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

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

Strong Balance Sheet Supports Ongoing ThermoDox® Development Program

Company to Hold Conference Call on Tuesday, November 12, 2013 at 11:00 a.m.
EST

PR Newswire

LAWRENCEVILLE, N.J., Nov. 12, 2013

LAWRENCEVILLE, N.J., Nov. 12, 2013 /PRNewswire/ --Celsion Corporation
(NASDAQ: CLSN), an oncology drug development company, today announced
financial results for the third quarter ended September 30, 2013 and provided
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).

Financial Results

For the quarter ended September 30, 2013, Celsion reported a net loss of $4.1
million compared to a net loss of $6.0 million in the same period of 2012. Net
loss for the quarter ended September 30, 2013 was favorably impacted by lower
operating costs ($1.4 million) coupled with a lower non-cash charge ($0.4
million) from the change in valuation of the common stock warrant liability
associated with registered direct equity offerings in September 2009 and June
2013. For the nine month period ended September 30, 2013, Celsion reported a
net loss of $4.3 million compared to a net loss of $18.3 million in the same
period of 2012. Net loss for the nine months ended September 30, 2013 was
favorably impacted by lower operating costs ($4.4 million) coupled with the
non-cash benefit of $8.1 million from the valuation of common stock warrant
liability associated with equity financings in September 2009 and June 2013.
The Statement of Operations was also impacted by a 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 $8.9 million for the nine months ended
September 30, 2013.

Revenue from licensing collaborations totaled $125,000 in the third quarter of
2013 and $375,000 in the nine month period ended September 30, 2013. Net cash
used in operations was $6.4 million for the nine months ended September 30,
2013 compared with $16.2 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 the Company's Chinese collaborator, Zhejiang Hisun
Pharmaceutical Company received in January 2013. During the first nine months
of 2013, the Company raised approximately $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 $45.5 million in cash,
investments and accrued interest on short-term investments.

Research and development expenses decreased by $1.2 million (36%), from $3.5
million in the third quarter of 2012 to $2.3 million in the third quarter of
2013. Research and development expenses decreased by $4.8 million (39%), from
$12.3 million in the nine month period ended September 30, 2012 to $7.5
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 $1,389,539
in the third quarter of 2013 decreased $30,719 when compared to the same
period of 2012 due to the impact of the Company's restructuring program
announced in April 2013. General and administrative expenses for the nine
months ended September 30, 2013 were $5.0 million, a $442,000 increase over
the comparable period in 2012 due primarily to one-time severance charges
associated with the Company's restructuring program announced in April 2013.

Recent Business Developments

In October 2013, the Company announced that the latest overall survival data
from its post-hoc analysis of results from the Phase III HEAT Study supports
continued clinical development through a prospective pivotal Phase III Study.
Celsion expects to submit its proposed pivotal Phase III clinical protocol for
FDA review in the fourth quarter of 2013 and anticipates initiating a
multicenter global trial in the first half of 2014. The data from the HEAT
Study post-hoc analysis suggests that ThermoDox® may markedly improve overall
survival, when compared to the control group, in patients if their tumors
undergo optimal RFA treatment. This post-hoc analysis followed the
announcement on January 31, 2013, that ThermoDox® in combination with
radiofrequency ablation (RFA) did not meet the Study's primary endpoint,
progression-free survival (PFS). The Company continues to follow patients in
the Study to the secondary endpoint, overall survival (OS). Data from three
OS sweeps have been conducted since the top line PFS data was announced in
January 2013, with each showing progressive improvement in statistical
significance. Emerging data from the HEAT Study post-hoc analysis has been
presented at three scientific and medical conferences in 2013 by key HEAT
Study investigators and leading liver cancer experts. The presentations and
data are available on the Company's website at www.celsion.com and include:

  oWorld Conference on Interventional Oncology in May 2013
  oEuropean Conference on Interventional Oncology in June 2013
  oInternational Liver Cancer Association Annual Conference in September 2013

These post-hoc findings apply to all single HCC lesions from both size cohorts
of the HEAT Study (3-5 cm and 5-7 cm) and represent a subgroup of 285 patients
(41% of the patients in the HEAT Study). Updated OS data from this subgroup
of patients is summarized below:

  oIn the patient subgroup treated in the ThermoDox® arm whose RFA procedure
    lasted longer than 45 minutes (285 patients or 63% of single lesion
    patients) clinical results indicate an improvement in overall survival
    with a Hazard Ratio of 0.63 (95% CI 0.393 – 1.011) and a P-value = 0.056.
    The median in this subgroup has not been reached.
  oIn contrast, the patient subgroup treated with ThermoDox® whose RFA
    procedure lasted less than 45 minutes in duration (167 patients or 37% of
    single lesion patients) demonstrated a Hazard Ratio of 1.14 (95% CI 0.737
    – 1.776) and a P-value = 0.547. The median in this subgroup has not been
    reached.
  oThe Hazard Ratios reported above, while more than sufficient to support
    additional clinical development, should be viewed with caution since they
    are not statistically significant and the HEAT Study has not reached its
    median for overall survival analysis. Celsion continues to follow all
    patients in the HEAT Study to the secondary endpoint, overall survival,
    and will update the subgroup analysis based on RFA heating duration.

