Imunon Inc (IMNN) 2011 Q1 法說會逐字稿

Good morning. My name is Andrea and I will be your conference operator today. At this time, I would like to welcome everyone to the Celsion Corporation first quarter and 2011 earnings 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). As a reminder, today's call is being recorded.

I would now like to turn the call over to David Pitts of Argot Partners. Please proceed.

Thank you. Good morning, everyone, and thank you for joining us. Our first-quarter 2011 results were released yesterday afternoon and are available on the SEC's EDGAR system and on the Company's website.

Today's call will be archived, with a replay beginning today at 2.00 p.m. and remaining archived until May 20, 2011. The replay can be accessed at 877-870-5176 in the US and Canada or 858-384-5517 outside these territories. The conference ID is 1092576. The call will also be available on the Company's website at Celsion.com, for 30 days after 5.00 p.m. today.

Before we begin the call, 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 in clinical trials by others; hospital acquisitions and other technologies, assets, or businesses; and 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 would like to turn the call over to Mr. Michael Tardugno, President and CEO of Celsion Corporation.

Thank you, David. Good morning to all and thank you again for being with us and for your continued interest in Celsion. I am joined today by Jeffrey Church, our Chief Financial Officer, and Dr. Nicholas Borys, our Chief Medical Officer. As always, we are delighted to be with you and to provide you with an update on our work and to answer your questions.

On today's call, Jeff will provide comments regarding our first quarter 2011 results, including highlights of the P&L and balance sheet. Following that, Nick Borys will discuss progress on our global Phase III HEAT study in primary liver cancer, an update on our recurrent chest wall breast cancer program, as well as our clinical expansion strategy for ThermoDox, a drug we see as a pipeline within a product.

I will then discuss key goals for the Company as we look forward to the critical phases leading up to and following commercialization. After that, we will open the line for your questions.

Just a few comments before turning the call over to Jeff. We expect that the coming weeks and months will mark one of the most pivotal periods in Celsion's history, a time that all of our stakeholders including our employees, our investors, and our partners in the medical community have anticipated since Celsion began developing ThermoDox in earnest four years ago. With some 43 patients left to enroll and more than a half a dozen screened patients in the queue in the HEAT study, several important developments are now in view.

The first is clearly reaching our enrollment goal of 600 patients in this pivotal study. Given where we are, there's no ambiguity in our ability to do so in the relative near term. The second is a preplanned in term efficacy and safety analysis by the study's independent data monitoring committee after 190 progression-free survival events have occurred. We would estimate that 190 progressions and completion of enrollment in our study to occur in the same -- in approximately the same time frame, after which it will take a number of weeks to collect data and format it for DMC's review.

This analysis as we have said is blinded to Celsion and has three potential outcomes including recommendation for early stopping based on overwhelming efficacy, a recommendation to continue on assessment of futility which we believe to be very unlikely. Either of the two positive outcomes of this assessment we believe signify strong positive momentum for the study, the drug, and the platform and our Company.

The next key event following this interim review is the final unbinding of the study for primary endpoint, progression-free survival. This milestone will occur at 380 PFS events, a figure which could be reached by this time next year. Once the PFS data is analyzed, Celsion will complete its NDA submission to the FDA and European regulatory authorities as we will discuss.

Meanwhile, as we have said before, the HEAT study may continue enrolling patients beyond 600 in order to complete a minimum of 200 patients in China if necessary and to ensure a robust overall survival endpoint.

The goal of this study is to establish that ThermoDox is safe and effective for patients with HCC, one of the largest unaddressed cancers globally. HCC is a disease whose dramatic growth worldwide continues unchecked and will do so for the foreseeable future.

It will also underscore the potential of our marvelous technology platform in a variety of other indications for more efficient targeted delivery of widely used anticancer agents may provide benefit. We will speak more of this towards the end of our call.

With our continued diligence, this quarterly conference call may be the final such call in which we discuss a lead up to enrollment completion for the HEAT study. I know that a great many of our investors have anticipated this moment for longer than they would have liked to. For this we can only thank you for your patience and perseverance.

The effort required to reach this point has been demanding to say the least. Our goal to conduct a quality study has at times been at the expense of speed. The complexity of running a global trial in 11 countries at 76 institutions has provided us with some unique challenges. In the end, however, we believe that our priorities are right and hope that our strict attention to excellence in clinical trial execution, fiscal discipline, and commitment to shareholder value will translate into significantly greater rewards.

