Imunon Inc (IMNN) 2018 Q2 法說會逐字稿

Good morning. My name is Travis, and I will be your conference operator today. At this time, I would like to welcome you all to the Celsion Second Quarter 2018 Financial Results Conference Call. (Operator Instructions)

At this time, I would like to turn the call over to Mr. Jeffrey Church, Celsion's Senior Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you. Good morning, everyone, and welcome to our investor conference call to discuss our second quarter 2018 results, which we announced this morning before the market opened.

During our call today, Mr. Michael Tardugno, Celsion's Chairman, President and CEO will provide an operational update on our clinical programs, and I will summarize our financial results for the second quarter ended June 30, 2018.

Today's conference call will be archived, and a replay will be available beginning tomorrow and will remain available by phone until August 28 as well as available on Celsion's website for 90 days.

Before we begin the call, we wish to inform participants that we will be making forward-looking statements regarding Celsion's current expectations and projections about future events. Generally, forward-looking statements can be identified by terminologies such as expect, anticipate, believe and other similar expressions. These statements are based upon current expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in the company's periodic reports filed with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements.

At the end of today's formal remarks, we will open the call for questions.

I would now like to turn the call over to Mike.

Thank you, Jeff. Good morning, everyone, and thank you for joining today's call. With me are Dr. Nicholas Borys, Celsion's Chief Medical Officer; and Jeffrey Church, our Chief Financial Officer from whom you have just heard. As always, we are very pleased to have the opportunity to update you on our progress and following our prepared remarks, to answer your questions.

I want to start this morning by saying we could not be more pleased to report that the company is sound on the fundamentals, and with a solid cash position, we expect to meet our objectives timely and with a great deal of confidence. I think it's safe to say that Celsion is well positioned. And for those of you who have been following us, you know that our goals have been consistent and that we have made steady and insurmountable progress towards those ends.

Our plans, worth repeating, and again, from last quarterly conference call, during which I said that: number one, we would maintain an operationally tight focus to ensure efficient cash utilization and timely achievement and development milestones; number two, we would maintain a strong cash balance sheet, with the financing strategy focused on enhancing shareholder value and providing a cash runway to critical inflection points, including data from -- data analysis from our Phase III trial in HCC and our Phase I portion of our Phase I/II study in ovarian cancer; and number three, that we are committed -- this company is committed to a steady news flow of key developments.

So now let me translate for you these objectives into our real-life accomplishments. With regards to second quarter expenses, I don't want you to be misdirected. You will note an asterisk on the spending line on the financial section of today's earnings announcement. Well, I want to point out clearly that our cash spending is in line with our budgets and trial enrollment expenses and that GAAP accounting requires us to burden our operating expenses with over $2.5 million of noncash stock option expenses. Jeff will discuss this more. But I want to say, our cash spending is in line with our tight focus.

Completion of enrollment of the OPTIMA Study, our global 550-patient Phase III study of ThermoDox in newly-diagnosed primary liver cancer is in sight and will happen soon, putting Celsion on a glide path to data. Based on this, we expect to see the first interim efficacy analysis -- it's a preplanned analysis, late in the second quarter of next year. We expect that this analysis will be prognostic and not definitive at the first read, but important directionally nonetheless. We'll talk about that in some detail later in the script.

Anticipating success, we are soliciting quotes from consultants to assist with drafting the ThermoDox NDA. It's not too soon to start. Our experience suggests that this is a 12- to 24-month process door-to-door from the initiation of the project when we see positive data, to the time we submit an application to the FDA.

As we continue to ensure our regulatory pathway is optimized, last month, we met again in person with the China FDA, the CFDA. We reconfirmed that an NDA for ThermoDox can be filed directly with the China FDA following positive data. The FDA will grant fast track and all but guaranteed a 6-month review. And this was a surprise. They also suggested that response rates would be acceptable as a primary endpoint.

This position, as I said, was surprising, that the agency would rather see 1, 2 and 3-year survival percentages versus overall survival, resets the bar for approval in the largest market for ThermoDox on the planet, and that's China. Quite different from overall survival from what we've seen in the HEAT Study data, 3-year survival appears to provide a lower threshold for success than overall survival does, potentially further derisking the study.

