Imunon Inc (IMNN) 2012 Q3 法說會逐字稿

Good morning. My name is Janine and I will be your conference operator today. At this time I would like to welcome everyone to the Celsion Corporation third-quarter 2012 shareholder 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)

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 third-quarter 2012 financial results were released this morning before the market opened. We filed our third-quarter Form 10-Q on Friday after the market close. The Form 10-Q is available on the SEC's EDGAR system and the Company's earnings release and Form 10-Q are both available on the Company's website at www.Celsion.com.

Today's call will be archived, the replay, beginning today at 2 p.m. Eastern and will remain available by phone until Monday, November 26, 2012, and 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 provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risk and uncertainties including without limitation the risk of clinical failures, delays, or increased costs; unforeseen changes in the cost of our research and development activities and clinical trials by others; possible acquisition of other technologies, assets, or businesses; and possible adverse action 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.

Today in addition to discussing our third quarter financial results we will provide you with a corporate update, including an outline of the events ahead in our Phase III HEAT study as well as our overall ThermoDox clinical development program. We will then open the call for questions, which we ask that you keep to no more than two.

With that I would like to turn the call over to Michael Tardugno, President and CEO of Celsion. Mike?

Thanks, Jeff. Good morning and thank you for your interest in and support of Celsion, a Company I trust you will agree is one of the most exciting and compelling in this world of biotech drug development. I am joined today by Nick Borys, our Chief Medical Officer; Greg Weaver, our Chief Financial Officer; and of course Jeff Church, from whom you have just heard, our Senior Vice President of Investor Relations and Corporate Strategy.

Before I get started this morning, on this Veterans Day I would like to give a special welcome to those of you who are veterans of the US military and on behalf of all of us thank you for your service to our country.

This is a great time for Celsion and by extension for our shareholders. Your confidence in our clinical focus and support for our innovative technology has brought us very near to the transformative event for our Company, which is the announcement of the results from the HEAT study. Because if we are right -- and we have no reason to believe we will not be -- we will bring to market more than a promise and more than just hope. We will bring to market ThermoDox, a drug that will extend life and perhaps provide a cure for those diagnosed with HCC or hepatocellular carcinoma, as you know, the largest unmet medical need remaining in oncology.

Completion of development and transitioning to the commercialization of ThermoDox is an exciting milestone for our management team, and I can tell you this is what we signed on for. This is why we are here. In the sophisticated industry of clinical science and medicine, full of regulatory complexity, it is good to know that many of you have been with us and are here with us this morning.

As I have been saying and it continues to be, we have never been so well positioned. In mid-September the HEAT study, our fully enrolled 700-patient Phase III pivotal trial of ThermoDox in combination with radiofrequency ablation, that is RFA, for the treatment of non-resectable patients in HCC completed its last intermediate DMC review prior to final data.

Last week -- Friday, to be exact -- we announced that 380 progression-free survival event, that is PFS events, have been projected in the HEAT study. According to the study's protocol, 380 events power the trial at 80% to show a 33% improvement in the time to progression in the therapeutic arm over the control arm.

The final data collection process is followed by query resolution, tabulation and summary, unblinding, and final analysis of the results by the study's independent Data Monitoring Committee. Following DMC review the Company will disclose top-line results, which we expect will be in January.

I will remind you that PFS in the HEAT study is the HEAT study's primary endpoint, which has been granted a Special Protocol Assessment, that is an SPA, by the FDA. 33% improvement is the hurdle of clinical benefit that supports approval. This is an exciting time for the Company, made even more so by the fact that we have the financial resources sufficient to see us through data and well beyond.

I would like to start out with a question that I post last -- was posed to me. It's posed to me over and over. When I posed rhetorically last time we spoke -- will the study be successful? I want to reiterate that we remain blinded to the results. The integrity of the trial depends on it.

I want you to know I have no reason to believe that the HEAT study won't be successful, but you don't have to take my word for it. The evidence is clearly on our side.

So let's start with the regulatory community. They get it. Look at the support that we have gotten from multiple regulatory agencies around the world, 11 in all.

And in particular the FDA. We have an SPA. We have fast track and orphan designation. We have agreed to a 505(b)(2) filing pathway. And ThermoDox will be a candidate for priority review, which we expect we will get on positive data.

The reason for this support? I think they are twofold.

First, there is no ambiguity. HCC is an enormous unmet medical need.

Let's go through the facts once again. I do this almost every call, as they are sobering.

ThermoDox's principal indication, HCC, has been a challenge for even the biggest of Big Pharma. Despite the hundreds of millions of dollars they have spent to find a therapy to improve outcome, HCC remains a large and deadly cancer.

The selection of this indication by Celsion is not a coincidence. We chose it because we believe fundamentally in the science behind our drug technology and its ability to work in this setting.