With that, I would like to turn it over to Jeff, who will cover our first-quarter financial results. Jeff?

Thank you, Mike. Our first quarter 2011 results and continued news flow reflect progress in the development activities for ThermoDox, including our ongoing clinical studies as well as regulatory and manufacturing efforts leading up to commercialization.

For the first quarter ended March 31, 2011, we reported a net loss of $3.5 million or $0.26 per share. This compares to a net loss of $6.1 million or $0.50 per share in the same period of 2010. The results for the first quarter of 2011 include the recognition of $2 million in licensing revenue resulting from the amendment to our development, product supply, and commercialization agreement for ThermoDox with Yakult.

This amendment provided for accelerated payments of up to $4 million in future milestone payments including the $2 million paid in January in conjunction with our convertible preferred stock offering. This was in exchange for a reduction in product approval milestones that the Company may receive under the Yakult agreement.

The first quarter last year bottom-line figure included a $1.6 million non-cash warrant liability charge related to a mark-to-market change in the common stock warrant liability related to a stock offering which we completed in September 2009. This compares to a $168,000 non-cash benefit for the same period in 2011.

The Company's research and development costs were $1.1 million higher the first quarter of 2011, primarily due to increased costs for investigator grants, monitoring costs, and milestone payments associated with higher patient enrollment levels in the HEAT study. Also contributing to this increase were activities associated with late stage and commercial manufacturing of ThermoDox.

Our general and administrative expenses decreased slightly by about 7% during the quarter as we continue to focus our efforts on clinical activities.

Net cash used in operations in the first quarter 2011 was $4.4 million. We ended the quarter with a total of $3.7 million in cash, investments and other prepaid assets. Subsequent to the close of the quarter, the Company completed two draws in sales under its committed equity financing facility for gross proceeds of $2.8 million at an average price of $2.65 per share. Broker fees and other expenses were approximately $90,000 related to these two draws.

The proceeds from these draws are being applied toward clinical development costs, accelerated CMC expenses, and working capital needs.

As I mentioned in our last call, the Company has completed a number of transactions to address its ongoing capital requirements. These include the committed equity financing facility which provides us with the ability to sell up to $15 million of common stock over a 24-month period at a predetermined discount of 5% to 6%. The Company did not issue any warrants as part of this facility, limiting its dilutive effect.

The committed equity financing facility has proven to be a very effective financing option for Celsion, but not our primary means of raising new capital and funding our Company. It proved its effectiveness in late December to bridge the Company to the preferred stock offering we announced in early January 2011. And on that note in January, we completed a registered offering of $5.1 million of convertible preferred stock and common stock warrants. Concurrent with the financing, as I mentioned earlier, the Company amended its agreement with ThermoDox with Yakult to provide for accelerated payments of approximately $2 million when we closed that offering.

It should be noted that as of the date of this call, approximately 45% of the preferred stock have voluntarily converted to shares of common stock.

Additional capital will be required to develop our product candidates through clinical development, regulatory approval, manufacturing, and commercialization.

Executing the multinational Phase III clinical trial and preparing for an NDA submission is a very costly endeavor. We will need to raise additional capital to cover our operating needs through the end of patient enrollment, data readout, and regulatory submissions. We will continue to balance our need for capital against the timing of development activities as well as business development initiatives with the goal of enhancing shareholder value.

We continue to evaluate financing alternatives to address our capital requirements including public and private equity offerings, additional strategic alliances, and licensing arrangements, collaborative arrangements or some combination of these financing alternatives on an ongoing basis.

Now at this time, I would like to turn the call back to Mike.

Thanks, Jeff. Thanks for your thorough review. Now I would like to pass it over to Dr. Borys, who will discuss our clinical program in more detail. Nick?

Thank you, Mike. I would like to start by addressing current progress with our pivotal program, the HEAT study. As Mike mentioned earlier, the study is now in the final phase of enrollment and in the process of preparing for data analysis, independent review, and all the other myriad of activities to prepare for a proper NDA submission.

Patient enrollment, as you know, stands at 93% of the 600 patients necessary to ensure that our primary endpoint, progression-free survival, can be achieved within statistical requirements. The study's independent data monitoring committee continues ongoing safety and data quality reviews at approximately every 100 patient increment and in each case has delivered a unanimous and encouraging recommendation in favor of study continuation.

