Imunon Inc (IMNN) 2011 Q4 法說會逐字稿

Well, good morning, ladies and gentlemen. My name is Kelsey, and I'll be your conference operator today. At this time, I would like welcome everyone to the Celsion Corporation year-end 2011 shareholders conference call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

(Operator Instructions)

And now I will turn the conference over to Mr. Jeff Church. Please go ahead, Mr. Church.

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

Our fourth quarter and full year 2011 results were released this morning before the market opened and are available on the SEC EDGAR system and on the Company's website at www.celsion.com. Today's call will be archived, the replay beginning today at 2.00 PM, and will remain archived until March 22, 2012. The replay can be accessed at 1-877-870-5076 in the United States and Canada; or 1-858-384-5517 outside these territories. The conference identification number is 3234714. The call will also be available on the Company's website for 30 days after today.

Before we begin the call, we wish to inform participants that forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, 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 and 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 said, I'd like to turn the call over to Michael Tardugno, President and CEO of Celsion Corporation. Michael?

Thanks Jeff, and thank you for being with us today. We are joined by Dr. Nick Borys, our Chief Medical Officer; Gregg Weaver, our Chief Financial Officer; and just back from his rock star presentation at the Roth conference, Jeff Church, who you just heard, our Senior Vice President of Corporate Strategy and Investor Relations.

On today's call, Gregg will provide comments regarding our 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 hepatocellular carcinoma, as well as our clinical expansion strategy for ThermoDox. 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'll open the call for your questions, which I will ask you to keep to no more than two.

First, I'd like to make a few comments, however. Starting with, Celsion is in a strong position strategically with solid fundamentals. We have a unique and elegant product candidate in ThermoDox that has the potential to become one the most important new drugs in recent memory. Assuming success in the clinic, ThermoDox's applications in oncology may be broad, having the potential to change the standard of care for a number of cancers, beginning with hepatocellular carcinoma, or HCC; or sometimes known as primary liver cancer. To realize this potential, the Company's committed itself to the successful completion of the HEAT study, a pivotal trial addressing this enormous unmet medical need.

Celsion has successfully enrolled nearly 700 patients in this global double-blinded, dummy-controlled pivotal Phase III study known as the HEAT study. By design and at our direction, the HEAT study has undergone multiple safety and risk/benefit reviews by its unblinded independent data monitoring committee, or DMC. Most recently, we reported that the DMC met in November for its first formal review of efficacy and futility in a pre-planned interim analysis. As we expected, the committee unanimously recommended the continuation of enrollment and patient follow-up to final data, an outcome we view as very favorable.

This evaluation was triggered as specified in our SPA, Special Protocol Assessment; by the realization of at least 50% of the PFS events required for final data analysis and enrollment of not less than 600 patients. The exact numbers -- 219 PFS events from 300 -- or 613 randomized patients, represented the most comprehensive evaluation of ThermoDox in the HEAT study to date

We've established important regulatory and commercial designations for ThermoDox, including orphan designation in the US and Europe, providing 7 and 10 years of market exclusivity [respectfully] following approval in those markets. We have successfully collaborated with FDA and received a Special Protocol Assessment, for our SPA for the key outcomes of this study, including PFS as a primary endpoint for conditional approval; and have taken great care to insure the study's acceptability within all the most relevant geographies in which this disease maintains a high incidence, including China, Taiwan, and South Korea.

In December, we announced that the European Medicines Agency, the EMA, provided a response letter to our discussion with the scientific advice working party, indicating that the HEAT study as designed is acceptable as a basis for submission of a marketing authorization application for centralized approval in the European Union. The EMA also stated that progression-free survival, of PFS, the primary end point of the HEAT study, would be sufficient as primary basis for registering ThermoDox in Europe. We have taken steps toward ensuring an uninterrupted global commercial supply of ThermoDox at launch, with costs of goods having the potential to generate 90%-plus gross margins.

Having now completed two of three registration batches required for NDA filing, we are confident in the process, the product, and our manufacturing costs. This is a critical, if undervalued and sometimes under-recognized as part of developing a novel new therapeutic. With both FDA and EMA, Celsion has established an efficient protocol for qualifying additional ThermoDox manufacturing sites, a program that is now in progress. Redundant manufacturing sites, as you may know, are critical for successful licensing to commercial partners.

The ThermoDox clinical program has been expanded into colorectal metastases to the liver, with enrollment in the first patient in our multi-center Phase II study known as the ABLATE study. Colorectal cancer is a widespread, globally prevalent disease and a leading cause of cancer mortality in the West with over 140,000 incidents in the US alone. We have taken great care to ensure that this study randomized Phase II trial that combines RFA with ThermoDox is being conducted in a way that is supportive of potential compendia listing of ThermoDox with the objective to expand its use beyond its label indication. Again, if we're successful.