HCC is the world's fifth-largest cancer and a disease of significant concern within the global oncology community and public health agencies. The incidence is approximately 28,000 in the United States, 40,000 cases in Europe. And it is rapidly growing at 5% worldwide from a base of 750,000 new cases annually.

Over 50% of incidence in China, emphasizing the importance of this market for us and the rationale for a high concentration of our investigator sites in that country and, I might add, the extraordinary support we received from the People's Republic of China's SFDA. We will talk about this more in a minute, and Nick will have some comments on this which I think will give you some confidence that we are on the right track in the PRC.

The World Health Organization estimates that HCC will become the number-one cancer worldwide by 2020, surpassing lung cancer. For countries in the West and Japan during the 10-year period ending -- forecast ending 2019 incidence is expected to increase by 20%, prevalence by 47%.

In our target population median time to progression is 12 months, with median time to death 30 months. Five-year survival is in the single digits. I will remind you as I said last call, outcome statistics as we continue to review them have remained constant since we began our research in HCC over six years ago.

The second point I want to make and equally important to the regulatory support -- it is clear that the clinical evidence for a successful HEAT trial is on our side. We know that doxorubicin, the anticancer agent in ThermoDox, is active in liver cancer. We know that combining ThermoDox with radiofrequency ablation, RFA, has shown remarkable potential in our early-phase clinical studies to delay disease progression.

We know that recurrence most often happens in the margins surrounding the ablated tumor, where micro-metastases that go undetected or untreated can form new lesions. We know unambiguously that ThermoDox will deposit and sequester a high lethal concentration of doxorubicin in these susceptible margins following RFA. And we also know that delayed progression, a meaningful clinical outcome, is both sensitive and specific as a surrogate for overall survival and an important confirmatory endpoint, particularly in the United States.

I cannot emphasize enough the significance of this study. Unlike almost all other cancers, HCC is growing in global prevalence and mortality, with few treatment options particularly for patients with non-resectable disease. The medical world I dare say is watching.

So we continue to work diligently to avoid any missteps and to assure no surprises with the clinical data set. Through our clinical quality dashboard we have tracked and evaluated timeliness, currentness, radiologic concordance, and certain trends in the data set which are routinely scoured by our data management team. This information has been reviewed and discussed in each and every DMC meeting.

We have instituted and completed a comprehensive remonitoring program for a number of high-volume clinical sites, to check and doublecheck the data supporting proper study conduct. We have also implemented a comprehensive clinical quality audit program as a check on our CRO and our work product. The goal here, as I have said over and over again, is no surprises.

Now as we look to commercialization our early market research, market landscape analysis, and price ranging studies with physicians, key opinion leaders, and payers has given us a better understanding of the patient journey as well as ThermoDox's positioning and its value in the treatment of HCC. On a preliminary basis -- once we have final data we will be able to give you some detail on this -- but on a preliminary basis I can share with you that the feedback we have gotten is at the top of the charts.

Of course price and economics are greatly influenced by clinical benefit. After top-line data are available, in-depth quantitative market analysis and pricing studies will be conducted.

I want to transition to the manufacturing front, an important element in our go-to-market strategy. We are establishing multiple manufacturing partners in the US, an important requirement to ensure supply continuity by most pharma companies interested in a commercial license for ThermoDox. In China, to assure reliable quality supply chain with a cost of goods that support high gross margins regardless of the territory, we announced a commercial supply agreement with Hisun Pharmaceuticals, a highly respected Chinese company, for the production of ThermoDox for the domestic China market.

Just a few more comments on CMC. We have now produced over 20 batches; I think Dr. Reed would tell me 22. We understand the manufacturing costs, and we know how to make this product. We expect high gross margins.

Our registration batch is to support the initial NDA, and MAA filings are complete and on stability. Launch inventory production is planned to commence immediately following positive data readout.

Now I would like to move on to regulatory affairs. Consistent with our global regulatory strategy, the HEAT study is designed to address as many markets as possible in a single study. In the EU we have EMA scientific advice confirming that the HEAT study will provide data acceptable as a basis for submission of an MAA for centralized filing and full approval. A single approval will give us access to 27 European countries.

European approval in addition or as an alternative to FAA approval provides the basis for international filings in countries that require a referenced approval, known as a CPP or certificate of pharmaceutical product, from a globally recognized regulatory agency. Bottom line here is that we have more than one option for international filings.

Very recently -- Nick will -- Dr. Borys will talk about this more I hope. Dr. Borys and I and Dr. Reed met for almost half a day with the Chinese FDA Center for Drug Evaluation and Research or CDER. The meeting, frankly, was planned to be for just a little over an hour; we spent more than -- almost half a day.

The outcome was positive, more than positive. SFDA will accept an NDA filing without the need for a reference country approval. This might be a first.

