Imunon Inc (IMNN) 2010 Q1 法說會逐字稿

Good morning. My name is Augusta and I will be your conference operator today. At this time, I would like to welcome everyone to the Celsion Corporation's first quarter 2010 shareholders conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions).

I would like to now turn the call over to Lee Stern of Trout Group. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us. This call will be archived for replay beginning today at 3 p.m. and will remain archived until May 11, 2010. The replay can be accessed at 888-203-1112 or 719-457-0820. The conference I.D. is 2068492. The call will also be available on the Company's website at www.celsion.com for 30 days after 3 p.m. today.

Before we begin, we wish to inform participants that 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 risks 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 periodic reports filed with the Securities and Exchange Commission.

With that, I'd like to turn the call over to Michael Tardugno, President and CEO of Celsion. Michael?

Thank you, Lee, good morning to all and thank you for joining us and for your continued interest in Celsion. I'm joined today by Timothy Tumminello, Celsion's Controller and Chief Accounting Officer, and Dr. Nicholas Borys, our Vice President and Chief Medical Officer.

We are delighted to be with you this morning to update you on our progress and answer your questions. Since our last conference call, as noted in our public announcements, our Company has made much progress.

For today's call, Tim will provide comments regarding our first quarter results including a high-level review of the P&L and the balance sheet, following which I will cover a number of topics, including our progress on our global Phase 3 liver cancer trial, and an update on our Phase 1/2 recurrent chest wall breast cancer study; make a few comments then about our joint research agreement with Philips, and then we'll have some time for questions.

Before I turn the call over to Tim, I have a few introductory comments. First, that I'd like to sincerely thank Celsion employees for their commitment and all of their hard work, particularly our clinical and CMC staff. Over the past few months, they have either been on the road with our clinical investigators or on the phone at all crazy and odd hours, ensuring that our HEAT trial gets the attention that it deserves.

I commend them for their efforts. And every day I'm reminded of the pleasure it is to be part of this team. Again, they have my thanks and on behalf of our shareholders, I'd like to extend our gratitude.

Second, I'd like to share my view of the successful R&D day that was held in New York in February -- the primary subject of which was the global HEAT study. We heard from Professor Richard Finn, medical oncologist at UCLA Medical Center, who spoke generally about HCC treatment options and where ThermoDox will fit if approved. While Professor Ronnie Poon, Professor of Surgery at the Queen Mary Hospital in Hong Kong, who reported in our Phase 1 liver cancer trial results, and his view of the support that they provide for our Phase 3 trial.

We then heard from Professor [Ricardo Lonchioni] from the [PC] University Medical School, who shared his view of the current and future role of interventional procedures for treating HCC, and the expected impact of ThermoDox in combination with radiofrequency ablation.

And we were delighted to be joined by Professor David Needham, PhD, Mechanical Engineering from Duke University. ThermoDox's investor, Dr. Needham, gave us an overview of our underlying technology and the reasons to believe that our drug platform and ThermoDox's potential in particular is a potent anticancer therapeutic.

Just to give you a few of the summary comments as I noted them from the presentation -- first, ThermoDox's distinctive heat-activated platform technology is highly effective, delivering locally high concentrations of drug with heat. Its clinical activity is well-established in liver and breast cancers.

Second is hepatocellular carcinoma or primary liver cancer is a serious global problem, with over 650,000 incidents and globally growing at 5% annually. Mortality is high and treatment options are limited for those who have this form of cancer.

Third, that ThermoDox is a first-in-class cancer therapy. It offers a curative potential for the millions of HCC patients who are eligible for radiofrequency ablation.

Fourth, that the promising Phase 1 trial results are being presented and discussed at international medical meetings and conferences, suggesting enhanced efficacy with favorable safety profile.

And the last point I'd note for you is that the ThermoDox treatment paradigm takes advantage of a multi-modality approach to cancer treatment, which does not require a change in medical practice to [dwell with pro] strategies and guidelines. All in all, I guess my summary comment would be that we are well-positioned with a promising, potentially one of the most significant new drugs for arguably the largest unaddressed cancer in the world.

I'd also note that following our R&D event, Professor Poon discussed Phase 1 results at a press conference that he initiated in Hong Kong. He made some very impressive observations, and I'll try to retrieve them here; but a copy of this presentation is available on our website. I would invite you to view it.

