Imunon Inc (IMNN) 2012 Q1 法說會逐字稿

Good morning. My name is Roxanne, and I will be your conference operator today. At this time I would like to welcome everyone to the Celsion Corporation first-quarter 2012 shareholder conference call. (Operator Instructions). I would now like to turn the call over to Jeff Church. Please proceed.

Thank you. Good morning, everyone, and thank you for joining us. Our first-quarter 2012 financial 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 PM Eastern and will remain available until Tuesday, May 22, 2012. The replay can be accessed at 1-877-870-5176 in North America or 1-858-384-5517 internationally using conference ID 306-6549. An audio replay of the call will also be available on the Company's website for 30 days.

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, 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 would like to turn the call over to Michael Tardugno, President and CEO of Celsion Corp.

Thanks, Jeff. Good morning and thank you for joining us and for your interest in Celsion, a company I am sure you are finding to be one of the more interesting in biotech. It is arguably one of the most important clinical trials in oncology today.

The message today is momentum. With positive data, we will be bringing to market a first-line treatment for the intermediate stage of a very difficult cancer and the largest unmet medical need of oncology, hepatocellular carcinoma, or HCC, sometimes commonly referred to as primary liver cancer.

We are joined today by Dr. Nick Borys, our Chief Medical Officer; Greg Weaver, our Chief Financial Officer; and Jeff Church, our Senior Vice President Investor Relations. On today's call, Greg will review our first-quarter 2012 financial results, including balance sheet and keynote highlights. Following that, Dr. Borys will discuss progress and future milestones for our global Phase 3 HEAT study in primary liver cancer, as well as an update on the expansion of the ThermoDox platform. I will then provide an overview of other key corporate goals as we work towards data readout, regulatory approval and the subsequent commercialization of ThermoDox.

After that, we will open the call to your questions.

As always, I would like to make a few comments first. Our Phase 3 HEAT study in primary liver cancer has technically reached all of its enrollment goals. With our primary endpoint data projected by year-end, Celsion is in acceleration mode as we prepare for global commercialization of ThermoDox, which I would like to cover for you briefly.

On the regulatory front, we are taking advantage of the extraordinary position with the HEAT study. The HEAT study is a special protocol assessment, as you know, and has fast-track designations in the US, both of which promise timely action on the trial after submission. DMA has indicated its support for centralized trialing of a marketing application authorization.

As a consequence of global enrollment, we are engaging regulatory agencies in all major markets to discuss our registrational application for local requirements for submission. To support rapid launch, we have enrolled patient cohorts in key markets, countries where HCC has a particular problem, sufficient to support filing without the need for bridging studies. We are hopeful to file directly, particularly in the PRC, People's Republic of China, and Taiwan without the need for approval for a reference country. Then we enjoy orphan drug designation in the US and Europe, providing among other things regulatory exclusivity of seven and 10 years respectively and in the US substantial pricing power.

On the clinical front, we are working diligently to assure no surprises with trial data with this three-step program.

First, we have established a clinical quality dashboard where we track and evaluate timeliness, current news, trends and anomalies in the clinical data set. This information is reviewed and critiqued at each and every DMC meeting, which you know have been regular and frequent. Number two, we have instituted a re-monitoring program for a number of high volume sites, the goal of which is to check and doublecheck data entry from source documents. And number three, we have implemented a comprehensive clinical quality audit program as a check on our CRO and their work product.

We are also moving forward with branding, market research and pricing analysis. We are conducting preliminary research with physicians, KOLs and payers to better understand the patient journey, ThermoDox's positioning and its value in the treatment of HCC.

We have registered a trademark ThermoDox in virtually every country where it will be sold.

We have also been given approval for ThermoDox as a brand name in all countries where we have applied except one, and that is Mexico. And the reason there is that ThermoDox can be confused with another drug marketed for veterinary use.

On the manufacturing front, what we are doing here is nothing short of remarkable. We are working to establish marketable manufacturing partners in the US, as well as in China, to ensure reliable, quality supply chain with a cost of goods that can support substantial margins on a global basis.

As for the NDA submission process, we have engaged our principal investigators and KOLs for discussions around the treatment landscape and standard of care as we consider label negotiations with FDA, SFDA, DMA and other regulators. We are moving forward with the selection of a CRO with FDA portal access and using a common technical document approach as a basis for our NDA and MAA filings.

What this means for us as a company is that preparation for commercialization and launch of ThermoDox is now fully underway. And we are not just considering the US; we are also addressing the broader global opportunity efficiently and effectively with a single global trial in a manner I suspect is incredibly unique for a non-revenue-generating company.

And important recent events along this path is a commercial supply agreement we recently signed with Hisun Pharmaceuticals, a world leader in the manufacture of chemotherapies and now a key partner of ours in China, which we will speak of more during the call.

Now a little more background on the promise of our technology platform and ThermoDox in particular. Some of you who are following oncology know that a considerable number of thought leaders today, including many if not all of the more than 200 principal investigators and sub-investigators in our trial will tell you that a multi-modality approach is the future of care in a list of difficult cancers.

One modality leading this charge is heat-based therapy, hypothermia, which has seen significant technological advancements in recent years is being used or developed in an increasing number of indications from liver cancer, to breast, colorectal, colon, pancreatic and many others. Recognizing this potential, Celsion embarked on a development of a heat-activated liposome technology and (inaudible) at Duke University. Unlike any other, that has the potential to greatly extend the curative reparative benefits of hyperthermic treatment.

