Imunon Inc (IMNN) 2011 Q2 法說會逐字稿

Good morning. My name is Fran and I will be your conference operator for today. At this time, I would like to welcome everyone to the Celsion Corporation second-quarter 2011 financial results conference call. (Operator Instructions). One final note. Our call is being recorded and now I would like to turn the call over to Jeff Church of Celsion. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us. Our second-quarter 2011 results were released this morning before the market opened and are available on the SEC's Edgar system and the Company's website at www.celsion.com.

Today's call will be archived, the replay beginning today at 2 PM, and will remain archived until August 16, 2011. The replay can be accessed at 877-870-5176 in the United States and Canada or 858-384-5517 outside these territories. The conference ID number is 4377542. The call will also be available call will also be available on the Company's website for 30 days after 2 PM 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 Legislation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, involving without limitation the risk of clinical failures, delays, or increased costs, unforeseen changes in the cost of our research and development activities and clinical trials by others; possible acquisition of other technology's assets or businesses and possible adverse 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 Mike Tardugno, President and CEO of Celsion Corporation. Michael?

Thank you, Jeff. Good morning to all and thank you for being with us and for your continued interest in Celsion. It's a pleasure for us to be with you.

We are joined today by Nick Borys, our Chief Medical Officer, and Jeff Church, who you may know was recently promoted to Senior Vice President - Strategy and Investor Relations. Jeff has been instrumental in strengthening the Company's balance sheet and in his new responsibility will play a significant role supporting the execution of our business development and commercial strategies as well as our commitment to our shareholders.

Also joining the call for his first of many is Greg Weaver, our new Senior Vice President and Chief Financial Officer. We announced recently that Greg joined the management team, having formerly been a member of Celsion's Board of Directors. He brings with him a strategic knowledge of Celsion and a wealth of financial expertise from his career as a financial officer in the biotech and healthcare industries. His Board contributions have been invaluable as I'm sure they will be in his new role as CFO.

As always, we are delighted to be here with you and to provide you with an update on our work and to answer your questions for which we will provide plenty of time at the end of today's call.

For today's call, Greg will provide comments regarding our second-quarter 2011 financial results including balance sheet and P&L highlights. Following that, Doctor Borys will discuss several positive developments and future milestones for our global Phase III HEAT study in primary liver cancer as well as our clinical expansion strategy for ThermoDox, a drug with the potential 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 the commercialization of ThermoDox, a goal now well within reach. After that we will open the call for your questions.

First I want to note and make clear that our fundamentals are sound. Despite recent macroeconomic events and the significant impact these developments have had on the NASDAQ and biotech sectors, including Celsion, the fundamentals of your Company are very strong. We are well-positioned for the strong balance sheet to support the delivery of our near-term and longer term strategic goals.

Second, I would like to recognize an event that highlights the culmination of all of our work since we began the transformation of Celsion just four years ago in regulatory affairs, clinical operations, drug development, and with some pride I say in attracting some of the finest talents in our industry. And that is this. The enrollment of 600 patients in our HEAT study which we announced last week.

I want to thank the Celsion team and our many collaborators in the global oncology community for their commitment to the HEAT study and their collective roles in helping us to reach our enrollment target for this vitally important study. The HEAT study is in fact the largest clinical trial ever conducted in intermediate hepatocellular carcinoma or HCC, also known as primary liver cancer.

The fact that we have and continue to see momentum from some of the most renowned principal investigators in liver cancer demonstrates the medical community's ongoing enthusiasm for the HEAT study and for their expectation of a timely evaluation of ThermoDox as potential as a new standard of care for this aggressive and devastating cancer.

The HEAT study has been designed and conducted with the highest standards in mind from a medical, scientific, and regulatory perspective. Over the past three years the entire Celsion management team has traveled to our clinical sites to meet with investigators to gauge their enthusiasm to ensure data quality and address any outstanding concerns. We expect that these efforts will ensure a smooth, efficient, data collection process and facilitate the steps necessary for moving ThermoDox to the commercialization process. The outcome of the HEAT study is greatly anticipated, not just by our Company but by the entire medical community and the patients and families in urgent need of new and better therapies for the largest unmet need left in oncology.

Today more than ever, we are well-positioned to deliver what is potentially the most significant new drug for what is arguably the addressed largest unaddressed cancer in the world. With that in mind, Celsion has begun the process of increasing our understanding of the primary liver cancer population addressable with ThermoDox in combination with radiofrequency ablation. We are doing this with our anticipation of positive data to support ThermoDox's launch in major markets around the globe.

This effort is being kicked off with a clinical symposium in Hong Kong later this week, the first of several in geographies around the world where investigators are participating from each targeted region. Our goal is to ensure that we understand the reach and market potential of ThermoDox and ensure that it's well-characterized in how we might however provide a new standard of care as a first-line treatment.

The next important event associated with the HEAT study is a preplanned interim efficacy and safety analysis by the study's independent data marketing committee, the DMC. The DMC is comprised of an independent group of medical and scientific experts with the responsibility for reviewing and evaluating patient safety and is charged with conducting the interim analysis. The interim analysis will begin once a minimum of 190 PFS or progression-free survival events are confirmed by our independent radiology CRO.

After confirmation, data will be connect collected at each of our 76 global sites, quality assured and formatted for DMC review, a process which is expected to take a minimum of eight weeks, again following PFS confirmation. The DMC's analysis is blinded to Celsion as required by our special protocol assessment agreed to with the FDA.

