Imunon Inc (IMNN) 2008 Q4 法說會逐字稿

Good morning and welcome to the fourth quarter and full year 2008 Celsion earning results conference call. My name is Janika and I will be facilitating the audio portion of today's interactive broadcast. (Operator instructions) at this time I would like to turn the even over to Mr. [Mateo Maled] Senior Vice President of FD

Thank you. Good morning, everyone, and thank you for joining us for Celsion's fourth quarter and full year earnings conference call. The call will be archived for replay beginning today at 2:00 PM and will remain archived until Monday, March 9, 2009. Replay can be accessed at 800-642-1687. Or 706-645-9291. The conference ID is 87627643. The call will also be available on the Company's website at www.celsion.com for 30 days after 2:00 PM today.

Before we begin, we wish to inform participants forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risk and uncertainties including without limitation, unforeseen changes in the cost of research and development activities and clinical trials by others, possible acquisitions of other technologies, assets or businesses, possible actions by customers, suppliers, competitors, regulatory authorities and other risks detailed from time to time in the Company's period reports filed with the Securities and Exchange Commission. With that said, I'd like to turn the call over to Michael Tardugno, President and CEO of Celsion. He will introduce the other speakers, give you an outline of today's call and provide some opening remarks. Michael.

Thank you Mateo. Good morning, all. Thank you for joining us and for your continued interest in Celsion. By way of introduction, Mateo is our financial communications advisor. He leads the Capital Markets practice in Boston for FD. As Mateo said, I'm Michael Tardugno, President and Chief Executive. I'm pleased to be here today with Dr. Nicholas Borys or Vice President and Chief Medical Officer, and Sean Moran, Celsion's Senior Vice President and Chief Financial Officer. Sean, as you may know, joined us in December of last year, in his short tenure I can tell you that he's really making a difference for the Company and on your behalf.

As always, we are here today because the opportunity to meet with you, to share our progress and to answer your questions as is a responsibility that we look forward to. Your questions are always welcome.

This is my 12th conference with you since joining the Company now two years ago. That averages about one call every two months. Together with our frequent stream of news releases, medical conference presentations and a redesigned and much more informative website, I hope that you will agree that the promise that we made to you to communicate more and more frequently is being upheld. Today again is a full agenda. Sean will provide comments regarding our fourth quarter and full year results including a detailed review of the P & L and balance sheet. Following which we will cover a number of topics, including an update on our global Phase III primary liver cancer trial, our pivotal Phase I, II recurrent chest law breast cancer study. Both of which, by the way, are showing much progress. Next we will provide a brief status review of liposomal Dox -- liposomal docetaxel and our active tumor targeting project. We will then have time for questions. Before going to Sean's comments, however, I have a few general comments that I would like to make, some of which may reinforce points made on earlier calls, but are important to those new to Celsion.

First, I'd like to say that I continue to be very proud of the accomplishments that Celsion and this management team have posted over the last two years. Repositioning your Company as a drug development enterprise, working collaboratively and successfully with FDA for clinical trials, carefully planning our costs and executing our programs, and building the quality CMC strategy are a few examples that have created value and a promising future. The effort and commitment of our employees is consistent with the promise of ThermoDox and our platform technology to provide a treatment option for cancer patients with significant need and the medical community that supports them. Quite frankly, it's a pleasure for me to be a part of this professional and results-driven team. It's because of them, we have been able to report meaningful progress on all key measures of success. I want again thank each for their dedication to our Company and our mission.

Our strategic initiative to study the potential of ThermoDox in combination with high intensity focused ultrasound to treat difficult cancers is progressing well. To accomplish this work, recall that we signed a join research agreement with Phillips, the premiere manufacturer of HIFU systems. The agreement provides that the funding for these studies will be principally borne by Phillips under their existing R and D program. Celsion is also amending our existing cooperative research agreement with the national cancer institute to incorporate experiments that may be of particular interest to Celsion.

So I want to report to date that our joint Phillips Celsion steering committee has met a number of times and narrowed our research focus it a few indications that appear to have a clear regulatory pathway. We have broadly defined the pre-clinical program necessary to file an IND. Feasibility work has been commissioned and is in progress at the National Cancer Institute, the goal of which is to establish HIFU heating characteristics that provide the best release and distribution of doxorubicin in phantom models that reflect the tissue type that we are interested in. We have identified two additional sites in Europe to conduct pre-clinical studies that will follow our feasibility work. And we have established a goal to have completed work this year sufficient to support a pre IND submission meeting with the FDA. If we are successful, this program has the potential to be a game changer. Imagine with me, if you will, non invasively locating and heating tumor tissues, delivering locally high concentrations of known effective chemotherapeutics. Envision a paradigm shift in medical treatment with the potential to control or eradicate difficult cancers. That's our objective and our vision.