While the ABLATE study would represent a significant increase in the adjustable population in the US and Europe, improving the value of our asset and our prospects for meaningful licensing terms in the US. The ABLATE study, along with some insights on the HCC program, is discussed in some detail by Dr. Steven Libutti, our lead principal investigator for ABLATE. A link was added to our website yesterday. We've talked about investigator interest and enthusiasm in ThermoDox. You can now hear it firsthand. I would encourage you to listen to the interview.

And finally, we've established a strong balance sheet with over $30 million in cash at year-end. You know, the road to clinical success is not inexpensive; our cash reserves provide sufficient resources to reach well beyond major critical milestones, including data from the Phase III HEAT study. Gregg will reinforce this point in his comments.

Part of our progress made in 2011 with the HEAT study -- four years ago, we had not enrolled our first patient. Last July, we completed at our initial target of 600 patients enrolled; and today, our statistician's forecast model indicates that we may reach 380 events by the end of this year. I know this is an important forecast for everyone, so we are committed to updating you as our DMC meets throughout the balance of this year. As the largest trial ever conducted in the intermediate HCC, this study the culmination of many years of planning, coordination with physicians, patients and regulatory bodies around the world.

Just a few more comments before I turn it over to Gregg. As you know, the DMC pointed out the opportunity for Celsion to conduct an additional interim efficacy analysis on the HEAT study data with little risk to additional output spending. After our review, we were encouraged by the rationale for conducting such a review and indicated that we would request FDA's agreement for a second pre-planned analysis as part of the SPA. In its response, FDA noted that subsequent looks following the first analysis could introduce a bias that would be difficult to quantify, and therefore would compromise interpretation of trial results, and was therefore not supportive of our proposal. Keeping in mind that PFS data is not that far off, as well as the years spent designing, enrolling, conducting the HEAT study, we are no less encouraged by the FDA's position. We will leave the study SPA unmodified, and look forward to completing the study in its original basis.

With liver cancer being described as a future epidemic in many populations, it's critical that the HEAT study provide a rigorous dataset as its -- to support adoption in broad use around the world. Consistent with our global regulatory strategy, we are addressing as many markets as possible with a single pivotal trial to HEAT study. We've worked closely with regulators in 10 countries around the globe to ensure that the study is consistent with local requirements for regulatory submission and approval. Accordingly, we've enrolled cohorts in China, South Korea, Taiwan, sufficient to support filing; whereas CPP, or Certificate of Pharmaceutical Product, is required, we will have either or both approvals in the US and/or Europe for this reference.

As I mentioned earlier, we received confirmation from the EMA that the HEAT study, if successful, would be acceptable as the basis for regulatory submission in Europe. Not only does this acceptance give us a clear regulatory path in this major market, it provides an additional basis for other international filings in countries that require approval from a globally-recognized regulatory agency. The EMA's decision, therefore, provides us with a second avenue for such recognition, further de-risking the ThermoDox global regulatory strategy.

So with that, I'd like to turn it over to Gregg, who will cover our 2011 financials. Gregg?

Thank you, Mike.

I'll begin my prepared remarks by commenting on the Company's cash and capital market strategy. As Mike mentioned, our balance sheet has been significantly strengthened in the buildup to key milestones of the pivotal HEAT study. The Company ended 2011 with $30.5 million of cash and investments. In 2011, we executed on the financial strategy that we laid out here a year ago, which was to significantly improve the cash position of the Company; and we did this in a volatile capital markets environment and through our use of various equity financing structures. The results were successful, as we raised $53 million in net proceeds through the completion of several financing transactions.

To put this into perspective, we began 2011 with a cash balance of just $1.5 million, representing roughly one month of operating cash. The new equity capital raised in 2011 was sufficient to fund the Company's global operations for all of 2011 and all of this year, 2012; and per our forecast, will cover operating costs into the third quarter of 2013. An important point, as per our current operating forecast, extent beyond the period of time where we expect HEAT trial clinical data to be unblinded.

Our year-end cash includes proceeds from the private placement completed in the fourth quarter 2011, which netted the Company an additional $13.9 million, providing an additional runway to fund operations, and eliminating near-term financing [overhead]. We disclosed details of these financings in our 10-K filed earlier today. I'd also like to draw your attention to the 10-K disclosure that we expect to use between $19 million and $21 million of cash to operate the business in 2012.

