Celsion Corporation Reports First Quarter 2013 Financial Results and Provides Business Update

Celsion Corporation Reports First Quarter 2013 Financial Results and Provides
                               Business Update

Company to Hold Conference Call on Thursday, May 9, 2013 at 11:00 a.m. ET

PR Newswire

LAWRENCEVILLE, N.J., May 9, 2013

LAWRENCEVILLE, N.J., May 9, 2013 /PRNewswire/ --Celsion Corporation (NASDAQ:
CLSN), an oncology drug development company, today announced financial results
for the first quarter ended March 31, 2013 and provided a business update on
its clinical trials of ThermoDox®, Celsion's proprietary heat-activated
liposomal encapsulation of doxorubicin. ThermoDox® is being evaluated in a
global, multi-center Phase III clinical trial (the HEAT Study) in patients
with non-resectable hepatocellular carcinoma (HCC), also known as primary
liver cancer. ThermoDox® is also being evaluated in a Phase II trial for
patients with recurrent chest wall breast cancer, The DIGNITY Study.

Following the announcement on January 31, 2013, that ThermoDox® in combination
with radiofrequency ablation (RFA) did not meet the HEAT Study's primary
endpoint, the Company conducted a comprehensive analysis of the data from the
Study which was reviewed by its key principal investigators as well as liver
cancer and clinical data experts. These emerging findings from the HEAT Study
suggest that RFA dwell time had a positive impact on progression free survival
(PFS) and overall survival (OS) in patients treated with ThermoDox® plus RFA
when compared to the control group. This analysis was conducted in a sizable
patient subgroup. These findings will be discussed by two of the HEAT Study's
lead investigators at scientific sessions of the World Conference on
Interventional Oncology on May 16, 2013. Celsion's lead investigators agree
that these are interesting findings which should be further pursued.

"With the support of our medical advisors, we have been working diligently to
better understand the clinical data and findings from the Phase III HEAT
Study. Concurrently, we have been taking appropriate measures to position
Celsion for future success including reducing expenses and exploring
acquisition opportunities," said Michael Tardugno, Celsion's President and
Chief Executive Officer. "At this point, we have concluded that emerging
findings from our post hoc analysis of the HEAT Study provide a basis for
review with various regulatory agencies and an opportunity to discuss a path
forward for our HCC development program. Our recent expense reduction
initiatives ensure a strong balance sheet as we explore opportunities to
broaden our product pipeline and mitigate risk."

Recent Business Developments

During the first quarter of 2013, the Company raised $27 million in gross
proceeds from several financing transactions as well as a new research and
development collaboration:

  oCelsion sold common stock through a Controlled Equity Offering Sales
    Agreement with Cantor Fitzgerald & Co. and received gross proceeds of
    approximately $7 million.
  oCelsion entered into a Securities Purchase Agreement with certain
    institutional investors, pursuant to which the Company sold, in a
    registered offering, an aggregate of 15,000 shares of its Series A 0%
    convertible preferred stock and warrants to purchase approximately 6.0
    million shares of its common stock at an exercise price of $1.18 per
    share, for gross proceeds of $15 million.
  oCelsion entered into a Technology Development Agreement with Zhejiang
    Hisun Pharmaceutical Co., Ltd. (Hisun) for ThermoDox® for the greater
    China territory. Under the terms of the agreement, Hisun paid Celsion a
    $5 million payment in support of ThermoDox® technology development.

In April 2013, the Company provided a comprehensive business update which
included the following:

  oEmerging findings from the HEAT Study post hoc analysis suggests that
    ThermoDox® markedly improved progression free survival (PFS) and overall
    survival (OS) in patients who had optimal RFA. The post hoc analysis
    indicated that if patients' lesions undergo RFA for 45 minutes or more,
    they clearly benefitted from ThermoDox®. These findings apply to HCC
    lesions from both size cohorts of the HEAT Study (3-5 cm and 5-7 cm) and
    represent a sizable subgroup of patients.
  oThe Company implemented a restructuring program to lower its operating
    costs to conserve capital. The program included the elimination of
    approximately one-third of Celsion's workforce and the deferral of
    expenses associated with the Company's Phase II study of ThermoDox^® in
    combination with RFA for the treatment of colorectal liver metastases (The
    ABLATE Study).
  oThe Company engaged Cantor Fitzgerald & Co. to conduct a comprehensive
    review of merger and acquisition opportunities with the goal of
    identifying novel products with high potential, or companies, for Celsion
    to acquire.