Now we have a lot more work to do with regards to this development, and we'll keep you posted. But it is a very important development that deserves a great deal of our attention.

And finally, we've begun the process of revalidating the commercial potential with ThermoDox in the U.S., Europe and China. Our early work suggests a blockbuster opportunity by any standard or measure. Now on the GEN-1, our gene-mediated IL-12 immunotherapy, we have initiated 2 of the 4 Phase I clinical sites for the OVATION II Study, our 130-subject randomized open label Phase I/II study of GEN-1 in newly-diagnosed advanced ovarian cancer patients. We expect to announce the first patient anytime now, and our initial goal remains unchanged, that is to complete the Phase I enrollment for the therapeutic arm before the end of the year.

So you can see, achievement of development milestones is in line with our tight focus. We are committed to maintaining a strong balance sheet and in the most non-dilutive way -- in the most non-dilutive ways possible. In June, we added 2 quarters to our operating runway at very low cost, with the recently announced venture loan with Horizon, the $10 million, 4-year note is interest only for the first 2 years and is a good deal for shareholders.

Also in June, we applied for the sale of our New Jersey net operating losses, which, if fully approved, will add another 3 quarters worth of operating runway, taking the company well into the fourth quarter of 2020, a point at which the results from our Phase III OPTIMA Study and our Phase I/II OVATION II Study should be well behind us.

So I hope you can see and it's clear that our strong balance sheet strategy focused on shareholder value is being implemented. And last, I also trust that you can see that our proprietary ThermoDox and GEN-1 programs have made meaningful advances, and we continue to expect to announce steady news flow for each of these programs over the balance of 2018 and 2019.

Now particularly, for those who may be new to the story, I'd like to talk now about Celsion's unique value proposition. Celsion has 2 platform technologies at clinical stage: one in chemotherapy, the legacy of oncology; and one in immunotherapy, the future of oncology. Both are nanoparticle-based, both are being evaluated in newly-diagnosed treatment of naïve cancer patients in indications of high unmet need populations where we believe the chance for clinically meaningful outcomes, not small iterative change, but meaningful outcomes to have the best chance to be achieved. Both platforms are designed to work in combination with the standard of care. And if we are successful, this approach will provide us with an extraordinary amount of pricing power and the potential for rapid adoption and market penetration.

Our first platform is a proprietary heat-sensitive liposomal vessel that can be loaded with a range of chemotherapeutics. We call this technology LTSL, lyso thermally sensitive liposomes. Invented at Duke University, we hold the exclusive license to all medical applications of the technology. In its current form, it's engineered to be administered intravenously. When it meets with tissue that's been heated just above body temperature, that's about 40 degrees centigrade, the liposome rapidly releases its payload in high local concentration. That our technology works is incontrovertible, publications and manuscripts are replete with the evidence. And I would encourage you to refer to them. If you need information in that regard, please check with our Investor Relations.

Our first drug on the platform is called ThermoDox, a name that has been conditionally approved by virtually every regulatory agency worldwide. ThermoDox, as the name implies, is a heat-sensitive liposomal formulation of doxorubicin, a broad spectrum antibiotic that has shown activity in both breast and liver cancers among others. Our lead indication for ThermoDox is HCC or hepatocellular carcinoma. It's also known as primary liver cancer.

Well, some of what I will say will be repetitive from earlier conference calls, but again, I think it bears repeating. ThermoDox is being evaluated in combination with radiofrequency ablation administered for a minimum of 45 minutes in the Phase III OPTIMA Study. This is a global trial being conducted in 14 countries and 17 time zones and in all major markets where hepatocellular carcinoma is a significant problem. At the final readout, the 550-patient OPTIMA Study is powered to detect a 33% reduction in the risk for death.

The evidence supporting the thesis for the OPTIMA Study is overwhelming and is based on our understanding of the application of RFA for 3-centimeter and larger lesions and the survival impact when RFA, used correctly, that is for 45 minutes heating and combined with ThermoDox. In the 285-patient subgroup, that was 42% of the entire population from a prior HEAT Study, a group that was followed every quarter for 2.5 years, median time of death and the treatment arm was never reached after 80 months.