The Company also reports the completion of computer modeling with
supplementary preclinical animal studies supporting the relationship between
heating duration and clinical outcomes.

In July 2013, the 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.

"As the Overall Survival data in the HEAT Study matures, the trend we have
seen in the subgroup of patients who received an optimal RFA treatment
continues to demonstrate a significant improvement in survival rates over the
control arm of RFA only. With the support from our medical advisors and liver
cancer experts we have concluded that the post hoc analysis provides
substantial support for the continued development of ThermoDox® for this very
serious cancer. Assuming agreement from the FDA, we expect to initiate a
prospective pivotal study in the first half of 2014," said Michael Tardugno,
Celsion's President and Chief Executive Officer. "As we announced earlier, we
have fully implemented our corporate restructuring program to adjust our
spending and headcount to levels necessary to maintain the necessary
competencies important to the execution of our current business strategy. We
ended the quarter with a strong balance sheet and the recently announced
reverse stock split provides the Company with the flexibility to evaluate
opportunities to broaden our product pipeline through acquisition of
complementary products and technologies."

Quarterly Conference Call

The Company is hosting a conference call to provide a business update and
discuss the third quarter 2013 financial results at 11:00 a.m. EST Tuesday,
November 12, 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 Third Quarter 2013
Financial Results Conference Call (Conference Code: 9720806) 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 Tuesday, November 12, 2013 at 2:00
p.m. EST and will remain available until Tuesday, November 26, 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: 9720806. 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. EST Tuesday, November 12,
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          Nine Months

                                     Ended September 30,   Ended September 30,
                                     2013        2012      2013       2012
Licensing revenue                  $ 125      $  –       $ 375      $ –
Operating expenses:
Research and development             2,269       3,539     7,495      12,345
General and administrative           1,390       1,420     5,029      4,586
Total operating expenses            3,659       4,959     12,524     16,931
Loss from operations                 (3,534)     (4,959)   (12,149)   (16,931)
Other (expense) income:
(Loss) gain from change in
valuation of common                  (518)       (881)     8,142      (1,251)

stock warrant liability
Interest, dividends and other
income (expense),                    (19)        (177)     (295)      (127)

 net
Total other (expense) income, net    (537)       (1,058)   7,847      (1,378)

                                     (4,071)     (6,017)   (4,302)    (18,309)
Net loss
 Non-cash deemed dividend from
beneficial

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

  stock
Net loss attributable to common
                                   $ (4,071)  $  (6,017) $ (8,903)  $ (18,309)
 shareholders


Net loss per common share
attributable

to common shareholders 

                                   $ (0.30)   $  (0.80)  $ (0.76)   $ (2.47)
 Basic and Fully Diluted
Weighted average shares
outstanding
 Basic and Fully Diluted           13,602      7,476     11,756     7,425



Celsion Corporation

Selected Balance Sheet Information

(In thousands)
                                              September 30,
                                                               December 31,
ASSETS                                        2013
                                                               2012
                                              (Unaudited)
Current assets
Cash and cash equivalents                   $ 13,170        $ 14,991
Short term investments and accrued            32,290          8,104
interest
Other current assets                          638             554
Total current assets                          46,098          23,649
Property and equipment                        947             1,115
Other assets
Deposits and other assets                     364             567
Patent license fees, net                      23              28
Total other assets                            387             595
Total assets                                $ 47,432        $ 25,359
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities    $ 3,643         $ 3,595
Deferred revenue – current portion            500             —
Note payable - current portion                1,945           1,410
Total current liabilities                     6,088           5,005
Common stock warrant liability                5,253           4,284
Note payable – non-current portion            2,347           3,661
Deferred revenue – noncurrent portion         4,125           —
Other liabilities – noncurrent portion        478             447
Total liabilities                             18,291          13,397
Stockholders' equity
Preferred stock                               –               –
Common stock                                  137             84
Additional paid-in capital                    197,083         170,958
Accumulated other comprehensive loss          (306)           (127)
Accumulated deficit                           (165,303)       (156,263)
 Subtotal                                    31,611          14,652
Less: Treasury stock                          (2,470)         (2,690)
Total stockholders' equity                    29,141          11,962
Total liabilities and stockholders' equity  $ 47,432        $ 25,359



SOURCE Celsion Corporation

Website: http://www.celsion.com
 
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