Now I'd like to make a few comments regarding Japan. Work with our licensed partner, Yakult, is also progressing very well. Yakult's clinical team has been with us in Maryland for the last 10 days as they prepare for a submission to the Japanese regulatory authority to request that Yakult sponsored Japanese sites be allowed to join Celsion's global Phase III liver cancer trial. And that the data from the trial can be used for ThermoDox approval in Japan. If Yakult is successful it would be a very good outcome for your Company. As it would have a positive impact on enrollment, provide subjects for our trial at Yakult's cost and assuming we meet our end points, beat approval in Japan by approximately two years meaning sooner royalty revenue stream for our Company. The approach that Yakult is taking is a departure from the typical Japanese approval model, which is based on separate clinical studies conducted after approval was granted in the United States. While there are no guarantees that Yakult will be successful, we have been impressed with their confidence and with their abilities.

Now I'd like to remind you of the terms of our agreement. In return for an exclusive license for ThermoDox for the country of Japan and Japan only, Celsion will receive milestone payments at certain events including $2.5 million at signing of the agreement, which has been paid, $18 million upon market approval in Japan, the contract also provides for substantial additional one time payments if certain milestones are achieved. The approval of indications additional to primary liver cancer will trigger additional milestone payments, significant double digit royalties will be paid by Yakult on sales, royalty rate increases at certain sales milestones. All the data generated by Yakult to support Japanese approval are jointly owned and can be used by Celsion to support it's regulatory filings in the US and elsewhere. And Celsion will be the exclusive manufacturer and will sell ThermoDox to Yakult at a premium to its manufacturing costs. Both the Yakult license and our Phillips partnership provide, in our view, an unmistakable endorsement for our clinical approach and the potential of our unique and elegant heat sensitive liposomal technology. As I have said in the past, the development of these commercial relationships reaffirms our decision to reposition Celsion as an oncology focused drug development company and in doing so, built an enterprise focused on delivering shareholder value. Now Sean Moran will provide a detailed review of our financials.

Thank you, Mike. I'd like to give you a summary of our fourth quarter 2008 financial results.

Our net loss from continuing operations for the fourth quarter ended December 31, 2008, was $0.9 million, which is a decrease of $1.6 million over the net loss of $2.5 million for the fourth quarter of 2007.

For the full year 2008, our loss from continuing operations was $11.8 million, compared to $14 million in 2007. A decrease of $2.2 million.

In December 2008, as previously reported, Celsion received a $2.5 million up front non refundable licensing payment from Yakult for Japanese ThermoDox rights that was recorded in the fourth quarter as licensing revenue. Comparing quarter to quarter research and development costs increased $1.5 million, with $3.6 million incurred in the fourth quarter 2008 compared to $2.1 million in 2007.

For the full year, R and D costs increased $3.8 million to $12 million, compared to $8.2 million in 2007. These cost increases are attributable to clinical trial costs for the primary liver and recurrent chest wall breast cancer clinical studies, as well as drug manufacturing costs.

General administrative expenses were $456,000 for the fourth quarter of 2008. Which is a $72,000 decrease from the prior year quarter spending of $384,000. For the full year 2008, G&A expenses were $2 million compared to $5.3 million in 2007. A decrease of $3.3 million. The decreases in G&A expenses are attributable to a decrease in a crude contingent liability and also reflect the Company's success to operate in a leaner and more efficient manner.

As for liquidity, Celsion is in the very fortunate position, given our current financial resources, of not being forced to raise additional capital in these difficult economic times. We ended the quarter with $22.5 million of cash and receivables. As always, we continued to manage our spending very carefully and are always finding ways to do more with less. And are realizing cost savings at every opportunity. With that I'll now hand it back to Mike.

Thanks, Sean. Now I'd like to talk to you about our global Phase III primary liver cancer study. Let me start by saying while we are not quite where we anticipated being when we launched our study a year ago because patient enrollment has occurred at a somewhat slower rate, and I'm going to talk about that, than we had projected, we have made significant progress and continue to be optimistic based on recent trends and developments.