An enrollment pause in Japan remains in place. I want to be clear that there is neither a clinical nor a regulatory hold. The DMC has had difficulty evaluating safety signals between the Japanese patient cohort and the rest of the world data. This is largely due to significant differences in Japanese standard of care compared to how patients outside of Japan are treated and followed. While we continue to work diligently with our Japanese partner, Yakult, to see that the Data Monitoring Committee resumes its important support for patient enrollment in this territory, we do not anticipate that this will affect our study timelines at this stage.

We are working closely with Yakult in an attempt to bridge the issue of the differences in the Japanese standard of care. We may have a pathway to do so, but we have at this point no guarantee. What I can say and I am sure that Yakult would be happy to confirm is that Yakult is very committed to ThermoDox and is anxious to reengage the clinical trial in Japan.

Of course, we will keep you apprised of any material developments related to this effort.

We are now entering an exciting time for Celsion and the HEAT study, the long and hard job of completing the randomization of 600 patients is not hand. We can now turn our focus on gathering the data for the interim analysis and to accelerate the preparation for an NDA submission.

As a review, ThermoDox, when activated by heat, has been shown to deliver approximately 10 times more doxorubicin to the treatment area than one would expect from systemic dosing. By concentrating the drug in a desired target, we achieve a much more potent anticancer effect in areas most susceptible to initial recurrence.

This treatment effect is what supports ThermoDox's potential well beyond primary liver cancer and as the HEAT study comes to a conclusion, we will look to aggressively pursue a broad spectrum of studies aimed at expanding its use. Among these target indications are secondary liver cancers, recurrent chest wall cancer, and bone cancer.

With regard to our program in recurrent chest wall breast cancer, the DIGNITY study, RCW in this population is refractory to previous therapy. Local control is meaningful. Provides clinical benefit and is the registrational endpoint agreed to with the FDA for the Phase II portion of our trial.

The last patient in the Phase I portion has been treated in December at the 50 milligram dose. The DSMB will be conducting a final safety review this quarter.

As the DIGNITY trial is currently configured, we continue to project that enrollment will extend into 2012. As we have discussed in past calls, we have made certain contingencies. Due to the challenges of patient recruitment, we are looking at other options to open the trial to other superficial cancers such as melanomas and sarcomas. More on this after we have reviewed the data and have some further discussions with our experts during this next quarter.

With regard to our program in secondary liver cancers, which are tumors of a different primary origin that have metastasized to the liver, last year we submitted our protocol for the Phase II colorectal mets to deliver as a follow-on to our Phase III ACC trial under our current IND. It was accepted by the agency without comment, meaning we are free to initiate the trial as planned.

This is a meaningful outcome because, as you know, the FDA takes time to review and accept new clinical programs. The study documents are now under submission at multiple colorectal centers in the US. Our plans are set to be fully ready to begin a recruitment as soon as possible after the HEAT study has enrolled 600 patients. Our objective is to have [MLC] data for presentation in a timeframe that follows closely with the approval of ThermoDox.

In summary, all of our clinical programs are achieving their missions without any major obstacles. The HEAT study is now entering the data retrieval and analysis phase. The DIGNITY study is readying plans for Phase II and the colorectal metastases study has begun the site submission process.

We are very excited that we may be less than a year away from evaluating our primary endpoint in the HEAT study and that we have advanced our programs in colorectal cancer, chest wall cancer, and HIFU.

I will now return the call to Mike.

Thanks once again, Nick, for an excellent report. Now I want to speak about our joint research with Philips Healthcare division. As most of you know, we have a joint research agreement with Philips that addresses the potential of ThermoDox in combination with [sonalive], Philips's proprietary high-intensity focused ultrasound technology as a means to noninvasively treat difficult cancers.

We have characterized this as a game changer in oncology. We believe that's right. This is the most exciting program having the potential to extend our platform technology well beyond what anyone had first envisioned.

On our last call, we noted that ThermoDox's potential as an effective therapy when delivery is mediated by HIFU, was highlighted in the International Journal of Hyperthermia in the article titled Localized Drug Release Using MRI Controlled Focused Ultrasound.

