Imunon Inc (IMNN) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Celsion Corporation Third Quarter 2011 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn things over to Mr. Jeff Church, Senior Vice President. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us.

Our third quarter 2011 results were released this morning before the market opened and are available on the SEC's Edgar system, and on the Company's website at www.celsion.com. Today's call will be archived, the replay beginning today at 2 p.m., and will remain archived until November 17, 2011. The replay can be accessed at 1 (877) 870-5176 in the US and Canada, or 1(858) 384-5517 outside these territories. The conference ID is 3247371. The 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 Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risk and uncertainties, including 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 technologies, 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, as always, to be with you.

We are joined today by Nick Borys, our Chief Medical Officer; Jeff Church, Senior Vice President of Strategy and Investor Relations who just spoke; and of course, Greg Weaver, our Chief Financial Officer. On today's call, Greg will provide comments regarding our third quarter 2011 financial results, including balance sheet and P&L highlights. Following that, Dr. Borys will discuss progress and future milestones for our global Phase III HEAT study in primary liver cancer, as well as our clinical expansion strategy for ThermoDox. Jeff and I will then discuss key goals for the Company as we look toward 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, which I will ask you to keep to no more than two.

I want to open the call with a comment that I've made to a number of our stakeholders over the last months, and that's this. I believe we're really on to something. We stand at the precipice of data from arguably one of the most important trials, if not in oncology, then certainly in liver cancer. Underscored by the major accomplishment of this past quarter, and it's many implications for the HEAT study. This, of course, is enrollments of the 600 patients which we addressed on our last call.

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

The fact that we have and continue to see momentum from some of the most important and well-known 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's potential as a new first-line standard of care for this aggressive and difficult cancer. he HEAT study has been executed to the highest standards of clinical, statistical, and regulatory rigor, from design through execution over a period of several years. We have worked closely with regulators in 10 countries around the globe to ensure this study reaches their standards for regulatory review and for approval, assuming, of course, a positive trial outcome.

Which brings me to the next important event associated with this study, and that's the pre-planned interim efficacy analysis by the Company's Independent Data Monitoring Committee. The IDMC 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 analysis, as you may recall, is triggered by two events -- enrolling of 600 patients and reaching a minimum of 190 progression-free survival events. The announcement of this interim analysis is expected within the current quarter, following a scheduled meeting of the IDMC. The IDMC analysis is blinded to Celsion, as is required by our special protocol assessment agreed to with the FDA.

The analysis has three potential outcomes as we have discussed in the past, including a recommendation for early filing based on overwhelming efficacy, which Dr. Borys will discuss in his comments later in the call. Second could be a recommendation to continue this study to the pre-planned data read out of 380 progression-free survival events, for which this study is designed and powered. Or third, an assessment of futility, which I believe to be highly unlikely if not de-minimus, given the numerous reviews that the DMC has given this trial over the past two and a half years, evaluating safety, specifically, in this patient population.

Either of these two of the first two outcomes, we believe, signifies a strong positive momentum and validation for the study, for ThermoDox, for our heat-sensitive liposome technology platform, and for the Company. The next key event following this review, possibly as early as a year from now, is unblinding of the study of 380 PFS events, and the availability of top-line clinical efficacy results, assuming, of course, the study is not stopped for efficacy or for the very unlikely event of futility at the interim analysis.

Now we have had questions about the timing for the final unblinding, and so has your Company. As good proactive companies do, we have taken steps to accelerate data, including extending enrollment of the HEAT study to 700 patients, along with other activities. We have modeled the historical and projected PFS events, fully expect the Company will have timely PFS and overall survival data.

Clearly, there has been a great deal of anticipation around this interim analysis and its implications for the study. Interim analysis such as this one is not uncommon in large trials registrational trials in oncology. A halt for efficacy is, however, quite uncommon.

To be clear, the study was originally designed and powered to provide a reasonable probability of statistical advantage in the ThermoDox arm at the full 380 PFS events. The study's final data readout, this is why we have time and again qualified and anticipated this as the most likely outcome. That said, this is the first assessment of efficacy undertaken in a randomized population for a large study using ThermoDox. So the outcome is certainly difficult for us to predict.

We have also had a number of questions regarding the stopping rules for the interim analysis. As we have pointed out, the IDMC must assess per the clinical protocol and their charter, the totality of the data, including an assessment of progression-free survival benefit relative to the added toxicity of doxorubicin, and must evaluate a trend in overall survival. For the decision to be made to halt the study, or to approach the FDA, the EMA, and other regulatory bodies, there must be a strong rationale to do so.

The PFS bar has been set high intentionally, not only to conserve Alpha but also to establish irrefutable correlation to the study's efficacy objectives. An overall survival bar has not been set. No less, we'll have to be trending in the right direction, and ThermoDox's toxicity profile again will be evaluated in parallel on a risk-benefit basis, as it has been in previous DMC reviews.

We are fortunate to count among our IDMC members some of the most respected statisticians and oncologists in the world. Our faith in their judgment is therefore absolute.