Our heat-activated liposomal encapsulation technology can incorporate many approved chemotherapies, delivering their well-characterized activity in a highly concentrated manner.

This targeted delivery takes place thanks to both the natural delivery liposomes to the organs such as the liver and through the leaky blood vessels of many tumors. Most importantly, not only when triggered by the presence of applied heat as the drug released, this activation approach is critical patented characteristic of our technology. It concentrates the therapeutic benefit only to the targeted area as compared to the same dose of a similar chemotherapy. It is a uniquely simple and an elegant solution.

ThermoDox, as the name implies, incorporates doxorubicin, a therapy known to be active in liver cancer. ThermoDox has an edge into our phase that is subject to the HEAT study, which I will remind you is the largest trial ever conducted in intermediate hepatocellular carcinoma. The goal is to improve the outcome in patients with intermediate stage HCC. And Dr. Borys will cover this in more detail during his remarks.

While liver cancer provides a significant market opportunity, it is just a first step. ThermoDox is a drop-in treatment for procedures like RFA that has the potential to sustainally improve outcomes, and in doing so, it changes the standard of care for many cancers. We believe, in fact, that it could become one of the most important new drugs in oncology in recent memory.

Now I would like to focus on our immediate issue, and that is liver cancer that. Ladies and gentlemen, the statistics here are sombering. The incidence of primary liver cancer today is approximately 26,000 to 28,000 in the United States, approximately 40,000 cases per year in Europe and is rapidly growing at 5% annually on a base of 750,000 incidence globally. This increase is due in a large measure to the prevalence of hepatitis B and C in developing countries.

For countries in the West and in Japan, during the 10-year period ending 2019, incidence is projected to increase by 20%, prevalence by 47%. Over half of new cases will be in China. The World Health Organization estimates that primary liver cancer may become the number one cancer worldwide, surpassing lung cancer by 2020.

Without new and effective therapy, the threat to public health presented by this disease is considerable. Of the 27 emerging therapies in development, only six are in Phase 3. Only one is for first line, and that is ThermoDox. More importantly, as the recent research publication Spectrum points out and I quote, "Any company that can develop a targeted agent to treat HCC has tremendous potential for success commercially, particularly those in the intermediate stage who are currently treated mainly with TACE or chemoembolization."

So while reflecting on Celsion, the last six months or so have been marked by significant progress and a number of important accomplishments with and in addition to the HEAT study.

Among our recent developments are the following. Yesterday we announced the joint resubmission with Philips Healthcare under our combined IND/IDE, the protocol with the FDA for a Phase 2 clinical study of ThermoDox, combined with MR-guided, high intensity-focused ultrasound known as HIFU for the treatment of prostate cancer matched to the bone. The resubmission was made with extensive supporting data from Philips Phase 1 HIFU trials, and this submission was made in response to earlier questions required or asked by the agency of both Celsion and Philips in the original submission of our Phase 2 protocol. We expect to initiate the clinical study in the second half of 2012, assuming, of course, we have agreement with the agency to move forward.

Earlier this month, we were very pleased to announce our collaboration with Focused Ultrasound Foundation to support preclinical studies exploring the use of ThermoDox in HIFU and pancreatic cancer. The phase will be funded by the FUS and carried out under the guidance of Joo Ha Hwang at the University of Washington School of Medicine. Celsion will provide ThermoDox for these studies among other research support. Pancreatic cancer is the fourth leading cause of cancer-related death in the United States and with an exceptionally high mortality rate. Any advancement in therapy would be an important step forward for treatment. Dr. Hwang is particularly excited about the prospect of combining these two modalities is a potential avenue for achieving this objective. This is the first of what we hope will be other cooperative programs with FUS and its affiliated researchers.

In April we announced the successful completion of a planned safety review by the HEAT study's Independent Data Monitoring Committee. The DMC reviewed comprehensive data from 652 patients and unanimously recommended that the study continue according to protocol. The DMC reviews comprehensive study data at regular intervals as a primary responsibility of ensuring the safety of all patients enrolled in the study, the quality of data collected and the continued scientific validity of the study design. To date, this study has undergone seven unblinded reviews and one pre-planned interim efficiency, efficacy and futility analysis by the DMC, all with positive recommendations to continue the HEAT study as planned.

The HEAT study remains on track with its over-enrollment objective to treat a total of 700 patients by the end of this quarter. This is an event-driven trial with PFS as its primary endpoint as progression free survival. The study is powered at 80% to show a 33% improvement in PFS. 380 events are required to reach the planned final analysis of the study. These events are projected to occur in late 2012 and, as we have said, with topline results announced following the DMC's review.

As I mentioned, we have reached our technical enrollment targets in all key markets for ThermoDox, most recently in China. China requires a minimum of 200 patients for registrational filing, an enrollment figure we reached in April. We continue to enroll additional patients in China to ensure a robust dataset and, of course, no surprises.

While the HEAT study has reached its key executional goals, we are looking to the various new promises of the regulatory and commercialization process.

On the manufacturing front, as I mentioned earlier, we recently signed a very important long-term commercial supply agreement with Zhejiang Hisun Pharmaceutical for the production of ThermoDox in China. Hisun is a leading manufacturer for a number of multinational pharmaceutical companies and the largest marketer of finished oncology drugs in China. They have recently entered a $300 million JV with Pfizer with a goal to expand their commercial footprint in China.