First some background. A year ago January we announced we reached an agreement with the FDA for our study under special protocol assessment guidance milestone by the way of which we are particularly proud as it sets us part as a Company having accelerated approval pathway. We also indicated that we had taken steps to initiate the trial. If February, of that same year, of last year, we announced that we'd have at least two sites up and running, in March and that our objective was to have 25 to 30 sites recruiting by the end of 2008.

Since then, I am pleased to report the following. We have clinical trial agreements or study approval in six of seven countries, we have CTA's, clinical trial agreements, in the US, Hong Kong, Korea, Taiwan, Canada and Italy. We now have 28 sites up and screening patients which is consistent with our last projection. Of those, Korea and Taiwan sites are meeting or exceeding our enrollment expectations. North American sites, however, have come on more slowly than anticipated and are slower in enrollment. Italy has five sites up and began enrolling patients in February. Our recent visit suggests that we will have a productive Italian trial once all sites are fully recruited.

Although we are awaiting for approval for the clinical trial agreement in China we are making progress. The Chinese regulatory authorities have completed their initial review and have requested answers to ten clinical questions to which we are responding, we don't see the answers as difficult. If there are no further inquiries, it is reasonable to assume that site initiation will begin later this summer. All in all, we expect to have between 35 and 37 sites enrolling patients by August. We have identified and qualified five rapid start-up sites in China and encouraged by the initial enrollment data in Italy. To date, recruitment is currently at approximately 80% of our most recent projections with 94 patients consented. Patient enrollment has been slower than we projected due in a large measure to the additional time required for site start up in Italy and to gain study approval in China. Based on the current status, we now project that patient enrollment will be completed by the end of the first quarter 2010. This projection is reflected in our latest internal expense plans and assumes CTA approval and site initiation in China again by later this summer.

Once again, I will say that completing patient enrollment is a priority focus for the entire clinical and management team and we have taken steps to accelerate enrollment. We are holding conferences and surveying the hepatology community. We are encouraging referrals with an aggressive clinical marketing program and Dr. Borys is personally meeting with investigators one-on-one in the US to identify opportunities to draw more patients into the study.

Now I'd like to make some comments on our Phase I, II recurrent chest wall breast cancer study. We recently issued a press release indicating that Duke investigators would be providing an update at the Society for Thermal Medicine for the Phase I study which is currently ongoing at Duke University Medical Center under the direction of Dr. Kim Blackwell. We expect the data will continue to show the remarkable evidence of clinical activity previously reported, and that ThermoDox in conjunction with hyperthermia has the potential to be an effective treatment option for patients with this devastating end stage disease. I will remind you Duke has previously reported that of the first data valuable patients in the study all showed clinical evidence or evidence of clinical activity and two of six patients in the 30-milligram cohort had a complete response. We expect that the investigators will provide data on six additional subjects at the STM conference including those in the 40-milligram cohort. Duke reports that the study is continuing and hopes to fully evaluate the 50-milligram dose before the fourth quarter. 50-milligram, as you may recall, if reached without dose limiting toxicity has been determined to be the maximum attempt at therapeutic dose for Celsion's Phase II study.

Now with regard to our study, based on the highly encouraging data that's been presented, Duke's current timing for their study completion and FDA's written support for our pivotal Phase II study we decided it was appropriate to move forward to initiate the trial. We are doing so with the following modification. The first three to six patients will been enrolled at 40-milligrams. Following the 40-milligram dosing, the DSMV, an independent monitoring board will determine whether the trial will dose escalate to 50-milligrams for completion or will be continued and completed at 40-milligrams. This Phase I, II approach mitigates the need to wait for Duke to independently reach the maximum tolerated dose.

We have moved forward aggressively to initiate our study and are pleased to report that we have two sites enrolling, the Florida Cancer Institute and the New York University Medical Center. And we expect to have four sites enrolling patients by the end of this quarter. These four sites will complete the Phase I portion. Concurrently, we have identified six sites, including the previously announced Cancer Treatment Center of America in Tulsa who will join the study for the Phase II portion. All sites have had pre-screening visits, (inaudible) contracts have been signed, and we are supporting the study with newspaper ads through a third party, direct e-mail contact with over 2,800 patients and with our promotional presence at major conferences. We are hopeful have the first patient on the study very soon. More importantly, however, we believe that we can fully enroll the study by the end of the first quarter 2010.