I also want to be clear in the fact that this study is the cornerstone of Celsion's value proposition. We've spent a number of years ensuring that its acceptability to regulatory bodies around the world and its proper execution at 76 clinical sites and its diverse geographies. Over the past three plus years, the Celsion Management team has traveled to our clinical sites to meet with investigators, to gauge their enthusiasm, to ensure data quality, and to 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 through to commercialization. As we have indicated, this process has already begun with our recent investigator symposium in Hong Kong this past August.

So 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 medical need left in oncology. It is therefore critical that any decision to affect this study before its designed maturity be taken with the utmost caution and sensitivity to each and every one of these audiences, including regulators, caregivers, patients, Celsion employees, and not least, our investors.

This also includes any decision with regard to disclosing information which may affect the blind or pure review of the data. Our strategy and decisions are being guided with these audiences in mind. We are fortunate to have a Management team, employees, and a Board with a great deal of experience in navigating these circumstances. We understand and fully share in the enthusiasm at this time and are eager to share our news with our constituents at the appropriate time.

Today more than ever, we are well-positioned to deliver what is potentially the most significant new drug for what is arguably the largest unaddressed cancer in the world. I will speak to our efforts in doing so in a moment.

Now I'd like to turn it over to Greg Weaver, who will cover our third-quarter financial results. Greg?

Thank you Mike, and good morning. I'll begin by commenting on the Company's balance sheet, which has been strengthened in the buildup to key milestones for the HEAT study. Early in the third quarter, we raised gross proceeds of $25 million in two equity financings, and we ended the third quarter with a total of $21.4 in cash and investments. These financings reflect what we believe is the growing financial potential from our maturing ThermoDox programs, and our attention to opportunistically strengthen our balance sheet at terms which bring value to all shareholders.

Notably, the largest of these recent financings was priced near our 52-week high that had a modest warrant coverage, thereby protecting existing shareholders. It also triggered the conversion of all previously issued preferred stock into common shares. Further, these financings provided the Company with an operating horizon into the fourth quarter of 2012, a period in which we expect to achieve several key milestones in our ThermoDox program, including the potential for top-line data from the completed HEAT study.

Celsion today is well-capitalized with a diversified institutional shareholder base and the capital resources to achieve its goals over the next 12 months. Now the Company's focus on expense management is appropriately intense as we invest in our key priorities. We realize we have limited resources and, therefore, we manage to this reality. As the Company has done in the past, we'll continue to balance our need for additional capital against the timing of development activities and BD initiatives, with the goal of enhancing and preserving shareholder value, and while assuring that our balance sheet remains in a position of strength.

Moving to this quarter's financial results, we reported a net loss of $6.4 million, or $0.25 a share for the quarter ended September 30, 2011, as compared to a net loss of $4.7 million, or $0.38 a share in the same period last year. For the first nine months of 2011, we reported a net loss of $17.1 million, $0.93 a share, compared to a net loss of $13.5 million, $1.10 a share for the same period last year. Our total operating expenses in Q3 were $6.8 million, an increase of $1.6 million compared to Q3 of last year, which was driven by our investments into the HEAT study.

To further explain our use of cash for the quarter. Of the $6.8 million in operating expenses for the three months ended September 30, $464,000 of that were non-cash expenses recorded for recurring depreciation and amortization expense and stock-based compensation. Total net operating cash expense in Q3 after deducting these non-cash expenses was then $6.3 million.

Our cash flow plans indicate that our current cash balance will enable us to operate and achieve our objectives over the next 12 months as we anticipate our relative use of cash to decrease somewhat incrementally in 2012, driven by the completion of the additional 100-patient enrollment into the HEAT study, and completing some planned manufacturing activities and CMC objectives.

To assure that we have continuing runway, we have the ability to exercise appropriate flexibility in our drug development investments made throughout the year. Research and development costs were $5.4 million in the third quarter, an increase of $1.5 million compared to Q3 of last year, which was primarily due to the anticipated increased costs for investigator grants, monitoring costs and other payments associated with higher patient enrollment levels into our HEAT study. Also contributing to this increase in Q3, R&D expenses were activities associated with late-stage CMC and commercial manufacturing development of ThermoDox.

Our G&A expenses increased $189,000 during the quarter compared with a year ago as a result of some higher outside professional services and personnel cost. Net cash used in operations in the third quarter was $6.9 million, which includes our partially absorbing the cost that had been previously borne by Yakult for Japan's participation in the HEAT study. And our decision to increase enrollment by the 100 patients to ensure that we enroll the minimum regulatory requirement of 200 patients into China, as well as well to accelerate the rate of progressions needed for final data read-out. As mentioned, we ended the third quarter with at total of $21.4 million in cash and investments.

At this time, I'd like to turn the call back to Mike.

Thank you for your usual thorough review, Greg. As always, very good.