The value of a Chinese partner goes well beyond the supply agreement, however. Our relationship with Hisun is an important component of our regulatory strategy in that country, and it affords us access to an accelerated SFDA review and the potential for regulatory exclusivity for the approved indication.

I can not express Hisun's optimism any better than their Chairman, Mr. Bai Hua has, where it certainly is reinforced with their willingness to finance the project. It should not go unnoticed that after some diligence (inaudible) suggests validation, Hisun accepts both the technical and financial risks associated with the project. Hisun will provide us with non-dilutive financing and the investing necessary to complete the technology transfer of the proprietary manufacturing process and the production of registration batches to support a registrational filing. Out-of-pocket costs for the program will be in the range of about $2 million and will be repaid to Hisun only after technical success, and it is the completion of three successful registration batches and after data from the HEAT study is unblinded.

Our supply agreement is initially limited to China, which I mentioned was the single largest global market for primary liver cancer. Hisun has been granted, however, an option for global supply after local regulatory approvals have been secured in countries other than China. The manufacturing price for ThermoDox under this agreement supports a generous gross margin across all global territories.

For our other markets, the HEAT study remains well positioned. In addition to special protocol assessment in the US, we have agreement with the EMEA that the HEAT study is accessible as is, but a basis of a submission for centralized filings for marketing authorization and potential full approval. This adds to other designations that provide for rapid review of ThermoDox once our global applications are submitted.

And for those of you who may have questions regarding Japan and your cost continuing interest, I am pleased to convey from our recent conversations with Yakult, Yakult's recent and continuing sentiment that they remain enthusiastic and that we should expect initiation of their clinical bridging study, among other development objectives, with positive data from the HEAT study.

With data in sight for primary liver cancer, we continue to strategically expand our clinical programs for ThermoDox, something Nick will talk about in a minute, but first we would like to turn this over to Greg to cover our first-quarter financial results. Greg?

Thank you, Mike. The Company ended the first quarter with cash and investments of $24.6 million. This provides us with sufficient cash to fund operations into the third quarter of 2013, which is beyond topline data in our ThermoDox pivotal trial in primary liver cancer and through the period of evaluating our strategic and financial options for bringing ThermoDox to market.

Our first-quarter use of cash is not indicative of our forecast run-rate going forward. The run-rate forecast reflects a gradual decrease in our quarter to quarter use of cash as the HEAT trial clinical costs and the initial cost of manufacturing registration batch development, which trended higher as expected over the past six months, are expected to lighten up later this year.

We reported a net loss of $6.2 million in the first quarter of 2012 or $0.19 a share compared to a net loss of $3.8 million or $0.28 a share for the same period of 2011. That Q1 2011 income statement included $2 million in revenue from licensing fees received from Yakult. Net cash used in operations for the first quarter was $5.7 million and total operating expenses in Q1 $6.3 million as compared with $5.6 million in Q1 of last year.

Research and development costs increased by approximately $350,000 to $4.7 million in the first quarter of 2012 compared to the same period of 2011. The increased R&D costs are related to our three ongoing clinical studies and to the development of commercial manufacturing capabilities for ThermoDox.

G&A expenses for the quarter increased approximately $350,000 to $1.6 million as compared to Q1 of 2011. And it increased the result of professional fees and personnel costs to support the Company's growth.

We filed an 8-K last week describing the new relationship with our partner in China, Hisun. I would like to briefly review the financial terms of this long-term commercial supply agreement. Hisun will provide technical and regulatory support services to complete the tech transfer of our manufacturing process and the production of registration batches for ThermoDox. Hisun will be paying for the cost of this work, and Celsion will then repay Hisun for the aggregate amount of these development costs and certain fees calculated on a cost-plus basis upon the successful completion of the three registration batches of the product, which will be repaid within four years of signing the agreement. We expect the registration batches will be completed next year, and we initially estimate the total cost of the manufacturing technology transfer will be approximately in the range of $2 million. I expect we will capture these costs as a payable to Hisun in our future company financial statements, and we will be repaying those cost investments by Hisun after we see the unblinding of the pivotal trial data and after Hisun delivers the successful registration batches.

So we are very pleased with the financial terms of this manufacturing supply agreement and the fact that following their diligence process, Hisun agreed to take on the technical and inventory risk in advance of seeing data from the HEAT study.

Beyond the financial terms, this deal is strategically important to provide ThermoDox the international manufacturing capability needed to drive commercial success into the largest markets in Asia, again funded with a non-dilutive cost structure and at very attractive future costs of goods sold.

Thank you for your attention. I will now turn the call over to our Chief Medical Officer, Dr. Nick Borys.

Thank you, Greg. I would like to start by addressing our pivotal HEAT study program. The HEAT study is a multinational double-blind placebo-controlled pivotal Phase 3 clinical trial evaluating ThermoDox in combination with RFA in patients with non-resectable primary liver cancer. For primary liver cancer, there exists poorly defined treatment options for intermediate disease, which is between the early stage of disease, which is eligible for curative resection, and later stage disease subject only to palliative treatment.