Now I'd like to make some comments on product development. But before doing so, I want to remind you that our immediate and near term objective is to develop new products through feasibility only, with the intent of demonstrating the platform capability of our heat sensitive liposomal technology. So for liposomal docetaxel, we have established the stable formulation, completed two small animal studies both demonstrating a statistically significantly tumor inhibition effect when compared to both free docetaxel non heat sensitive liposomal formulation, we have complete our technology transfer from the research lab facility to our labs. Results were reported at the liposomal days conference last June, in Tokyo, by our Dr. Wei Ping Yu the abstract are posted on our website for your review. Our first batch of product was manufactured in a GMP facility in September and is being used in our pre clinical studies. We have initiated refining studies to determine the effectiveness of our formulation on three human cancer strengths. The results from the first protocol are in, showing a statistically significant tumor inhibition advantage over all doses -- at all doses when compared to the negative control. The positive control showed an advantage to liposomal formulation however with a 60% complete response rate. That said, the obvious anti tumor effect of our formulation has encouraged us now to complete evaluation on the two added cell lines over the next four to five months, and when those results are in, we will be sharing them with you.

Now to our active tumor targeting program which uses a peptide that has an affinity for epidermal growth factor receptors is undergoing a series of definitive titrating experiments. The early outcome of which have been encouraging. Just as a reminder, early invivo targeting studies have been going positive using a human cancer cell line experiment, results are suggestive that the ligand, in fact, is attracted to the EGF receptors in higher concentrations in ThermoDox alone without the ligand. Concentrations around the cells measured by fluorescents are two to three times greater than that of the control.

In a second invivo experiment, however, we did not show a tumor inhibition advantage over this higher concentration at comparable dosing. So then, as I mentioned in October, a set of experiments have been conducted to determine if lower concentrations of the ligand associated liposome will produce results equivalent to higher doses of the non peptide ThermoDox. Now, the early read on the results support our hypothesis. The data suggests that a one-third dose of the ligand associated liposome provides tumor inhibition equivalent to a full, and I say full in quotes, dose of ThermoDox.

Now, we have to look a little bit more closely at the data but at this point I'm reasonably confident that there is the potential for a safer potentially lower toxicity version of ThermoDox. And this would be a very positive outcome indeed. Just remember though, this is an R and D project and there are feasibility studies. But that said, the results are encouraging nonetheless. A few more comments before going to questions.

In closing, your Company is sound, and we are executing against our plans. We have committed ourselves to delivering not only on our promises, but also against the milestones that have reduced our development, risk, substantially funded our ThermoDox clinical program and have provided a clear regulatory pathway. We have stabilized and focused your Company and built a strong clinical capability.

Last June we received a second payment from Boston Scientific of $15 million for the sale of Prolieve. We fully expect to receive the third and final payment of $15 million this June. As we have said, we have the cash to substantially complete a pivotal trial to a point where, depending on the results, we will file an NDA. With the initiation and potential for rapid completion of our pivotal RCW trial, we would like to be more definitive with regards to the use of our cash.

So going forward, we will describe the milestone as based on our current plans and projections, we believe that we have cash sufficient to complete enrollment for both HCC and RCW pivotal trials. Second, to open a backup ThermoDox manufacturing site. Third to complete the CMC studies required to support an NDA filing and fourth to complete our feasibility assessments for docetaxel and the active tumor targeting formulation.

We are fortunate, as Sean said, not to be forced to seek capital during this very difficult economic period that sets us apart from many biotechs or biopharma companies whose balance sheets are such that they are facing what I would characterize as egregious terms or worse to raise needed funds. Our fundamentals are solid and we will continue to work hard to deliver and build shareholder confidence in value. With the proper evaluation of our Company as our primary responsibility and one that I take very seriously. So now I'd like to ask you -- we'll open this to questions, and I'd like to ask you to limit them to not more than two in the interest of time. So, operator?

(Operator instructions) The first question comes from Holt Faircloth an individual investor.

Good morning, Holt.

Your next question comes from Chrystyna Bedrij from Griffin Securities.

Good morning, Michael. How are you? Congratulations on your progress. Thank you for taking my call.

Thank you, Christina.

Just a quick question. Couple of questions. And I'll keep it short. Just I'm not sure if you covered this. I know you covered the status of the sites, for liver cancer. Did you cover the sites and maybe you can just review it in terms of sites and timing on the enrollment of the Phase II breast cancer trials?

Yes. We announced in our recent press release that both New York University Medical Center and The Florida Cancer Institute are sites that had been initiated and are currently enrolling patients. We have two additional sites that we will add before the end of this quarter. We haven't identified them as yet. Once we have received IRB approval, we will do so, Chrystyna.