Our capital market strategy remains straightforward -- to continue to employ fiscal discipline in operating our Business as we meet corporate objectives. We have flexibility on our reliance on the capital markets while meeting our business objectives in clinical, regulatory, and CMC, thereby reaching ThermoDox's full potential. We'll keep the Company in a strong financial position, ready to execute on our strategy, strategic and financial options, to bring ThermoDox to market.

Celsion has operated throughout this period and for the last several years with a keen attention to fiscal discipline. We've managed our operating expenses efficiently, and we'll continue to do so. As reflected in our year-end income statement, Celsion reported a net loss of $23.2 million in 2011, or $1.11 per share, compared to a net loss of $18.8 million, $1.52 per share in 2010. And for the year-ended December 31, 2011, we used a net cash in operations of $22.8 million.

Moving to the P&L. Research and development costs were $5.2 million higher in 2011 compared to the prior year, primarily due to the expected increased costs for investigator grants, monitoring costs, and milestone payments associated with higher patient enrollment levels for the Company's Phase III HEAT trial. Also contributing to this increase for activities associated with development expenses related to our commercial manufacturing for ThermoDox. And general and administrative expenses were $232,000, or about 5% higher in 2011 compared to the prior year, which reflects some increased professional services and personnel costs to support our Company's growth.

That concludes my remarks, and I'd like to return the call back to Mike.

Thanks, Gregg. Now Nick Borys will discuss our clinical program in more detail. Nick?

Thank you, Mike. I'd like to start by addressing our pivotal HEAT study program.

As Mike mentioned, the HEAT study is a multinational, double-blind, well-controlled pivotal Phase III clinical trial evaluating ThermoDox in combination with RFA, or Radio Frequency Ablation, in patients with nonresectable primary liver cancer. The study is being conducted under an FDA special protocol assessment, has received FDA fast-track designation, and has been designated as a priority trial for primary liver cancer by a working group at the National Institutes of Health, underscoring the urgency for treatments addressing this unmet growing medical need. We continue to capitalize on regulatory support from the FDA, the EMA, and numerous regulatory agencies around the world, not least of which is the Chinese FDA. We have begun working relationships with these agencies, and have a regulatory strategy in place for ThermoDox marketing approval throughout the world.

For primary liver cancer, there exists a poor choice of treatment options for patients between the early stages of the disease that are eligible for cure to resection, and later stage disease patients, who are only available option is palliative treatment, which would include procedures such as transarterial chemoembolization, or better known as TACE. RFA, a treatment with curative intent, is the predominant choice for non-resectable liver cancers that has an average local recurrence rate of around 50%. Its efficacy, however, is limited by tumor size, showing significantly less effective tumors three centimeters in size or greater.

By combining RFA with ThermoDox, the margins surrounding the tumor is heavily treated, which is an effect that our data convincingly indicate may extend the cure rate of RFA to larger, more dangerous tumors. Having a direct understanding of ThermoDox's effect in larger tumors is therefore a critical component of the ThermoDox clinical value proposition. Our targeted initial label for ThermoDox will simply be that it is indicated for the treatment of hepatocellular carcinoma. The final labelling will be the result of our data and discussions with regulatory authorities.

We are working to ensure that the study is supportive of international filings, particularly in the Asia-Pacific region, where the incidents of hepatitis, a leading cause of liver cancer, is widespread. The HEAT study has already reached sufficient local enrollment to support registrational filings in South Korea and Taiwan. And as you heard, enrollment in China has now reached beyond the minimum 200-patient requirement necessary to support local registrational filing in this important territory, where over one-half of the incidence of HCC exists.

We expect to continue enrollment to a final figure of 700 patients, which is an accomplishment we look forward to announcing in the second quarter. By continuing enrollment worldwide, the time [for] final data is improved. I'm also pleased to announce that we've entered the final phase of recruitment into the HEAT study, and we are instituting plans for a study of recruitment termination. The study team is very excited about entering this phase of the HEAT program, and you'll be hearing more details about that in the future.

In Japan, if Yakult continues its work on [pharma's of] ThermoDox toward the development of a bridging study, it will remain enthusiastic about the program and again, we hope to be reporting more on that in the future.

While primary liver cancer is a priority for Celsion, ThermoDox's unique properties support its potential well beyond this indication. As Mike mentioned, we recently enrolled the first patients in our randomized double-blinded Phase II colorectal mets to the liver study, which we refer to as the ABLATE study. There are an estimated 141,000 new cases of colorectal cancer, and about 51,000 colorectal cancer deaths each year in the United States alone. Up to 25% of patients with colorectal cancer present with liver metastases, and another 50% develop liver metastases within five years. Unresectable liver metastases frequently represent a very poor prognosis. Because RFA is both efficacious and a widely-accepted local treatment modality for this disease, a rational strategy is to attempt to increase its efficacy for medium and large colorectal tumors with an adjuvant therapy such as ThermoDox.