We have also noted that the related late breaking abstracts were presented recently at both annual meetings of the Society of Thermal Medicine and International Society of Therapeutic Ultrasound. Both the academic community and the medical community have been very supportive of targeted drug delivery using MRI-guided HIFU as a vehicle to deliver chemotherapeutics.

Now I am pleased to report that we have support from the regulatory community. What was once a concept less than two years ago is progressing to human studies. Earlier this year we submitted pre-Phase II briefing book to the FDA. Just last week we had our first meeting with the agency. The outcome I can report was quite positive.

We have agreement that a Phase II study with pain palliation as an endpoint in mets to the bone is an acceptable trial design for our first clinical program. We do have some follow-up data to provide in the next iteration of our submission, which we hope to complete by September.

I would also note that Philips continued to be as excited as we are and has offered to continue as our -- as the principal funder of our program.

Just a few more concluding remarks. With completion of the HEAT study now on the horizon, the Company is expanding the focus of our resources and efforts on several key goals. First and foremost, we are taking steps to ensure smooth commercialization process in anticipation of a potential positive study outcome. This effort encompasses a number of areas including regulatory CMC operations and business development.

Second, we are looking at ways to maximize the value of ThermoDox as a commercial product through the realization of its full clinical potential, a successful global licensing strategy and a broad patent strategy.

Third, we are looking to maximize the value of our liposomal technology platform through the development of additional product candidates.

Now to the first point, while our efforts to prepare for commercialization are not always news items, this undertaking is both multifaceted and resource-intensive. We have pursued a streamlined global regulatory strategy which provides us with fastest pathway to approval in significant global markets like China, South Korea, Taiwan, and Japan where local enrollment is intended to support filing without the need for additional bridging studies as is commonly required.

To ensure that there are no surprises with data or protocol compliance, we continue to rigorously audit our sites. Data entry and accuracy, which can delay an NDA filing, is being monitored carefully by Celsion, our CRO, and is a function of the regular meetings of our DMC.

Further supporting our clinical and regulatory goals, are fast track designation, special protocol assessment agreement, and 505(b)(2) designation with the FDA. These components provide us with the fastest pathway possible for regulatory approval of ThermoDox. Fast track among other things provides Celsion with priority review and a PDUFA date certain of six months. 505(b)(2) streamlines the approval process by removing a degree of regulatory risk based on the understanding that ThermoDox employs the previously approved drug, doxorubicin.

Additionally, China's CDE and the Japanese PMDA have indicated their support for early NDA applications assuming of course that we hit our PFS endpoint.

As part of fast track, we are also eligible for a rolling submission. Initiation of the NDA process has begun with a review of our filing strategy and the breadth of our preclinical program, which the agency has agreed are sufficient to support submission.

During the last quarter, we announced that the Company received orphan drug designation in Europe for ThermoDox to treat primary liver cancer. ThermoDox will have 10-year of marketing exclusivity following EMEA approval. This adds to orphan drug designation in the US which provides seven-year market exclusivity following FDA approval.

Briefing book has been prepared for the EMA Scientific Advice Committee meeting which will be submitted shortly. Our goal for the meeting among other things is to outline our regulatory pathway in Europe. We expect to have guidance to share with you later this year.

With regard to Chemistry Manufacturing Controls or CMC, as it's known, one of the goals in using the [SEF] was to support acceleration of our commercial manufacturing strategy and to expand the number of contract manufacturing organizations available to produce ThermoDox, which we are doing. I am delighted with the progress that Bob Reed and his team have made and expect as we communicated last year that our first registrational batch will be initiated later this year.

To maximize the value of ThermoDox as a commercial product, we have and will continue to pursue a variety of indications where early benefit has been observed including, as Nick pointed out, recurrent chest wall breast cancer or superficial cancers, secondary liver cancers, and bone cancers. Each of these indications represent a significant market opportunity and the potential to address key unmet medical needs.

We continue to pursue these indications with both our collaborators in the medical community and with our partners including Yakult and Philips Healthcare.

Supporting a return for continued investment in these additional indications is a deliberate and comprehensive intellectual property strategy aimed at maximizing the patent life of our products and our technology. We made progress during the first quarter in expanding our global patent estate including the following. The issuance of a US patent in the Needham Patent Family covering temperature-sensitive liposomal technologies including ThermoDox formulation. This new patent provides coverage for a new method of loading active agents such as doxorubicin or other chemotherapeutic drugs into liposomes, which with US PTO patent term adjustment provides protection through February 13, 2021.