RFA, a treatment with curative intent, is the predominant choice for non-resectable liver cancers with average local recurrence rate of around 50%. Its efficacy, however, is limited by tumor size, showing significantly less effect in tumors greater than 3 centimeters in size. By combining RFA with ThermoDox, the margin surrounding the tumor is heavily treated with doxorubicin, an effect which our data strongly indicates may extend the cure rate of RFA to larger but locally advanced tumors. Having a direct understanding of ThermoDox's effect in larger tumors is, therefore, a critical component of the ThermoDox clinical value proposition.

We are working to ensure that the HEAT study is supportive of international filings, particularly in the Asia-Pacific region where over 70% of the 750,000 worldwide annual incidence of liver cancer occur. The HEAT study recently surpassed sufficient enrollment to support a registrational filing in China, which adds the study population sufficient for registration in South Korea, in Taiwan, two other large and important Asian markets for ThermoDox.

The team here at Celsion is working diligently to prepare for commercialization. Supporting our regulatory goals are a number of key designations, including special protocol assessments and 505(b)(2) agreements with the FDA, as well as fast-track and upon submission priority review status. We are planning for a rolling NDA submission and a six-month regulatory review and a simplified review process.

We also have confirmation from the EMEA that the HEAT study, if successful, would form the basis for our European filing application, as well as a second avenue for global registration. We may be afforded many review benefits through what the EMEA calls a full mixed review registration process. While primary liver cancer is a priority for Celsion, ThermoDox's unique properties support its potential well beyond the syndication. We are currently exploring ThermoDox's use in four other prominent oncology indications and are taking care to ensure that each of these programs assuming positive outcome can form a basis of support for the use of ThermoDox in additional indications.

In January we enrolled our first patient in the ABLATE study, a multi-center Phase 2 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 their liver tumors. The primary endpoint of the study is local tumor control at one year with secondary endpoints of time to local progression and overall survival and, of course, safety.

There are an estimated 140,000 new cases of colorectal cancer and about 50,000 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 poor prognosis. RFA is both efficacious and widely accepted local treatment modality for this disease. However, it, too, has limitations. As with our work with HCC, we believe we can improve RFA's efficacy in colorectal liver metasteses with an adjuvant such as ThermoDox.

In recurrent chest wall breast cancer, as many of you know, data from an early Duke University Phase 1 study in very advanced recurrent disease were exciting. We are currently moving forward with a Phase 2 study in this indication, the DIGNITY study.

This Phase 2 study has been limited to 40 patients with this form of risk cancer, and we will enroll patients who have received a failed prior treatment.

As many of you know, Celsion is also working with Philips Healthcare, a division of Royal Philips Electronics, to develop treatment for painful bone metastases using ThermoDox and HIFU. This, I believe, will just be a beginning for combining important device technologies such as HIFU with important drug technologies such as ThermoDox. I am personally very enthusiastic about the potential of ThermoDox enabling technologies such as HIFU in making tumor removal become less invasive while more effective.

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

Thank you, Nick. As I hope we have made clear to you, Celsion is tightly focused as we are preparing for what will be the most important event in this Company's history -- validation of our technology platform and our lead therapeutic ThermoDox to results from the single largest study ever conducted in intermediate primary liver cancer. The outcome of the HEAT study will set into motion a transformative process at Celsion, something that will take us from a development stage organization to an integrated, commercial biopharmaceutical company with perhaps the single most important new therapeutic introduction to the global oncology market in years. Data expected within months is now clear in sight. And, as the year-end projected events target approaches, we expect to announce several milestones, including enrollment completion of the HEAT study, which should occur this quarter and various milestones related to our NDA application with the FDA.

We also look forward to advancing our non-pivotal study for preclinical work in colorectal cancer metastases, recurrent chest wall breast cancer, bone cancer and pancreatic cancer. This work will give the oncology community a snapshot of the broad potential of ThermoDox around the time where its approval is being considered by several regulatory agencies around the world.

As always, we greatly appreciate your interest in the Company, and we look forward to updating you on our continued progress. Now we will go to questions, which I will ask you to limit to no more than two to give everyone a chance to get answers.

So, operator, if you will please open the lines for questions.

(Operator Instructions). Keith Markey, Griffin Securities.

Congratulations on the deal that you signed with Hisun. That sounds like a very interesting one. I was wondering if you might expand upon the reasons for choosing them. For instance, will they have any marketing -- do they have marketing capability, and would they be supplying areas outside of Asia, for instance?

I will answer that for you. The agreement that we have with Hisun exclusively focuses on manufacturing of ThermoDox. At the moment, the supply will be limited to the territories represented by the People's Republic of China, which includes mainland China, Macau and Hong Kong.

Hisun will have an option to expand distribution into territories outside of the PRC following approval of their manufacturing process by other regulatory agencies like the FDA and, of course, with the consent of any license partner that may have responsibility for commercializing ThermoDox in the respective territory.

With regard to Hisun's aspirations for a commercial relationship with Celsion, I really cannot comment on that. At the moment, our relationship with Hisun is exclusively related to a supply agreement.

Very good. Thank you. And if I could ask, did I understand that Yakult plans to resume their trials once they see the HEAT data?

Yes. So just to restate, we have had a number of conversations ongoing and recently with Yakult. As I shared in my prepared remarks, Yakult remains very enthusiastic, not only with regards to the potential for ThermoDox to treat Japanese patients but also with the outcome of the trial.