As we have said before, this analysis has three potential outcomes including, number one, a recommendation for early filing based on overwhelming efficacy which Doctor Borys will discuss in his comments later on the call. A recommendation to continue the study to the preplanned data readout of 380 events for which the study is designed. Or, which we believe to be quite very unlikely de minimus, in fact, an assessment of futility.

Either of the first two outcomes we believe signify strong positive momentum for this study. The drug, our heat-sensitive liposome technology platform and our Company.

The next key event following this review possibly as early as a year from now is the un-blinding of this study and the availability of topline clinical efficacy results assuming, of course, the study is not stopped for efficacy or the unlikely event of futility in the interim analysis. We know more about the -- we will know more about the PFS rate once the IRC provides us with the number of PFS events confirmed to date. I have to say this is indeed a very exciting time for your Company.

In addition to establishing evidence of ThermoDox's efficacy and safety in the treatment of a disease whose growth worldwide remains unchecked, we will also underscore the potential of our novel technology platform in other cancers were heat in combination with ThermoDox has demonstrated remarkable potential. We will speak to our efforts in these areas later in the call.

So with that I'd like to introduce Greg Weaver, who will cover our second-quarter financial results and again, Greg, welcome.

Mike, thank you very much and thanks for those words of welcome. I'm very excited about the Celsion story and the opportunity to participate in its evolution at the management level. I'd like to begin by addressing the Company's balance sheet which, as you remarked, has been greatly strengthened in the buildup to key milestones for the HEAT Study.

Since the beginning of the quarter we've raised gross proceeds of $33.6 million in three different equity financings, $25 million of which was raised after the close of the second quarter, and each of which was secured among terms of superior to the last.

Allow me to briefly review these financings. The first of private placement closed in early June of $8.6 million in common stock and warrants priced at $2.65 per unit to unaffiliated institutional investors and officers and directors of the Company at $2.90 a unit. Second, our registered direct offering closed early in early July of $6.6 million in common stock and warrants, sold in units at a price of $3.17. And the sale in late July of an aggregate $18.4 million of the Company's securities through a registered direct offering and a private placement. Registered direct was sold at a price of $4.26, and the private placement of $4.27 per unit.

These financings reflect what we believe is the growing value potential from our maturing ThermoDox programs. The last financing was priced within $0.10 of our 52-week high and had a very modest warrant coverage, thereby minimizing minimizing dilution to the existing shareholders and it also triggered the conversion of all preferred stock into common shares.

Further, these finances provide the Company with an operating horizon into the fourth quarter of 2012, a period in which we are hopeful to achieve several key milestones in our ThermoDox program, including the potential for topline data from a completed study. Celsion today is very well-capitalized with a diversified institutional shareholder base and the capital resources to implement a broader development program.

Moving to our financial results for the quarter, we reported a net loss of $6.9 million or $0.42 a share for the quarter ended June 30, 2011 compared to a net loss of $2.6 million or $0.22 per share in the same period of 2010. For the first six months of 2011, we reported a net loss of $10.7 million or $0.72 a share compared to a net loss of $8.8 million or $0.72 a share for the same period in 2010.

The second-quarter 2011 results still include a $586,000 non-cash charge related to the change in the common stock warrant liability compared to the non-cash benefit of $1.8 million in the prior year. And in the first six months of 2011, we recorded a $418,000 non-cash charge related to this same common stock warrant liability compared to a non-cash benefit of $259,000 in the same period of 2010.

Moving to the P&L, R&D costs were $1.5 million higher in the second quarter of 2011 compared to last year, primarily due to anticipated increased costs for investigator grants' monitor 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 CNC development and commercial manufacturing development of ThermoDox.

General and administrative expenses increased 25% or $256,000 during the quarter compared with last year, as a result of anticipated higher costs associated with outside professional services and personnel costs.

Net cash used in operations in the second quarter of 2011 was $7 million, partially absorbing the cost that had been born by Yakult for Japan's participation in the HEAT study. We ended the quarter with a total of $5.5 million in cash and investments. This figure includes proceeds in the second quarter of the $8.6 million private placement financing and $2.8 million from two draws under the Company's committed equity financing facility with small-cap biotech which is now exhausted.

The Company has no near-term plans for any similar equity financing arrangements. As the Company has done in the past, we will continue to balance our need for additional capital against the timing of development activities and business development initiatives with the goal of enhancing shareholder value.

During these uncertain financial times, the Company's financial fundamentals are sound. And with that I'd like to turn the call back to Mike.

Thanks, Greg. Thanks for the great review. We're looking forward to many more.

Now it's always my pleasure to ask Nick Borys to go over his comments. Nick?

Thank you, Mike. I'd like to start by addressing our pivotal HEAT study program. The HEAT study is a multinational double-blind well-controlled pivotal Phase III clinical trial evaluating ThermoDox in combination with greater frequency ablation in patients with non-resectable primary liver cancer.

For primary liver cancer, there exists poorly defined treatment options between early-stage disease eligible for resection and a later stage disease subject only to palliative treatments. RFA, a treatment with curative intent, is the predominant choice for non-resectable liver cancers with average local recurrence rate of around 50%. This efficacy is limited by tumor size showing significantly less effective tumors 3 cm in size or greater.