We were also granted the Japanese counterpart of the Needham composition of matter patent, temperature-sensitive liposomal formulation by the Japanese patent office. This new patent provides patent protection for 20 years from the international filing date, which was June 9, 1999.

Celsion has an additional divisional patent in the Needham family pending in Japan and continues to pursue various avenues including patent term extensions to maximize the Company's intellectual property protection in Japan and other territories.

Prosecution of new patent filings continue globally particularly in markets where our technology provides a significant revenue opportunity.

Lastly, as we gain validation for our drug development platform through the HEAT study, it is our goal to generate additional product candidates from this platform and advance them through research into the clinic. Unlike the first-generation liposomal technology used in drugs such as Doxil and [Monoset], Celsion's liso-thermally sensitive liposomal technology possesses a novel mechanism of action as Dr. Borys pointed out, delivering a very high concentration in a region specifically targeted with the application of localized heat.

This technology shows promise in three major oncology chemotherapy classes. First, anthracyclines, such as doxorubicin, the basis for ThermoDox; taxanes, such as docetaxel; and platinums such as carboplatin.

Dr. David Needham from Duke University is currently leading our research with carboplatin, which is being conducted under an SBIR grant. In addition to expanding our pipeline, these efforts provide the opportunity to file patents that could significantly enhance and extend our patent coverage.

We have also demonstrated feasibility in animal studies using liposomal docetaxel. Based on results to date, it is our goal to expand research efforts to include extensive preclinical studies leading to an IND.

I would just like to make a few more points before opening the line to questions. As a development stage company, the significant potential of both ThermoDox and our technology platform can only be unlocked through external capital resources. To get the most out of our capital we remain as always judicious and cautious with expenses.

Our strategy and approach to future financing needs remains unchanged. We will continue to seek funding for the Company on terms that are best designed to enhance shareholder value. Reflecting this are the various financing tools we have employed to date to fund ongoing operations.

As a mature Phase III asset, ThermoDox also continues to attract interest from potential partners. We continue to evaluate such opportunities, the timing of which will be dependent on terms that represent value for our Company and our shareholders.

In closing, I would like to convey how excited we are at Celsion to stand at the cusp of such a pivotal moment. We are positioned to deliver what may be one of the most significant new drugs for arguably the largest unaddressed cancer in the world. Preparation for this outcome has led to incredible work from our focused team effort here at Celsion in clinical operations, chemistry manufacturing and controls, on a regulatory front, and finance, business development, and other areas.

We look forward to the continued support of key research leaders and our partners at Yakult and Philips Healthcare as we make strides toward the achievement of both our near and long-term objectives. As we hit milestones, the wealth of options from both ThermoDox and our technology platform provide will be taken advantage of. Our strategy for creating immediate value, however, is clear. We will complete the HEAT trial and are prepared to lead a successful commercialization process.

In closing, I want to recognize Celsion employees for their commitment and all of their hard work. We continue to make impressive strides in our clinical programs, preparations for regulatory submissions and ThermoDox commercial manufacturing. Every day I am reminded of the pleasure it is to be a part of this team.

Now, with that, we will go to questions, which I would like to ask you to limit to no more than two to give everyone a chance to get answers. So, operator, if you would please open the line for questions.

(Operator Instructions) Keith Markey, Griffin Securities.

Good morning, Mike. Thank you for taking my call. I was wondering if you could provide us with a little bit more information about the secondary liver trial design?

Certainly we can. I think just to start it off here, Dr. Borys will fill in the blanks, but the secondary liver cancer program really leverages the work that was accomplished in our Phase I study of ThermoDox in treating a variety of liver cancers. We are quite excited about not only the potential for ThermoDox to provide an effective means to treat metastases to the liver, but also the market opportunity. You know that liver mets represent an incidence that is almost 10 times that of primary liver cancer in the US. So, Nick, would you care to comment on the protocol design?

Sure, I appreciate the question and this trial is designed as a Phase II but it's designed as a randomized Phase II and as you probably know, secondary cancers to the liver primarily are seen from the colon -- colorectal cancers, and there are still a good number of patients with colorectal cancer that couldn't -- that have metastases to the liver that still can be treated with curative intent.