Before I turn the microphone over to Tim, I have a few comments that is background on our financials.

Our spending is on plan. We finished the first quarter with approximately $10.5 million in cash and equivalents. Our low cash consumption reflects the actions that we took last year to strategically reduce expenses. Our cash balance had the immediate effect of fully funding current operations through 2010, and that includes our Phase 3 HCC study, our Phase 1/2 recurring chest wall breast cancer study, our continued CMC work, and our joint research with Philips to evaluate high-intensity focused ultrasound in combination with ThermoDox.

This financial runway is what we promised following our capital raise last September. As for future financing needs, our strategy, as I've said before, and approach remain unchanged. We will always take to find the most non-dilutive means to raise capital, including commercial licenses for ThermoDox, where the turns are attractive, and represent long-term value for the Company and our shareholders. In that regard, we continue to believe that a second license agreement for ThermoDox will be completed in 2010.

And we will always look for events that have the potential to minimize dilution or that can be accretive in order to enhance shareholder value. In the meantime, however, the Company will continue to progress its research programs and will work to make sure that news flow proper will reflect our accomplishments and advances in bringing ThermoDox to market through the rigor of well-executed clinical programs, and a well-defined regulatory pathway, which as you may know, has been established with the FDA through our SPA for our Phase 3 trial, and with written agreement for our pivotal Phase 1/2 recurring chest wall breast cancer study.

Now with that, I'll turn it over to Tim, who will cover our first quarter financials. Tim?

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

For the first quarter ended March 31, 2010, Celsion reported a net loss from operations of $4.6 million compared to a net loss from operations of $3.6 million for the same period in 2009. Cash used in operations totaled $3 million in the first quarter of 2010, which is comparable to the first quarter of 2009.

In the first quarter of 2010, the Company recorded a $1.6 million non-cash [warrant] liability charge. The after-effect of this non-cash charge, Celsion reported a net loss of $6.1 million or $0.50 per diluted share for the first quarter ended March 31, 2010, compared to a net loss of $3.6 million or $0.35 per diluted share in the same period of 2009.

After the non-cash effect of the [warrant] liability charge of $1.6 million and other non-cash charges of $0.6 million, which were related to stock-based compensation and other expenses, and that balance sheet changes of $0.9 million net cash used in operations totaled $3 million in the first quarter of 2010.

Operating expenses increased to $4.6 million in the first quarter of 2010 compared to $3.6 million in the same period of 2009. Comparing quarter to quarter, research and development costs increased $0.4 million, with $3.4 million incurred in the first quarter of 2010 compared to $2.9 million in 2009. These cost increases are attributable to clinical trial costs for the primary liver cancer clinical study, partially offset by increasing clinical trial costs for the RCW program.

Comparing quarter to quarter, general and administrative expenses increased $0.6 million with $1.3 million incurred in the first quarter of 2010 compared to $0.7 million in 2009. These cost increases are attributable to the expiration of the indemnities reserves the Company recorded prior to 2009, and advertised as a reduction of G&A costs through mid-2009. The non-Cash benefit in the first quarter of 2009 of this reserve was $0.5 million.

The Company ended the quarter with a total of $10.4 million in cash, investments and other receivables and current assets, which will provide sufficient cash supply for ThermoDox clinical studies for primary liver cancer, recurring chest wall breast cancer through the end of 2010 and possibly into early 2011. As always, we continue to manage our spend very carefully and are always finding ways to do more with less, and are realizing cost savings at every opportunity.

With that, I now hand it back to Mike.

Thanks, Tim. I'd now like to update you on the HEAT study on global Phase 3 primary liver cancer trial, which is designed to evaluate the efficacy of ThermoDox in combination with radiofrequency ablation, or RFA, when compared to RFA alone, which is becoming, if not the standard of our global standard procedure for non-recyclable disease in many countries.

Now we continue to make much and significant progress. Enrollment is improving -- not exactly where we projected the last time we talked. We've seen some ups and downs. In fact, at one point, I recall we had seen as many as 14 patients in a week. But all in all, I believe that we are well-positioned to complete enrollment within this calendar year, with sooner rather than later being the primary focus of our Company.