Now that said, the pathway for filing a drug derived outside of Japan follows a typical pattern. And that pattern is approval outside of Japan first followed by typically bridging our safety studies followed by a submission to the PMVA for local approval. That is the pathway that was always contemplated in our original agreement with Yakult. And not to get into -- to confuse the question, but we try to accelerate that, as many of you know, by including a cohort of patients from Japan in our Phase 3 trial.

Be that as it may, the pathway we are filing currently is the traditional pathway. And so Yakult under our agreement has been conducting some preclinical research that is required specifically for filing in Japan. I believe that is all completed. And once the data from the Phase 3 trial is available -- and, of course, we expect it to be positive -- they will commence their bridging studies to support registration in Japan as had originally been contemplated.

If I could just expand upon that, how long do you think their bridging study will take them?

I'm not sure I am in any position to comment on that. I would just say this is it is typically a small, a smaller study. (multiple speakers) I don't know the exact number of patients that will be included in this study, but typically their smallest studies are largely focused on kinetics and safety.

Edward Nash, Cowen & Co.

I wanted to find out with regard to Hisun, do they actually have the capacity right now to be able to supply for worldwide material? Do they have that ability right now, or would you have to have a backup supplier?

Yes, so let me try to answer that in a couple of different ways for you.

Number one is, it is our objective to have multiple manufacturers for reasons of supply continuity. We want to make sure that there is no interruption of supply of ThermoDox in any market, number one. So we will not be capacity constrained by a single manufacturer entity.

Number two is -- and it goes to the first part of your question -- Hisun has just completed what appears to me to be an almost -- I'm not sure I should quote a number -- but hundreds of millions of dollars have been invested in capacity expansion in our manufacturing sites in China. They are some of the most modern manufacturing facilities that I have seen. They rival European and US manufacturing sites with regards to the quality of their facilities and certainly the modern equipment that they are importing from the US and European manufacturers of pharmaceutical equipment.

So I suspect that they will have more than sufficient capacity, not only to supply China, but if they were to gain approval, if we were to authorize them to manufacture for territories outside of China, they would have sufficient capacity to support that.

That is helpful. Thank you. And then my last question is, just with regard to the indications that you are going after beyond primary liver cancer, so you have got recurrent chest wall, and then you are in the pipeline looking at the colorectal liver metas and then prostate metas to the bone. What is the rhyme or reason here for the indications? Are you doing some type of assay or testing to show that you are having greater applicability with the technology, with these particular types of cancers, or are you particularly looking at historically what we are able to see ThermoDox be effective in and going after maybe cancers where you are seeing less effect and maybe higher incidence? What is the thought process there?

I will answer that question. I think the basic thread that is holding our approach moving forward is, number one, looking at cancers that are sensitive to anthracyclines. And, as you know, breast cancers are treated with anthracyclines, and early data from Duke University in patients that have previously been heavily pretreated also may have received radiation treatment, showed very interesting response rates when given ThermoDox and superficial mild hypothermia. So we are just continuing with those Phase 1 programs into a Phase 2 program.

And then our early Phase 1 studies, we had a little bit of a mixed population where much of our population were primary liver cancer patients. Also almost half of those patients were metastatic liver cancer patients. And both of them showed, again, very interesting results in our Phase 1 studies.

Our first goal is to get NCC indication, and that is through our HEAT study, and then now we have embarked on going on the ABLATE study to look at the metastatic liver cancer population.

But following that, now with the HIFU technology, one area that is a big unmet need is metastatic bone pain cancer. And this, again, is an area where HIFU by itself is showing some activity, but I think adding high concentrations of an anthracycline such as ThermoDox follows along where we can improve upon that technology there. So that is a bit of an opportunistic new area, particularly with this new technology to try to piggyback one upon the other.

So I hope that answers your question, and I hope you understand the strategy moving forward.

Thank you for your question. I just want to add a little bit more to what Dr. Borys said in as it relates to HIFU. Our underlying technology is effective with heating devices, which are somewhat limited. Hypothermia and the radiofrequency ablation, microwave ablation, are all on a use in one manner or another in treating oncology patients.

So HIFU brings a -- opens a wide, very wide door for us. HIFU, of course, it is a noninvasive means to use acoustic energy focused on large tissue masses and elevating the temperatures. In some cases, it elevates the temperature above the temperature of necrosis or causes ablation. (inaudible) to combine ThermoDox with HIFU, we really appreciated the breadth and the depth in the application of our heat-sensitive liposome technology to a broad range of cancers.

So, as Dr. Borys is pointing out, we are focused on a number of indications, some which expand the use in areas for ThermoDox and areas where we have seen some clinical benefit in HIFU where we have been working with Philips to show the potential of this multimodality approach. But the potential that ThermoDox, in combination with HIFU, bring to a broader range of cancers I think is just opening the door. So thank you for that question, and we look forward to your continued interest.

Reni Benjamin, Rodman & Renshaw.

Congratulations on the progress. Just a couple of questions. Mike, I'm curious as to how many more DSMB meetings are scheduled? And even more importantly to that, I would like to get a sense as to how the event rate might be occurring. Because since we have not delayed when the results will be announced, I expect they are occurring according to plan. But at what point or at what meeting might that update change?

So that is not to confuse the other people on the call, the DSMB or the DMC, as we have been referring to it. It has been meeting about every 100 patients or about every three or four months during the course of the trial that meeting schedule will continue. So if you project off of the last April meeting, the next meeting should be August/September timeframe. I believe it has been scheduled. Greg, correct me. So it has been scheduled. So you can expect a meeting about mid-September.