Now, Dr. Borys will discuss our clinical programs in more detail. 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, large, pivotal, Phase III clinical trial evaluating ThermoDox in combination with radio frequency ablation in patients with non-resectable primary liver cancer. For primary liver cancer, there exists poorly defined treatment options, between patients with early-stage disease eligible for surgery, and those with later-stage disease, subject to only palliative treatment. RFA, a treatment with curative intent, is the predominant choice for non-resectable liver cancers, with average local recurrency rates of around 50%. Its efficacy, however, is limited by tumor size, showing significantly less effect at tumors three centimeters in size or greater. This is due to the increase in local recurrence.

ThermoDox is engineered to concentrate doxorubicin in the margin surrounding the tumor, activating only in the presence of heat generated by the RFA procedure. By combining RFA, a heat-based therapy with ThermoDox, the margin surrounding the tumor is heavily treated, an effect which our data strongly indicates they extend the cure rate RFA to larger, more locally-advanced tumors.

A key feature of the HEAT study is indeed its stratification across different tumor sizes. The study protocol differentiates between based on lesion size, 3 centimeters, or about the size of a ping pong ball, to 5 centimeters, and 5 centimeters to 7 centimeters, about the size of a tennis ball. Having a direct understanding of ThermoDox's effect in these larger tumors is a critical component of the ThermoDox clinical value proposition in hepatocellular carcinoma. 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 year. The incidence 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, is possible in fewer than 20% of patients. By 2020, the World Health Organizations estimates that hepatocellular carcinoma will 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. As announced in August, we have reached our pre-planned enrollment objective of 600 patients in the study, a critical milestone toward successful data read-out. This enrollment objective was established to ensure that the study's primary endpoint, progression-free survival, or PFS, can be achieved with adequate statistical power and is one of two triggers for an interim efficacy analysis by the study's Independent Data Monitoring Committee. The second trigger being confirmation of a minimum of 190 PFS events in the study population, which has also occurred.

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, PFS, and survival data. In other words, the totality of the data, when making a final determination based on risk-benefit analysis of those combined clinical data. It would be wrong and inappropriate to give a singular number or statistical criteria that would be indicative of a positive outcome.

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 by the National Institutes of Health. This underscores the urgency for treatments addressing this unmet medical need. We enjoy enormous regulatory support from the FDA, the EMA, and numerous other international regulatory agencies around the world in support of the way we're conducting a study.

Liver cancer is being described as a future epidemic in many populations, including US veterans. But it's certainly a major global challenge, and 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, a leading cause of liver cancer, is widespread. In August, for example, we held a clinical symposium in Hong Kong to discuss the reach and market potential of ThermoDox in the Asia-Pacific region. The symposium was attended by 35 investigators that are participating in the HEAT study.

The HEAT study has already reached sufficient local enrollment to support registrational filings in two important markets in Asia, South Korea and Taiwan. Enrollment in China is quickly approaching the minimum 200-patient requirement necessary to support local registrational filings in this important country, where over one half of the global incidence of HCC exists. We're continuing enrollment worldwide in order to improve the time to final data.

Our partner in Japan, Yakult, is planing to continue evaluation of ThermoDox. As you know, the IDMC has been unable to conduct the separate safety evaluation required by the Japanese PMBA due to the different standard of care in Japan. Nevertheless, Yakult remains enthusiastic about the program and continues to evaluate ThermoDox separately from the HEAT study.

While primary liver cancer a priority for Celsion and a focus of the vast majority of our resources, ThermoDox's unique properties support its potential well beyond this indication. We continue to move forward in terms of planning and execution with our studies and recurrent chest-wall breast cancer, bone cancer, and colorectal cancer metasticized to the liver. It is critical that we begin building our understanding of ThermoDox in these indications now, so that the broader oncology community may have an understanding of ThermoDox's benefits, and additional highly meaningful indications of significant unmet medical need. Our technology has a platform potential and represents a pipeline within a product.

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

Thank you, Nick. Certainly excited me.

Adding to Nick's update, our program in secondary liver cancers has approached the key inflection point. Now that the HEAT study has accrued its 600 patients target, we are initiating our randomized, blinded Phase II colorectal mets to the liver study, which we now refer to as the ablate study. We have IRB approval and a clinical trial agreement at Montefiore Albert Einstein Hospital. Our lead principal investigator, known to many of you is Dr. Steven Libutti.

The second trial site is nearly ready. All told, we plan to initiate additional sites over the coming months for this randomized Phase II trial.

Our objective, as we communicated in previous conference calls, is to have data from this trial for presentation in a time frame that closely follows the approval of ThermoDox for HCC. With the intent that our clinical evidence would support compedia listing and expanded use of RFA plus ThermoDox to treat liver metastases, a market in the United States and Europe that is 10 times that of HCC.

This study, and indeed, all of our Phase II studies are designed to support potential compedia listing of ThermoDox. Compedia listing would in turn support adoption and reimbursement from private and public payers. We see this as a critical means of multiplying the clinical and commercial value of ThermoDox with, as Nick said, little delay following the validation in the HEAT study.

This brings me to our joint research collaboration with Philips Healthcare. As most of you know, we have a joint research agreement, or a JRA, with Philips that addresses the potential of ThermoDox in combination with Sonaleve. That's Philips proprietary high-intensity focused ultrasound, or HIFU technology, as a means to non-invasively treat cancers.