Now, in addition to the four sites that will complete the Phase 1 portion of the study, once that's completed, the Phase II portion will include six additional sites. We'll have 10 sites enrolling across the United States that we've been very strategic about locating geographically. As you know, this is a small study population. And making sure we have broad geographic distribution with our investigational sites we believe is important to making sure that we have a rapid enrollment. I can add only one more thing to that is for the Phase II portion we have already identified one of the six additional sites. That's The Cancer Treatment Center of America in Tulsa, Oklahoma. They will join as soon as the Phase 1 portion is completed.

Excellent. That's great. I'm glad to hear that. Just one more quick question. Are you negotiating with other companies to support the marketing in additional geographic areas? I'm mean your continuing, I'm sure you are doing that, but just if you can comment.

Sure I can. That is a good question. So our stated strategy is to license ThermoDox to qualified, quality pharmaceutical companies who have demonstrated a focus in oncology specifically. We completed an agreement with Yakult, as we talked about. We have seen an interest, although I wouldn't characterize them as negotiations yet. But we have seen a very genuine interest that is resulting in due diligence, by other companies. I hesitate to give you the number, because we are, well it's a little sensitive because we have two companies that are conducting or planning to conduct due diligence. And we don't want to give away our hand too soon I think in terms of the overall expression of interest. So there is a lot of activity in that regard. And as you know, that kind of activity creates a lot of work on our part.

Yes.

I mean, we are delighted to have that kind of work, frankly.

Excellent. Thank you. Delighted in your progress. Appreciate it.

Thank you.

Your next question comes to Keith Markey from Griffin Securities.

Good morning, Keith.

Good morning Mike. Good morning, Sean.

Good morning.

I have a couple of questions about your budget. Could you give us the R and D budget for 2009 and your expected burn rate?

Let me talk about the burn rate. Which I don't like to, Sean was -- when he joined us, called it the burn rate. I have been very reluctant to call it that. Because we don't think we are burning cash. We are making investments to create shareholder value. So if you'll pardon my repositioning of your question that way.

No problem.

So the way we have looked at our cash balance and our future expenses, is for the most part, the majority of our expenses are tied to our clinical trial program. And the majority of those expenses are, occurred through our relationship with C R O's. We have constructed the majority of our costs with our C R O's to be paid on a milestone basis. So as we make progress in our clinical program, the contract research organizations are paid. I think that, the nature of those relationships, or those agreements, are kind of unique, frankly.

But it allows us to have some confidence that we can progress our studies, independent of specific time frames, in a way that gives us confidence that we have the cash to reach the important milestones.

So that said, if we currently have a cash balance in receivables of about $23 million.

$23 million.

We believe that in our current enrollment projections, and that is to complete enrollment in both the HCC and the RCW studies, we expect to complete it by the end of the first quarter of 2010, we have enough cash to get us there.

Fantastic. That's great. Will Japan's entry into your global liver cancer trial affect your expenditures much? Perhaps by lowering those? Your cash needs?

Yes. The answer to that is clearly yes. I just want to give a little background on that.

You recall that I mentioned that the traditional approach for a Japanese company to gain approval for a licensed end product from the west or from a US company is from a US company to gain approval in a major market like the US or Europe. And then for the Japanese company to follow with bridging studies and an application to the MHLW for approval. That strategy or that approach is the basis of our contract. Yakult, in cooperation, actually with Dr. Borys, had put together a strategy that takes advantage of a recent interest of the Japanese government to bring novel therapeutics into Japan sooner because the traditional approach creates about a two-year delay. Yakult is intending to take advantage of that, by making an application to MHLW, to join our Phase III study.

If they are successful, I want to say if, although I don't believe they would be making this much of an effort if they didn't believe they could be, but if they are successful, the patients that they recruit, they will pay for. Those additional subjects will off set costs that we had planned to incur for an equivalent number of patients recruited elsewhere. So the net effect would be to reduce our costs one for one.

That's fantastic. Great. Thank you very much.

I kind of look at it as a non dilutive way of advancing our programs without the need for external cash.

Clearly, and it sounds like it might even accelerate the overall enrollment?

It could, it depends on the response from MHLW and how quickly Yakult is able to bring up sites.

Thank you very much.

Thank you.

Your next question comes from Holt Faircloth, individual investor.

Good morning, Holt. I guess we lost you first time through.