That's more than 7.5 years median survival, more than 2 years better than the control group. Again, a single dose of ThermoDox with properly used RFA in intermediate-sized tumors has the potential to be curative. Now that's not my word, that's the word our investigators are using when they present this data to their colleagues.

With over 850,000 new cases annually, this is the largest unmet medical need in oncology, period. Median time of death for this population has historically been reported in multiple journals as 36 months although refinement in RFA techniques, many of them driven by our prior study. With this refinement, overall survival is improving globally.

In addition to our survival observation, the study's thesis has been tested in prospective preclinical and computational models. Manuscripts supporting the basis for the OPTIMA Study cover virtually every aspect of our analysis and have been published in peer-reviewed journals, including Clinical Cancer Research, PLoS ONE and the Journal of Hyperthermia.

Based on this research and our data analysis with the OPTIMA Study, we believe that we have arrived at the best design and protocol to fully evaluate ThermoDox, in fact, in treating primary liver cancer, HCC, and its potential for a cure of this very difficult form of cancer.

We're talking a lot about prior RFA timing. So compliance is extremely important, and compliance is an important aspect of our quality review of the study. Last April, for example, the independent Data Monitoring Committee met to review, among other things, each site's compliance with the minimum RFA heating time. The DMC reported that over 99% of sites adhered to the RFA protocol.

In addition, and very importantly, we had some interesting news I presented at the last quarterly call. We learned that the blinded progression-free survival from the intent-to-treat population for the OPTIMA Study is so far consistent, if not slightly better than the PFS that we saw in the subgroup -- that we see in the subgroup population that showed benefit in the HEAT Study.

Well, I want to emphasize that the study is blinded, and no definitive conclusion can be drawn to point to ThermoDox's performance specifically. Nonetheless, we view this finding as encouraging and continue to believe that ThermoDox with longer duration RFA ablation can be found to be effective, very effective in treating HCC.

Also, I want to remind you, once again, at the request of the Director of Interventional Oncology, we've provided the National Institutes of Health with 3 terabytes -- that's 3,000,000,000,000 of HEAT Study data, from which they conducted an independent analysis of the intent-to-treat-population of 437 single-lesion patients from the HEAT Study. So again, the subgroup analysis that I just talked about previously, 285 patients, this slice of the data conducted by the NIH independently of the 437 single-lesion patients in that same study.

The NIH concluded that when combined with ThermoDox, longer RFA heating times result in a statistically significant improvement in overall survival. The same is not true for RFA alone. To add ThermoDox to a longer procedure, a statistically significant improvement in overall survival. These findings were presented at standing-room-only crowd at the RSNA, that's the Radiological Society of North America Conference in December of 2016. And there's more.

Adding to the body of evidence supporting the importance of sufficient heating time to the delivery of ThermoDox are results from a Phase I trial of ThermoDox that were just published last month in a peer-reviewed journal, The Lancet Oncology. This Phase I trial was conducted by a multidisciplinary team of biomedical engineers, oncologists, radiologists and anesthesiologists at the University of Oxford in the United Kingdom.

The Phase I trial evaluated safety and efficacy of ThermoDox, along with another heating method, some of you may know this, focused ultrasound, also known as HIFU, to noninvasive means to use acoustic energy to heat tissues. So ThermoDox, combined with focused ultrasound for the treatment of liver cancers, the study successfully show that ThermoDox plus the Oxford team's focused ultrasound technique increased doxorubicin delivery to tumors up to ten-fold in many of the patients in this 10-patient trial.

I think the evidence is clear. Now on the regulatory front, I note that the 14 regulatory agencies from across the globe and all major HCC markets including Europe, North America and Asia have reviewed and approved the OPTIMA Study protocol.

I'll remind you that our regulatory strategy is based on these interactions. We've designed the OPTIMA Study to enroll a sufficient number of patients from each country to support registrational filings and market launch in the U.S., Canada, Europe, China, South Korea, Taiwan, the Philippines, Thailand, Malaysia and Vietnam. In the U.S., ThermoDox has received Fast Track Designation and provides for, among other things, priority review. ThermoDox has also been granted orphan designation for primary liver cancer in both the U.S. and Europe, which extends market exclusively -- exclusivity for 7 and 10 years, respectively, in these major markets.