I have characterized this as a game-changer in oncology, and I believe it is. Both the academic and medical communities have been very supportive of targeted drug delivery applications using MR-guided HIFU. You'll also note that the EU has provided through the Center for Translational Medicine, a $7 million grant to evaluate our combination therapy approach. The grant is co-sponsored by Celsion and Philips, with the research being led at the University of Utrecht in the Netherlands.

Earlier this year we submitted a pre-Phase II briefing book to the FDA. We had a conference with them. We have agreement with the agency that a Phase II trial with pain palliation in bone metastases is an acceptable trial design, and our first clinical study using ThermoDox in combination with HIFU. We are hopeful to move forward quickly once the agency's questions are fully satisfied, and those questions largely surround the use of high-intensity focused ultrasound in this indication.

With that, now I'll turn it over to Jeff who will discuss some of our licensing and other strategic initiatives. Jeff?

Thank you, Mike. As we discussed on our last call, knowing that this is a transformative time in our history, which will require key resources to be successful, in late October, the Company completed its move to our new, yet modest, headquarters at 997 Lenox Drive in Lawrenceville, New Jersey, under attractive lease terms, which offset the cost of relocation. Our ongoing rent expense is less than what we were paying in Maryland.

The Company received a New Jersey Economic Development Authority Business Employment Incentive Program grant approved in August to support the move. The grant provides for up to $1.1 million in tax incentives for jobs created in or relocated to the state. This move provides ready access in close proximity to large multinational pharmaceutical companies, research institutions, academic centers, and investment sources. This deep resource pool and the addition of a facility that will support our future growth, brings us the commercial, financial, scientific, and partnership resources that are in abundance within this area to Celsion, providing for our growth in the coming months and years.

Further to this point, ThermoDox, as a mature Phase III drug candidate, remains an attractive asset to potential partners. It is our goal to evaluate geographic and indication-specific partnerships throughout the world to support the commercial launch of ThermoDox, as we did in Japan on very attractive terms. We have the benefit of sufficient capital resources to negotiate terms that are attractive for the Company and that deliver maximum value for our shareholders.

I will now return the call to Mike.

Thanks, Jeff. It has 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 call the fastest pathway to approval in significant global markets.

With completion of the HEAT study on the horizon, we are working diligently to ensure there are no surprises with data or protocol compliance. Supporting our clinical and regulatory goals, our fast-track designation by the USFDA, and 505 B2 agreement with the agency. Providing for a rolling NDA submission, a six-month regulatory review, and the simplified review process associated with 505 B2, as well as orphan designation in both Europe and the United States for ThermoDox and primary liver cancer.

During the third quarter, we had a very productive and positive meeting with the EMA Pre-advice Committee. The results of which will help us to fine-tune 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. When we have that, we'll make an announcement with regards to our approach forward in Europe.

With regard to chemistry manufacturing controls, or CMC. I'm delighted to report on the progress that Dr. Reed and his team have made, and expect, as we have communicated on our last call, that our first of three registration batches is on track for manufacture in the next few weeks, with timing for the final two batches accelerated so that they will be completed this year. As many of you know, an NDA filing requires three registrational batches to be completed and time-sufficient to be able to submit data that supports product stability over a given shelf-life projection. It's important to complete those batches in a way that supports our registrational aspirations.

Getting to this point has been no small feat. Much work has been done and has gone into refining and quantifying a reproduceable, scaleable, and cost-effective commercial manufacturing capability, having the potential to generate 90-plus gross margins and support a global launch. Our decision to invest in the acceleration of our manufacturing program and to expand the number of contract manufacturing organizations available to produce ThermoDox will help to ensure no delays in our registrational filing, and will give greater supply-chain assurances to a potential license partners.

Celsion is, today, at a most important inflection point. We have designed and pursued a rigorous strategy for successfully delivering ThermoDox through a regulatory process and to the market assuming, of course, a successful outcome of the study. Too often, promising drugs fail because the sponsor tries to cut the statistics too close to the line, or study is conducted with speed, but without rigor. We do not intend to see this outcome at ThermoDox. We have raised substantial capital, approximately $35 million over the past two quarters, to see us through this critical period, and believe that we owe it to all of our shareholders to ensure ThermoDox is given the best chance at success, not to mention our employees and the hundreds of patients and caregivers who are behind this effort.

That's not to say we will not take action if it the data supports doing so, but we will only affect this trial and the substantial investment in time and resources that brought us to this point if a high degree of certainty exists. It gives us great pride to see the continued dedication and enthusiasm of our key research leaders, our partners, our employees, and our collaborators. We thank them and you, our investors, for your continued support.

Now with that, we'd like to go to questions. And again, I'd like to ask you to limit them to no more than two, ideally one and a follow-up, would give everyone a chance to pose their questions and get answers. Operator, if you would please open the line.

(Operator Instructions) [Siavochi Siachi], private investor

Thank you so much for taking my call and --

Good morning.