So we plan to expand that because RFA is used routinely in these types of patients. If we are correct in our predictions, we believe that this study will be completed at around the time that we will be securing our NDA for HCC. So that the liver world could have a very full view of not only ThermoDox's activity in HCC but also get a Phase II taste as to its activity in metastatic liver cancer cases.

That's terrific.

Does that cover it for you, Keith? Do you have any other questions?

You would need to at least officially if you wanted FDA approval for metastatic liver, you'd have to do a Phase III trial?

That would be correct. So this would be I think a robust Phase II and then depending on the outcome, then we could think about what type of Phase III we would need to proceed with.

Right, right, thank you. I just was wondering if you could provide us with a little bit more detail on the HIFU bone cancer trial. For instance, when do you think it might start? How many patients might be involved? Would this be regulated as a drug device combination?

Yes, let me take that in reverse order. We submitted our protocol as a combination therapy. The office of combination products at the FDA generally designates a lead branch to evaluate these kinds of applications. In our case, the lead branch CDER, as we expected. Although in our first meeting with FDA on this protocol, we had a very large audience from both CDRH and CDER. In fact, I will give you a little anecdotal color here.

We submitted -- as these things go, we submitted our request for a meeting. We submitted our protocol and briefing book. As is usual, we were given a date for the meeting. As is also usual, we were provided with some summary answers and additional questions from the agency before just about a week before the meeting. We thought to be prepared for the meeting we would need some additional time and requested such.

The agency got back to us. And this I think is kind of unusual and asked us not to delay anything because they were very, very interested in speaking with us about our program.

So I don't know exactly what to infer from that but they were delighted that we did keep the meeting. We got quite a few questions, frankly, on the physics and the technology associated with this acoustic energy. I think we were -- no surprises at all with regards to ThermoDox. You know, now that ThermoDox has been administered to some 300 patients, safety is pretty well established. So no real questions there.

With regards to -- and Philips was of course on part of the call and they were delighted. Actually I think very well prepared to wax eloquently on their technology.

So from here, we have a little bit more work to do to provide some mostly I'd call it engineering kinds of questions -- or answers than engineering kinds of questions. I think about it that way. And resubmit those. They've given us some direction on how to incorporate what we agreed to as the appropriate approach into our next submission of the Phase II protocol.

I suspect we are also relying on Philips to complete their end of the work, so it's hard for me to give you a firm commitment. But we have some internal targets that before the end of the summer we would have all of this work completed in a resubmission.

If we are lucky, Keith, we will get two thumbs up from the agency late in the fall, in which case as I've pointed out, Philips has offered to fund completely the Phase II trial. We are delighted with that.

As far as the protocol design goes, maybe we can say a little bit about that at this point, Nick?

Yes. Again, one of the clear things that we established with the FDA is that we could proceed with the Phase II study, because I think the safety profile of ThermoDox is well characterized at this point. People understand how the drug works, and we've already demonstrated a good experience in a high number of patients. So I think the agency is comfortable that we are proceeding at a Phase II level.

Again, I just want to reiterate what Mike just mentioned is the timing on this issue really depends on working together with our partner, putting together all those engineering responses that we need to put together with Philips. But meanwhile, Celsion stands ready as soon as we respond to all these questions from FDA.

Okay. Well, thank you very much for taking my questions.

Mike Waterman, Waterman Financial.

Good morning, guys. How are you all doing?

We're doing terrifically, thank you.

Good. Two questions, one on the second license deal that's kind of been out there looming for the past year or so, is there any kind of catalyst or milestone that we need to meet in order to get that deal done?

That's a good question. You know, I --.

That you can comment.

Yes, I'd like to comment on it. I just want to make sure that everybody knows that we have seen a great deal of interest and nothing but positive interest. We are hopeful that following this interim analysis that we could find terms that we believe represent the appropriate basis for -- that would lead to a license. That's all I would like to say at this point.

Okay, and second question on the timeline to the point where we actually have a drug in the marketplace to hopefully then be followed up with future drugs, what sort of timeline in terms of years are we talking about after hopefully ThermoDox gets its approval and then we follow it up with other drugs? Are we talking a three to four year timeframe or what?

No, I would say not three to four years. So let me just -- I always take a risk with these things, Mike. But let me just kind of follow up what would be a just a normal progression of events. Let's assume that we have data about this time next year, topline data from this study. Typically, although we will move as quickly as we can, it takes about six months to analyze the data, format it, submit it, put it into the appropriate NDA format, get -- gain enough confidence with the application to submit it.

