CME Webcast featuring Dr. Poon on Recent Advances in Management of Hepatocellular Carcinoma
CEO letter
August 24, 2010
Dear Fellow Celsion Shareholders,
The HEAT Study: NCI Priority Clinical Trial
As I start the 2nd Quarter letter I thought it important to note that the recent consensus recommendations of the National Cancer Institute Clinical Trials Planning Meeting for hepatocellular carcinoma (HCC) included Celsion's Phase III ThermoDox "HEAT Study" as an NCI Priority Clinical Trial. The recommendations were made by a taskforce of internationally recognized experts in the field of HCC management; convened by the NCI to "identify key knowledge gaps and define priorities for clinical trials…" The value for our HEAT Study is significant. Investigators and those treating HCC are urged to support enrollment in our trial with precedence.
I would also point out that the NCI's focus on this difficult cancer reinforces our clinical strategy for ThermoDox. HCC, as we've discussed many times, is currently the #5 global cancer; projected by the World Health Organization to be #1 by 2020. In the United States, it is the only cancer increasing in incidence in both males and females and has been identified as a serious health concern by the Center for Disease Control and National Institutes of Health, among others. Of the eight priority trials nominated at the Clinical Trials Planning Meeting, our HEAT Study has the distinction of being the only one identified as a potential 1st line therapy. Should we meet our study endpoint, ThermoDox could very well become the standard of care for non-resectable liver cancer patients worldwide and represents a $ Billion + market opportunity.
HEAT Study Sites Support Global Registration
We continue to make progress enrolling our Global Phase III Primary Liver Cancer study. The study is designed to evaluate the efficacy of ThermoDox in combination with radio frequency ablation (RFA) when compared to RFA alone; which in many countries is the predominant procedure for non-resectable liver cancer.
I am pleased to advise you that enrollment in this study is almost 70 percent complete, representing recruitment of approximately 0.7 patients per day during the last quarter. We are highly focused on improving enrollment rates and, with a healthy backlog of patients who have passed screening; our target is to enroll between 35 and 36 patients per month for the balance of the year. To ensure that we do so, the HEAT Study has been expanded to include 75 investigational sites in 11 countries worldwide. We also fully expect to add one additional site in Italy in the 3rd quarter, capping the number of sites at 76.
The HEAT Study is designed with a concentration of sites in countries where HCC is a serious health problem, including China, Japan, Taiwan, and Korea. Our goal is to enroll a study cohort in each one of these countries sufficient to support registration; avoiding the need for a separate local trial that is typically required for foreign country drug approval. This strategy provides Celsion with a "fastest pathway to approval" in markets where ThermoDox may provide a life saving treatment option, and early access to significant market opportunity.
To ensure quality data and protocol compliance, we have completed a rigorous audit of our highest enrolling sites. Data entry and accuracy are being assured. Our Data Monitoring Committee (DMC) has reviewed unblinded data from approximately 300 patients. It has found no safety issues and has recommended study continuation. The DMC also recommended continuation of the Japan cohort after a specific focus on safety for the first 12 Japanese patients enrolled. This safety review was a specific requirement of the Japanese Pharmaceuticals and Medical Devices Agency (PMDA). The DMC will meet again in September, ensuring proper trial management and data acquisition.
Looking ahead, we expect to see the 380 tumor progressions needed to determine ThermoDox's efficacy to improve progression free survival (PFS) as an adjuvant to RFA within 12 to 16 months following last patient in. This outlook assumes that historical data is reasonably predicative of the time to progression. As a part of its SPA, the DMC will conduct an interim analysis once the study has enrolled 600 patients and has reached 190 events. The review will be blinded to Celsion and will include a safety, efficacy and futility analysis.
The DIGNITY Trial
Our pivotal Phase I/II Recurrent Chest Wall Cancer Study, The Dignity Study, is now enrolling patients at seven sites: New York University, St. Barnabus Medical Center in N.J., Rhode Island Hospital, Florida Cancer Institute, Virginia Commonwealth University, University of California, San Francisco, and Washington University in St. Louis.
While enrollment has shown some recent increase in momentum, recruitment for this study remains a challenge. We project enrollment will extend into 2012. We are now treating patients at the 50 mg dosing cohort and expect to complete the Phase I portion of the study this quarter. Assuming no dose limiting toxicity, the 50 mg dose will be declared the maximum tolerated dose for the remainder of the study.