ThermoDox is designed to concentrate doxorubicin in the margins surrounding the tumor, activating only in the presence of heat. By combining RFA, a heat-based therapy with ThermoDox, the margin surrounding the tumor is heavily treated, an affect which our data strongly indicates may extend the cure rate of RFAs to larger or locally advanced tumors. The HEAT study is poised to confirm this potential and indeed the potential of this novel and innovative approach.

The global importance of establishing an effective treatment for this disease cannot be understated. Primary liver cancer is currently the fifth most prevalent cancer globally with more than 750,000 individuals diagnosed each year, a figure growing at a rate of over 5% per annum. On an age-adjusted basis, the incidence rate has tripled in the US between 1975 and 2005. The five-year survival rate is less than 10% and median survival from time of diagnosis is generally 30 months.

Cure usually through surgery or transplantation is possible in fewer than 20% of patients. By 2020, the World Health Organization estimates that hepatocellular carcinoma may become the number one cancer worldwide, surpassing even lung cancer. The importance of finding new and better treatments that can extend cure rates is immense.

As Mike mentioned earlier, the HEAT study is the largest clinical trial ever conducted in intermediate hepatocellular carcinoma. We've now reached our pre-plan enrollment objective of 600 patients in the study, a critical milestone for successful data readout.

The enrollment objective was established to ensure that the study's primary endpoint progression-free survival or PFS could be achieved with adequate statistical power and is one of two triggers for an interim efficacy analysis for the study's independent data monitoring committee, the second trigger being confirmation of a minimum of 190 PFS events in the study population. We have received numerous questions regarding what are the criteria governing the DMC's interim analysis.

Please note that the DMC takes into account safety, efficacy, and survival data and makes a final determination based on risk benefit analysis of those combined data. So it would be inappropriate to give a singular number or statistical criteria that would be indicative of a positive outcome.

In July of this year, the independent Data Monitoring Committee reviewed data from 535 randomized patients and completed a series of safety and quality reviews, and has recommended that the Company continue the HEAT study. The HEAT study is being conducted under a US Food and Drug Administration special protocol assessment, has received FDA fast track designation and has been designated as a priority trial for primary liver cancer for the National Institute of Health., underscoring the urgency for treatments addressing this unmet medical need.

Liver cancer is being described it as a future epidemic in many populations, including US veterans, but it's certainly a major global challenge consistent with our global regulatory strategy. We plan to address as many markets as possible with the HEAT study, particularly those in the Asia-Pacific region where the incidence of hepatitis B, a leading cause of liver cancer, is widespread.

As we announced yesterday, Celsion will convene a symposium of leading experts in primary liver cancer to address ThermoDox's reach within this important geographic area.

China, one of the largest population centers in this region, is a priority. And as such it is our goal to meet Chinese State Food and Drug Administration requirements for registration of filing.

We've opted to do so by continuing to enroll patients in the HEAT study in China, where we expect to randomize at a minimum the required 200 patients. The study has enrolled approximately 150 patients in China and we believe that additional enrollment through the HEAT study allows us to secure SFDA registration all requirements at modest incremental costs relative to a separate study in China.

The HEAT study has already reached sufficient local enrollment to support registrational filings at two other important markets in the Asia-Pacific region, South Korea and Taiwan, who are continuing enrollment worldwide in order to approve the time to final data. Now that our HEAT study has met its goal of 600 patients, our partner in Japan, Yakult is planning to continue evaluation of ThermoDox in Japan in a separate study.

As you know, the IDMC has been unable to conduct a separate safety evaluation required by the Japanese PMDA due to the different standard of care in Japan. Yakult remains enthusiastic about the program and will continue to evaluate ThermoDox at its own cost, separately from the HEAT study. Celsion is continuing to work closely with Yakult in securing approval of ThermoDox in Japan.

While primary liver cancer is a key focus for Celsion, ThermoDox's unique properties support its potential well beyond this indication. This potential was articulated in a recent publication in the Open Nanomedicine Journal, which explored advances, trends, and challenges in use of regional and local hypothermia and nanomedicine and oncology.

The recent article published by a Duke University research team describes a number of the advantages of low temperature-sensitive liposomes, the technology behind ThermoDox over traditional chemotherapies and liposomal technologies. It underscores the science forming the basis of our clinical programs including the HEAT and DIGNITY studies and a broader application in other cancers. We invite you to read this interesting article which can be found on the Celsion website.

With regard to the DIGNITY study, a Phase I study of ThermoDox and hypothermia in recurring chest wall breast cancer, we recently announced that after reviewing safety data from the Company's recently completed phase 1 portion of this Phase I and II study, an independent drug safety monitoring board has recommended advancing from Phase I to Phase II at 50 mg per liter squared of ThermoDox.

Our DIGNITY study is important for two key reasons. Firstly, breast cancer recurrence at the chest wall presents a significant treatment challenge, often resisting surgical radiologic or chemotherapeutic intervention. Two, for these patients, local control is meaningful and provides clinical benefit and is in the registrational endpoint agreed to with the FDA for the Phase II portion of our trial. Our near-term plan is to review the overall Phase I data and proceed with the Phase II design that incorporates what we've learned in Phase I and modifications that may enhance patient enrollment.

With that, I hope you're as excited as I am about the future of Celsion's clinical programs and I thank all of you for your support and encouragement. I'll now return the call to Mike.

Thanks, Nick. Great job. Great overview. Good overview. As Nick pointed out earlier it's been our goal from the beginning to pursue a streamlined global regulatory strategy for ThermoDox in primary liver cancer which provides us with what we've coined the fastest pathway to approval in significant global markets like China, South Korea and Taiwan, where local enrollment is intended to support filing without the need for additional bridging studies as is commonly required.