The ABLATE study is a multi-center Phase II study that is expected to enroll up to 88 patients with colorectal cancer metastasized to the liver. Patients will be randomized to receive either RFA plus ThermoDox or RFA alone for the treatment of liver tumors. The primary study end point is based on one-year local tumor recurrence, with secondary end points of time for progression and overall survival. Our lead principal investigator, known to many of you, is Dr. Steven Libutti.

Dr. Libutti is the Professor and Vice Chairman of the Department of Surgery and the Director of the Montefiore-Einstein Center for Cancer Care at the Montefiore Medical Center and the Albert Einstein College of Medicine in New York. In addition to Montefiore, leading research institutions from North America, including the Cleveland Clinic and the Rhode Island Hospital, will be included in the Phase II study. Our objective is to have colorectal liver metastases data for presentation and time frame that follows closely with the approval of ThermoDox for HCC. With the intent that our clinical evidence will support Compendia listing and expanded use of RFA plus ThermoDox to treat liver metastases on markets in the US and Europe that is 10 times that of HCC.

Finally, I am pleased to report that the DIGNITY study is now ready for initiation of Phase II. We recently held an investigator meeting, and agreed to a publication plan, which would mean submitting abstracts to two major oncology meetings followed by a full publication of the data. We're all encouraged with the data and look forward to reporting them in the scientific literature.

With that, I'll turn the call back over to Mike.

Thanks, Nick. Good report as always. Very informative.

Well, as always, Celsion is working diligently to ensure that the regulatory process for the HEAT study is a smooth one. Supporting our regulatory goals, therefore, are a number of important designations, including fast track destination and 505(b)(2) agreement with the FDA. 505(b)(2), as you know, among other things provides for a rolling NDA submission; a CNA six-month regulatory review that is, for the most part, a short [area] of discussions with FDA. In addition, as I mentioned earlier, we now have confirmation from the EMA that the HEAT study, if successful, could form the basis for our European filing as well as the second avenue for global registration.

Over the next 12 months, we look forward to reporting on several important developments. First, we expect to complete enrollment of the HEAT study, with sufficient patient numbers to support registration in top geographies for primary liver cancer. And as Nick pointed out, we've reached the threshold -- minimum threshold -- for filing in China. I think I can report to you that, as of today, we have 204 patients in China. We'll continue to enroll a few to ensure that we have a buffer that would make our data presentation to the Chinese that much more robust.

We're working with Yakult Honsha as, again, as Nick pointed out, to ensure that the bridging program that's necessary for registration in China -- I mean in Japan, which by the way, is the typical approach, is fully supported by our Company and in a manner that allows Yakult access to the data in all the necessary information required for a timely submission to the PMDA for authorization and approval in China -- I mean, sorry, I keep saying China -- Japan.

We also look forward to providing clarity on the progress with our research collaboration with Philips Healthcare. As many of you know, we have collaboration with Philips that addresses a clinical development program to expand the potential of ThermoDox in combination with Sonalleve, Philips' proprietary HIFU technology -- that's high intensity focused ultrasound -- as a means to noninvasively treat cancer. As we have reported, we have an agreement with the FDA that a Phase II study with pain palliation as an end point in bone metastases is an acceptable trial design, and would be our first clinical study using ThermoDox in combination with HIFU. This process is being driven largely by our partner Philips, and while we have a -- in relation to a number of questions that arose during our discussion with FDA.

And so we look forward to a resolution to the questions from data that will be supplied by Philips, and hopefully continue to advance this program to a clinical application in the near term. In the meantime, in addition to Philips, we're looking at other opportunities to advance this very exciting combination treatment. As I have noted in the past, the EU has provided, through the Center for Translational Medicine, a EUR7 million grant to evaluate this combination therapy. The grant is co-sponsored by Celsion and Philips, with research being led at the University of Utrecht in the Netherlands. This grant also includes a clinical program for more than one cancer indication. And of course, and most importantly we expect to reach 380 progression-free survival events in the age study; an event which, depending on the magnitude of effect, will trigger unblinding of the study and full data readout soon thereafter.

I think you can agree with me that Celsion has made significant progress, both in the last year and in the years leading up to this point. The next 12 months hold the potential to validate our many years of hard work and significant commitment to this very important research. And we look forward to the outcome of this Phase III, very important pivotal trial that the HEAT study is a culmination of all of our work.

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 their continued support. We'll now go on to questions, which I'll ask you to limit to no more than one or two to give everybody a chance to get answers. I also, which I will address throughout, have a number of questions that were sent to us, via e-mail; and so, as time permits, we'll try to work answers to those questions in.