The fact that we can file directly in China goes to the strength of our strategy to enroll a minimum number of patients necessary for local registration -- you have Dr. Borys to thank for that -- and to engage a large manufacturer for -- a local manufacturer for the China ThermoDox market. And we have Dr. Reed to thank for that. Our smart approach will save us over a year in approval timelines.

In summary, we have a single global trial with agreements from local regulatory agencies that give us immediate filing access to some 29 countries around the world. We have started the NDA process. We have a CRO with FDA portal access and publishing expertise.

We are using a common technical document approach, known as a CTD, as a basis for NDA and MAA filings. Using this CTD, it is a template that is recognized virtually globally by all regulatory agencies as a basis for regulatory filings for approval, for new drug approval filings.

Using the CTD we would expect to file in the US and the EMA on about the same time frame, then followed by China. Nick will speak to this in some more detail.

I'd like to report top-line progress on our clinical development program to evaluate ThermoDox in multiple indications. The ABLATE study, a randomized Phase II study of ThermoDox in combination with RFA for the treatment of colorectal metastasis, is underway in four locations. Recruitment, as I have said in the past, is being limited by design to preserve cash. Following unblinding of the Phase III HEAT study, enrollment will be accelerated in this trial.

The DIGNITY study, a difficult to enroll trial but one that we refuse to give on, as I said in the past, particularly given the remarkable and strong results reported from the Duke Phase I trial and from our Phase I study, the DIGNITY study, an abstract of which was presented at the 2012 Congress for the European Society of Medical Oncology this past September by Dr. Hope Rugo from the University of California San Francisco School of Medicine. The poster presentation is on our website, and I am sure Nick has more comments on this also. So we are excited to continue into a Phase II study where local control provides dignity for these patients and a clinically meaningful benefit.

So I will point out that the evidence here is clear. We have a pipeline within this drug platform, within ThermoDox, made even more exciting with the potential for a next-generation treatment for difficult cancers, and that is combining ThermoDox with HIFU, high-intensity focused ultrasound -- acoustic energy.

Since the announcement of our research with Philips, the maker of Sonalleve, one of the three HIFU devices in evaluation for oncology applications, the potential of these devices to noninvasively target and mediate drug delivery directly to tumors when combined with our heat-sensitive liposome technology has captured the attention of key opinion leaders on the leading edge of cancer research.

In ThermoDox I believe they may have exactly the therapy they seek. This is being made clear by the growing list of collaborators. In addition to our joint research plan with Philips Healthcare initiatives and collaborations with some of the top institutions in medicine, include preclinical studies at the University of Washington School of Medicine; we are exploring the use of ThermoDox in combination with MR-guided HIFU for the treatment of pancreatic disease or pancreatic cancer. Preclinical and planned clinical studies at the University of Utrecht at the Netherlands under a $10 million European cooperative grant for MR-guided HIFU for the treatment of liver cancer.

We are collaborating with the University of Oxford for a clinical study of ThermoDox in combination with ultrasound-guided HIFU to treat metastatic cancer. And I can tell you now there are others which we will announce over time as our agreement contracts are negotiated and executed.

Supporting all of these efforts is a strong financial position. As we have stated, the Company has sufficient cash to fund its operations through 2013 and we have no current plans to raise capital prior to data release from the HEAT study or prior to top-line data release from the HEAT study.

I will ask Greg speak about our finances in more detail in a moment, but first want to turn the call over to Jeff Church. Jeff?

Thank you, Mike. At this late stage in the development of ThermoDox, drug product manufacturing and our ability to meet global demand is a key priority, both for the commercial launch and for the regulatory steps that precede it. As we announced earlier this year, we have in place a commercial supply agreement in China with Hisun Pharmaceutical for the production of ThermoDox for the domestic China market.

Hisun Pharmaceutical is one of the largest manufacturers and suppliers of chemotherapeutic agents globally and a go-to partner for pharma companies in China, including such companies as Pfizer and Eli Lilly. Our Hisun agreement, in addition to providing the investment needed to support the production of three registration batches, also provides certain regulatory advantages when filing for approval in China.

Our Hisun relationship is also important in that it illustrates a careful attention to cash management in the period leading up to data. This balance between advancing the largest study ever conducted in intermediate-stage primary liver cancer and maintaining a strong cash position has allowed us to develop what will be a registration-stage product, potentially one of the most important new therapeutic introductions in oncology, without giving away any global rights outside of Japan.

The level of interest for a $1 billion product with near-term approval potential in the US, Europe, and emerging markets such as China and Asia-Pacific is high. China and the rest of Asia-Pacific are key markets for ThermoDox as they represent over 70% of the global incidence for HCC.

The appetite among both large multinational pharmaceutical companies as well as major domestic Chinese pharmaceutical companies has continued to increase as we approach final data readout. Companies are looking for large new product opportunities like ThermoDox in emerging markets like Asia-Pacific to replace revenues for many of their products coming off patent.

And now Greg will provide an overview of our third-quarter financial results. Greg?