Of course, execution is extremely important. And on the execution side, I am pleased to report that we have engaged internationally recognized world-class contract research organizations and data management teams. The goal is to ensure Good Clinical Practice, ICH compliance, protocol adherence and high-quality data analytics. We also have a proven and reliable supply chain with 3 redundant contract manufacturing organizations, all of whom are registered and capable of producing ThermoDox for all regions of the world and I would say on a blended price basis, providing us with very high respectable gross margins once we are in our commercial form.

So now I -- well, I referred earlier to the interim analysis. I'd like to give you some guidance. So if you have it, pull out your pencil. We expect to complete the enrollment shortly, as I said, after which, the OPTIMA Study will be on a glide path to data. The study, as you know and we have said, has been designed with 2 preplanned interim efficacy analyses.

The first will occur at 118 deaths, the second in 158 deaths and the final, if needed, the final analysis at 197 deaths. So I want to put this into perspective for you. The basis of -- for -- the stat plan for the OPTIMA Study has been the HEAT Study subgroup. That group demonstrated a Hazard Ratio of 0.65 with a p equal of 0.02. So most of us aren't statisticians, so I'm going to translate that for you. A Hazard Ratio of 0.65 represents a 54% reduction in the risk for death in the therapeutic arm. That's the basis.

Now the first interim analysis of the OPTIMA Study will be deemed successful if it demonstrates a Hazard Ratio of 0.61. That converts to a 64% reduction in risk for death. Now that's a high bar. Results at this point, from this analysis, are likely to be prognostic and not definitive. In other words, we will most probably know that we are on track for success at the next preplanned interim analysis or final efficacy analysis at that point.

The second interim efficacy analysis will be deemed successful if it demonstrates a Hazard Ratio of 0.7, which translates to a 42% reduction in the risk for death. When compared to the HEAT Study subgroup, it appears that we have a much better chance for success at this point.

And if needed, the final analysis will be deemed successful with the Hazard Ratio of 0.7 or 33% reduction in risk for death -- now .75, I'm sorry, or 33% reduction, a much lower bar for success by almost 40% than the 54% improvement on which the plan was based. The final analysis, if needed, will likely be in late 2020, a point of which as we've been talking about with all of our NOLs, are approved for sale, the point of which, we should have sufficient cash to cover that analysis.

So I think, positioned -- well positioned was the -- where I started this conversation. I think you can see your company is making a great deal of progress and is well positioned for the coming next 2 years. So I want to conclude our discussion of ThermoDox in HCC with the commercial opportunity. We've talked about this before, with over 850,000 incidents, that's new cases of HCC each year worldwide, the addressable market opportunity for ThermoDox is conservatively over 200,000 patients, annually with intermediate stage HCC.

On a global basis, the incidents of HCC is growing at 5% annually. And recent reports from the CDC, the Center for Disease Control indicate that in the United States, the rates of new liver cancer cases grows 38% over the period 2003 to 2012 and that the death rate from liver cancer has increased 56% since 2012. This is a problem. And ladies and gentlemen, if we're right, if ThermoDox is successful in the OPTIMA Study, it will be one of the most important new drugs in oncology in a generation, if not our lifetime. I believe that sincerely.

Now shifting gears to GEN-1, our priority gene therapy in development for localized treatment of advanced ovarian cancer, as I discussed on the last call, GEN-1 developed in our TheraPlas technology platform, that's a novel immunotherapy, which recruits the body's immune system to fight malignancies. Our GEN-1's active agent is a DNA plasmid coded for a potent anti-cancer cytokine, that's an inflammatory protein, interleukin 12 or IL-12.

IL-12 plasmid is incorporated -- that DNA strand is incorporated into our proprietary synthetic nanoparticle delivery vector. When administered locally into a body cavity, like the peritoneum, the peritoneal cavity or the bladder or even a cavity created by surgical removal of a tumor mass, these nanoparticles invade surrounding cells and takeover the cells metabolic machinery, turning each into a little biopharmacy for the sustained, up to 7 days, production of the IL-12 protein.