We have a fast-track agreement with the agency. There's a potential that the preclinical portion of the NDA and the CMC portion of the NDA may be submitted before the topline data, but it would take about six months and typically then the FDA has about six months for their review.

In our case, the PDUFA date is reasonably certain as a function of fast track, about another six months. Depending on the data, we would be on a parallel basis planning for commercialization. So I hope that gives you some kind of color on what we think the timelines could be.

Okay, all right, thank you.

[Nick Mavropoulos], private investor.

Good afternoon. Thank you for taking my question. I have a couple questions. First, I guess probably a little bit simpler than the second. My first question is now just by perusing the literature, it seems to me that different RFA treatment modalities have resulted or may have resulted in different rates of efficacy. I'm curious, the HEAT study trial design, how is it -- how did it make -- how did it arrange to take that into consideration? Was it essentially physician's choice with regard to the specific type of RFA treatment that was given? Or is there a hard and fast rule in the design that stipulated what physicians could use in terms of specific RFA modalities?

Nick?

I will take that question. First of all, I am not sure what you mean by RFA modalities. RFA is a singular modality and maybe there are different types of RFA in terms of maybe you might be thinking about comparing it to a microwave technology that has now recently become available. But RFA in terms of instruments, there's pretty well a single design made by at least three major manufacturers throughout the world.

In our study, it's standardized. We only allow sites that have good experience on their RFA that has been documented and investigators who have experience on the particular RFA machine that is approved by the FDA, and that's documented. And also they are to follow the manufacturer's recommended methods for ablating the tumor with the RFA machine.

So this was carefully reviewed in the protocol design, reviewed by external experts, and then finalized and agreed to by the FDA. So I think if your question is have we standardized the way we do our RFA, the answer is yes.

I see, okay. That answers that question. Thank you for that. The second question is again concurrent with me coming -- [arrives] with the question regarding that you just answered. I also noticed that PFS as a primary endpoint is -- it seems to me that the trial, it may bias the HEAT trial against ThermoDox. The reason why I say that is because it has been my -- the evidence that I have been able to unearth has been that it's been local recurrence that has been the primary metric that has often been used in RFA and various liposomal formulation type therapies.

By using PFS, because you are also considering progression -- extra hepatic progression and not only extra hepatic but intra-hepatic, not necessarily the tumor that is being treated, it seems to me that you may have ThermoDox working extremely well; however, you may theoretically, you may still miss PFS simply because the ThermoDox is working extremely well in the local area where it's supposed to be -- being administered, but it may not have very much effect outside that area. And you may just have micro-metastasis outside that area which may develop. And so do you see what my concern is, how PFS could bias the trial against ThermoDox?

Yes, this is Nick Borys again. I understand your view on that, but I think the reason why we will be successful is because when you look at the patients that we are treating and you look at the lesion sizes, the most common first recurrence is local recurrence. And depending on the size of the lesion, for example, we start at three centimeter lesions and we go as high as seven centimeters. It increases pretty dramatically. And depending what literature you look at, for example, three centimeter lesions at a minimum I think all authors would agree have a 20% recurrence rate. And as you increase that, goes as high as 50% recurrence rate.

What I mean by that recurrence rate is local recurrence. So the driving force in the PFS in those patients will be local recurrence. So that's why we are comfortable with our endpoint.

Wouldn't you also say, Nick, that the study is powered appropriately to account for extrahepatic and distant hepatic progressions?

I see, that's a good point. The powering could -- it could be sufficient to perhaps deal with any -- in quotes -- outliers perhaps, if you will.

So both extrahepatic and distant intrahepatic regressions were accounted for in the statistical plan.

I see, those are my few questions. I -- thank you for answering them.

[Shavasi Syasi], private investor.

Thank you so much for taking my call. I again want to thank you for all your work. A quick question, this actually goes out quite a bit. So assuming a successful outcome in the HEAT trial, when it comes down to actual FDA labeling, are you anticipating that FDA will specify use, essentially mirror the inclusion/exclusion criteria of the trial? Or will it be somewhat open and just specify use in combination with RFA?

I'm sure you can appreciate from a commercial perspective there could be some impact there. I would imagine if it works as well as it probably does is the way I'm thinking, even for lesions up to three centimeters, I would imagine some oncologists would say, well, hey, just to play it safe, we will use ThermoDox as well. So I just wanted to get your thoughts on that and again I know that's thinking way far out.

