Analyst Conference Summary

conference date: August 14, 2020 @ 8:00 AM Pacific Time
for quarter ending: June 30, 2020 (second quarter, Q2)

Forward-looking statements

Overview: ThermoDox highly likely failure; what's next? GEN-1 for ovarian cancer.

Basic data (GAAP):

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

Net income was negative $5.3 million, down sequentially from negative $5.1 million, and up from negative $5.9 million year-earlier.

EPS was negative $0.18, sequentially from negative $0.20, and down from negative $0.29 year-earlier.

Guidance:

Has enough cash to get to Q2 2021. Expects cash use in Q3 at $3.5 million.

Conference Highlights:

Michael H. Tardugno, Celsion's CEO, said: "In July 2020, we announced the randomization of the first two patients in the Phase II OVATION 2 Study. This milestone was achieved approximately five months ahead of our previously announced schedule. We have a very aggressive recruitment program and anticipate completing enrollment of 105 patients in the second quarter of 2021. Importantly, as an open-label study, clinical updates will be provided throughout the course of treatment including response rates and surgical resection scores."

Cutting expenses, including some employees, from the Thermodox program, in order to continue with the GEN-1 program.

The OPTIMA Phase III study of ThermoDox plus RFA for liver cancer is fully enrolled and reported its second interim efficacy analysis in July, which was essentially a failure, though the patients continue to be followed. The DMC's analysis found that the pre-specified boundary for stopping the trial for futility of 0.900 was crossed with an actual value of 0.903. The p-value of 0.524 for this analysis provides a high level of uncertainty as to the actual hazard ratio value, therefore, the DMC left the final decision of whether to stop the OPTIMA Study to Celsion. Celsion announced plans to continue following patients for overall survival (OS), noting that the unexpected and marginally crossed futility boundary, suggested by the Kaplan-Meier analysis at the second interim analysis, may be associated with a data maturity issue.

Claimed that post second interim data moved the futility p-value back to the good side. Admitted statisticians would be dubious about such an analysis.

In February 2020 Celsion raised $4.8 million through a stock sale. Believe the operating runway now goes to mid 2021. In April 2020 will receive $1.8 million through the New Jersey NOL (net operating loss) tax credit program. In Q4 2019 Celsion established a Subsidiary in China.

Beginning Phase 2 portion of the GEN-1 study and expects to complete enrollment in about 12 months, now using a synthetic control arm. In May 2020, the Company announced the final recommendations of the DSMB following completion of the Phase I dose-finding and tolerance portion of the OVATION 2 Study with GEN-1 in advanced (Stage III/IV) ovarian cancer. Based on favorable safety data from 15 randomized patients, the DSMB recommended that the Phase II portion of the OVATION Study proceed with the dose of 100 mg/m2. The DSMB also determined that safety is satisfactory with an acceptable risk/benefit, and that patients tolerate up to 17 doses of GEN-1 during a course of treatment that lasts up to six months. No dose limiting toxicities were reported in Phase 1.

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 $25 million, up sequentially from $15.7 million. Debt includes $6.0 million milestone earnout liability and $5.6 million in outstanding notes. In June raised $9.3 million with a stockoffering. Has an ATM and shelf registration to raise cash if necessary.

Total operating expense was $4.9 million,consisting of $3.0 million for R&D and $1.9 million for general and administrative expense. Interest and other expense net $0.6 million.

Celsion continues to pursue non-dilutive sources of financing.

Q&A summary:

GEN-1 manufacturing? Has been successful in reducing costs, now has multiple sources for components. Important because treating one patient may require 500 vials.

Data maturity issue timeframe? The easiest answer is to continue to follow patients until the outcome is clear. The death rate will determine that, could have an answer in Q4. If we become sure there is a data maturity issue, we may ask for a meeting with the FDA, and inform investors. Celsion has not yet talked to regulators about the data.

37% of liver cancer patients were enrolled in Vietnam and China.

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