So, with that, operator?

Well, thank you so much. (Operator Instructions) We'll go first to Ren Benjamin with Rodman.

Hi. Thank you and congratulations. Thanks for taking the questions, and just a couple of questions. Can you talk just a little bit about the filing strategy? I know that we're going to have the PFS events coming out at the end of this year. Clearly, overall survival is also a secondary end point. Do we need to wait for the overall survival results as well before a application can be filed or go under an accelerated filing? Can you just take us through and maybe add some color?

Nick, do you want to take that?

Sure. We have an agreement with the FDA that we have designed what's called an accelerated review, which means that we can use PFS as our designated primary endpoint, and with that data, once it meets its end point, we can go to the FDA and do a filing for marketing approval. So, the FDA will look at the totality of the data, but PFS is the primary end point in order to get marketing approval.

And is that --

Yes. Just, Ren, if I can answer that, as I pointed out earlier in our prepared comments, EMA has also accepted PFS as a primary end point for filing in Europe. Our strategy is to use a common technical document approach to developing the submissions.

The CTV, as its known, will provide us with an opportunity for submissions using essentially the same format with some customization required in various territories. But our sense, here, Ren, if you want to talk about filing strategy, is that we could be filing both in Europe and the US in a relatively close time frame to each other.

And just as a follow up, Mike, I understand it's an accelerated review, and maybe I'm just having some (technical difficulty) but, is it an accelerated approval as well or if that's conditional approval or is it full approval?

It's conditional approval in the US. Outside of the US in Europe, it really, depending upon the magnitude of effect that we see with PFS -- in PFS, the European Medicines Agency has indicated to us that they -- a robust response in the therapeutic arm could support unconditional approval on a PFS end point.

And would the --

No guarantee.

Right. Would the OS end point from the HEAT study allow you to qualify this as -- for full approval, or would you need to run a confirmatory -- another confirmatory study?

There's been no indications that a confirmatory study is needed, either in the US or Europe.

Yes, the HEAT study was designed so that we would do a survival follow-up for full approval. So, a separate study would not be required.

Perfect. Okay, and my second question, because those were all parts of the first. If you don't mind, is when does EMC meet next? And how many more times between now and the end of the year could potentially the time line for PFS events be modified?

Good question. You know, at our direction, we like the DMC to meet frequently. In the past it's been approximately every 100 patients. And I'd say from my observation, the DMC is keen to meet on a relatively frequent basis. So, the next meeting of the DMC is being scheduled as we speak. And I suspect we may have beyond this next meeting one, possibly two more leading up to final data.

Terrific. Thank you very much for taking my two questions.

Thank you.

(Operator Instructions) We'll move on to Keith Markey with Griffin Securities.

Hello, everyone. Thank you for taking my questions.

Good morning Keith. Good to hear your voice, as always.

Pleasure. If we could just expand a little bit about the DMC meetings. I was just wondering if you could just walk us through the process of data coming in to the Company or to the CRO and then what triggers the meeting? If the CRO says, oh, we've hit the designated end point, do they let you know and then you would have to schedule the meeting or how else, how does that work?

Yes, I -- let me just -- I'll make a few comments. If you really want to get down to the nits and nats of how these things are planned, we certainly could do that. But we -- the study, for the most part, is fully enrolled. The event rate is I think reasonably well-known to us and our statisticians. The event rate projections as a function of prior enrollment history is -- it's somewhat predictable, I suppose.

But given all that, the Company will make an assessment at some point that we will reach the minimum 380 events required for data review. So, I'll make an assessment on the time for that to occur, and then we'll give it a little bit of a generous margin to assure that -- because we are blinded, frankly.

Yes.

To assure that we do have 380 events for DMC meeting to review the data. That's how that works, Keith.

Okay.

I can't give you exact time frames, but typically, it's taken us six to eight weeks for data to be collected and presented to the DMC. For the interim analysis, it took a little bit longer for the final data. I think we will be so excited to present the data to the DMC that it won't take us much more than that, if certainly not less.

Okay. That's great. And then if you could tell us a little bit about the process of cleaning up the data after the trial is over and preparing the submission to the FDA and EMA. What kind of time does that take, and what -- is there anything that you see especially involved in that process?

I would pay quite a bit of close attention to the trial, Keith. The DMC has met quite frequently. Dr. Borys has constructed a quality, what do you call it, a quality dashboard that ensures that we and our monitors and our collaborators pay careful attention to data quality. In addition to that prospective quality assurance program that involves the DMC, we have, within the Company, a quality assurance capability to audit a number of the larger sites. Larger in terms of enrollment.

Yes.