The first indication we're studying for GEN-1 is in ovarian cancer. For newly-diagnosed patients, this cancer -- with this cancer, there's less than a 45% chance of surviving 5 years. One of the major reasons for this is that the diagnosis is made when most patients have advanced disease, at stages 3 and 4 when the cancer is spread throughout the pelvis region.

In previous clinical trials, in this patient population, GEN-1 has been used either as a monotherapy or in combination with standard chemotherapy and has shown promising results. Most importantly, however, GEN-1 clearly demonstrated signs of activity and clinical benefit in our Phase Ib dose escalation study, the OVATION I Study recently completed. I'm going to go over some of the data from that trial with you.

The OVATION Study evaluated GEN-1 plus neoadjuvant chemotherapy, followed by interval debulking surgery in newly-diagnosed, the treatment naïve Stage III and IV patients. The goal of neoadjuvant chemotherapy, I'll remind you, is to improve surgical outcome by shrinking the tumor masses and drying up the accompanying fluids, more known as ascites.

In the study to the neoadjuvant chemotherapy, we added 8 weekly cycles of GEN-1. Now the findings, while these are small numbers, folks, but the findings are impressive, nonetheless. I'll just go over a few bullet points with you.

GEN-1 plus neoadjuvant chemotherapy demonstrated no dose-limiting toxicities as it is safe up to 80 milligrams per meter square. Investigators in the Oversight Committee, that's DSMB, did not find any significant toxicities associated with GEN-1. There is clear evidence and compelling evidence of a dose-dependent bioactivity in efficacy signals. The clinical findings included a partial or complete response in 86% of patients. Again, small numbers but directionally, I impress.

The surgeons and all of our PIs in this study are surgeons, OB/GYN surgeons, were able to completely remove all visible tumor, which is called an R0 resection in 100% of patients treated at the highest dose. This is an important outcome because it's clear from the -- that an R0 equates to improve overall survival.

Distinct immunological changes in the local disease [environment] (inaudible) [that's] the tumor microenvironment, appear to be pro-immune in 3/4, that's 75% of subjects. And PFS, an important surrogate for survival. PFS is now projected to be over 24 months in the treated per protocol patients. And we still haven't reached a definitive median. Historically, PFS in this patient population is about 12 months.

And based on these findings, in November 17, yes, we've talked about this, we announced the submission of the Phase I/II clinical trial protocol to the FDA for GEN-1 for the localized treatment of ovarian cancer. This is an open label randomized study called the OVATION II study. We will treat the first 6 patients in the GEN-1 arm at a dose higher than we concluded the prior study, that's at 100 milligrams per meter square, followed by a continuation of their selected dose, either at 100 or 80 milligrams per meter squared in the Phase II in up to 130 subjects.

The entry criteria and treatment protocol are the same as the prior Phase I, the OVATION I study, with 1 major addition, and this is important. So you know that the patients are treated with neoadjuvant chemotherapy plus GEN-1 followed by surgery. In the therapeutic arm, patients will continue to receive up to 9 additional intraperitoneal doses of GEN-1 following surgery.

This will be a maintenance treatment. Our hypothesis is that continuous stimulation of the immune system after surgery may provide a further benefit by delaying progression, which again, we know is a surrogate for improved survival.

Now I want to give you an update on that study. We have had a few delays, mostly administratively, nontechnically and frankly, most related to costs. You know how religious we are about controlling our cost, and we negotiate hard. All those negotiations are now behind us. We expected to have 3 functioning clinical sites in August, now we have 2. We expect to have all 4 of the originally planned Phase I sites by September, and we'll add 2 more as a catch-up for a total of 6, in an effort to make up for lost time and remain optimistic that we will be on track to initiate the Phase II randomized portion of the OVATION II Study in the second quarter of 2019.

Now importantly, and I know, everyone is focused on data as are we. This will be an open label study where we report data periodically throughout 2019.

Now going back to the OVATION I Study, we continue to follow up patients, and we currently expect to have final PFS data from the OVATION I Study within the second half of this year. Assuming that PFS for the treated per protocol remains strong, well, we plan to discuss options for accelerating our program with the FDA, including a review for breakthrough designation. More on that later, but the more I look at the data, the more optimistic I become.