Thank you, Jeff. We reported total cash and investments at September 30 of $22.7 million, which compares to $24 million at the end of the second quarter. This reflects a net change in total cash of just $1.3 million in Q3.

During the third quarter the Company received the benefit of proceeds of $4 million from investors' cash exercise of common stock warrants along with some stock option share purchases by Company insiders. The total use of cash for operations in the third quarter was $5.25 million, which is down from $6.9 million in Q3 of last year.

The reduction in cash usage was a result of a continuing trend in the dropping of operating expenses, which is consistent with our prior guidance, driven by HEAT study CRO costs globally trending down, as we completed enrollment in the study in June of 2012 and are now moving into the next phase of the study, approaching end of trial results. This is reflected in the numbers, with Q3 total operating expenses dropping to $4.9 million, which is down from $5.7 million in Q2 of this year and down from $6.8 million in Q3 of last year.

Given our current operating assumptions, we expect to end the calendar year 2012 with cash sufficient to fund the full-year of 2013 and beating Street estimates.

Q3 2012 R&D expense of $3.5 million reflects a decrease year-over-year of 35%, which is down $1.9 million from $5.4 million same quarter last year, and down 15% from $4.1 million in Q2 of 2012. Our management of clinical activities for the HEAT study continues to trend down as expected, partially offset by the increases in our development of the US commercial manufacturing activities for ThermoDox. General and administrative expenses of $1.4 million were flat year-over-year compared to Q3 of 2011 and are down from the $1.6 million in Q2 of this year.

So to summarize, we completed the third quarter with cash and investments of $22.7 million, as compared to $24 million at the end of the second quarter. This provides the runway to fund operations and debt service through 2013.

And as we pointed out last quarter, on last quarter's call, one important element of our culture here emphasizes the wise use of cash and cost controls, and our ability to make cash and by extension our equity work as hard as possible, but not at the expense of our commitment to clinical research and growing of shareholder value.

I would add we also have an additional $5 million available from our loan facility with Oxford and Horizon following positive clinical data from the HEAT study, which adds to the strength of our balance sheet at a relatively low cost of capital. So to reiterate we have no current plans for issuing new equity prior to the HEAT study data disclosure in January.

Now I would like to turn the call over to our Chief Medical Officer, Dr. Nick Borys.

Thank you, Greg. In my review with you today I would like to focus on our current and recent efforts in ThermoDox development. The HEAT study, as part of its Special Protocol Assessment, as agreed to with the FDA and endorsed by the European regulatory authorities, is designed not only to show statistical significance with our results but clinical significance as well. In other words positive data means that our results are not only meaningful to regulatory authorities and statisticians, but meaningful in the clinical treatment of HCC.

The team here at Celsion is working diligently to prepare for our regulatory submission. Supporting this goal are a number of key designations including Special Protocol Assessment and a 505(b)(2) agreement with the FDA as well as Fast Track. After our NDA submission is accepted, we expect to secure a priority review in line with FDA's current PDUFA performance goals.

We have confirmation from the European regulatory authorities that the HEAT study provides the basis for a centralized European filing application or MAA. We will be afforded many of the same priority review benefits through what European regulatory authorities call a full mixed review registration process.

As Mike mentioned earlier, we have recently met with the Chinese regulators and came to an agreement that the HEAT study would also serve as an adequate basis for marketing approval. And because of our relationship with local manufacturing of ThermoDox, we would be eligible for submitting a Chinese NDA in parallel with the US NDA submission and the European submission.

Though primary liver cancer is a priority for Celsion, ThermoDox's unique properties support its potential use beyond first-line treatment in HCC. As Mike mentioned, we have announced several important new collaborations recently that underscore not just our belief in this potential but support for it within academia and industry.

First, we announced this quarter FDA clearance to advance a joint development program for ThermoDox combined with Royal Philips Electronics' Sonalleve MR-HIFU technology in the palliation of painful metastasis to the bone. We expect to initiate a Phase II study in this indication in early 2013.

There are between 300,000 to 500,000 patients with bone metastasis. Many of these patients experience excruciating and unrelenting pain and are often treated with powerful analgesics such as opiates, resulting in only modest benefit. External beam radiation therapy is effective in palliating painful bone metastasis, but is limited by accumulating toxic effects to healthy organs.

The Sonalleve HIFU system has the potential to noninvasively target lesions with acoustic energy, creating sufficient heat to activate ThermoDox and preferentially release high concentrations of doxorubicin in a targeted treatment area. This multimodality approach may have the effect of creating a next-generation noninvasive treatment for this condition. It may also have other treatment potential.

A newly announced collaboration with the University of Oxford in the UK (technical difficulty) began a [close] study of (inaudible) HIFU in the treatment of metastatic liver cancer. The trial, which is supported by the UK's National Institute for Health Research, will be carried out as a multi-discplinary collaboration between Celsion, the Oxford University Institute of Biomedical Engineering, and the Oxford University Hospitals NHS Trust.