I really appreciate all your efforts to date, and I appreciate you taking some time to really provide some color around the interim analysis at the top of the call. Just one -- a couple questions here. Assuming the DMC goes ahead, and again just assuming here, goes ahead and makes that recommendation to un-blind, to what extent, if at all, would the FDA be involved? How would that --

To what extent the FDA would be involved?

Right. Exactly. Would the DNC have to consult with the FDA? Would there be back and forth before an announcement is officially made?

So it's a little bit of a tricky pathway, Siavochi. We're in some uncharted waters, here. We do have an agreement with the agency as a part of the SPA, before halting the trial to consult with them. The exact process, as a matter of fact, Nick and I were discussing that this morning. How that would unfold really will be a matter of our discussion with the DNC if in the event we do have that wonderful news coming from our DNC members. I can say this to you, however, as far as news from the Company if, in fact, we intend to go to the FDA, we're likely to announce that.

Okay.

That would not mean, however, it would be qualified completely. The Company would have to have agreement with the FDA before un-blinding the trial. I want to remind everyone, that PFS is a surrogate end-point for survival, gold standard in oncology, as you know, for those who are schooled in the -- understand the business of oncology trials, survival, overall survival, is the gold standard. So we're evaluating a surrogate under this SPA, with agreement with the FDA.

It's important for us all to recognize that there has to be a clear relationship or correlation between PFS and survival. The literature suggests there is with a high degree of confidence. I think Dr. Borys could speak to that if you'd like him to. But within this trial, it's clear to us that survival will have to show a trend, a positive trend, in the direction that is support -- PFS is supported with a positive trend in overall survival.

Okay. Thanks for the explanation. If I might have just one follow-up to that, if I may. If the trial does continue and the recommendation is made to go to 380 events, exactly what data can we expect to be released at the interim, if anything? I know you've suggested in the past there wouldn't be much data, if anything, but I may have heard otherwise, as well. Will there by anything that we'll get from that interim PR, and if so, what would it be, specifically?

Well, of course, the -- if there was any futility, we certainly would discuss that. De minimus, obviously. If there were a recommendation to continue, at this point, again, we're likely to consult with the DMC in some detail, but at this point our guidance remains the same, that recommendation to continue would be announced as a recommendation to continue.

Does that answer your question, sir?

Yes, it does. Thank you.

Bruce Watts, Watts Global.

Two quick questions. First, I'm sure that you watch the competitive horizon and always have very carefully. If you were to compare your competitive situation today, technically, and in terms of who the competitors are now, how would you compare your relative position today, versus the competition in comparison to a year ago or two years ago?

As you pointed out, Bruce, we scan the horizon for competitive trials all the time. We know virtually every clinical trial that's being conducted in primary liver cancer specifically, and more broadly in liver cancers, including metastatic disease. From a year ago, I don't believe that there's anything that's changed that I would be in a position to comment on. We don't feel threatened. I guess that's the point I want to make with you, by any drugs that are in development currently, for the most part. ThermoDox is indicated as a first-line therapy. Those other drugs that we do know that are being evaluated, are being evaluated in later-stage disease. Does that answer your question?

Yes. I mean, it sounds like -- the way I would summarize that is, there are no missiles on the horizon. Things are going well from a competitive position.

Yes, we would agree with that point of view.

Okay.

We're very comfortable where we are. The trial work -- we're likely to be a year or so from data, and as we look at the clinical trials horizon, there's nothing out there that we believe would be competing with us in the near term or on the relative intermediate term.

That's great. That means the need for ThermoDox and your technology, as acknowledged by some of the actions of the FDA, et cetera, is all the greater, because there isn't an obvious option out there for the same stage of the technology, or any technology, so that's great.

It's not just our opinion, either.

I know.

It wasn't too long ago that there was a conference convened by the NIH of key opinion leaders from throughout the world to evaluate clinical programs in progress for primary liver cancer. They identified eight trials that were given a designation priority trial. We were the only trial of those eight that has the potential to be a first-line treatment.

Yes, that's great. I don't mean to be overly optimistic, but it's beginning to seem like it's not an if, it's only a when. You don't have to comment on that. That's my comment.

We like your point of view.

Second question relates somewhat to the earlier question with regard to the DMC. There's no prohibition on the DMC talking at whatever frequency they might choose with the FDA and vice versa, right?

No, that's not exactly right. There is no open dialogue between the DMC and the FDA, if that's what you're --

But if they wanted to talk, there's nothing to prevent it?

I suppose not. I can't imagine why they -- you're talking about talk independently outside of --

I don't know why they would, but I'm not sure there aren't reasons why they might.

Yes. We just can't envision a circumstance where that would happen.

Okay.

There's nothing to prevent it, I suppose.

My other actual real question with regard to the DMC is can you give us a sense of how many people with the DMC you're actually interfacing with on day-to-day, week-to-week, month-to-month kind of a basis? I don't have a good sense of that. I think I've just forgotten, but that would be helpful.

