Analyst Conference Summary

conference date: August 15, 2017 @ 8:00 AM Pacific Time
for quarter ending: June 30, 2017 (second quarter, Q2)

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 $125 thousand year-earlier.

Net income was negative $4.9 million, up sequentially from negative $5.2 million, and down from negative $4.5 million year-earlier.

EPS was negative $0.79, down sequentially from negative $0.12, but up from negative $2.63 year-earlier.

Guidance:

Has cash through the end of 2017, but first data from Phase 3 trial data won't be until end of 2018. [wpm: recently (October 3, 2017) amended to Q1 2019]

Conference Highlights:

"We have also made great strides to advance our global Phase III OPTIMA Study evaluating ThermoDox in primary liver cancer, with clinical sites currently enrolling patients in 14 countries worldwide. In addition, we are pleased to report that the independent Data Monitoring Committee recently recommended continuation of the OPTIMA Study after their review of the safety and efficacy data for 275 patients enrolled in the study. Enrollment momentum continues to improve with the addition of new clinical sites in China and Vietnam," said Michael H. Tardugno, Celsion's CEO.

On August 7, 2017, announced that the independent Data Monitoring Committee (DMC) for the Company's OPTIMA Study completed a regularly scheduled review of the first 50% of patients enrolled in the trial as of April 2017. It was unanimously recommended that the OPTIMA Study continue according to protocol to its final data readout. At this time enrollment is over 60% complete, with completion (550 patients) expected in mid-2018.

The shareholder meeting on May 16 included a vote to reverse split the stock and to raise $25 million by issuing 20% more shares for up to $25 million.

The OPTIMA Phase III study of ThermoDox plus RFA for liver cancer initial readout won't be until 2H 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."

The median overall survival point for the original (failed) ThermoDox trial equivalent subset has still not been reached. ThermoDox has both fast track and orphan drug designation.

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 early data was revealed at ASCO in June. Data from first 14 patients showed 100% disease control and 86% objective response rate. Highest dose group had 100% objective response. A full data review will be done in September. Early stage drug combination studies also showed strong results. Remains on track for an IND for a Phase 1/2 combination trial with Avastin. New very strong translational data on CA125 & other markers gives further reason for optimism. Of seven earliest treated patients, six are still progression free.

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

Cash and equivalents ended at $3.6 million, sequentially from $4.5 million. No debt (paid off in June). Cash used in operations was $4.2 million. During the quarter raised $5.1 million from warrants, including $3.1 million repriced downward. After the quarter ended, in July raised $5 million from a stock offering.

Total operating expense was $4.7 million,consisting of $3.0 million for R&D and $1.6 million for general and administrative expense. Other expense was $0.3 million.

Q&A:

GEN-1 in post-surgery maintenance setting? The latest data is from the adjuvant setting, before tumor removal. That should tell us what would be the best use of GEN-1.

There is a suggestion that some immune cells are cancer-related and go untreated when the other cancer cells are killed by chemotherapy. GEN-1 could be effective against them.

Enrollment timing, first interim data? We have exceeded our enrollment rate target. It is possible we could do better that Q2, or at least early in that quarter, if we add new sites. Death rate is key to first interim data timing. It is at 118 events. 0.62 hazard ratio and P=0.05 to unblind the study. We could be courting success at 118 events. The current prediction is two quarters following full enrollment of the study we will be able to release first interim data.

China requirements? 100 pairs of Chinese patients. There is a question about whether Taiwan patients will count. China considers liver cancer a health emergency. So we can file in China without a report from the U.S. FDA, and they could even wave the 200 patient requirement.

GEN-1 so far had just one progression after 12 months. PFS is very encouraging, hope it is a predictor of overall survival.

The Children's Hospital study has not reported its first patient enrollment yet.

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