So, I think on the whole, we don't expect the data to require a lot of triage.

Yes.

Because of the proactive approach.

Right.

So, I think maybe, would you like to make a comment about that, Nick, in any way?

Yes. The general philosophy here is that the Company works very closely with the DMC determining the dates for the next meetings, and both of us are -- keep an eye toward our regulatory strategy so that we meet those dates and work it out in such a way that we can have effective follow-up with submissions.

So, once we read out the data for our endpoints, for example, of the 380 events, then that would prompt us to follow up with regulatory authorities and then determine the data log and then progress with how we agree to submit with the regulatory authorities through these pre-NDA meetings.

I think, again I don't want to get into too much into the minutia of this, but people who that have had experience with the NDA submissions would know what I'm talking about. We're going to be following that route and work closely with DMC and with FDA, EMA, and we're also going to keep an eye on the Chinese as well for future enrollment. So, we're not going to do anything unorthodox. We're going to go the way that -- working very closely with FDA and EMA.

It seems likely that this is a normal clinical trial close and it would take, what, maybe two, three months to prepare the documents for the clinical data to be submitted once you've completed the trial?

So, with all due respect, I think you're asking us for some time lines. We'd be speculating at this point with you, Keith.

Okay.

As Nick pointed out, we've begun the process to plan for the NDA, and that involves quite a bit of pre-planning work. That plan is in front of us as we sit in the conference room. It makes some assumptions on data availability and generating the appropriate reports to support the NDA filing. But I think it would be probably too speculative at this point for us to give you hard dates and times. You can know this, though, is we're out in front of it.

We spent a great deal of time and energy reviewing associates, collaborators who have experience in the latest ECD technology, ECTD technology, to ensure that we have a submission format that can smoothly be transmitted to not only the US FDA, but to other regulatory agencies around the world. So, we're quite excited by all of this. We're looking forward to data, and I can assure you and everybody else on the phone that once we do have data, we will be working as aggressively as possible to ensure that the submission happens on a timely basis.

That sounds great. Thank you very much.

Thank you.

We'll now hear from Jonathan --

Operator, before we take another question, let me -- I indicated earlier that we had gathered some questions by e-mail, and I'd like to try to address a few of those. The first one is this. Is it within the realm of possibility that ThermoDox hit its PFS end point at the interim that the DMC nevertheless decided to recommend a continuation of the trial due to other factors?

So, that's the question that was submitted. I want to start out by saying you're asking -- the question asks me to speculate some. And which I'm not sure that it's appropriate for me to do so, but I'm going, you want to start with -- no, I don't think that's the case. I don't think it was within the realm of possibility that the answer to this question would be yes. And here's why. I think it requires a little bit of education.

You know that PFS is a surrogate for survival. On that interim analysis, for lack of another word, is a surrogate for a fully powered study. Given that the unblinding would be based on a surrogate of a surrogate, it's very clear to us, and I think it's well within the -- what's considered to be a accepted practice, that standard of proof for a PF end point has to be, for unblinding at the interim, has to be uncontested.

Meaning that the bar for both the magnitude of effect for the hazard ratio and for the confidence interval set quite high. And so as a result of that, we provided our view that the recommendation to continue was the likely outcome from the interim analysis. Okay. So operator, let's go to the next questioner please.

Certainly, that will come from Jonathan Aschoff with Brean Murray.

Thank you. So, with the Chinese enrollment completion imminent, when would that cohort be fully PFS valuable, just given the importance of that market?

Thank you, Jonathan, good to hear your voice. It's a little bit of a speculation, but go ahead, Nick.

Yes, I think I know where your question is going with that. The approvals in China is not dependent on so much the outcome of the Chinese patients, but the fact that China has experience with native patients. So, the approval in China will be based upon the US or rest of the world data. And they will take that heavily into consideration and not necessarily wait to see if their own Chinese population is consistent with the overall rest of world population.

They just need their own patients to be taking part and their own investigators to have been part of the trial. Does that answer your question?

Well, sort of. Like, it would certainly help to see Indigenous efficacy, you know, after approval. I think it would really help you penetrate that market to show that.

Yes, and that certainly would be helpful. Nobody would deny that. But it's not necessary for approval.

Right. Can you guys also help us understand the magnitude of the statistical penalty that you did not wish to incur by taking a mid '12 second interim look?

Jonathan, the Company was not prepared to take any significant penalty for a second interim analysis.

Okay. Thank you.

Okay. Operator, I'm going to answer another question that was e-mailed. And I want to paraphrase this question, because there's some personal comments made leading into it.