Now in that regard, I'm pleased to report the following. First, it's important to note that our study includes some of the most recognized leaders in the medical community focused on liver cancer. The HEAT Study has been expanded to include 73 investigational sites in 11 countries worldwide. Achieving and managing this number of sites, as you know, is no small feat, but it's a measure of our commitment to completing this study on a timely basis.

By the middle of this month, we expect to increase our sites to a total of 75 by including new sites in -- two new sites in Italy, both of which are sites that we expect will enroll patients on a productive basis.

In addition to the US, the HEAT study is designed with a concentration of sites in countries where HCC, primary liver cancer, is a serious problem, including China, Japan, Taiwan, and Korea. Our goal, as we have stated, is to enroll a study cohort in each country sufficient to support registration; (inaudible) the need for a separate local study that is typically required for foreign drug approval. This strategy provides Celsion with the fastest pathway to approval in markets where ThermoDox may provide a life-saving treatment option.

Now, we are currently beyond the halfway point of our 600 patient enrollment target. As of this morning, we have 333 patients treated, with 13 patients with signed consents and eligible to be treated within a week or so. So if my math is right, that's 346 patients, 13 of which will be treated in the very near future.

While we have begun to see the positive effect of our added study sites, our current accrual rate is approximately 30 patients a month. Based on our discussions with investigators, recent discussions, particular in China and Taiwan, and our understanding of what some of the small barriers have been for our newest sites that are now eliminated, our expectation is that we will continue to improve our accrual rate. The numbers fluctuate, but on the whole, the averages that we're seeing and the inflection that we expect support our objective of completing enrollment within this calendar year.

We have held very successful investigator meetings in Thailand, Korea, and China with our Japanese partners. Bottom line is we have every reason to believe that our confidence is not misplaced. We're particularly encouraged by the ongoing commitment of our highest enrolling sites to the study and their desire to continue to enroll patients.

To ensure that there's no surprises, we've taken a very aggressive approach to quality assurance. On the direction of Dr. Borys, we've initiated a rigorous audit of our highest enrolling sites. Our clinical team is visiting and reviewing case reports at virtually every site in Asia, including China, Philippines, Taiwan, and Korea.

Our goal, as I said, is to make sure there is no surprises. And as you know, the data review following completion of a trial sometimes can lead to problems that delay an NDA application. So we're working proactively to ensure that data quality and protocol compliance is in line with our high-quality expectations.

And as we reported earlier, our DMC has reviewed unblinded data from approximately 120 patients. It's found no safety issues and recommended study continuation. The DMC will meet again in May, with a specific focus on safety for the 12 Japanese patients that have enrolled to date. While this safety review was a specific requirement of the Japanese PMDA, following the DMC reviews, which I suspect will be positive, the DMC will provide their recommendation with regard to continuation of the study in Japan.

Looking forward, you can expect the following. Assuming the historical data is reasonably predictive, once enrollment is completed, we should see enough progressions -- 380 is required by our statistical analysis plan -- we should see enough progressions to be able to determine ThermoDox's efficacy as an adjuvant for RFA within 12 to 16 months following last patient in.

We also expect to receive a recommendation from the DMC's formal interim analysis once this study has reached 190 events. The review will be blinded to Celsion, so we won't have hard data. What we will have is a recommendation coming in one of four ways -- the study should continue as is, is the most likely recommendation if we've done our homework properly.

The second recommendation could be that the trial should be modified; the third that the data support the discussion with FDA for an early NDA application; or, unlikely that the data suggest that ThermoDox will not meet our endpoint objective.

With that, now I'd like to turn to our recurrent chest wall breast cancer program. Our pivotal Phase 1/2 recurrent chest wall study is now enrolling patients at seven sites -- that's two more than we discussed in our last conference call. For your reference, it's NYU; St. Barnabas in New Jersey; Rhode Island Hospital; Florida Cancer Institute; Virginia Commonwealth; University of California, San Francisco; and Washington University; along with the CTCA in Oklahoma, which will join the study at the Phase 2 portion, we've initiated nine sites as of April.