This early-phase clinical study is being finalized and will require approval from a local Ethics Committee. Treatment of the first patient is targeted over the next four months. The details of the study will be made public (technical difficulty) approvals (technical difficulty)

(technical difficulty) working with the Focused Ultrasound Foundation in preclinical studies designed to explore the use of ThermoDox in combination with MR-guided HIFU for the treatment of pancreatic cancer. The studies are being conducted at the University of Washington School of Medicine by Professor Hwang. (technical difficulty) research is expected to include animal models to confirm the ability of HIFU to target high concentrations of doxorubicin in proprietary pancreatic cancer cell lines, and in vivo studies to assess the response of tumors treated using ThermoDox with and without HIFU-induced hyperthermia.

Our (technical difficulty) sponsored studies all continue (technical difficulty) forward. We recently expanded the number of institutions participating in the ABLATE study, our multicenter randomized Phase II trial, up to 80 patients with colorectal cancer metastasized to the liver. Primary endpoint for this study is local (technical difficulty) control one year from treatment. Our goal with ABLATE is to enroll patients more rapidly once following positive data from the HEAT study such that the study will mature around the predicted time (technical difficulty) ThermoDox.

In recurrent chest wall breast cancer, as Mike mentioned, we continue to move forward with our Phase II DIGNITY study. The DIGNITY study builds upon promising data from Phase I, which was presented at the European Medical Oncology Conference.

In the Phase I portion of the DIGNITY study a highly treatment refractory RCW patient population was treated using ThermoDox in combination with mild local hypothermia for superficial lesions that have failed standard treatment. Clinically meaningful responses were observed, including a target lesion response rate of 45% without local progression, that included a complete response of 9.1% and four partial responses.

As we have said in the past, the Phase II study has been limited to 40 patients with this form of breast cancer and will enroll patients who have received but failed prior treatment. Again, this study will accelerate with completion of the HEAT study.

Our ThermoDox research program at this stage is deep and diversified. We have laid the groundwork for moving forward with multiple company-sponsored studies on a schedule of our choice. With that, I look forward to the announcement of the HEAT study results and return the call to Mike.

Well thank you, Nick; as always, a great report. And thank you, Greg and Jeff.

As I hope our remarks made clear, with your support we have worked and are prepared for what will be the most important event in Celsion's history, and that is the validation of our technology platform and lead therapeutic ThermoDox, and to watch what may be one of the most important new therapies in oncology in a generation -- the culmination of many years of work and preparation from a small but very dedicated team.

We will continue to focus on our critically important work and look forward to reporting to you on our success. In doing so we expect to create exceptional value for our shareholders and, most importantly, make a significant difference in the lives of patients and their families.

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

(Operator Instructions). Keith Markey, Griffin Securities.

Thank you for taking my questions. Just a couple. I was wondering if you could tell us, do you think the top-line data will include the trend in survival?

That is a hard question to answer at this point. Certainly we would like to report as much information as possible, Keith. I think we want to be mindful of the fact that we don't want to deliver results or information prematurely, so we'll want to make sure that the data has matured enough to be able to share the trending information, if it is available, with the general public and with our shareholders.

I think as Dr. Borys would point out, reserving as much important clinical results as possible for publication and for our conference presentation is important. So we are going to go through a very structured process of evaluating what can -- what we will and what we can share to, one, most importantly, to ensure that our investors know the results with some confidence that they can continue to support the Company. But at the same time we have to balance it with our scientific and academic obligations to preserve enough data so the presentation -- so the paper and the presentation is accepted by the highest of top-level fora. Does that answer your question?

It sure does. Thank you. Then I was just wondering; can you give us -- remind us of the time frame you expect to file the documents with the different regulatory agencies?

I don't think we have given guidance on that point just yet, but we will be moving as quickly as possible. As I said in my remarks and Nick reconfirmed, we have already begun developing the NDA. It is being written as we speak.

At least one possibly two sections will be ready for submission. If the FDA grants a rolling -- allows for a rolling submission, we will be able to do so quite quickly.

The submission date will be conditioned. We have our plans, but I think it is important to recognize the submission date will be conditioned on the outcome of our pre-NDA meeting with FDA.

We have already had conversations -- written exchanges, let me say it that way, with the FDA regarding our expectation for data availability and what our plans are for filing. As we expected and as we look forward to, they reminded us that pre-NDA meetings would be necessary in order to ensure that we are addressing all of the issues in an appropriate manner, to ensure a quick and timely review of the application in line with our expectation and I'm sure their expectation that we will have a priority review agreement.

So until we have met with FDA -- and we will have a similar meeting by the way with the EMA and with SFDA. Until we have met with these agencies, it gives me just a little bit of pause here to give you any firm dates with regards to our expectation for filing. But you can rest assured that it is a -- filing timelines are a subject of regular review and conversation within the Company.

