Celsion Corporation Reports Second Quarter 2013 Financial Results and Provides HEAT Study Update

Celsion Corporation Reports Second Quarter 2013 Financial Results and Provides
                              HEAT Study Update

Analysis of Overall Survival Data in the HEAT Study Continues to Show
ThermoDox® Improves Survival Benefit when RFA Heating is Optimized

Company to Hold Conference Call on Thursday, August 8, 2013 at 11:00 a.m. EDT

PR Newswire

LAWRENCEVILLE, N.J., Aug. 8, 2013

LAWRENCEVILLE, N.J., Aug. 8, 2013 /PRNewswire/ --Celsion Corporation (NASDAQ:
CLSN), an oncology drug development company, today announced financial results
for the second quarter ended June 30, 2013 and an update from its
retrospective analysis of the clinical trial results for 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 has conducted a comprehensive analysis of the data from
the Study supported by its key principal investigators as well as liver cancer
and clinical data experts. The Company continues to follow patients enrolled
in the HEAT Study to the secondary endpoint, Overall Survival (OS).

As of the June 30, 2013 cut off, the date of the latest OS patient follow-up,
Celsion reports the following:

  oOverall Survival has not yet reached the median for the full HEAT Study
    population. A total of 226 deaths have been recorded through June 30,
    2013.
  oSubgroup analysis based on RFA heating duration continues to suggest that
    ThermoDox® markedly improves Overall Survival, when compared to the
    control group, in patients if their lesions undergo RFA for 45 minutes or
    more. These findings apply to single HCC lesions (63% of the HEAT Study
    population) from both size cohorts of the HEAT Study (3-5 cm and 5-7 cm)
    and represent approximately 300 patients.
  oWhile the Overall Survival data reported above should be viewed with
    caution since the HEAT Study has not reached its median point for Overall
    Survival analysis, there is a strong signal which our investigators
    consider to be encouraging and sufficient to warrant additional clinical
    investigation.
  oDetails of the retrospective OS findings will be presented at the upcoming
    International Liver Cancer Association (ILCA) 2013 Annual Conference in
    Washington, D.C. on September 14, 2013.

"As we continue to follow patients in the HEAT Study to the secondary
endpoint, Overall Survival, there is clear evidence that ThermoDox® can
benefit patients when RFA is optimized," said Dr. Nicholas Borys, Celsion's
Chief Medical Officer. "It is impressive that a single dose of ThermoDox® can
demonstrate a meaningful impact on patient survival. The influence of longer
RFA heating time on local tissue concentration is consistent with the
mechanism of ThermoDox® activity."

"We believe that the emerging data from our post hoc analysis of the HEAT
Study may provide a rationale for continued development of ThermoDox® and a
basis for discussion of a path forward for our HCC program with various
regulatory agencies. While this important work continues, we have fully
implemented our previously announced corporate restructuring program to adjust
spending levels and headcount with the goal of reducing pressure on our cash
resources while maintaining the necessary competencies important to the
execution of our current business strategy," said Michael Tardugno, Celsion's
President and Chief Executive Officer. "Our recent expense reduction
initiatives ensure a strong balance sheet and positions the Company to fully
explore the appropriate regulatory path forward for ThermoDox® and to evaluate
opportunities with the potential to broaden our product pipeline through
acquisition of complementary products and technologies."

Recent Business Developments

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® improved progression-free survival (PFS) and overall survival
    (OS) in patients who had an optimized RFA procedure. The post-hoc
    analysis indicates 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 approximately 300 patients. These
    findings were presented and discussed by two of the HEAT Study's lead
    investigators at scientific sessions of the World Conference on
    Interventional Oncology on May 16, 2013 and the European Conference on
    Interventional Oncology on June 19 and 20, 2013. The presentations and
    data are available on the Company's website at www.celsion.com.
  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.

In May 2013,

  oThe Company announced the issuance of additional patents covering its
    ThermoDox® technologies in four of the largest markets for primary liver
    cancer – China, Japan, South Korea and Taiwan. These new patents extend
    proprietary protection to 2026.
  oThe Company entered into a Securities Purchase Agreement with certain
    institutional investors, pursuant to which the Company sold, in an
    at-the-market registered direct offering, an aggregate of 6.3 million
    shares of its common stock for gross proceeds of $9.8 million. There were
    no warrants issued as part of this financing transaction.

In July 2013,

  oThe Company was notified that the International Liver Cancer Association
    (ILCA) has accepted the HEAT Study abstract for webcast oral presentation
    at the plenary session of its annual meeting in September 2013 in
    Washington, DC. Prospective and retrospective findings from the HEAT
    Study will be discussed by the Study's lead principal investigator in
    Asia, Professor Ronnie Poon, MD, PhD, professor of surgery at the Queen
    Mary Hospital in Hong Kong.
  oThe Company reaffirmed its continued strategic partnership in China with
    Zhejiang Hisun Pharmaceutical Company (Hisun), with the announcement of
    the signing of a Memorandum of Understanding for the future development of
    ThermoDox® and other liposomal formulations.