I will remind you as background, that we initiated the RCW trial based on -- largely based on FDA's written support that our Phase 1/2 study will be considered pivotal, depending on robust objective complete response rate, which is our primary endpoint. The data from Duke's Phase 1 study shows that ThermoDox in combination with hypothermia has great potential to be an effective treatment option for local disease control, an endpoint that's important to this patient population.

Our experience so far, however, suggests that recruiting patients is difficult. We are taking steps to enlist -- as a part of our plan, to improve enrollment, to enlist a health insurance database management firm to assist us in identifying physicians that treat individuals with this indication. The preliminary analysis confirms some of the assumptions that we've made with regard to the patient population pool. They're estimating as many as 11,000 to 12,000 patients currently with the disease who meet our inclusion/exclusion criteria.

Now this is encouraging; but as it appears now, enrollment will extend well into 2011 should we continue the study as designed. As I said during our last call, we have made contingencies -- if we do not meet enrollment traction in the reasonable near future, we are prepared, among other options, to open a trial to other superficial cancers, such as melanomas and sarcomas.

Now I'd like to make a few comments about our filing strategy for the HCC indication. We've done a lot of work in this regard, including a GAAP analysis, a review of the filing options, where we stand with our data and the like. And we've concluded that ThermoDox meets the criteria for 505b2 filing, and expect to meet face-to-face with FDA to formally confirm this opinion in the near future.

In addition to our orphan drug agreement, we have requested fast track status, which will support, among other things, our plan for enrolling NDA. We are filing for orphan drug status with EMEA, the European regulatory agency. We expect to be successful, as HCC has been designated an orphan indication. Achieving this status provides us with the ability for a centralized approval and supports our plans to discuss filing for a hybrid application, which is the equivalent of the US 505b2.

Just a comment on our program with Philips to evaluate ThermoDox in combination with HIFU. We've completed a number of preclinical studies; there's one left outstanding. We expect to complete that large animal study within the relative near-term. As soon as that data report is in and it supports our application, we will be filing our first IND later this summer for metastatic bone cancer.

Now I'd like to outline what we see as milestones ahead for the balance of 2010. We expect, as I said, to enroll 600 patients in our Phase 3 HCC trial. We expect to complete the Phase 1 portion of our RCW trial, and then consider the best way forward for Phase 2 in evaluating ThermoDox in superficial cancers. We expect to initiate a Phase 2 colorectal liver metastasis trial. And lastly, we continue to believe that a second license for ThermoDox will be negotiated with the execution of the deal in 2010.

In closing, I'd like to say that our strategy is clear, that our execution is showing results on all fronts. Our commitment to ThermoDox in our clinical program is second to none. The Company is stable and focused. We've sufficiently funded our ThermoDox program through major pivotal events this year and through the end of the year.

We'll now go on to questions, which I'd like to ask you to limit to no more than two. So, Operator, if you'd open it up for questions, please.

(Operator Instructions). Mark Monane, Needham & Company.

Good morning, Michael. Thank you for reviewing the information with us. (multiple speakers) Hello from New York City, where it's a bright and clear day.

And the Yankees won another game last night.

And the Yankees won another game. Thank you very much. Here's the -- well, what I'd like some clarity on, to go along with this clear day here, is the timing of the interim analysis to the extent that you can share with us. I believe you had mentioned -- the team had mentioned before that interim analysis would be pretty proximal to when you'd finish enrollment.

Are you still confident that that would be true? Or, since the enrollment is a little more back-end loaded than might have been expected, then the interim analysis may be a little bit later. What are your thoughts?

I will give you my thoughts and then, Nick, maybe you'd like to jump in.

Because it appears that the enrollment is back-end loaded, a larger bolus for the second half enrollment than we had originally anticipated, I suspect that the 190 event that is the key to the interim analysis will not be proximal to the conclusion of the study, and may be delayed a number of months.

Yes, Mark, this is Nick. I agree with Mike that there might be -- it depends on how proximal your definition is. I don't expect it to be too much of a lag, but I think we'll be seeing it within some reasonable proximity of when we finish our enrollment -- because we're seeing a bulk of our patients, I think, right now.

All right. And are the characteristics -- do you expect the characteristics of the patients in the second half of the enrollment now to be different than the characteristics of the first? Have you gotten any news from investigators and any changing of the epidemiology of the patients being enrolled?

