impacted by COVID-19. Will go up to 25 sites, each enrolling a patient every 2 or 3 months. So about 12 month enrollment timeframe, but depends on if new sites are ready.

R0 resection rates, doses? 100mg/m2 is the maximum dose we are considering. That is where we planned to stop, it is a very large dose of plasmids. At the highest dose we are consistently seeing a high R0 rate, 7 of 9 patients. The surgeons are reporting the GEN-1 patients are better to resect. The safety looks very, very good.

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