With completion of the HEAT study now on the horizon it is our goal to ensure that there are no surprises with data and protocol compliance. We continue to rigorously monitor our sites, our data and our vendors. Data management which can delay an NDA filing is being monitored carefully by Celsion and our CRO and is a function of the regular meetings of the IDMC.

Further supporting our clinical and regulatory goals are the following. Fast track designation, which we announced last year; a 505 B2 agreement with the FDA. These components provide us with the fastest pathway possible for a regulatory review of ThermoDox. Fast Track, among other things, provides Celsion with priority review and produce the date for PDUFA date certain of six months. 505 B2 streamlines the approval process by removing a degree of regulatory risk based on the understanding that ThermoDox employs a previously approved drug, doxorubicin.

As part of fast track designation, we're also eligible for enrolling NDA submission. Initiation of the NDA process has begun with review of our preclinical program which the agency has agreed is sufficient to support submission pending, of course, final data review. And in the first quarter of 2011, we announced that the Company received orphan drug designation in Europe or ThermoDox to treat primary liver cancer.

ThermoDox will have a 10-year regulatory exclusivity following the EMA approval, in Europe. This adds to orphan drug designation in the US which provides seven-year regulatory and marketing exclusivity following FDA approval in the US. Also point out a week ago Friday, we had a very productive and positive meeting with the EMA Pre-advice Committee. The results of which will help us to finetune our formal briefing book submission which is planned for later this month, which should lead to a formal opinion of our trial and European regulatory filing strategy by year end.

Now, with regard to CMC, our Chemistry Manufacturing Controls, I am delighted with the progress that Bob Reid and his team have made and expect as we communicated last call that our first registrational batch is on track for manufacture this year. All of that validates our decision to invest in the acceleration of our commercial manufacturing strategy and to expand the number of CMOs at the contract manufacturing organizations available to produce ThermoDox. Important to us, important to the commercial strategy and critically important to any potential license partners.

All these important processes -- as these important processes move forward, it remains another key goal of ours to advance ThermoDox's clinical development in other areas where ThermoDox in combination with heat has demonstrated efficacy including, as Nick mentioned, recurrent chest wall breast cancer.

In addition, secondary liver and bone cancer -- each of these indications represent a significant opportunity and the potential to address unmet medical needs. Our program in secondary liver cancers has approached the key inflection point. You know that we intend to start this study once the HEAT trial had accrued 600 patients. I want to advise you today that we are initiating our randomized double-blinded Phase II colorectal mets to the liver study which here on endeavor after will be referred to as CRLM.

Some background, as you know, last year our protocol was accepted by the agency without comment meaning we were free, we are free to initiate the trial as planned. This is meaningful. As you know, the FDA takes a great deal of time to review and accept new clinical programs.

As promised, we've done all of our background work except we've laid the groundwork for quick initiation of the trial. We now have IRB approval and a clinical trial agreement at Albert Einstein our lead principal investigator, known to many of you as Steven Libutti, we are delighted to have him leading this very important trial. The second trial site is near ready.

All told, we plan to initiate some six to eight sites over the coming months for this randomized Phase II trial. Our objective to have CRLM data for presentation in a timeframe that closely follows the approval of ThermoDox for primary liver cancer ACC.

We hope that our clinical evidence will support expanded use of our RFA plus ThermoDox to treat CRLM, a market in the US and Europe 10 times that of HCC.

I want to add a few remarks on our joint research agreement with Philips Healthcare division. As most of you know we have a joint research agreement with Philip's that addresses the potential of ThermoDox in combination with Sonalleve -- that's Philips's proprietary ion-tested [e-focused] ultrasound technology as a means to noninvasively treat cancers. We've characterized this and continue to believe it to be a game changer in oncology.

Both the academic and medical communities have been very supportive of targeted drug delivery applications using MR guided HIFU. I'll also note that the European Union has provided through the Center for Translational Medicine its $7 million grant to evaluate our combination therapy approach. The grant is cosponsored by Celsion on and Philips with the research being led at the University of Utrecht in the Netherlands.

And, our expectation is we will see some very promising publications and data coming from this research work, which we will make available to our investors and the public at large as soon as we have it. Exciting time for HIFU plus ThermoDox.

Earlier this year, we submitted a pre-Phase II briefing book to the FDA to talk about that. We have agreements at a Phase II study with the [pin affiliation] as an endpoint in prostate mets to the bone as an acceptable trial design for our first clinical study using ThermoDox in combination with HIFU.

Philips is working on a number of questions -- no showstoppers but a number of questions that were provided by the agency. Once they are fully satisfied, we are highly optimistic that we can move forward together quickly to initiate this very important trial.

So, with those aside, I'd like to ask our new Senior Vice President of Strategy and Investor Relations to discuss some of our licensing and strategic initiatives. Jeff?

Thank you, Mike. Knowing that this transformative time in our history will require key resources to be successful, Celsion announced recently a plan to relocate its R&D operations and corporate headquarters to Lawrenceville, New Jersey -- an area essentially located between New York and Philadelphia, as well as Trenton and Princeton. We anticipate no increase in occupancy costs as a result of the relocation which is contingent upon our receiving a business employment incentive program grant from the New Jersey Economic Development Authority.