Yes. So, we're going to see quite a large contingent from Southeast Asia -- right, Mike? Do you want to comment?

Yes. I think it's an interesting question, Mark. And certainly in terms of demographics, because the regions and the countries that we -- that enrolled towards the end of our study most recently are Southeast Asia and China.

We don't see big differences in the way RFA is processed, but we do see differences in the way HCC is screened out in those particular countries, particularly in Southeast Asia, where their screening is not as advanced as the rest of the world. So you could suspect that you might be seeing bigger lesions in those parts of the world, which could just nicely round out our database.

Got it. That was helpful. I'll step back into the queue. Thanks for the avid information.

[Chris Bosta], RBC.

Just wanted to know, can you clarify the recent long-term follow-up data from both Dr. Poon and Dr. Robby Kumar? Were they separate patients? Or were they the same groups?

Well, they were two separate studies of patients with similar inclusion/exclusion criteria. They were both [all-cover] studies, including patients with metastatic liver disease and primary liver cancer. They were two separate studies.

I'm always hesitant to speak on behalf of our investigators, but, no, Dr. Poon reported in Japan that from the patients that he saw and treated, three of them survived more than three years; and one patient, who showed some resistance to treatment, continues to survive, which I suspect is very encouraging.

And if I have this correct -- and maybe you can jump in here, Nick -- Robbie Kumar -- Dr. Robbie Kumar reported recently at the IHPBA, the impressive complete response rate. I believe it was 50% of his patients showing a complete response. I'm not sure if he translated that -- I don't believe he translated that into a survival benefit.

Yes, the only thing I could add to that is that Professor Poon's patients were primarily HCC patients, while Professor Robbie Kumar's patients were primarily MLC patients. And so there's different ways we need to look at that data and, also as you know, we're very interested in MLC as well.

So, just by the numbers, then, that were reported, you got an approximate 50% response rate in a dose escalation trial for liver cancer. Has this data been circulated amongst your 73 sites and helping enrollment?

Well, the data is circulated as part of an investigator brochure, which is a routine effort in any study and at the investigator meetings.

And then, Mike, as far as feedback with investors, I mean, you've got a 70% reported response rate in recurrent chest wall cancer. It looks like you've got a 50% long-term follow-up response rate in liver cancer. Why do you think the valuation of this Company for a Phase 3 biotech is so below almost all of your peers?

Well, that's a good question. I'm not going to try to explain the way the market works, Chris. We think we have a very promising drug. By all accounts, it's shown clinical activity in two very important diseases, with endpoints that are meaningful for both patient groups.

We've seen enthusiasm from all of our investigators and we had a recent conference call with five of our six investigators for recurrent chest wall breast cancer to review the actions that need to be taken to encourage enrollment with -- frankly, with the discussion on should we continue, unanimously this group of investigators -- they were unanimous in their desire to continue the trial because they believe that ThermoDox brings a very important therapeutic option to treat these patients.

You've seen the willingness of our key opinion leaders, our principal investigators from the US, Europe, and Asia, to address a group, the Wall Street group, before a Phase 3 study is completed. Their view of the potential of ThermoDox to treat liver cancers -- I won't try to speak for them, but their presence alone, I think is -- speaks volumes.

So ThermoDox has great potential. The strategy that the Company took and the right strategy, frankly, to move from a Phase 1 directly to a Phase 3 in some circles implies that the absence of Phase 2 data adds some risk, investment risk, and doesn't provide the kind of data that's typically seen by knowledgeable investors to evaluate the potential of any therapeutic data's endpoint in a pivotal study. And that could be one reason.

But I'm not going to speculate any more there, Chris. I think we have a very strong story with regards to execution over the last two years. I challenge any company, any company to post the kind of results that we've posted in this short period of time, and repositioning a company from a device company to an oncology-focused drug development company, and with the kind of results that we've gotten in this very short period of time.

We're well over 50% enrolled in a Phase 3 study. We have agreement with regulatory agencies around the world to move directly from a Phase 1 to a Phase 3, based on the data that we presented to them and the potential for our drug to be an important therapeutic option for HCC.