Financial Results

For the quarter ended June 30, 2013, Celsion reported net income of $421,000
compared to a net loss of $6.1 million in the same period of 2012. Net income
for the quarter ended June 30, 2013 was favorably impacted by lower operating
costs ($1.7 million) coupled with the non-cash benefit of $4.4 million from
the valuation of the common stock warrant liability associated with registered
direct equity offerings in September 2009 and June 2013. For the six month
period ended June 30, 2013, Celsion reported a net loss of $230,000 compared
to a net loss of $12.3 million in the same period of 2012. Net loss for the
six months ended June 30, 2013 was favorably impacted by lower operating costs
($3.1 million) coupled with the non-cash benefit of $8.7 million from the
valuation of common stock warrant liability associated with equity financings
in September 2009 and June 2013. 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. Revenue from this collaboration totaled
$125,000 in the second quarter of 2013 and $250,000 in the six month period
ended June 30, 2013. The Statement of Operations was also impacted by a
one-time, non-cash deemed dividend from the beneficial conversion feature of
$4.6 million on the preferred stock equity financing announced in February
2013, resulting in a net loss attributable to common shareholders of $4.8
million for the six months ended June 30, 2013.

Net cash used in operations was $3.6 million for the six months ended June 30,
2013 compared with $10.9 million used to fund operations in the same period
last year due to lower operating costs in the current year combined with the
$5 million payment from Hisun mentioned above. During the first six months of
2013, the Company raised $30 million in new capital, net of issuance costs,
from the sale of 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 $48.9 million in cash, investments and
accrued interest on short-term investments.

Research and development expenses decreased by $2.1 million (50%), from $4.1
million in the second quarter of 2012 to $2.0 million in the second quarter of
2013. Research and development expenses decreased by $3.6 million (41%), from
$8.8 million in the six month period ended June 30, 2012 to $5.2 million in
the same period of 2013.These decreases were 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 $1.95 million in the
second quarter of 2013 increased $356,000 when compared to the same period of
2012 due to a one-time severance charge associated with the Company's
restructuring program announced in April 2013.

Quarterly Conference Call

The Company is hosting a conference call to provide a business update and
discuss the second quarter 2013 financial results at 11:00 a.m. EDT Thursday,
August 8, 2013. To participate in the call, interested parties may dial
1-800-723-6498 (Toll-Free/North America) or 1-785-830-7989
(International/Toll) and ask for The Celsion Corporation Second Quarter 2013
Financial Results Conference Call (Conference Code: 3083628) 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 Thursday, August 8, 2013 at 2:00 p.m.
EDT and will remain available until August 22, 2013. The replay can be
accessed at 1-888-203-1112 (Toll-Free/North America) or 1-719-457-0820
(International/Toll) using Conference Code: 3083628. 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, August 8, 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 and
Chief Financial Officer
609-482-2455
jchurch@celsion.com







Celsion Corporation
Condensed Statements of Operations
(in thousands except per share amounts)
(unaudited)
                                        Three Months        Six Months

                                        Ended June 30,      Ended June 30,
                                        2013      2012      2013      2012
Licensing revenue                     $ 125     $ –       $ 250     $ –
Operating expenses:
Research and development                2,022     4,112     5,226     8,805
General and administrative              1,951     1,595     3,639     3,166
 Total operating expenses              3,973     5,707     8,865     11,971
                                                                    
                                        (3,848)   (5,707)
Loss from operations                                        (8,615)   (11,971)
Other income (expense):
Gain (loss) from change in valuation
of common                               4,380     (447)     8,660     (370)

stock warrant liability
Interest, dividends and other income
(expense),                              (111)     50        (275)     50

net
 Total other income (expense), net     4,269     (397)     8,385     (320)

                                      $ 421     $ (6,104) $ (230)   $ (12,291)
Net income (loss)
 Non-cash deemed dividend from
beneficial

conversion feature on              ─         ─         (4,601)   ─
convertible preferred

stock
Net income (loss) attributable to
common                                $ 421     $ (6,104) $ (4,831) $ (12,291)

shareholders


Net income (loss) per common share
attributable

to common shareholders 
 Basic                              $ 0.01    $ (0.18)  $ (0.10)  $ (0.37)
 Fully Diluted                      $ ─       $ (0.18)  $ (0.10)  $ (0.37)
Weighted average shares outstanding
 Basic                                54,392    33,236    48,632    33,211
 Fully Diluted                        61,280    33,236    48,632    33,211





Celsion Corporation
Selected Balance Sheet Information
(In thousands)
                                              June 30,       December 31,
                                                             2012
ASSETS                                        2013
                                                            
                                              (Unaudited)
Current assets
Cash and cash equivalents                   $ 6,021       $ 14,991
Short term investments and accrued interest   42,913        8,104
Other current assets                          639           554
 Total current assets                     49,573        23,649
Property and equipment                        1,022         1,115
Other assets
Deposits and other assets                     396           567
Patent license fees, net                      24            28
 Total other assets                       420           595
Total assets                                $ 51,015      $ 25,359
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities    $ 3,305       $ 3,595
Deferred revenue – current portion            500           —
Note payable - current portion                1,905         1,410
 Total current liabilities                5,710         5,005
Common stock warrant liability                4,734         4,284
Note payable – non-current portion            2,848         3,661
Deferred revenue – noncurrent portion         4,250         —
Other liabilities – noncurrent portion        483           447
 Total liabilities                        18,025        13,397
Stockholders' equity
Preferred stock                               –             –
Common stock                                  618           380
Additional paid-in capital                    190,963       165,276
Accumulated other comprehensive loss          (213)         (127)
Accumulated deficit                           (155,698)     (150,877)
  Subtotal                              35,670        14,652
Less: Treasury stock                          (2,680)       (2,690)
 Total stockholders' equity               32,990        11,962
Total liabilities and stockholders' equity  $ 51,015      $ 25,359







SOURCE Celsion Corporation

Website: http://www.celsion.com