With regard to relocation costs, we negotiated a period of free rent as part of the new lease agreement which will offset these moving costs. Relocation to this area offers us close proximity to top biopharmaceutical companies' research institutions, academic centers, and investment sources providing us with access to a deep resource pool in addition to a facility that will support our growth well into the future.

Further to this point ThermoDox, as a mature Phase III asset, remains an attractive opportunity to potential partners. We have already licensed the rights to ThermoDox in Japan on very attractive terms to Yakult. We will continue to evaluate opportunities for realizing values through other strategic alliances.

As part of my new role, I will also be focused on ensuring that the strength associated of Celsion's story reaches a wide audience within the investment community. With the recent financings, we have increased our institutional investor base to approximately 40%. We have attracted several new fundamental health care funds, including a leading Asia Pacific fund focused on promising new therapeutics in that region of the world, to our list of investors.

As we continue to achieve milestones, we expect that interest in the Celsion story will continue to grow, attracting investment from other institutional funds. I will now return the call to Mike.

Thanks, Jeff. So I have to say Jeff Church is a modest fellow. What he calls a period of time or how did you say that, Jeff? Relocation with negotiated period of free rent. Jeff, it's hard to know that the lease deal was six months free rent more than offsetting our relocation costs. So thank you on behalf of our shareholders for your great work there, Jeff.

So as we conclude here I just want to make a few more comments. Celsion today is at a most important inflection point. We have very substantial capital. Very important in this uncertain environment. $33 million since the start of the second quarter to see us through this current period.

We're making progress in a number of indications for which ThermoDox holds great potential. And with our key enrollment objective in the HEAT study now behind us, the promise of ThermoDox, as a new standard of care in treatment of primary liver cancer, is coming into focus. As I said at the shareholder meeting which we're grateful that many of you attended and hope to see more in future shareholder meetings I'd just say this on behalf of the management team.

We're in this industry because we believe we can make a difference. New drug development is not for the faint of heart. In this difficult and sophisticated world of clinical research and regulatory planning, we are every day motivated by our progress; and we have no intention of letting up.

Celsion continues to work diligently to ensure that all aspects of our ThermoDox's clinical and commercial development are handled to the highest of standards from clinical operations to CNC regulatory finance. In finance and other areas, our employees have accomplished much and I again want to recognize each for their commitment and all their hard work and look forward to continued support of research leaders and our partners from collaborators and we thank you, our investors for your continued support.

So we'll now go on to questions which I'd ask you to limit to two and we're going to be pretty strict about that since so that everyone can have a chance to have their questions answered. So, operator, if you would, please open the lines.

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

Thank you and good morning for the comprehensive review. I'm calling you from Boston. It's a beautiful day here. And you can see very far ahead into the distance over the horizon which is great.

That relates to my next question which has to deal with the horizon. We had some expectations that we would see the interim analysis of 190 events at the end of the last year or the beginning of this year. And we haven't seen the event. Is that's a good sign or worrisome sign? How would you evaluate -- does the timing change mean anything about the strength of the data or the strength of the control group, the strength of the experimental group? Do you have any comments you could -- and insights you could potentially share with us?

Yes. Let me give you a first nonclinical comment or a non-statistical comment. We may have been too optimistic in forecasting what we thought would be the completion of this study. That meaning enrolling 600 patients.

So we've gone through our bumps and bruises, particularly with getting regulatory approvals in a few countries and we got them. We got them with quite a bit of support. But that took a little more time than we anticipated -- particularly China. And with the pause, let me call it that, the DMC suggested for the Japanese cohort has taken a little bit more time for us to get to this point.

So enrollment has some -- enrollment rate -- some effect progression is as obvious. It's certainly obvious to you. With regards to 190 events from a clinical standpoint, I'm going to put our Chief Medical Officer on the spot here.

But I think what we're going to probably going to say here, Mark, is, we're not going to speculate. We are encouraged -- simply encouraged -- by the enthusiasm of our investigators across the [ford], but, Nick, did you (Multiple Speakers)?

Sure, Mike. I think that's a question that we often get. And the first thing that I would like to express is that I do get caution from our independent Data Monitoring Committee to be very careful and not try to overinterpret the data.

So, some people might be tempted to think that this is a good sign. Some people might be tempted to think otherwise or -- but our DMC is very neutral on this. There could be a lot of factors that go into when the events actually came through. And the DMC, through its statistical analysis, does updates on when to expect the event rates. And they have no concerns as to how these event rates are coming through and that has been communicated to me.

So, as a company, we are very neutral on it and again I just want to emphasize what Mike just mentioned. I would avoid any kind of speculation on trying to interpret this because there are many factors that go into when we see these events.

That was a thoughtful answer. I'll heed your thoughts here. But, in follow-up then, when you started the trial, I think you went after an area of clear unmet need where the cure rate there could be better and it was a wise decision for the landscape. But, since that time, do you see any other competitive pressures? Do you see some of the [TKIs] coming in potentially into your space? Into the earlier stage patients to try and make a difference there as well?

Good question. I think the Company that devotes quite a bit of resource to evaluating the competitive landscape, particularly with regards to developments and new therapies for primary liver cancer, first line evolution or developments in first-line treatment. It just is not fair to us other than what appears to them, Celsion to be a fairly high rate of adoption for radiofrequency ablation for non-resectable patients.