Well, sure. There are three experts on the DMC panel, but that panel is supported by a number of individuals, including our data management people, our primary clinical CRO, our internal individuals, of course. So when we convene a DMC meeting it involves, as we've talked about in the past, an open session, an executive session, and a confidential or a blinded section.

Right.

The meeting participants for the open session usually include as many as 10 or 12 people, and it winnows down to a very small, select group, the DMC members, and the un-blinded data management person.

Thank you very much. I just want to add one comment, and that is that we're always asking you about how things are proceeding positively into the future, but let me compliment you on the fact that there don't appear to have been any slip-ups at Celsion under your leadership, and that's every bit as important as whether we make certain amount of progress two months sooner or four months sooner or whatever. Slip-ups can kill you, and you're not having them.

We thank you for that comment.

Thank you.

Thank you next, please?

Holt Faircloth, Private Investor.

Good morning, Holt.

Good morning, Mike.

It's been a long time.

Yes, it has. Hopefully, though, the time becomes shorter as I'm sure we'll have meetings where all the successes we can share and talk about.

We're with you on that.

What I want to do is I'd like to follow up on Sia's question, or maybe a clarification -- this is an easy one, though. Because we don't know the terms of the SPA, and I presume this is in the SPA, or it may not be, but what I'd like to know is what data, and I'm not looking for specific data, but what is released to the Company from the DMC from the interim efficacy evaluation? Do you get the full data of trial data?

Nick Borys will take that question.

Yes, there's a standard set of data that we get with generally all the DMC meetings, and I have to tell you that the data we get is blinded data, so we'll get pooled data, for example. We don't get data, for example, that shows what happened to the patients in the ThermoDox arm versus the patients that were not. We get pooled data that gives us a better understanding of the safety profile of our patients. We get a better idea to make sure our demographics are there. We get an idea of how well we're doing in following patients for CT scans, how well the sites are turning around. We get a bunch of quality measures.

The thickness of the tables and listings that we get from the data management group is easily four inches, so that is supplied to us for these meetings and it's discussed during the meetings, so you can imagine there's a number of metrics that are discussed in the meetings beyond any potential metrics regarding efficacy and survival.

I would add to that, Holt. Nick is always modest. He has a quality dashboard that evaluates data quality, timeliness of data, concordance, discordance, any outlier investigator sites that he wants to bring to the attention of DMC, all of which is actionable information. So it's not only a safety review and we like to kind of characterize it, the DMC is always eye-balling for risk/benefit.

Also, we use it as a forum, Nick uses it as a forum to sure that we bring the experience of these DMC members into helping us to ensure that the study is being conducted in a high-quality way. Because In the end, what we want to be able to do is collect data efficiently from our investigator sites, with a minimum of queries, with a minimum of delays, without any concern from regulatory agencies regarding the quality of the data. So that's a big piece of the work that he does, and I think we all owe him a thank you for that effort.

And while that's interesting and I'm glad to know that, again, I go back to the efficacy part of it, that when the DMC reports, its report, now while it may suggest, make a suggestion to you that you do something, the efficacy data, how much of -- will you receive that data?

So we've received none on efficacy. When they report at the end of the meetings, we do not receive efficacy data. Let me just -- let me try to be clear about this. Maybe we'll ask Nick to clarify it more than I'm going to make in this statement. But when we're looking at an end-point like survival, it's very clear, it's a binary end-point. Either the patient is alive, or they're not.

When we have a surrogate end point like PFS, there's always the potential, because it's a radiologic end point, there's always the potential for the outcome to be [interperable]. So it has the potential, if it's not guarded very carefully -- if the blinding of this study is not guarded very carefully, for regulatory agencies to be concerned that the data might be compromised. So we are very rigorous internally about remaining blinded to efficacy data, and the DMC even more so.

So does that mean -- okay. I'm -- forgive me, maybe I'm confused. The DMC is looking at this efficacy data.

They certainly are.

What, perhaps, maybe I should ask, will they report to the Company? Will they only say we recommend that you move forward with the FDA? Will they only say we should halt the trial for futility or we should continue the trial, or will they give you efficacy data?

I think we tried to answer how ticklish this is, we're threading a needle here. We want to make sure that our commitment to the FDA is maintained, and that's before we un-blind the trial when we involve the agency. I think that as we said earlier, that's going to be a matter of discussion with the DMC when we meet them in relative near term.

All right. I'll accept that as an answer. Thank you very much.

Thank you.

We'll take our next question from Philip Lee, Mangrove Partners.

It's Nathaniel on for Philip, Mike. A couple questions for you. First, could you tell us first when the DMC is meeting? The dates, since you've scheduled it?

We have decided, in conference with the DMC, not to disclose that.

Could you explain the rationale behind that?

Well, it puts enormous pressure on the Company and the DMC. If, for example, the DMC were to meet on a Friday and wanted to deliberate over a period of time on the information at hand and consult with the Company, the timing to do so may not be consistent with the exact date that they meet. So we want to make sure that we don't put ourselves in a position where the investors and the Company are committed to a specific date for an outcome that is not -- we're not able to talk about. And then it gets into the speculation of what's holding it up. I'm not sure that's a fair position for the Company, and it's certainly not fair to investors, we don't think, and it's certainly not fair to the DMC.