Okay, thank you very much.

(Operator Instructions). Joe Pantginis, ROTH Capital Partners.

Hi guys, good morning and thanks for taking the question. So my two questions are -- I was wondering first, can you provide a little more color with regard to the great amount of background logistics that are going on right now? Obviously you have been having a great amount of work through the entire trial, through your clinical quality dashboard.

But what new things are coming up now to be able to finalize data from this international study? Obviously, you have a lot of geographies to compile the data in a centralized location.

That's a good question. And it doesn't -- collecting data from 79 sites in 11 countries, and I think we have 16 different languages that we are working through, it is not a trivial task by any means.

The clinical group here regularly and frequently meets with our CRO and the extended group. We reach down right into the countries, speaking directly with our CRAs in the countries, with regards to collecting data in an efficient but more importantly in a quality manner.

Because as you know we will be locking the database at some point in order to assure that there can be no changes following the collection of data, the summary of information that is provided to the DMC, ultimately provided to regulatory agencies. But it is a sophisticated and complex endeavor.

Nick, do you want to maybe just talk through some of the elements of the data collection in the far reaches of the world? How this all works?

Sure. For the data managers out there, as you probably know that we are now completing our final data sweeps with a focus on survival sweeps and imaging sweeps, to ensure that our PFS events and survival events can be well determined and confirmed by our DMC. You also probably know that, as Mike had mentioned on many occasions, that the data is always checked and rechecked. As this data goes through the checking process queries arise, where if something is not exactly clear we have to go back to the sites and rediscuss it with the investigators and clarify them all.

So all this has to be finalized to a point where we can declare a data lock, and at which time we can prepare all the documents and the tables and the graphs that are necessary for our DMC, that eventually will go out to the regulatory authorities for an approval process. So it is a multilevel effort that is being done by multiple vendors and is being monitored by us here at Celsion.

And it is a very exciting time for us. So everything so far is so good.

That is very helpful. Thank you. Then my second question, I guess, if you can link. You have talked about some of your precommercial and your pre-regulatory plans. Anything you can add regarding potential business development activities?

I don't think at this point, Joe, we are in a position to really talk any more about interactions with other companies, although they are happening, and they are frequent, and they certainly take some of our precious time and resource. But a priority for the Company nonetheless.

Our expectation is that post positive data we will be entertaining multiple term sheets. Now, whether those term sheets address a regional license or larger will really be the function of the other companies' interest.

Our sense is that on positive data the Company will realize the best terms for a license. So we are operating with some patience and expect that our patience will pay off.

I wanted to make another point on licensing, and I think this maybe further addresses some of the comments that Jeff made. A critical, a very high concentration of patients are in Asia-Pacific. So when we look at prioritizing our time and effort and as it relates to diligence, which as you probably know is time consuming, the majority of our work is and the majority of the interest that we have seen is in that region of the world.

Thank you very much, Michael. Very helpful. Good luck with the data.

Thank you very much, Joe, and thank you for continuing to follow us.

Ren Benjamin, Burrill & Company.

Hi, good morning guys. Thanks for taking the questions and congratulations on your success so far.

Thank you.

Could you talk to us a little bit about the role of overall survival in the entire context of the data package? Maybe think of help us understand how we should be thinking about overall survival from a regulatory point of view and then maybe from a marketing point of view.

Let me start with the second part of your question first. It is very clear that a survival benefit will certainly be recognized as a critical benefit that has -- that provides substantial pricing power. There is simply no doubt about it.

So when we are anxious to see the survival trends, which we would expect to have maybe not enough events (technical difficulty) to be able to conduct a proper statistical analysis, but we will be looking forward to survival trends which we would expect to have certainly by the time the trial data, the application, has been reviewed and approved by the US FDA. So survival benefit is important in the overall equation for the market value of ThermoDox, simply no doubt about it.

But with regards to -- let me just come at it from another way with regards to PFS as a primary endpoint, outside the United States, we know that particularly in our indication we may be different than quite a few others that have had some notoriety of late. Patients in our trial have had no metastases of cancer, no evidence of cancer outside of the liver. Post-RFA treatment, all of their lesions have been addressed and eliminated.

So they are leaving the physician post-treatment with no evidence of cancer. Progression is a meaningful event in that situation, in that setting.

That was recognized very clearly by the EMA. In our scientific advice meetings with the EMA they made it clear to us that PFS alone in this setting may be sufficient for unconditional approval or final approval of ThermoDox for the European Community. We think that is right.

In the US it is reasonably clear to us, given the construct of the trial as negotiated with the FDA in our SPA negotiation, that a confirmatory endpoint, survival, needs to be a part of the trial. So we will be following our patients to establish a confirmatory endpoint.