With regard to any other chemotherapies that may be -- losing my voice here -- that may be in the pipeline, we're just not aware of any new developments in chemotherapy that would prevent any kind of change in our thinking about the use of ThermoDox in combination with RFA to treat HCC patients.

So with that, let me ask you to jump in there.

Yes, I think in terms of the competitive environment, ThermoDox is in a very good position. First of all, we are expecting to improve the cure rate and I think that's very important for everybody to know.

For the technologies that are in the horizon, there is exciting ones for liver cancer, including HIFU. And as you know, Celsion is very much involved in HIFU development; so we may be seeing more of that in liver cancer coming in the future and also, we see great potential of combining our technology with HIFU as well.

But, otherwise, with the technologies that are non-curative, palliative technologies, I think the future holds for a potential combination approaches for utilizing a curative approach and a palliative approach in order to improve patient outcomes. So, for us, we see us working with the future technologies and just improving this important unmet medical need.

And I'll just add to that, Mark. We will -- this is a very important question that you asked. It will be a central question at our symposium coming up later this week in Hong Kong with our principal investigators.

Thank you for the information and we'll look forward to the upcoming event.

Bruce Watts, Watts Associates.

Well done to you, all your veterans and all your new people. I've got a longish question and a short question. The long one will go first.

Suppose that everything goes virtually perfectly for Celsion on over the next 18 months. What is perfect? And let me say that I have asked this question of over 100 companies in my lifetime and everybody gives me an answer. Some of them more detailed than others. But, that's my question.

That's a pretty open-ended question. For us, we repositioned this Company with the idea that moving it from a device company to a drug development company required us to focus. So I think as we have recounted over numerous phone calls and conversations, the Company thought it was very important to use its limited cash resources to demonstrate that we could take a very promising platform technology rapidly, as rapidly as possible, through a very important clinical trial and I think we've done this demonstrated that. At the same time, we did make sure that we put some opportunities in the pipeline with evaluating feasibility of our platform to accommodate other chemotherapeutics as well as other indications.

The goal of the Company fundamentally has been up to this point is to create value for our shareholders with a very narrow, very focused, very deep approach to evaluating ThermoDox in primary liver cancer with a contingency, let me call it that, that might be the wrong way to characterize it, but with a second trial in breast cancer should we hit unforeseen bumps in the road.

ThermoDox, in that case, is a growth engine. We believe that's important, demonstrating credibility with the investment community for a company that we've transitioned as quickly as we have, we believe, is very important. So, the growth engine now is beginning to provide us with the horsepower. So, if things go perfectly, the growth engine continues to generate confidence in the Company and our technology and in this management team.

It certainly allows us to access very important large markets. Attracting of course what we think are the appropriate players of outside the US to commercialize ThermoDox.

If things go perfectly, that leverages our interest, this Company's interest, in developing a platform of chemotherapeutics to address a broad range of indications. And I would say again, if things go perfectly, our interest in bringing those chemotherapeutics to market in the US ourselves continues to be very strong.

So, if things go perfectly, the future of this Company is one that is delivering superior returns to our shareholders, providing chemotherapeutic, particularly in unmet medical needs that provide the medical community of patients with options that they had never even dreamed of. If things go perfectly where we continue to recruit extraordinary talent to the Company and give them the range and freedom to use their skills to continue to create value for our shareholders, things go perfectly, our shareholders gain extraordinary benefit in the support that they've given our Company to date.

The last thing is things go very perfectly, my handicap goes from a 22 to 18.

My second question is subtly related but short. Monthly or quarterly or whatever period you want to select, can you give us some insight as to the number of unsolicited calls you are receiving from senior people in the medical community worldwide?

I don't know if I have a collective answer in that. We'd have to put our noodles together to figure that out for you.

I can say this. For the medical community, we certainly get the number of -- the number of [arms] to listen, personal introductions requests for involvement in our clinical programs, ideas ranging from different therapeutics to different indications, questions or requests to participate in our clinical trials. Certainly a number of requests to provide information to support academic research.

I don't know if I have a clear answer on that but if we put everybody together I would think the number might be quite large.

Edward [Demkin], a private investor.

I'm a newbie and I've got only one question for you. My question is related to pricing of ThermoDox. I'm not really looking for a price point but do you have a price range for ThermoDox therapy?

Yes, we do. This deserves a little bit of color. I'll take some time with it for the newbies and maybe to refresh.

We talk about this quite often. You know, the definitive pricing can only be established once you've had a data to base a quantitative pricing study on, and given the fact that ThermoDox is a global -- it's a global drug. There is no doubt about it. With the principal markets being outside the United States pricing studies in the, particularly in the Asian markets, require a lot of preparation and they certainly require the background and information as it relates to efficacy and value to the medical community before you conduct it. So we are very conscious of that. So, that's point number one.

Point number two is, you may not know this but we've been involved and continue to be involved with due diligence and licensing discussions with various multinational pharma companies; and that will continue. They have tended to validate some of the conservative assumptions that we've used for pricing generally.

So, and we've conducted some -- we would call it qualitative discussion pricing and, we did it on three continents across a number of different specialties in oncology across two indications. And so, we think when we really have some pricing power assuming that we meet our endpoints in our clinical trials, in both breast cancer and HCC.

So, all that said is, we've looked to some surrogates. We've looked at Doxil. And we've looked at Nexavar or sorafenib and we looked at their price points. And we know that Doxil has a global footprint. It's called a couple of different -- it has a couple of different brand names globally.