My next question is, I understand that your decision whether or not to un-blind is going to take a lot of factors into account. One of them is clearly going to be a black and white factor of meeting a P value with regards to PFS. Could you share that P value with us?

Again, I think that's not something that we're prepared to share. The P value has been set intentionally high, as we pointed out in our prepared remarks, to ensure that the correlation to survival -- I'm sorry, the correlation to our end-point or a P value at 380 events is irrefutable.

All right. My last question has to do with the timing of the final read-out on the study. The Company has a very poor history of meeting timing deadlines. I traced your conference calls back to February of 2008 when you originally said that you thought you would be fully enrolled within 18 months, which subsequently slipped in March of 2009 to seeing full enrollment in the first half of 2010, or in November 2010 when you said full enrollment in early 2011. Clearly, you were off on a repeated basis. I'd like to understand what confidence we should have that you're actually going to read-out by the end of the 2012? And if not, who should take responsibility for it? And in what manner they're going to take responsibility?

I don't think there's any guarantees. We certainly take responsibility for -- and I certainly take responsibility for the activities of the Company. What we know today is quite a bit different than what we knew when we initiated the trial. We don't make our projections on a cavalier basis. We've always tried to be as transparent as possible with the investor community. We think that's important. We've given continual updates. We have never tried to hide anything. I don't want to get to -- try to defend the past, but there have been certain events with regards to getting clinical trials agreements with various regulatory agencies around the world that took longer than we anticipated, for reasons that we would not have understood until we made the filing.

Just to be clear --

With that said, what we know now is we do have a number of investigator sites. We have a track record of enrolling patients. We've modeled that in an appropriate way. We believe there's a benefit and I'll communicate that to you. If we enroll patients in a time frame that we are anticipating, a benefit of four to six months. That's based on a model.

To be clear, if we don't have a read-out by the end of 2012, we should hold you responsible?

Okay, yes. You can always hold me responsible.

Okay.

Mitch Lancraft, Private Investor.

Good morning, gentlemen.

Good morning, Mitch, how are you?

Doing great, I'm a shareholder of Celsion Corporation, what could be better? I want to echo Mr. Watts' statement that among the development-biotech companies, it's actually unfortunately common that there are mistakes and poor decisions and mistakes in the registrational process or the sensitivity with which you handle data and your interaction with the various stakeholders and I want to commend the Company by -- in how they have done that to date.

My question -- it kind of relates as a follow-up, you have referred to speculation about what could be reasons for the delay. I'm just wondering if you are able to calm some of that speculation by commenting? To many of us it would seem as if the -- some sort of result from the DMC is quite delayed from what we might have expected, and I know that's based on conjecture of when the 190th event might have happened. Are you able to submit that that delay is due to the 190th event coming much slower, or whether it's just been difficult to get the DMC members to find a date and be able to meet? Or whether there's been needs from the DMC or the FDA for more information? If it's appropriate to any extent, can you comment on any possible reasons toward the delays?

I'm not sure I'd call it a delay, but when we announced 600 patients, Mitch, we said our internal tracking of events were following closely 600 patients, and from that, once we had 190 events, that our view was that we could convene a DMC within eight to 10 weeks following the cutoff. We always caution investors, we always caption their comments, but our reading of events was an internal reading of events and it was not official.

As you know, this is a trial in progress. So the official reading of events comes from our Data Management Committee. When we ask them to freeze the database and take a look to ensure that we had sufficient number of patients to conduct the interim analysis, we asked them to take a look and provide a little bit of a safety margin. So we arrived at that. Once we had a confirmation of 190 events, we scheduled a DMC meeting. That's it.

Right. I would assume you are not at liberty to share, indeed, if we have or when we did achieve 190 events, according to your internal following, is that correct?

Yes. I don't think that would be appropriate. Back calculating the probability on the study is a function of a date specific on 190 events. I'm not sure that we think it's responsible for us to do that, or allowing that to happen.

Great. Finally, I'd just like to comment. I've been a shareholder and supporter of this technology and the Company for over a decade. I watch every development, and I want to commend the Company onto the greatest level of my due diligence, it is quite evident that no one, no institution, no individual shareholder, anyone, is getting any more information than anyone else. Management is exceptionally forthcoming and what's out there is equal access to all. That really protects the value of this gem of drug delivery, I consider it to be, and I want to thank you in that regard, as well. Thank you for taking the calls.

Thank you.

We'll take our next question from [Nick Mavropoulos], private investor.

I have a couple questions, unrelated. My first question is, the 190 events that occurred in, roughly, sometime in the third quarter, I'm assuming late in the third quarter. Could you comment on whether it was substantially more than 190 at the point it was reported or would you say roughly more or less non-substantially more, just about around 190?