So I think -- I believe we are well-positioned. Our data in the end, I think, will support some of the data that's been -- confirmatory data from our pivotal trials will, in the end, support data from our open label Phase 1 dosing escalation study. I believe we're well-positioned. We have potentially the most significant new chemotherapeutic to treat the largest, unaddressed liver cancer on the planet with some very encouraging support from our investigators.

That's the way I'd answer your question.

Marc Robins, Catalyst Financial Resources.

Hey, thank you, and it was good to hear this update -- my questions have been answered.

Okay, Marc. Thank you so much. Good to hear your voice.

Yes, it's good to hear yours, Michael.

(Operator Instructions). Chrystyna Bedrij, Gryphon Securities.

Congratulations, obviously. It seems like you're making tremendous progress around the world and it's really impressive, and thanks for taking my question.

My question really relates to -- or builds on a previous question in terms of the competitive environment. We are looking at Delcath and maybe some of us are looking at Delcath's systems. And they're trading at a market cap of something like $500 million at this point. And they're just treating a very small population, I think, of melanoma metastasis to the liver. And they have a system that they developed to isolate the liver from the circulatory system and then they administer the chemo directly to the liver. I think you know that system.

But maybe you can just -- it seems like they're addressing a very small market and yet they have such a huge valuation. And maybe you can just compare, contrast ThermoDox to that system and what you believe the advantages are of ThermoDox, and just where it fits in the treatment paradigm vis-a-vis your system.

Chrystyna -- well, thank you for that question. I mean, first, I'd like to say congratulations from all of us to the Delcath team. From what I've seen of the data, they have a very important treatment option for metastatic liver cancer. Good for them, good for their shareholders. More importantly, good for the medical community and patients who have this metastatic condition.

I'd just start out by saying that in no way do we believe that the Delcath technology for treatment approach competes with ours. We expect that as an adjuvant to RFA, ThermoDox will be a first-line treatment for early to mid-stage liver disease, in particular HCC. Delcath's approach is more akin to a taste procedure, although it involves a whole organ profusion as I understand it.

Would you have any comments, Nick, on how you see the difference?

Yes, I'd like to add to that. This technology, as Mike said, gives me a lot more confidence that we're going in the right direction. What the technology basically does is in a very invasive fashion and still is a great, a high concentration of chemotherapeutic drugs directly to the liver. And the important point here is that it's invasive.

And it's good to see that the market has responded so positively now to liver cancer, so that gives me great hope. Once our data starts getting out, then we'll be joining in those kinds of valuations that Delcath is now enjoying.

So the contrast between Delcath's invasive system and the high concentrations of chemotherapy versus ThermoDox is, number one, ThermoDox is not an invasive procedure. It's given IV, just like any other chemotherapy drug. It's given once. The patient can go home the next day, in most cases. And it delivers high concentrations using key technology. So I think in terms of what we are learning from Delcath is exactly the way ThermoDox is being applied, but in a very large patient population with a great unmet medical need.

So to me, I'm very encouraged by what we see at Delcath and other systems that are invasively delivering high concentrations of chemotherapy, because we can do it non-invasively.

And with T cells, yes.

Yes. Again, I'd just add to what Nick says is in maybe with just a little bit of a different twist. Treating liver disease, liver cancers is difficult at best. There really are no good chemotherapeutic options. Anything that shows some promise in treating this disease appears to be well-received by investors. And as I said earlier, we are on the precipice here of treating the largest unaddressed cancer globally. And as Nick points out, should our data support approval, my expectations, our expectation is that we should get a similar, if not better response from the investment community.

Thank you, Michael. Very helpful. And thank you, Nick.

Private retail investor, [Mitch] (inaudible).

I sound like a broken record to commend the incredible work of 24 people in cooperation with all of our lead investigators in DNC. It is just amazing and I thank you on behalf of all who suffer with HCC and other cancers that our platform may treat over time.

Two questions, if I may. The first is brief. May I assume that everything is still in place, that if Medifocus is successful with our former APA technology, as they go into, I believe, a Phase 3, that Celsion remains set up to receive royalties if that is approved and generates income?

The answer to that is yes. And just maybe to help some of the other investors on the phone, Medifocus is a company that Celsion Canada, if you remember that name, merged into, I believe, last year. They're developing a technology that was sold to Dr. Chung as a part of our repositioning of this Celsion as a -- to investing our device (inaudible) and focusing our efforts on developing oncology drugs.