So, the question essentially is this. Does intrahepatic distant metastasis, or PFS, unrelated to the local ThermoDox effect in any way put the trial in jeopardy? That's the question. I think our answer is a confident no. This is a highly prone trial, as many of you know, in a predominant area for PFS, is near the tumor margins following the ablation. Over 50% of recurrence happens in the margin surrounding the ablation.

So, the -- all forms of progression, local progression, distant hepatic progression, extra hepatic progression and death were taken into account in developing the statistical plan in the study population. So, let's go on. Operator, let's go on to the next questioner please.

Certainly, we'll turn to Mara Goldstein with Cantor Fitzgerald.

Question. I guess I just wanted to try and get a little more color on the disconnect between FDA's assessment about being able to take an interim look versus what the DMC said was allowable as per study protocol and why the disconnect and I guess the magnitude of it. If there's any color you could provide.

Yes, Mara. I don't think there was any disconnect in the -- from a statistical point of view. I think FDA has taken a position, as I've pointed out, that any bias that potentially could affect interpretation of the data, even if it's difficult to quantify, is not a risk that we should, as the sponsor or the agency as the regulatory approving group should incur. I think it's just that simple.

Okay. But I thought from the perspective of what that alpha spend was, that you were comfortable with being able to incorporate that into your data package. So, I guess that's where I'm a little -- left a little confused.

FDA's point of view has nothing to do with the alpha spend.

Okay.

I think it was pretty clear in my comment.

Okay. Fine.

But let me just, let me repeat it for you. I have the document in front of me. An additional interim analysis for PFS may introduce a bias by modifying the trial design that is difficult to evaluate and will compromise or can compromise the interpretation of the trial results. Okay?

Okay.

That's FDA's point of view.

Thanks.

Operator, let's go on to the next questioner please.

Certainly, that will come from Ren Benjamin with Rodman.

Thanks for taking the follow-up. Just a quick question for Nick. I thought you mentioned in your prepared remarks that the DIGNITY study is about to begin Phase II trials. Did I hear that right, or is it the DIGNITY study that's -- the completed portion is abstracts are being filed for a medical journal? And when would you begin the Phase II and when do you think you'd get publication?

Well, the truth is both. At the investigator meeting, we reviewed our data from the Phase I portion. We have outcomes data there that we're very pleased to report. And that will be submitted to several international meetings from our group in the DIGNITY study for the Phase I.

And yes indeed, we are now having a protocol that was reviewed by the FDA and accepted by the FDA, which we now are finalizing and sending out to the sites. And pretty well all the sites that were involved in the Phase I are continuing with the Phase II, so we're very pleased with that. And I think that should be an indicator to you that the investigators like what they saw.

And when we will see the first patient? Well, as you know, these things take a while there. We'd have to get through IRVs, contracts and all that, so I'd hate to speculate that on this time, but we're just getting started. It's going to be in a typical time frame for a Phase II program, and it's going to be a site that already know our trials, so we're hoping that accelerates things as well. But I think we're starting to build up some more momentum in a DIGNITY second phase trial.

Thank you.

We'll move onto --

Yes, operator, I think we have time for about two more questions. So, please, the next person.

Certainly, that will be [Ciovachi Ciaci].

Ciovach?

Good morning.

Good to hear your voice.

Good morning. I hope you guys are doing well. Thank you so much for the comprehensive call this morning. But I just had one question. Again, I thought the call was very comprehensive today. In regards to the ABLATE trial, it's been a little confusing to me why the inclusion criteria goes as low as two centimeters, so greater than two centimeters for that study. Of course, that stands in stark contrast to the HEAT study, which is only looking at tumor sizes greater than three centimeters.

Is there something inherently different about the CRLM population of the tumors you regularly size or something where a greater than two centimeter cut off would suffice? I guess I'm a little confusing -- confused on the rationale to go that low. If you could provide some color on that, that would be great.

Yes. That actually is a great question, and we've had a lot of discussion, and the simple answer is because the investigators wanted it. They have not been very happy with the results they see when they ablate two centimeter lesions, and they feel that the literature does not represent that. In their experience, patients do have a high recurrence rate, as low as two centimeters and upwards.

And in fact, in our investigator meetings, there was much debate not even to put any size limitation at all, because of the difficulty of colorectal liver metastasis. So, we compromised and went with two, so that's the answer.

Great. That's my only question. Again, thank you so much.

And ladies and gentlemen, we have time for one more question which will come from [William Niffen].

Hi, I appreciate you gentlemen talking my call and wanted to tell you I appreciate the work and effort that you've put into getting Celsion on the market. I do have a question for you about financing, and here's my question. In the past, there had been some offerings, but it sounds like right now the cash position is such that there would be enough to get through the end of 2012. Do you anticipate during the course -- the balance of 2012 having to do any additional financing? And if so, under what circumstances would you see that financing becoming necessary?