Good morning, gentlemen. Evidently so. Couple of easy questions, both concerning the RCW trial.

We like easy, Holt, we like easy.

These are easy. First, what is the odds of a presentation this year at ASCO 2009?

I think the presentation for ASCO 2009 is not going to be likely, because, number one, the newer data from the Duke study is going to be presented at the site of Thermal Medicine Conference. So, we tried to submit that data to an audience of people that are primarily interested in heat treatments. And that would give us a good base for our future RCW site recruitment, so we made a strategic decision on that.

Okay. Second question, and this would go back to Dr. Borys also, and the question is, recent data that suggests that anthracyclines are only beneficial to breast cancer patients who over express her two, do we have biomarker profiles on Duke's 30 milligrams cohorts and early ones to see whether those patients who got the complete response were? Her two positive?

That's a very good question about that. I am familiar with that data but I'm not sure if it really applies to ThermoDox, because in our case I think we overwhelmed the her two defenses with the concentration of doxocin that we're delivering to the patients. But, it's an area we are going to look at some more and perhaps see some more data on that later on.

All right. Thank you very much. I'll just end it by saying you guys are doing a fabulous job. I really appreciate it I do see progress coming after many, many years. And I'm very optimistic. Thank you.

Thank you all.

Next question comes from Bruce Watts from Watts and Associates.

Good morning. Likewise congratulations on what I would describe as a very prudent job you are doing in managing Celsion. I think you are genuinely getting the most bang for your buck. And that's you know very critical, and good job.

Thank you.

A couple of questions. One of them immediately relates to that. Having said that, and I genuinely mean what I said, where, if things did stretch out for some reason, in this current world economy, certainly anything can happen, are you establishing relationships with lending banks or some sort of alternatives, should you need additional funding?

Yeah, sure. That is correct, Bruce. We have an ongoing relationship with investment banks. We have a strategy of getting the word out on the Company, we're meeting with analysts and bankers. We'll have a contingency plan in the event that we need it, but as Mike had mentioned, we have cash to get us through enrollment.

I would think too, that it's in Phillips and Yakult's best interest to be in your camp in that regard. But I wanted to ask the question because I think it's important. You never can tell.

We'll just add to that just as a general principle. I think it's very important for us to work aggressively to live up to the commitment we made to our shareholders when we sold Prolieve. We said we would accomplish five or six things with the sale of Prolieve. You recall we realized about $45 million net from that. What we said we would accomplish are these. I'm going to be very quick about it, but I think it's important to talk about this. One, was we'd be able to generate enough data from our HCC study to be able to determine whether or not we had enough evidence of clinical of efficacy to support an NBA filing. Second, we said we would be able to initiate our RCW study. Third, we said we'd be able to have confidence that we have quality manufacturing in CMC capability. Fourth, we said we'd conduct some feasibility work to demonstrate that our technology is indeed a platform. And I think fifth, we said that we'd conduct an honest and earnest physical development program. We are delivering against all of them.

If we have to raise capital, to achieve any of those objectives, I will feel like we've let our shareholders down to some degree. Although, like every other company in this very difficult economic time, it's hard for us to have a crystal ball on the future. We're dealing with institutions, that are themselves under some financial pressure and they want to negotiate higher terms for clinical studies and we would have anticipated. CRO costs, are for the most part, fixed in our contracts, but they can waver some. But overall as a principle, we are committed to delivering those five or six commitments that we made two years ago. If we are successful, if ThermoDox continues to show the progress that we see over the last year in the presentations made by our investigators, and we have a pharmaceutical industry that continues to be interested in licensing oncology drugs, and frankly I'd say the current financial environment even the big pharma companies are being very careful about investments they're making to licensing products or make acquisitions, it's a tough environment. But if we are successful there, frankly, that would be the most productive way to ensure that we have funds to continue to grow your Company.

Sean points out we are pretty prudent guys. I think are reasonably experienced. So having contingencies is very important. And we will make sure that we do that. Because in the end, we have to make sure that we have a Company that is sustainable in its mission to deliver advances in oncology-focused drugs.

I'm certainly confident you'll continue to get the bang for the buck, although as someone once said to prophesy is very difficult, especially with respect to the future. Second question. It would be very useful if you could provide a transcript of your conference call. I think FD could handle that. One place you could turn is seeking Alpha, which is associated with Barons, I'm sure FD is familiar with them they publish a very large number of company transcripts on their website daily. And that would simply save those of us who are very, very detail oriented from listening to the recording ten times in order to create our own transcript.