So, as a part of that sale agreement, Celsion enjoys a royalty from the commercial sale of Medifocus equipment. That royalty agreement is still in place.

Great. And then I just want to comment that I really appreciate the manner in which you addressed Delcath. I share completely similar stances, in that it is a much more invasive -- more limited procedure, but brilliantly shows, in fact, the proof of our concept that high concentrations of chemotherapeutics are the target much more effective. In our case, our technology is much more elegant and ours being a platform shows much more potential to this indication and beyond.

My last question refers to Dr. Reed, who I consider to be a brilliant stealth doctor of our Corporation. Has to kind of do with just things like -- I know we've talked about him looking at rolling submissions. I'm wondering if we have -- what's going on, if we are still pursuing orphan drug designation in the US for RCW and that small population?

And finally, if I may, if we revised the RCW protocol to include other superficial cancers, is it possible that we will continue to enjoy the kind of support that if Phase 2 shows durable response, even in those other cancers, that it could be considered pivotal? Or is it likely we would have to go back on those expanded indications and kind of go back to a typical registrational process?

Okay, I'll try to take them top to bottom. If I miss one of your questions, just remind me, Mitch.

First of all, I'm sure Dr. Reed appreciates your comments. We value his contribution. Bob Reed is a PhD. He's a fellow in the pharmaceutical sciences, the recognition that's not given lightly. He's worked -- in the past, he's worked in the liposome world. He's worked for Merck and he's been a great addition to the staff, particularly on the formulation scale of manufacturing and now on the regulatory side.

With regards to our orphan drug application for recurrent chest wall breast cancer, it is in the works. We would expect a response I would suspect in the near future from FDA. Of course, a positive response is not guaranteed but we certainly believe that our application is one of merit. And we would expect a positive response from FDA.

With regards to changing the scope of the recurrent chest wall breast cancer study, one of the reasons why it's so difficult to enroll -- and we actually -- we took this position because we thought it was important for the Company and to stage it with that, part of our strategy. With now the focus of our patients, to those who have exhausted all of their treatment options, end stage patients, providing a benefit for those patients in a single arm study following our discussion with FDA -- or during our discussion with FDA, would seem to the Agency that if we could provide a local control benefit, that that would be sufficient to warrant a review for approval.

Changing the exclusion/inclusion criteria or expanding to other forms of cancer for which there are treatment approaches that provide a comparator to hyperthermia plus Radiofrequency ablation, I believe, in fact, would change the status of the trial from being pivotal to being a Phase 2 trial -- or potentially even a single arm Phase 2 trial with no comparator.

So we would expect then that we generate -- if we were to open the trial, we'd generate data on superficial cancers, which would be valuable for the medical community. And pending the data that would come from that trial, we'd decide whether or not then turn to a further studies, including a Phase 3 trial.

Great. Thank you so much.

Chris Bosta, RBC.

Just wanted to ask on the European group that's doing a study on liver cancer with ThermoDox. When do you anticipate that they would -- this is the HIFU -- when do you anticipate to enroll patients? And will we see that data as an open label?

Yes, you're talking about the grant that was provided by the European agency to study HIFU in combination with ThermoDox, right?

Yes, and it's going after liver cancer, I believe, and bone metastases -- if I'm correct.

Liver cancer, bone metastases, and maybe some others, depending upon where the research takes it. I can say this, Chris -- it's going to take awhile. Preclinical work has to be completed. We have to show some data that supports safety before trial would be moved into a human setting. It's going to be awhile.

So that will have no impact on the IND filing with Philips, which you still anticipate in the summertime?

It will have no impact on the IND filing that we would make with the US Government, yes.

Is that still on target for the summer?

Yes. From everything I see, the data that we're expecting from this large animal study is available to us in the next 60 days, we'll be prepared to make an application as soon as possible thereafter.

Thanks.

And we have no other questions at this time. I'd like to turn it back to our presenters for any additional or closing remarks.

Well, as we do, I'd like to thank you for your interest and your continued support. We will continue to work hard on your behalf. We look forward to meeting you at our annual shareholder meeting, if you can possibly make it, which is June 25 -- correct?

Thanks again.

That does conclude today's conference. Thank you all for your participation.