No, actually that's a great question. We have thought about that in the design of the trial. We are designing the trial in a way so that we can show the efficacy of ThermoDox in the most robust way with the smallest population possible. So we did consider that.

There's every potential that the FDA will want to have a discussion with us with regards to the label and the extent to which they would allow us to incorporate lesion sizes larger or smaller than those that are specified in the protocol. Our point of view is that assuming we have robust data coming out of the trial is that the label that we will apply for will not be restricted by lesion size. That's our point of view. But that always could end up in the debate. It certainly could.

Now whether the label limitations translate into a bias in the way ThermoDox is used in the market, that's another -- I think you made that point very clearly in the last part of your question.

But our sense here is that in talking with our medical advisers, a number of our investigators and those people who lead opinion in radio frequency ablation, is that ThermoDox is an adjuvant. If we show data to support registration in this Phase III trial, in as much as we do not, we do not change the treatment process at all, there's no change really to the practice of radio frequency ablation other than the administration of a bolus of ThermoDox into the IV. That the assumption here is that most procedures would be accompanied by ThermoDox. Nick, would you --?

Obviously the labeling question will come in the final negotiations with the different regulatory agencies and it really comes down to risk-benefit. It will all depend on the safety profile of the drug in the final data analysis and how it looks in terms of efficacy. So we are confident that the safety profile will be as we expected and that there will be very robust labeling for the drug in the end.

But as you know, that's still many months away before we enter a label discussions, but for us we think that HCC is a very large patient population that we will be able to address in the labeling.

Although it is, just as you pointed out, it is a far-off question. It was a very important question to incorporate in our thinking on the protocol design. Thank you for the question. We will take one more, operator.

[David Spaeda], private investor.

Good morning, Mike. I appreciate the efforts of the Celsion team. Obviously being a long-term shareholder, I have experienced the pain of all of the offerings that you have done recently at low share prices. And I am wondering what you and Jeff are doing to get the word out to the investment community to get that share price up, so as you raised future capital, it doesn't hurt the long-term shareholder who supported you over all these years.

My second question is looking at your balance sheet, I see that large payable out there that is almost $7 million. My concern is who is all that money owed to? I am concerned with the issue of how much is past due and could those payables force you into a collection effort that may hurt the shareholders in the form of a potential bankruptcy.

David, before you worry too much about that, I want to answer the second question first, and so Jeff? Because I think that's a function of the accounting treatment more than anything else.

A lot of these are items that we have to accrue based upon when we have incurred an event in the enrollment cycle. We are current with all of our payables. A lot of this is accounting treatment relative to making sure that we have the proper earnings reflected in the proper quarter.

So we are talking about liabilities that incur for which we -- I want to be more clear about that, Jeff. It's liabilities that we incur in a clinical trial or that we anticipate incurring in a clinical trial.

Correct.

But when are they due?

They will be due to typically in the next quarter or two. As I said, we are current with all of our payables and accrued liabilities and we very closely monitor all of those liabilities.

Is there one or two that are particularly large that could force you into an uncomfortable financial situation?

We are on top of it, David. Now with regard to your first question, we have been out meeting with a number of different investors and different research analysts. I think you may have seen today there was a nice write up on the Company on Street.com which was released today, gave a very good overview of the Company's progress.

And we continue to communicate the story to a number of different individual's institutions to get the word out about Celsion and ThermoDox and the fact that we are on the cusp of a very significant what we believe a value inflection point.

Good. Well, I continue to support you and I hope we could all meet one day and offer a nice congratulations on the success and just a huge value to the Company. All right, thank you.

David, we look forward to it too. I think -- are we finished? Is there -- operator, is there anybody else on the line?

That is actually all the time we have for questions today. With that, I would like to turn the call back over Mr. Tardugno.

Thank you so much. To our shareholders, I think what we tried to communicate to you this morning is that we are reaching a very important milestone in our HEAT trial. It underpins the belief that we have that our heat-sensitive liposome can provide a platform and a pipeline of opportunities for the oncology world. We are excited about where we are at and we are very appreciative of your continued support. Thank you very much and have a nice day.

Once again, ladies and gentlemen, that does conclude today's call. Thank you for your participation and have a great day.