The event rate is currently proceeding as we would expect it to. We really have not given guidance on the number of events or the event rate, other than to announce the number of PFS and deaths at the interim analysis. We thought it was appropriate to do it then. But one of the big responsibilities we have here as a Company is to protect the integrity of the trial and the integrity of the data.

So that is an important focus for us. It is not a question that is inappropriate, but we have been guarded with information like that, not only to protect the integrity of the trial and the data, but also at the request of the DMC.

So I can only tell you this. With regards to progressions and event rates, we believe they are substantially following what we would consider to be consistent with the successful trial. So that is my view.

Fair enough. And then just one question regarding the DIGNITY trial and when that will officially start to conclude, as well as how is the recruitment for the ABLATE trial going?

So I'm just going to comment on the ABLATE trial and maybe a couple of comments and then ask Dr. Borys to comment.

So the ABLATE trial really leverages our experience in two Phase 1 studies. So all-comers study, as Nick pointed out earlier, we demonstrated local control of patients with metastatic disease. So that is on one hand. On the other hand, the primary focus of the Company is to complete the HEAT study with sufficient resources to be able to begin the commercialization process.

So we have been very interested in moving forward with colorectal liver med study for two reasons. One is we have demonstrated a clinical activity, which could support an improvement in the outcomes of patients treated with radiofrequency ablation. And number two, and this is very important both in Europe and in the United States, the incidence of colorectal meds to the liver exceed that of primary liver cancer by a factor of 5 or 6. So it is truly a needy market, and it is a large one.

So our goal here with the ABLATE study has been to organize the infrastructure. That is -- number one is to get agreement with the FDA that the protocol is sound, and it can proceed as designed in a Phase 2 study. Number two is to design a Phase 2 study in a, I would say, a very well-disciplined, controlled, double-blinded, randomized trial such that the data coming from the trial would be beyond question. That if the data were to be positive, that it would be sufficiently positive that it would be reviewed and accepted by any peer-reviewed journal. So it's a double-blinded, randomized trial. We are using, in fact, a core lab to adjudicate the results or the -- to adjudicate the results for progression.

So that is a long-winded answer. Our goal here is to complete the 88th patient trial in a timeframe that matches up with our expectation for the approval of ThermoDox for primary liver cancer, which could be as early as around the end of 2013. Okay?

With regards to the DIGNITY trial, the goal here is to -- well, first was to get acceptance that the trial was sound both medically and scientifically valid. We have gotten that agreement with the FDA. We submitted the protocol, I believe, it was the end of last year. It was accepted without comment by the agency after its 30- or 45-day review period.

In the meantime, we have been recruiting investigator sites. We will have a little bit more to say about that most likely when we enroll our first patient in the trial. But it is safe to say that a number of these investigator sites who were involved with our Phase 1 trial are keenly interested to continue this study.

I think as everybody knows who has followed the Company, recruiting patients into a trial like this has not been an easy task. So one of the things we are looking forward to is the publication of data from our Phase 1 trial in order to be able to encourage physicians who treat these patients to consider this trial as an option for their patients. (multiple speakers).

Sorry.

Yes, I can only underline Mike's remarks right now that when it comes to the ABLATE trial, our efforts right now are in working with the sites, optimizing our recruitment efforts and then adjusting the number of sites as needed in order to complete the enrollment as planned.

And the same thing with the DIGNITY study. Again, I wanted to emphasize that the key sites that were involved in the Phase 1 enrollment have re-signed up for the Phase 2, and we are in the process with working with them as well. And all I can say at this point is we look forward to reporting on the news as we start that trial in the near future.

And just regarding presentation, guys, we have ASCO coming up. Do we have anything in way of update from Celsion?

We have no presentations planned at ASCO.

Thank you very much and congratulations.

(Operator Instructions). [Tron Hildo], Heartstone Capital Management.

Congratulations on the progress. Been a good call so far. (multiple speakers) I do have two questions for you. The first one is regarding timing of various countries' approvals. I am pretty comfortable with the timing in the US with priority review. Can you comment on the timing it would take you in Europe and in China in particular, please?

So I mean we have a broad sense. I think historically our review in Europe is less than nine months, more likely 12 months following submission of a MAA.

In China it really depends on the classification of the therapeutic and the indication for which it is being treated. We believe we fall into a category of a novel compound that is being evaluated in a cancer with serious significance and high mortality. That puts us essentially in a category somewhat of fast-track in the United States. The benefit of that is the typical turnaround -- if we -- and it is one of the reasons why we are working so closely with Hisun.

Frankly, they have -- as a local manufacturer, they give us quite a bit of access to the SFDA. But typically a turnaround for an application, an NDA type application in China can take anywhere from 12 to 15 to 18 months. Our understanding is that with the appropriate designation applied for the appropriate indications -- let's say, again, a novel compound treating a significant disease -- the review and approval time could be cut by as much as half.

Okay, appreciate that. As a follow-up to the timing then, did you specifically say that the final or the 380th event would occur in quarter one or that that we will also know the results in -- I'm sorry by quarter four, or will we also know the results by quarter four?

Well, it depends on when the 300 -- I'm not trying to be cute here, but this is a very good question. So we are dealing with biological systems, and progression happens as it happens. So we have used the regression analysis to estimate and have had some validation in prior reviews from our statistician that we can expect the 380th event by the end of the year. Whether it happens a lot bit sooner or a little bit later, it is just hard for me to comment. But everything that we see suggests before the end of the year.