So we're very excited by GEN-1's prospects, and we're looking forward to both the OVATION I and final PFS readouts and the initial -- in the initiation of OVATION II -- I'm sorry, the initial OVATION II data in the coming months.

So I want to conclude by saying we are looking forward to delivering on our clinical development plans and achieving multiple important milestones over the remainder of the year. We are well positioned with financial resources, backed by prudent financial and operational management to achieve our goals.

And now to discuss the financials, I'd like to turn the call over to Jeffrey Church. Jeff?

Thank you, Mike. Details regarding Celsion's second quarter 2018 financials were included in the press release and Form 10-Q made available this morning.

As Mike mentioned, we continued to make strong steady progress in advancing our 2 key clinical programs, and we continue to be focused on efficient cash management to ensure successful execution.

As of June 30, 2018, Celsion's cash balance was $26.3 million, providing us with 6.5 quarters of operating runway, enabling us to continue to focus on clinical and operational execution into the first quarter of 2020.

In June, we closed on a 4-year $10 million venture debt agreement with Horizon Technology Finance Corporation, for which the first 2 years this obligation is interest payment only. The net proceeds from this debt financing are included in our June 30 cash balance. This debt agreement provides additional flexibility to finance our development programs and operating needs at an interest rate of less than 10% and a very modest warrant coverage.

We are also pursuing other financing initiatives and tools to further bolster our capital position and to finance the company's clinical trials. To that end, I am pleased to say that an application to sell our net operating losses, based in New Jersey, has been accepted. And on Friday, this past Friday, August 10, the Board of the New Jersey Economic Development Association recommended the application for approval.

This avenue of non-dilutive financing has made available to us under unique economic development program initiative by the state of New Jersey and should allow us to receive up to $8 million to $10 million in non-dilutive capital from the sale of New Jersey-based NOLs for the tax years 2011 to 2017. The actual amount that we will receive this year will be determined by the state and will be dependent on how the annual pool is allocated among companies applying. Any amounts not used this year can be carried forward. There is a $15 million cap for any 1 company, so our plan is to continue to use this program until we reach the maximum allowed.

In addition to this, we have a cost-effective warrant-free aftermarket facility with Cantor Fitzgerald. This allows us to be opportunistic with respect to any needs for future capital raises. This $25 million ATM facility has been in place since 2012, and there's approximately $11.7 million still available to us. So you can see, we have not used the ATM to finance the company over the last 5 to 6 years but rather, to use it opportunistically to raise between $2 million to $3 million annually.

For the second quarter ended June 30, we reported a net loss of $8.2 million compared to a net loss of $5.2 million in the same period in 2017. For the 6 months ended June 30, 2018, our net loss was $12.7 million compared to a net loss of $10.4 million for the same 6-month period last year. This increase was due to higher patient enrollment in our Phase III OPTIMA Study as we push to complete enrollment in this pivotal trial. Also, contributing to this increase were higher noncash stock option expenses as required by GAAP accounting and higher professional fees and personnel costs related to NDA and commercialization preparation and business development initiatives.

Operating expenses were $12.5 million in the first half of 2018 compared to $9.4 million in the same period of 2017. The important thing here is the cash, actual cash used for operations in the first 6 months ended June 30, 2018, was $8.8 million compared to $7.3 million in the prior year. These results are in line with our earlier projections. We expect our cash utilization to decrease in the second half of the year with the completion of enrollment in the Phase III OPTIMA Study and the continuation of our prudent cash management program.

We continue to operate with a lean organizational structure with 25 full-time equivalent employees, and our spending will continue to be directed to research and development activities. We expect our quarterly cash by usage for operations to be approximately $4 million per quarter for the balance of 2018.

As we look forward, we believe that maintaining a strong balance sheet is important to continue the strong development momentum we have built around our lead product programs. Our balance sheet and business fundamentals remain strong. We are committed to executing our financial and operating plan, and we have the financial levers to properly capitalize the company for success and drive value for our shareholders.

I'd now like to turn the call back to Mike.

Thank you, Jeff. As always, a very nice overview.