Okay. Well that's a good suggestion. We'll give it some thought Bruce.

Thank you.

Thank you.

(Operator instructions) Next question comes from Phillip Wellman, investor.

Morning, Phil.

Hey, Mike, how are you doing?

I'm good, thank you.

You consistently said that you will have adequate resources to get to where we need to be with the product. Does that include possible up front licensing that could be coming from Italy or other regions of the world?

Yeah that's a good point. You know our current projections for expenditures, assume that we have not taken any expenditures on our cash balance, assume that we have not taken any additional payments as a function of licensing our product. So, if we are successful in a accomplishing a licensing agreement with an up front payment, that would be an offset.

My second question is, you said there were two companies that were conducting due diligence. Are they for different regions of the world? Or are those two companies for the same region or countries?

I'm not going to share that information for you, Phil I'd love to, but,

That's fine.

I think it's important for us to maintain a competitive environment around a product.

I just didn't know if you had two for the same region or if there were two in total.

Yes, there is actually more interest than two. I'm comfortable in saying two because we progressed to a point where the, taking an active role now and digging deeper into our science and our technology and our clinical programs and our regulatory filings.

You answered my question.

Okay. Thank you.

Thank you.

At this time there are no further questions.

Maybe we should just wait one more minute.

(Operator instructions)

You do have a follow-up question from Bruce Watts, Watts and Associates.

Bruce, you only get two.

Oh. There weren't any. So you were going to end the call. That is the reason why I asked for more.

Okay. One more.

Can you comment further on the status of the applicability of ThermoDox and your other technologies to illnesses beyond breast cancer and liver cancer?

We really haven't done a lot of work in that regard.

Yeah. I think that's an area that holds future promise. As you know in our Phase 1 studies we looked at metastatic colon cancer cases which showed interesting data. I think going into the future a lot of it will rest on our data that we generate from our breast cancer studies and from our ACC studies and use that as a springboard into potential other indications.

I can add also if you take a look at our website, you'll see we have a number of scientific advisors now. And that Dr. Borys is going to provide some leadership in exploring the range of, well into the future. The range of future opportunities that might be available to your Company. Okay. Next question.

Your next question comes from Vincent Dempsey, private investor.

Maybe I didn't catch it, at one time I thought you talked about a licensing deal in Italy. What is the status on that?

No, I said it was a priority. I didn't say a licensing deal. I said in the past that our priority, our next priority, if we had to prioritize deals, it would be Asia first, largely because that's the highest concentration of primary liver cancer patients in the world, with Japan being at the top of the list, because we believe that given the size of the HCC population and the affluence of the country, that could be one of the, in terms of dollar revenue, one of the largest markets in the world. As a second priority. Priority. Italy was a focus, again because there's a large concentration of HCC patients in Italy and because we are conducting a clinical program there.

Okay. So it is something you are looking at, is that what it comes down to?

What it comes down to, if we had to prioritize our interest, that's it. We are a little bit more opportunistic than that, frankly Vincent. If there was an interest in a region other than Italy at the moment and it was more promising and we thought it was the right company, we certainly would pursue that.

Okay. Okay. So you are basically going to do what is best for the Company and it doesn't matter in terms of region?

Yes, sir. What's best for the Company and the shareholders.

Okay. Here's the other question. Do you see anything in the near term the next three to six months that might move the stock in a forward direction?

Well , I hate to comment on that. We are making progress all the time. As news becomes available we're happy to share it with you. I just out lined in my comments a number of milestones that we think are important for the Company and to communicate with our shareholders. Completing the Phase 1 portion of our RCW studies is an important milestone. Initiating the Phase II portion of our RCW studies is an important milestone. Gaining clinical trial agreement in China and enrolling patients there is an important milestone. If, and I say with a big if, Yakult is successful in their request to join our Phase III study with Japanese sites, that would be a very important milestone.

Okay. I appreciate all the work you are doing and continued success. Thanks a lot.

Thank you.

Your next question comes from Thomas O'Brien with Catalyst Financial.

Guys, Mike, Sean, how are you? You just basically answered my question. I was just going to circle back to the your internal assumption of bringing both HCC study as well as RCW study to conclusion with internal funds. And what sort of impact, if you got a favorable decision from Yakult, what sort of impact that would be on that cash. And your ability to maintain, that healthy balance sheet that we like to see.