What the hurdle will be as to -- for OS to support PFS I think is yet up in the air. But we know that the trial is powered in a way to show a 30% improvement in overall survival from a statistical standpoint. So that, I just -- before we leave this question I want to ask Nick if he has anything to add to that.

Yes, one thing I think is very important for everyone to know is, number one, FDA has committed to approve the drug based on PFS. And then later on we will continue following our patients for OS, which is again a confirmatory endpoint as Mike has described.

PFS in itself is a very important critical endpoint, as the European authorities have recognized. You could imagine that if we are able to control the disease at the liver before progressions continue, that increases the chance for patients to get other curative treatments such as transplantation.

So PFS by itself is very important in liver cancer, and that might offer a contrast to other cancers as well. So from my point of view, from a clinical point of view, from a regulatory point of view getting that PFS is very important; confirming it with OS later on, we have very high confidence.

Okay, thank you very much for that. I guess just another question, kind of the flip side of what Joe had asked regarding partnering. Can you talk to us a little bit about how you are thinking about commercialization?

So do you have to get a partner? Is that the primary goal of the Company? Or if the economics just don't seem to be right are you willing to go it alone? And if you are, what does the Company look like if you're willing to go it alone?

Yes, I think that is a good question. It has been our point of view that to be successful we need to penetrate in the areas of development and commercialization for which we have expertise and confidence. Sticking to our knitting I guess is the saying as it goes that comes to mind.

Outside the United States it is pretty clear to us, Ren, that we do need a partner to have the maximum potential for success. I do not have any question that we post positive data, then we will have partnering relationships that we can come to the conclusion will be -- will have terms, economics, that benefit the Company. So I am not overly concerned about that.

In the United States, however, our viewpoint is quite a bit different. We are prepared to bring ThermoDox to market in the US ourselves. It may be our first-line strategy. In fact we put quite a bit of time behind assembling that strategy, and we think we have a reasonable approach that manages risk, conserves as much cash or limits the amount of cash that -- not limits, but it's the right -- manages the amount of cash necessary to bring ThermoDox to market in a very responsible way.

So unless we see term sheets for the US that would provide shareholders with a better return on investment than our management team could do alone in bringing ThermoDox to market ourselves, we are likely to commercialize ThermoDox in the US ourselves or potentially in some kind of a co-marketing or co-distribution arrangement.

Perfect, guys. Thank you very much and good luck.

Thank you.

Mara Goldstein, Cantor Fitzgerald.

Thanks, I just had two things. The first is I understand you are limited is what you might be able to say in terms of how much data will be released at first blush. But do you think that you will have regional stratification when you release the top-line data?

Then secondarily I just wanted to confirm that you said the trial was 30% powered to show an improvement in survival.

That's right. Want to -- survival?

Okay, the first question is -- are we going to release regional results? That I think for -- at the time that we are going to be releasing top-line results we probably will not be drilling down to a lot of detail.

Again as you know, what we are trying to do is protect the data in order for it to first undergo a peer review process; and that will afford us to get publications in very high-quality journals. And again, as you know journals will not publish data if it has already been publicly released.

So for me, I will be very jealous of releasing much data after that, before it goes to a regulatory review and before it goes to a peer review. Again if you look at other examples of great drugs that work in the area of liver cancers and other cancers, you will see that that is usually the path that is followed.

Okay.

Now for the second part of your question I think what Mike was (technical difficulty). Yes, I think he was quoting the statistical power for PFS not necessarily for OS.

Okay. That is what I was confirming. And that is 30% or 33%?

33%.

Okay. All right, thank you.

Trond Hildahl, Heartstone Capital Management.

Hey, good morning Mike and team.

Good morning, Trond.

We have two questions. First (technical difficulty) of course maybe even three or four if I can pack them in, right?

No, you (technical difficulty) two, Trond. (technical difficulty)

Well, I hope you don't mind a softball question to lead off here. But there is concern among some analysts and journalists about the ability of micro and small-cap biotechs that navigate a successful course through the FDA. I would like you to review your management staff's experience in prosecuting drugs through the FDA approval process.

Well, you know it is an evolving environment. But historically we have had our hands on over -- in one way or another from a variety of functional areas on over 27 NDA submissions. I can't off the top of my head tell you how many have been successful, but I suspect it would be a good number of those that would be successful.

Perfect. Just wanted to have that on the record that you guys have done it before.

(technical difficulty) Let me just go on beyond that, Trond. So we do have a great deal of experience in filing NDAs. From an executive level, from a hands-on level, from writing documents, various sections of the documents.

But we are also smart enough to know that it is an evolving environment. We have multiple consultants who are very close to the FDA in terms of current filings, one of which has an expertise in publishing and submitting data through this electronic common technical document approach. The other consultant has a great deal of experience in oncology, in messaging and positioning, and certainly in dealing with ODAC, which we don't expect will be a requirement for approval of ThermoDox, but certainly we are preparing for it.