Financial Results

For the quarter ended March 31, 2013, Celsion reported a net loss of $651,000
compared to a net loss of $6.2 million in the same period of 2012. Net loss
for the quarter ended March 31, 2013 was favorably impacted by lower operating
costs coupled with the non-cash benefit of $4.3 million from the valuation of
the common stock warrant liability associated with warrants issued in a
registered direct equity offering in September 2009. Also in the first
quarter of 2013, the Company entered into a Technology Development Agreement
with Hisun, which included a payment of $5 million from Hisun, to support
technology development transfer of ThermoDox® in the China territory. The
first quarter income statement was also impacted by a one-time, non-cash
deemed dividend from the beneficial conversion feature of $4.6 million on the
preferred stock issued in February 2013, resulting in a net loss attributable
to common shareholders of $5.3 million.

For the quarter ended March 31, 2013, net cash provided by operations was $1.8
million. During the first quarter of 2013, the Company raised $20.8 million
in new capital, net of issuance costs, from the sale of preferred stock to
certain institutional investors, the sale of common stock under a Controlled
Equity Offering Sales Agreement with Cantor Fitzgerald & Co., and the exercise
of common stock warrants and options. The Company ended the current quarter
with $45.9 million in cash, investments and accrued interest on short-term
investments.

Research and development expenses decreased by $1.5 million (32%), from $4.7
million in the first quarter of 2012 to $3.2 million in the first quarter of
2013. This decrease was primarily due to reduced clinical development costs
associated with the Phase III HEAT Study and activities related to the
development of commercial manufacturing capabilities for ThermoDox®. General
and administrative expenses of $1.7 million in the first quarter of 2013 were
relatively flat as compared to the same period of 2012.

Quarterly Conference Call

The Company is hosting a conference call to provide a business update and
discuss the first quarter 2013 results at 11:00 a.m. EDT Thursday, May 9,
2013. To participate in the call, interested parties may dial 1-888-329-8862
(Toll-Free/North America) or 1-719-325-2376 (International/Toll) and ask for
The Celsion Corporation First Quarter 2013 Earnings Conference Call
approximately ten minutes before the call is scheduled to begin. The call will
also be broadcast live on the internet at http://www.celsion.com.

The call will be archived for replay on May 9, 2013 at 2:00 p.m. EDT and will
remain available until May 23, 2013. The replay can be accessed at
1-877-870-5176 (Toll-Free/North America) or 1-858-384-5517
(International/Toll) using Conference ID: 2227568. An audio replay of the call
will also be available on the Company's website, http://www.celsion.com, for
30 days after 2:00 p.m. EDT Thursday, May 9, 2013.

About ThermoDox® and the Phase III HEAT Study

ThermoDox® is a proprietary heat-activated liposomal encapsulation of
doxorubicin, an approved and frequently used oncology drug for the treatment
of a wide range of cancers. ThermoDox® is being evaluated in a Phase III
clinical trial for primary liver cancer (the HEAT study), a Phase II clinical
trial for colorectal liver metastasis and a Phase II clinical trial for
recurrent chest wall breast cancer. Localized mild hyperthermia (39.5 - 42
degrees Celsius) created by radiofrequency ablation (RFA) releases the
entrapped doxorubicin from the liposome. This delivery technology enables
high concentrations of doxorubicin to be deposited preferentially in a
targeted tumor. On January 31, 2013, Celsion announced that ThermoDox® in
combination with RFA did not meet the primary endpoint of the HEAT study in
patients with hepatocellular carcinoma, also known as primary liver cancer.
Celsion is conducting additional analyses of the data from the HEAT study to
assess the future strategic value of ThermoDox®.