We looked at their price points Europe, US, Asia and so we benchmarked that. And it's a liposome with a generic active. And we looked at sorafenib, the therapeutic that is designed for -- not for indications specifically or for the state specifically but for advanced stage disease. So when we look at the pricing, it ranges anywhere from on an equivalent basis to a single dose or a single treatment of ThermoDox with RFA ranges anywhere from 12 to -- these two different surrogates, $12,000 to maybe as much as $60,000 per regimen. And that $60,000, whatever it is. And it's close to that number. Sorafenib provides about 11 weeks of survival. So you see the value of life literally, associated with chemotherapeutic.

So if you go to our webpage and you look at the latest investor presentation, you will see incidents and relatively modest revenues -- revenue assumptions that drive to about $1 billion in revenue with some very conservative pricing assumptions. That's all I can say. Does that give you some clarity?

It gives me some clarity, yes, sir.

[Nick Maveropoulos], a private investor.

My first question is am I right in assuming that you will be informed when 190 PFS events have occurred independent of a DMC review? Is that a correct assumption?

That's correct.

And my second question is perusing the literature, there is some indication that there are better outcomes depending upon how the RFA is done. In particular, there may be better outcomes using open surgical as opposed to percutaneous, and in particular for large tumors, there may be better outcomes using multipronged RFAs as opposed to single pronged RFA or single electrodes, multi-electrode. My question is, is the key trial well balanced with respect to those parameters so that there is as much as there can be no bias for or against ThermoDox? Has that been factored in?

We use a very, very thoughtful randomization strategy that we are very confident does not introduce bias into either arm. I think Nick Borys will comment.

Yes, first of all, you bring up some important points which actually increase the interest in the HEAT study. There is discussion in the literature as you say about open surgical versus percutaneous versus laparoscopic. But, the data literature really is only suggestive and the number of those studies are far and few between; and I think the HEAT study will bring back to maybe some sort of conclusion because of the raw numbers that we have.

But what I wanted to assure you is that at least by the procedure versus surgical versus percutaneous versus laparoscopic, our study's stratified in order to address that.

I see. And, with respect to multi-electrode versus single electrode, is that physicians' choice essentially?

Yes. That's a physicians' choice and they are required to follow the manufacturer's instructions on that and again, I haven't seen any data to show superiority of that approach versus other approaches. So that's the literature that I think is still a little bit more hazy in terms of -- about that bringing any kind of potential bias.

I see. Okay. I think that's about it. Thank you very much, gentleman.

William Pike, Pine Tree Securities.

Could you just tell me how many -- I'm looking for the fully diluted number of shares, deluded defined as counting all warrants as one, no treasury method. I am buying the stock because I think it's going up. And if it goes up I think all the warrants are going to be exercised.

Right now we have, just to add to the question on an outstanding basis about, 26.2 million. One of the things that we have pointed out is that we will have all of the preferred stock mandatorily converged so with that plus the warrants, we have about 36 million shares outstanding on a fully diluted basis.

Okay. When does the preferred conversion happen?

That's occurring as we speak. There was a 10-day notice after we concluded the last financing which was the registered direct. It triggered the demand mandatory conversion. So, in early August, all the shares will convert into common.

Got it. So 36 is the number I should be using going forward?

Correct.

And I believe you said the cash at the beginning of the quarter was $33 million?

No, we said we raised $33 million in the second quarter.

That's what I was confused about. Okay.

Yes. At the end of the second quarter we had $5.5 million in cash and investments. Then we raised an additional $25 million in July. So it really [stretches] the balance sheet quite significantly.

So, the cash today is --?

In the $26 million -- in that general range. $28 million.

Right. And could you talk about the brand over the next few quarters? If you mentioned it I missed it. Really things are pretty turbulent now but if you could give us a general (Multiple Speakers).

I think I mentioned this in my script but it's worth reiterating. Thanks. We anticipate that the current cash gets us into Q4 of 2012.

Thank you very much, gentlemen.

Bob Greene.

Just a quick question. You just mentioned the RFA in the control arm. Is it the facility -- do they choose which treatment they want for the RFA? Multi-probe or whatever?

There are three approved devices that are -- I don't know if this answers your one. You can ask another question on it. But there are three improved devices that are allowed in our study. Each one of those devices are generally accepted around the world. Those devices are chosen, which device is going to be used by the investigator is the choice of the investigator. We restrict that investigator to use that device throughout his or her participation in this study.

So once they've selected one of those devices and one of the manufacturers, they have to use that device on every patient who is enrolled in our study.

Will that -- could include multi-probe?

Well, multi-probe I think -- that's maybe another name for multi-antenna?

Yes.

Multi-antenna, sure, absolutely. Again, it comes down to the investigator's preference and the success they have with their technique and procedure. I think Doctor Borys can talk to you. We qualify every single one of our sites and we go through a pretty rigorous program of evaluating their experience and technique and capability before we allow investigators to participate in our study.

Maybe you want to mention something on one of those lines, Nick.

Yes. Again, just to reiterate all the devices that they use and the pros that they use have to be FDA-approved. And, they are required to have a minimum criteria experience on the probes and the instruments that they're using in order to enroll in this study which we document and verify. And again, we expect that the study will be well-balanced.

Also I think it's of interest to note for everyone that when it comes to approaches using the RFA devices, for example, probably around 90% of our RFA procedures are being done percutaneously. And then, the rest of -- the rest, the 10% are a combination of laparoscopic and surgical. So, that gives you sort of an idea how RFA is being practiced around the world.