So I think the bottom line is we know we know. We have a great deal of experience. We are also smart enough to know that staying current requires a lot of effort, and so we are bringing with us, bringing into the Company experts in the area that have had very recent interactions with the FDA in oncology applications.

Awesome. The second question then is specific to the HEAT protocol. I was looking at Clinical Trials just the other day to review the protocols for it and something struck my eye.

It says incomplete ablations start over basically in the same arm. In other words if the next visit they find that they didn't get all of the tumor they can go back in and go through the same process within the same treatment arm that they were assigned.

So that necessarily means that some ThermoDox patients may have received two doses. I am wondering if you know the number of those, and if you have guesses of how that either may help the patient -- again maybe from Phase I trials -- how it helps patients or it may add to adverse effects?

We certainly do know the number, but with regards to how it may help them, do you want --? You are asking us to speculate a little bit here, Trond. Doc, do you have any thoughts?

Yes. As Mike says, yes we know the exact number of patients that are getting multiple doses of ThermoDox, and we will be following them and we have followed them carefully. And we will be reporting them both to the regulatory authorities and in our subsequent publications.

I think one of the great things about RFA as a procedure by itself is that you could do repeat administrations, and nothing to date suggests that ThermoDox changes that. We still consider that RFA will continue with ThermoDox giving multiple applications in order to keep the tumor in check. So our data will show the feasibility of that and the safety of that.

Okay, perfect. Thank you, guys, so much for taking the questions and congratulations on hitting 380.

Thank you, Trond. Do we want to clear up his point on the power? The overall survival power?

Yes, back to the previous question, again to confirm. There are scenarios also in the OS where we are going to be showing -- with the power of 80% showing a hazard ratio of 1.33, or 33% improvement for the statisticians there.

Mike King, Dawson James Securities.

Good afternoon guys. Thanks for squeezing me in.

Good to hear your voice.

Likewise. Just to maybe follow up on the OS line of questioning, I was wondering if Dr. Borys could just help us understand how post-treatment mortality is treated from a statistical standpoint. In other words, if patients go on -- let's say they go on to let's say either the control arm or the placebo arm, go on to subsequent therapy, and then expire subsequent to that.

How do you -- are those events censored? Or are those counted in the intent-to-treat analysis?

I think you are touching on one of the issues that surround OS as an endpoint, where particular patients that have a long survival from when they progress to the time that they die, that because they get multiple interventions in between, that sometimes is considered a confounding effect on OS. I think in our case that is less of a concern. Because as I think all of us know, the treatment options for people that have progressive HCC are relatively limited. You have perhaps if the disease is still localized or you have minimum volume disease, maybe you would be considered for TACE.

But generally the alternative would be going on to sorafinib, particularly if you have extrahepatic disease. So I don't see any confounding issues there.

Our rules for censoring patients are quite clear and established for both the PFS endpoint and the OS endpoint. And I don't think I am in a position right now to go through all the censoring rules.

Okay, yes, I know; I appreciate that. Then just maybe a question for Mike and/or Greg. You have done an admirable job controlling costs, and a lot of that obviously due to the wind-down of HEAT.

But looking forward to 2013 and beyond, I would imagine that there are going to be expanded trials for perhaps breast and liver mets; you may have some post-approval commitments for HCC. I am just wondering if you can give us a thought about longer-term where -- will R&D level start to scale back up, and if we should think about that as far as building our model is concerned?

I think your point is well taken. Post positive data we certainly will be investing in additional clinical programs that support the broader use of ThermoDox, Mike. We have been very cautious about investing in the trials that we have initiated to preserve our cash, to ensure that we have a runway to complete our trial, to be able to negotiate a license from a position of financial strength. And when the time does come, if the time does come, to raise additional capital through an equity offering, to do it in a manner -- from a position of strength.

But we do see, as we pointed out and I think that was a very important part of our discussion with investors today, we do see a very broad opportunity for the utilization of our underlying technology, and in particular ThermoDox, to treat some very difficult diseases. HIFU for example it changes the paradigm. So we are spreading our interest across a number of, researchers, again priming the pump, following which upon positive data you would expect to see this Company investing pretty aggressively in those trial models.

Terrific. Thanks for the clarity on that.

Thank you.

Thanks, Mike.

I think that is it. Operator?

And that is all the questions we have for you today, sir.

Thank you. I want to thank all of you for your interest and support of the Company, and your time and attention for this quarterly conference call. Again as we close it down, close down the call we would like to give a special recognition to our veterans on this Veterans Day and thank them for their service. On behalf of all of us, we appreciate what you have done for our country.

And beyond that we look forward to our next conference call with you, which should be following the public announcement of the results from our HCC trial. Thank you very much. Have a great day.

This does conclude today's Celsion Corporation third-quarter 2012 shareholder conference call. Thank you for your participation.