So Gregg, you want it take that?

Yes, thanks for the question, this is Gregg Weaver, the CFO. While I'll never rule out using the capital markets opportunistically, as we mentioned in our 10-K that's filed this morning, we anticipate the year-end 2012 looking ahead will have cash sufficient to run our business into the third quarter of 2013. So, that represents, of the $53 million net cash that we raised in the financings of 2011, that funded 2011, 2012, the first half of 2013 and well into Q3 of 2013.

So Bill, I think you can never say never, obviously, but we have a very strong cash position at this point. We believe that the Company does a extraordinary job of planning its expenses. If you look back over the years, you'd see that the efficiency, the use of the capital of this Company is, I like to think of it as benchmark in biotech.

As Gregg pointed out, the Company has strong cash reserves well beyond data. We certainly are focused on using our current cash in a way to improve shareholder value as well as bring a very important clinical trial to a conclusion. I just hope you put all those comments into context. We can take one more question, operator, I think we've got three more minutes.

Certainly, that will come from Mitch Landgraf.

Gentlemen.

Hello, Mitch, how are you?

I'm doing fine, thank you for the call. I think like most investors that really understand what our science is and what or prospects are, we are completely befuddled by the market's complete under evaluation expressed in the share price, as such we listen very closely to the presentation. Mr. Church's presentation in California was outstanding. And in listening closely and talking about partnerships, there was a statement to the effect of, we're working in a way to do all we can do in preparation for the data.

It seems as if to suggest that the talks with the various partners, licensing possibility partners that are talking with us doing the BNF that it's probably not likely there will be any sort of license agreement prior to the availability of data or the FDA response. Can you comment to that effect in license partnership developments in any way?

Sure. I'm going to sound like a broken record, but let me just start by saying you don't sell a license to a pharma company. They buy it. Having been on the other side of the table, on the buying side, in a past life, I know the process is always very rigorous. It takes an extraordinary commitment from the diligence folks on the buy side to evaluate an asset.

So with that as a little bit of background, Mitch, we've seen an extraordinarily high level of interest for a company like ours, a binary event company in a Phase III trial, more than I actually anticipated when I joined the Company. That interest has led to diligence being conducted by a number of multi-national companies. I've been fond of saying if you open your medicine cabinet, you might see their names.

And, in fact, the -- we do have diligence being conducted on an ongoing basis from additional companies. So, I guess the punch line to all of this is the -- it's not a matter of if we will complete a license, it's a matter of when. And I don't know that I can speculate with you as to that when will be.

Yes I appreciate --

Data certainly is important to fully de-risking a licensing program. On the other hand, I think we've been -- I mean, I dare say smart enough to ensure that this trial, this one single trial has enough presence in the most important markets for primary liver cancer, to support the fast registrational program in China, South Korea, Taiwan. That does not escape potential license partners.

I wish I could give you an answer. I have a personal gut check of what I think it might be, but at this point, I'm not -- I don't think it's appropriate for me to share it with you. I can say this, we were pretty excited not too awfully long ago that we would be able to announce something with a big pharma partner. Unfortunately, they were acquired at the very end of the process. So, just to give you maybe a sense of the doability of a license and the interest from a major player.

That's great information. I'd like to echo Cio's comment that it was a very thorough call. The only area that I didn't hear an update on, is there anything available to be updated on what we fondly refer to as product number four and mysterious product number five.

No, there's no update there. Number four has -- I think we've talked about number four as being funded through the interest of another company. A company that we've done some -- do some work with. What can I tell you about that? At their request, we're not -- the only reason we call it number four is so we're not -- we're bound by our confidentiality agreement not to talk in detail about it.

Sure.

We think product number four has some potential, but whether or not this company would like to take it forward I guess is a matter of their internal decision-making process.

Sure. Well, thanks all of you for your work. I look forward to the annual shareholder meeting, and I would like to encourage all my fellow shareholders to make it there in person.

Okay. Well thank you very much, Mitch. Operator?

And no further questions. Gentlemen, would you like me to go ahead and close out the conference?

Let me just -- yes, we will. Thank you all very much for your time and attention today. I think as you can see from our comments, the Company is very, very focused on completing this important program in primary liver cancer, extracellular carcinoma.

We're on the verge of seeing data from one of most important clinical programs in one of the largest unmet medical needs left in oncology. We could not do that without your support, so we appreciate your continued interest and support, and as Mitch said, look forward to seeing you at the annual shareholder meeting, thank you.

And again, ladies and gentlemen, that does conclude our conference for today. We thank you all for your participation.