Okay so what they choose when they first start in a trial, that's the one they keep throughout the trial.

That's correct.

Okay. One more question, quick. I know you're busy. When we get 190 events, are we going to get a PR for that or after the DMC comes back?

Yes. So let me answer that. So we would be inclined to providing that information and we think it's important but, we also I think as Nick pointed out so to the DMC is -- we owe them a courtesy. They are very possessive of this information and I think appropriately itself the study is, of course, blinded.

So, we want to consult with the DMC before we release it but, I'm inclined -- I think we're inclined to release that information.

Well, what we're looking for is you say you're going to be eight weeks after the 190 events for the DMC to do their work. Well, will we know when they actually start their 190 review?

Yes, it's a [pretty continuous] process. So let me just kind of take you through real quickly. So, once we know we confirm a minimum of 190 events, could be -- actually could be more. I'm not going to speculate but -- just those range of options. Then task force will signal to our CRO that the database will be locked. There are 76 sites in 11 countries and 17 time zones.

We go to every one of these sites; we pick up the -- something known as the case report form or the CRF. They're all collected. They are sent, in some cases electronically, sometimes hard copies to our state of management, independent data management method. Our met data management CRO, database management here.

They populate a very sophisticated database with all the information coming out of the CRFs that that information that is queried, or -- because the program that they use to collect this data looks for errors, mistakes, miscues, conflicts, so they query the data -- that -- those queries resulting questions. We go back to each one of our 76 states with a series of questions. Those questions are responded to and then data that is uploaded again to our data management CRO.

And it's only then that we generate reports. Then about two weeks before the DMC meets they like to have their reports. So if we can make this thing happen faster, we will. But the important point I want to make for you is we're taking this particular data set as seriously as if we were at the end of the trial.

We want no mistakes. We want to make sure the data is clean; it's accurate; and it represents information that can be -- that is actionable by the DMC.

Ladies and gentlemen, we do have five minutes remaining to take your questions. [Svotche Syassi].

Thank you for taking my call. Really appreciate it. I've got two questions there and firstly, assuming the RCW trial is opened up to the superficial cancers, does that remain a registrational trial as was originally planned [RCW alone]?

That's a good question. I'll answer that. The trial that was originally designed, we were really focused on the end-stage patients with an endpoint that was not survivable. We were very conscious about that. The -- with no options.

Our goal was to construct a trial assuming, of course, we had a great deal of confidence to get enrolled in the trial in a relatively reasonable timeframe. But in that population, our presentation to the agency was, here is a patient population with no therapeutic options, only palliative and end-of-life care, who has a medical need here and can -- local control providing a quality of life for -- actually quality of life for clinical benefit of controlling the lesion locally, which would agree if we can show them we can control this lesion locally in thus population that ThermoDox could be a -- could be submitted for approval. So we limited, limited, limited ourselves with the idea that we might have an outside chance here for a single trial Phase II trial for approval. Enrollment has been the biggest issue.

If we expand the trial to either other superficial cancers or to earlier stages which is quite likely frankly in this recurrent chest wall breast cancer population, the FDA -- and I think rightfully so -- will ask for a randomized trial or controllable control group.

So, the answer, the long answer to your question is no. It won't be a registrational trial if we make the changes that I think we're thinking about. And I think you want to -- you want to add more to that?

Yes. I think that at a minimum we are looking for a very well-constructed trial that could potentially be registrational. We have this guidance that Mike described to you from the FDA.

But, the key issue is, is to you come up with a Phase II trial that is going to be medically meaningful and, potentially, an important foundation where once the drug is approved by the FDA. So, that still needs to be decided as to how this Phase II is going to be designed.

But, clearly, it's going to meet minimum GCT criteria. Minimum medical standards for a high-quality clinical trial and then as the data comes in we will re-initiate discussions with the FDA.

Philip Baughman, private investor.

When valuing a company like Celsion, you generally look at discounted cash flows back to present day. And we've seen the billion-dollar numbers and at the annual shareholders meeting there were projections for various indications going to, I think, $3.8 billion.

Other than pricing, what other assumptions are you making as far as market penetrations or growth rates, those sorts of things? It's been said many times that they are conservative but what sort of assumptions are you making when you're looking at your sales targets?

That's a good question, Phil, and it's a timely question. We never want to be accused of or be lumped into with companies that overpromise on the revenue line. We've seen what happens.

So, in any event, so let me just talk about HCC particularly, and then I can give you an idea how we think about these things. We have -- we look globally at incidents. We look globally at the use of our RFA and where it's indicated we compare the treatment algorithms to this population. And it looks like about 25% of those presenting with HCC are eligible for -- under the current guidance -- are indicated for radiofrequency ablation.

And then, we assume that we'll achieve no more than 50% of that penetration of that 25% of the overall incidence. And, we assume that we will arrive at 50% of 25% over a five- to seven-year period depending on the market. Does that answer your question?

Yes it did. Thank you very much. I want to thank everyone for all the hard work. We are very encouraged by what we are seeing and wish you very -- wish you well in future endeavors.

Thank you very much and thank you all. We certainly do enjoy speaking with you and look forward to our next conference call. In the meantime, as we've always promised, as things develop in this Company we intend to be very transparent ink and communicate as frequently as possible. Thank you much. Bye now.

Ladies and gentlemen, that does conclude today's conference. Thank you for joining.