For the (technical difficulty)-- get that than I think anyone in the Company and is, in fact, to put him on the spot here a little bit, has put a program in place to as they occur to just absolutely ensure that the Company is aware of each event as it occurs.

But once we had the 380th event, we have to lock the database. So we will anticipate the 380th event with the database, a planned database lock. We will have to gather the data from the investigator sites as we typically do. So that takes a little bit of time and turnaround.

The study data, it is comprehensive data. It is not just the number of events. I want to be clear about that. The study data is tabularized in a format that is reviewable by the DMC, and once we have a DMC concurrence that the 380 events represent a positive outcome or, god forbid the otherwise, we will make that information available.

Perfect. Appreciate that. All right. The second question is about the HIFU trial with Philips. Could you go into a little bit of detail about the number of patients you expect to enroll and what the endpoints will be in that?

Sure. But then just to be a little comical here is just your third question. But I'm going to ask Dr. Borys to comment on that.

The protocol, the way it is written at the moment, I believe that our target number of patients is in the 20s, and our primary endpoint is for the control of painful bone metastases. That would be the primary endpoint, and that will be looking at painful bone metastases over time and, of course, secondary endpoints of safety.

Mara Goldstein, Cantor Fitzgerald.

I actually have a forward-looking type of question. I'm curious to know once the Phase 3 HEAT trial is completed -- and let's just assume for a minute a successful outcome in that trial -- how does that inform the other additional Phase 3 studies in different settings from the perspective of FDA and what it would be known versus what is unknown at this point in time?

Okay. Let me make sure we have the question right. And, by the way, thank you for (technical difficulty)--. So if I understand it correctly, what you are asking (technical difficulty)-- data, and the data has been reviewed with the FDA in a pre-NDA meeting. Are you asking if that data is somehow used to reform (technical difficulty)-- other sponsors of Phase 3 trials? (multiple speakers)

(multiple speakers) another trial in terms of when you meet with the FDA for your end of Phase 2 meetings, and to the extent that there are unknown questions and this is essentially working in a relatively new area combining ThermoDox with RFA. So I'm just curious as to how that might change possibly timelines or considerations in the trial, the number of patients, those type of things.

For other sponsored trials?

Yes.

Okay. So let me just give -- I don't know the answer to that question. Maybe Nick does but (technical difficulty)-- . I can give you a little bit of experience that we had (multiple speakers). In our discussions, during our (technical difficulty)-- with the FDA, next we have already completed -- both [Clear] and [Onex] had completed their Phase 3 trial in primary liver cancer with [Sarafa] and [Epinexavar]. The agency was in possession of that information. They never disclosed the results of the trial was to us, but it seems to me it certainly helped to guide FDA's deal. You know, you negotiate an SPA. But it seemed to help guide the FDA's view of the construct of our statistical plan and the powering of our study. It just seemed to me -- I cannot say for sure -- but we were told by a member of the panel of FDA that another therapy had completed, but they did not tell us much more than that about the study. (multiple speakers). Nick?

Maybe another -- I'm not sure if I fully understand your question, but what I think I'm hearing is -- what I would like to emphasize is what Mike's recent comments on the fact that we have a special protocol assessment with the FDA.

So when we go to the FDA at our pre-NDA meetings, this has gone into Phase 2 as you just mentioned. This is going to be a pre-NDA meeting. We are going to be going with the merits of our data. At this point, the FDA is in no position to challenge the size of our trials, the design of our trials, the impact of our trials. They have to judge our data on its own merits in terms of safety and efficacy, and then they make a -- then they based upon that, if we met our predetermined target, then they have to make a decision based on all that.

So what impact current clinical care might have had over the last few years will have minimal impact on their decision process because they have to judge it based on the merits.

Also, I think it is very important for everyone that follows Celsion to know that our target is intermediate HCC, and this is an area that has very, very little good data. Our study is the largest study ever conducted in intermediate HCC. So our data will be very powerful and be able to elbow our way into that area because we are going to have powerful safety data and powerful efficacy data.

So, with that, I think we are going to have a lot of confidence going into our NDA meetings.

[C.S. Seasti], private investor.

I'm very displeased with the recent progress, so a couple of quick questions here, and I will try to make them fast. I'm not sure if this has been asked before. Has the Company reported on the average lesion size from the HEAT study, and can you even make that public? I'm just curious where patients fall in that 3 to 5 versus 5 versus 7 range.

We have not discussed that publicly, and really until all the data is in, I'm not sure we are in a position to be able to discuss that.

That is understandable. I actually expected that answer. It is no problem.

The next question, there was a question earlier about ASCO. Arguably the World Conference on Interventional Oncology is probably a more direct audience. I'm curious if you guys will be presenting there or have some kind of impact there?

At the WCIO?

Yes.

We are not presenting at the WCIO. I believe the first conference we will be presenting at this year will be our data from our breast cancer trial (multiple speakers) that is being submitted. So we don't know that we have been accepted yet, so it is premature to announce that.

Thank you so much. I know we are at the end of the call here. So, again, appreciate it.

So, operator, we will take one more question.

[Mitch Landgraf], [Odat Enterprises].