About Celsion Corporation

Celsion is dedicated to the development and commercialization of innovative
cancer drugs, including tumor-targeting treatments using focused heat energy
in combination with heat-activated liposomal drug technology. Celsion has
research, license or commercialization agreements with leading institutions,
including the National Institutes of Health, Duke University Medical Center,
University of Hong Kong, the University of Pisa, the UCLA Department of
Medicine, the Kyungpook National University Hospital, the Beijing Cancer
Hospital and the University of Oxford. For more information on Celsion, visit
our website: http://www.celsion.com.

Celsion wishes to inform readers that forward-looking statements in this
release are made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned that such
forward-looking statements involve risks and uncertainties including, without
limitation, unforeseen changes in the course of research and development
activities and in clinical trials; the significant expense, time, and risk of
failure of conducting clinical trials; HEAT Study data is subject to further
verification and review by the HEAT Study Data Management Committee; the need
for Celsion to evaluate its future development plans; termination of the
Technology Development Contract or collaboration between Celsion and Hisun at
any time; possible changes in cost and timing of development and testing,
capital structure, financial condition, working capital needs and other
financial items; possible acquisitions or licenses of other technologies,
assets or businesses or the possible failure to make such acquisitions or
licenses; possible actions by customers, suppliers, competitors, regulatory
authorities; and other risks detailed from time to time in the Celsion's
periodic reports filed with the Securities and Exchange Commission. Celsion
assumes no obligation to update or supplement forward-looking statements that
become untrue because of subsequent events, new information or otherwise.

Investor Contact

Jeffrey W. Church
Senior Vice President – Corporate
Strategy and Investor Relations
609-482-2455
jchurch@celsion.com



Celsion Corporation
Condensed Statements of Operations
(In thousands except per share amounts)
(Unaudited)
                                                        Three Months Ended

                                                        March 31,
                                                        2013       2012
Licensing revenue                                     $ 125      $ -
Operating expenses:
 Research and development                           3,203      4,693
General and administrative                              1,689      1,570
Total operating expenses                               4,892      6,263


                                                       (4,767)    (6,263)

Loss from operations
Other income (expense):
Gain from valuation of common stock warrant liability   4,280      78
Interest, dividends and other income (expense), net     (164)      (1)
Total other income, net                                 4,116      77


                                                       (651)      (6,186)

Net loss


Non-cash deemed dividends from beneficial       (4,601)    –

conversion feature on convertible preferred stock


                                                     $ (5,252)  $ (6,186)

Net loss attributable to common shareholders

                                                      $ (0.12)   $ (0.19)
Net loss attributable to common shareholders per
common share – basic and diluted
Weighted average common shares outstanding –
                                                        42,996     33,197
basic and diluted



Celsion Corporation
Selected Balance Sheet Information
(In thousands)
                                              March 31,      December 31,
                                                            2012
ASSETS                                        2013
                                                            
                                              (Unaudited)
Current assets
Cash and cash equivalents                   $ 20,367      $ 14,991
Short term investments and accrued interest   25,486        8,104
Other current assets                          562           554
Total current assets                          46,415        23,649
Property and equipment                        1,040         1,115
Other assets
Deposits and other assets                     477           567
Patent license fees, net                      26            28
Total other assets                            503           595
Total assets                                $ 47,958      $ 25,359
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities    $ 5,278       $ 3,595
Deferred revenue – current portion            500           —
Note payable - current portion                1,884         1,410
Total current liabilities                     7,662         5,005
Common stock warrant liability                4             4,284
Note payable – non-current portion            3,173         3,661
Deferred revenue – noncurrent portion         4,375         —
Other liabilities – noncurrent portion        443           447
Total liabilities                             15,657        13,397
Stockholders' equity
Series A convertible preferred stock          1             –
Common stock                                  515           380
Additional paid-in capital                    190,743       165,276
Accumulated other comprehensive loss          (159)         (127)
Accumulated deficit                           (156,119)     (150,877)
 Subtotal                                    34,981        14,652
Less: Treasury stock                          (2,680)       (2,690)
Total stockholders' equity                    32,301        11,962
Total liabilities and stockholders' equity  $ 47,958      $ 25,359





SOURCE Celsion Corporation

Website: http://www.celsion.com
 
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