Yes. Let me just correct one of the points you made, Tom. Those are both good questions. We did not say that we had the funds to conclude our studies. We have the funds to enroll our studies.

I beg your pardon. Enroll. I beg your pardon.

That is a big difference.

Yes yes.

We have to follow patients in the HCC study, for example, to progression and then continue to follow them to survival. It is a little clearer in the RCW studies that enrollment, completing enrollment within a relatively short period of time translates into completing the study, because the end point is a durable, local complete response. Which is a valuable in about 45 days following the third treatment, second treatment.

Yes.

So that completing enrollment of the RCW study, within a number of months thereafter a reasonable prediction, we're able to determine whether there has been a response or not. With regards to Yakult, we've kind of idealized what we think the enrollment potential is in Japan. I can't share that with you. Because I think that's a topic that Yakult and Celsion have ought to agree to before we make any kind of public number. But for every patient that Yakult would enroll in the study, it would offset one for one Celsion's need to enroll studies in other countries. Then the cost the actual cost per patient would be borne by Yakult. As opposed to being financed by us. So we would cheer enrollment frankly in Japan. We think our meeting with investigators in Japan that there's a great potential for an efficient study in that country. I know it doesn't specifically answer your question.

I know. It's a bit of an unknown. But again, it could be one of those benchmarks that the previous caller had asked about. You basically have answered my question. Thanks. I'll talk to you off line about, I have a couple of other thoughts on the well, we'll talk off line. Thanks, guys. Good job.

Thank you.

Your next question comes from Mark Smith, private investor.

Morning, Mark.

Morning. In an earlier call, I think y'all mentioned that it's become more difficult for the industry in general, and slower to get people enrolled for trials. And I was wondering if there is a particular reason for that? Happening? And do y'all see that changing at all? Or also, as you get further along, does it tend to speed up?

There's probably multiple reasons, do you want to make a few comments Nick?

Sure. And it varies from region to region. As Mike mentioned earlier in the conference call, the US has been a little difficult in getting started and a little bit slower in terms of getting patient recruitment. Much of that is for a number of reasons.

Number one, just competing with cancer patients in general. There are a large number of cancer trials that are ongoing. Number two, certain HIPPA regulations make it difficult for patients to be approached and consented to take part in trials. And thirdly, working at large university institutions, you have to go through a huge bureaucracy in order to get patient notifications out, through the IRB's to get notices out. We have been advertising in newspapers for example. Those have to be all reviewed and it all takes time in the current system, particularly in the US. So it is a large number of reasons that makes it a little bit difficult to get our trial information in front of patients and working with the different institutions, particularly in the US. So we tried to customize our approach to recruiting patients on a site by site basis. We are hoping that, that will bear good fruit.

Thanks a lot. Great job.

Operator, we have time for just one more question.

Your final question comes from Bob Greene, private investor.

Good morning, Bob.

Okay, two quick ones, yes, no. All the liver cancer sites that you have up and running are they going to be acceptable to the FDA numbers? And two, Japan, if they accept the rest of the trial for their information, would that equal to what you are doing with Japan coming in to the numbers for the rest of the evaluation?

Yeah, I think the -- I'll just answer that. The first question I'll ask you to clarify the second. The answer to the first question is yes. We would not open or support an investigational site unless we were absolutely confident that they had good investigational practice or GCP, good clinical practice. We are confident that the investigator was experienced and they had the staff to be able to support the study. In addition to that, we monitored the progress of the study on a frequent basis. If we identify any issues, and we haven't yet, we would remediate those issues very, very quickly. So can you repeat your second question?

The deal with Japan, trying to get their authorities to accept the rest of the trial sites into their information, would that balance out with what they are trying to do reverse? In other words, can all of the trial sites be accepted into the Japan trial?

Yes. That's part of the question that will be posed to MHLW. And the question is essentially, will the data from the global Phase III trial including the Japanese sites be acceptable to the Japanese regulatory authorities for an approval or an NDA application. So we don't have the answer to that question yet. With that question, will be asked by Yakult when they meet with P.M.D.A. later this year.

It seems like that would be a balance if it is good going one way it should be good going the other. That's going to help both sites.

Absolutely. That is the logic that we think will prevail.

Thanks, much.

Okay. Thank you. So a couple of comments on behalf of Dr. Borys and Sean the rest of the team here, we continue to appreciate the support we get from our shareholders. Thank you very much for your continued interest. And I can promise you this, in return for that, you get from us our very best. We look forward to speaking to you very soon. Thanks much.