A good call. I certainly echo what Ms. Goldstein was saying in that from the layman's point of view, this idea with doxorubicin we know the nature of the drug. With our delivery model, at a time we are doing later NDAs, we are just going to be well aware of the delivery mechanism in RFA, microwave and at least in other parts of the world HIFU is well known. So it is kind of a common man, common person's expectation that we would hope those types of things could lead to much more rapid trial processes for later indications with all the knowns into that. I think that is kind of what she was trying to get at, and I share that point of view.

My question is about Philips, and I don't expect you to answer for another company. But I'm just concerned about, if we really look back, what is going on with HIFU mediated drug delivery and how the FUS foundation is taking the leadership with it. This is a historical breakthrough. This study will be the first with HIFU mediated drug delivery for cancer treatment. It is huge news, and the PR was great.

My concern is, if you look at the news PRs for Philips on their website, there are things like -- they put a new system of electronic medical records, that is great, but there is absolutely nothing about this historical groundbreaking news about HIFU and drug mediated delivery and no quotes from anybody from Philips and the PR about the trial.

I don't expect you to answer for them. I guess from the Company's point of view, do we approach Philips to see if they want to be a part of our PRs in regards to this collaboration? I just don't see the presence of Celsion on their website or in their news, and yet we are years and years ahead breaking ground as a company of our size. Does Philips I mean just don't see it? Can you comment all about Philips' collaboration with us with the PR and things like that?

Sure. No, that is not an unreasonable conclusion to make. Obviously we are not as visible as we would like to be with Philips IR and PR. And that said, HIFU is still an investigational device in many countries, particularly in the United States. Philips (technical difficulty) still an investigational device.

So I think you are seeing a little bit of cautiousness on the part of not only the research arm of Philips but also their general management. It might be a little bit different story -- I cannot speak for them, but it might be a little bit of a different story if the device were in commercial sales at the moment. So it still is an investigational device.

With regards to their interest and their support, the conclusion you are drawing from the lack of visibility is not correct. In fact, we announced I think it was just about a year ago that the FDA had provided us with some questions with regards to our Phase 2 approach to treating painful bony mets. And the majority of the difficult questions surrounded the use of HIFU to treat these patients. And they asked and, you know, you can respond anecdotally or with information from our preclinical trials. But I can tell you this, Philips went right to work, and they are conducting two phase 1 studies in bone cancer patients, the data from which is used to support our re-submission of the Phase 2 protocol.

So their commitment to this multimodality approach, or I like better the way you say this, HIFU mediated drug delivery and our using ThermoDox is, I think it is enormous. They are completely committed to it.

Whether or not the company culture is one that requires the kind of investor enthusiasm that is noted in a non-revenue-generating biotech company or not is, I guess, for you to conclude. Obviously Philips' stake -- it is multi-billion dollars in sales, multi-billion-dollar market cap is investing strategically in what they think are promising new technologies. Their research and now their general management believe that HIFU has some potential. I don't know if I should say great potential. I don't want to speak on their behalf, but has some real potential to treat oncology patients when combined with our heat-sensitive liposome ThermoDox.

And I mean I think actions speak louder than words in many cases. They are funding it. So they are putting their money where their mouth is.

So with regards to do they get involved with our press releases, well, we have a very professional and courteous relationship with Philips. Our press release was reviewed since we used their name, and actually they even agreed to it inside the Philips organization before we announced it. So their lack of a quote I don't think should be misinterpreted here. (multiple speakers) It is a company that has got tens of millions, hundreds of millions of dollars invested in a very promising state-of-the-art, probably best-in-class HIFU technology who have extended their research to include financing some very important preclinical work and now hopefully will be clinical to support the expansion of ThermoDox and the other indications for which we would not have access.

So all that said, let me just take a little bit further with you. (multiple speakers). It would be too hot out on the West Coast and has been taking some groundbreaking steps. And I think [Wilburn] is excited to see us, but I think he may be more so with regards to the pancreatic cancer indication.

We also have developing relationships in the areas of clinical research and preclinical research that we will be talking about. It is too soon other than to just give you an illusion that we are not sitting on our -- on this what may be perceived as a mountain that moves slowly to get our drug to market. We think we have more avenues to get our drug to market using HIFU. We think we have other avenues from very interesting clinical and preclinical approaches. So I hope that answers your question.

It does. Very well. I know it is a sensitive issue, but I appreciate the thorough response. I am not alone, especially among people much more qualified than I, in believing that Celsion and HIFU mediated drug delivery is literally going to revolutionize the oncology world period.

So I am very grateful for the answer. I had another question, but I'm going to retroactively grant it to my friend, Tron, who took three questions. Thank you very much, gentlemen.

Thank you. We would like a business card, please. (multiple speakers)

Thank you. At this time I will turn the conference back to Michael Tardugno for any closing or additional remarks.

I want to thank everybody for joining us today and for your interest in Celsion. The comment I made when we opened the conference call was the watchword here is momentum. We are moving aggressively to evaluate regulatory and commercial pathways for ThermoDox, now looking forward to data from one of the most important if not the most important clinical trials being conducted in oncology today, and that is in primary liver cancer. We believe that the HEAT study can provide a basis for the commitment -- a return on the commitment -- that is what I am trying to say -- a return on the commitment and the patience that we have seen from our investors. And we look forward to presenting you with that data hopefully at or about the end of this year. Thank you.

Thank you for your participation. That concludes today's conference.