I'd say it's -- you keep asking the question a number of ways and I'm not trying to get around your question. But it's 190 events with some comfort to assure that the 190 events would be the minimum required for the DMC to review the data and be able to conduct the interim analysis.

I understand, sir, that makes sense that you would want to have that comfort. My more point in question is assuming that there is a recommendation by the DMC to continue the trial, how strong of a signal as a shareholder -- how should I perceive that to be with regard to progressing negotiations with a potential partner?

Well, I think that's -- you could assume that would be an important next step to a partner in discussions. Does that answer your question?

Sort of. Could I perhaps maybe try to ask you a little bit more specifically, is there anything that is predicated -- not a final agreement, of course, I'm sure that would never even be -- you would never even say that anyway, so I wouldn't ask you that question, but a progression would be -- is there progression that is predicated on that, more or less? Could you give color with regard to that statement?

I'm not sure I understand your question. Could you just say it again for me, please?

Sure. Are there -- would any sort of next step of -- next step in the direction of something conclusive with regard to partnering discussions that is predicated on basically a DMC, either a DMC early stoppage or a DMC continuance, are partners sort of waiting in the wings for one of the two, or I should say, either of the two before they ramp it up?

I don't know if I can answer that with confidence, that would be the -- that's the only barrier to a license. As we have said in the past, I think Jeff mentioned that there are multiple interested parties at various stages of due diligence. The positive signal continuing the trial from the DMC certainly would be an important next step for diligence for a number of those companies. I think that's what I can say. But, a review of the ThermoDox asset from clinical through regulatory, manufacturing, market opportunities, cost, pricing, it's a very complex diligence activity.

Was I correct in hearing that the margins could potentially be 90% plus? Is that correct?

Sure, yes.

That's a very healthy margin. Very good. Okay, thank you, sir, for answering my questions.

Certainly. We have time for two more.

[Sam Leon], KCO Partners.

Good morning. My question is regarding, it was asked by one of the earlier participants. I'm actually pretty excited about the prospects of this technology, and I'm quite hopeful that a positive outcome, if it all happens because of the DMC review. In that event, what would be the next steps for the Company? And if it's a continue and -- would we see a partnership before any other financing, or just a question on your next source of cash?

We're always going to keep our options open. As Mike said, we have a lot of positive momentum with a number of different multinational companies, but we also understand the importance of maintaining a very strong balance sheet. You always want to good in any negotiation from a position of strength. We're going to keep options open, and as we always have in the past, we're cognizant of dilution from any financings, and we'll continue to drive the milestones forward toward what we hope to be a very successful trial.

Thank you for that. I mean, I have a follow-up on the [data read] part. I know the Company wouldn't want to disclose any indication if they aren't made aware, but wouldn't your prospective partner want to see some light into the data before they decide to partner? Because if it a completely un-blinded data, how would a partner get any insight? That's why I'm a little confused on that part.

I think it's -- that's a good question. That balance of value in deciding to wait until data, in which case the price of the license could be substantially higher, or concluding that there's enough evidence to complete a license before the final data is available, is what business development people at these multinational companies consider. I suspect this is -- what's embedded in your question, why don't they wait for final data? Because they might lose, they might lose the opportunity.

Yes, and that's understandable explanation. Is the only point is to a certain extent, would the Company be in a position to negotiate anything with the DMC to at least be helpful in your forward track? Is Company in a position to negotiate either with DMC or FDA to release a part of something at all, or is that completely out of table?

I think my first reaction to that is it's not appropriate that we would ask that question on the part of a licensing discussion of the FDA, certainly. But it would depend on the nature of the information that the Company would be looking for.

Yes, all I'm trying to say is the direction of the data possible, may not be complete un-blinding but even if it's directionally possible to get some kind of insight which may help you to negotiate with your partner, or because I understand you can't disclose that openly if it's not un-blinded, but so understand that partner, your views that a partner will have to kind of take a shot, trust your technology. Anything else you could help your partners with?

It's an interesting theoretical question, but we've had multiple, I'm not going to give you a number, of fairly deep dives on the ThermoDox and primary liver cancer due diligence activities. We have not even had one company ask to look at, or speak to, the DMC about data that they're seeing. If we get that question, it's a nice hypothetical question, if we get that question it would depend on what information they were looking for. We would have to consider that before we would ask any member of the DMC to comment. But as far as un-blinding the trial to provide data for potential license partner, I suspect that we will not want to do that.

Thank you. I appreciate that. Thank you for that.

Thank you.

We'll go next to [Tran Hildo], [Harstone] Capital Management

Sorry, I had to take myself off speaker there. Good morning, and thank you for taking my call. I actually was going to ask a question that was already asked, so I'm going to cede my time to the next person.

Okay, thank you, Tran. Operator, is there another person in the queue?

We have no other callers queued up.

Okay. Again, thank you all for your interest in support of Celsion. We continue to move forward with this very important trial. We are looking forward to the data from the trial as all of you are. If we have information, we will be sharing it with the investors as quickly as possible. Again, thank you and have a good day.

Once again, ladies and gentlemen, that concludes our conference. Thank you all for your participation.