Our ThermoDox and GEN-1 development programs continue to make significant progress. As you can see, we remain steadfast in our objective to deliver transformative new medicines for patients with HCC and ovarian cancer. We have a number of important milestones ahead in the coming months, and I look forward to reporting them to you, along with our progress.

And that concludes our prepared remarks for today, so I'd like to ask the operator to open the lines for your questions. And please, no more than 2 to give everyone a chance to ask questions. So operator?

(Operator Instructions) Our first question comes from Hartaj Singh.

This is Emma on for Hartaj. Just on the OpEx, aside from the noncash expenses that you described this quarter, can you just help us think about the R&D spend? And whether this is now a reasonable run rate going forward into the second half of the year and into next year as well?

Yes, Emma. Yes, the -- excluding the noncash charges, we believe that our R&D expenditures remain on track and in line with our previous guidance, somewhere in the neighborhood of $4 million a quarter. We tend to spend a little bit more in the first half of the year. And with the completion of enrollment for the OPTIMA Study, we still expect to see it -- our annual spend in the $16 million, pretty much in line with the split between R&D and then G&A expenditures.

Your next question comes from Edward Sherman.

On the PFS data, from the OVATION Ib Study, are we awaiting the data from the patients who are in the highest dose cohort?

I think more than just the highest dose cohorts, do you recall it?

Yes, that's probably the majority of the patients that we're waiting for and that we're still keeping track of are in that last dose. But there's -- I think there's a handful more in the middle doses as well.

Okay. I would think that bodes well for the subsequent trial given the increase in dosage.

Yes, I'm with you. I agree.

Certainly.

All right. Mike, you had mentioned back in March that we would be awaiting a publication from the NIH regarding their post hoc analysis. Any idea when that might come?

I don't -- we talked to the NIH just not too long ago, Dr. Borys and I, and they told us they had been -- they would be submitting the manuscript here shortly. They did not identify the journal for us. So we just believe we rely on their testimony here that they're submitting the -- or the manuscript for publication. I suspect that it will be done, if nothing else, researchers, particularly those in the academic setting are very focused on getting public patients.

Okay. And just 1 last question. I have a hard time believing that you can still be on schedule given your -- you had stated back in the last conference call that you expected the initiation of the trial within a couple of weeks, which most people took to mean in the beginning of June. We're now in the beginning of August. A patient has not been randomized. You're almost 3 months in delay. How can you expect to be on track?

Yes, so what I said was, we'd be on track for initiating the Phase II portion, later next year. In our -- and I also mentioned in my prepared comments that in order to be able to do that, we had planned to conduct the Phase I portion with 4 sites. Now we're adding 2 more sites, so we'll be adding a total of 6 sites to complete the Phase I portion.

And you think that will make up for the 3-month delay?

We'll have more patients being evaluated for inclusion in the study with an increase in number of sites. So in order to move to the Phase II portion, we have treated a total of 6 patients in the therapeutic arm, and that will be accompanied by probably 6 patients, but it could be fewer, in order to complete the Phase I portion. So in 6 sites, we expect to be able to get that done. It's -- I mean, I don't have a crystal ball. I can tell you what our operating plans are and what the history has been. And you should take comfort in that fact that your management is -- recognize that we just -- we should manage our cash in combination with execution, and that we're going to take steps, proactive steps to attempt to catch up, if not, exceed our plans [completing] the study.

No, and I appreciate that. I just think that you need to appreciate the fact that people take your word literally. And when you underpromise or overpromise and underdeliver in a company that has some credibility concerns, you can see what happens to your stock. So maybe, next time.

Maybe next time, what?

Maybe next time, don't overpromise. Don't say 2 weeks is going to be the initiation when 3 months passed, and nobody knows what's going on.

I'm not going to debate it with you. The study was initiated in 2 weeks. It wasn't -- we did have sites up and running in June.

I don't -- I'm not trying to be combative. I'm just saying.

(Operator Instructions) There are no further questions in the queue. I would like to turn the call back over to you, speakers.

So again, I want to thank everyone for joining us on today's call and for your interest in Celsion. As I started this call, I want to conclude with the same comment that we continue to make significant progress, we have a strong balance sheet and Celsion, as you can see, is positioned for success. Thank you again. We look forward to talking with you on our next conference call.

Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.