Data from the Phase I portion of the DIGNITY Trial will be presented by Dr. Brigid O'Conner at the ASTRO Conference in early November. The presentation will include both safety and investigator assessment of tumor response.
HIFU + ThermoDox Shows Promise
Our joint research with Philips Healthcare, evaluating the potential of ThermoDox in combination with High Intensity Focused Ultrasound (HIFU) to treat difficult cancers, has shown very encouraging preclinical results. The data are unambiguous, providing a basis, we believe, to support an expansion of our clinical program. We expect to file an amendment to our Investigational New Drug Application later this year to evaluate the promise of unique, non-invasive combination therapy in patients with metastatic bone cancer.
Strengthening our Team
In June we announced the addition of Jeffrey W. Church as Vice President and Chief Financial Officer. Jeff has more than 30 years of experience in corporate finance, mergers and acquisitions, investor relations, and SEC reporting. He has worked in both private and public clinical stage Life Science companies and his time with Wall Street and on strategic corporate issues will serve us well as we move forward.
Robert W. Hooper joined our Board in July 2010. Bob is President of Crows Nest Ventures, Inc., which provides advisory and consulting services to the health care industry. Bob brings a great deal of industry experience to Celsion. His time in Asia and as President, North America Operations for IMS Health, the global leader in health care information and market research, will serve us well as we consider our commercial plans for ThermoDox®. I know he will be a worthy steward for our shareholders and good counsel for our management.
I'd also like to recognize all of our Celsion employees for their commitment and hard work. They continue to make impressive strides in our clinical programs and preparations for Regulatory submissions and commercialization. I commend them for their efforts. Every day I'm reminded of the pleasure it is to be a part of this team.
Financial Overview
Our approach for our future financing needs remains unchanged.
We will always seek to find the most non-dilutive means to raise capital; including commercial licenses for ThermoDox, where the terms are attractive and represent a long term value for the Company. While it's always difficult to predict, we continue to believe that a second license agreement for ThermoDox will be completed in 2010. As you will recall, Celsion successfully completed a licensing arrangement for ThermoDox® for the Japanese territory with Yakult in 2008. This transaction provided Celsion with an upfront payment, reimbursement for and sharing of development costs. Also included are significant commercial based payments in the form of milestones and royalties. This license agreement demonstrated our ability to execute on our business strategy. We will always look for events that have the potential to minimize dilution or that can be accretive in order to enhance shareholder value.
The Company has a $50 million shelf registration statement in place that allows us to issue any combination of equity securities to fund future development costs. In June 2010, the Company entered into a Committed Equity Financing Facility (CEFF) with Small Cap Biotech Value Fund to sell up to $15 million of common stock over a 24 month period at a pre-determined discount of 5 percent to 6 percent. The Company did not issue any warrants as part of this new facility. The CEFF enhances the Company's financing strategy moving forward. It provides other options for raising additional capital through a strategic alliance or licensing transaction with a third party, or through the sale of stock.
We will continue to balance our need for capital against the timing of events discussed above with the goal of enhancing shareholder value.
2nd Quarter Financial Results
Celsion reported increased costs in the second quarter. These expenses are the result of significant advances in both the clinical development and manufacturing of ThermoDox. In addition to the Phase III HCC pivotal trial now being more than two-thirds enrolled, a second manufacturing site to support our regulatory submission next year has been qualified.
These events have contributed to the net loss of $2.6 million Celsion reported for the second quarter of 2010, compared to a $4.6 million loss for the comparable period in 2009. This decrease is primarily due to a $1.8 million change in the fair value of the common stock warrants issued in connection with the registered direct offering in September 2009. Excluding this non-cash item, the Company's operating loss for the quarter was consistent with the prior year as costs associated with the 600 patient HEAT Study were slightly higher than last year. These higher costs were offset by lower costs for the RCW trial due the utilization of internal resources during the current year versus an outside Contract Research Organization last year.
Celsion reported a net loss of $8.8 million for the six-month period that ended June 30, 2010, compared to an $8.2 million loss for the comparable period last year. This increase is primarily due to higher costs associated with the HCC trial as new clinical sites and new countries were added to the clinical development program.
Cash used in operations totaled $6.8 million during the first half of 2010, or approximately $1.1 million per month, resulting from numerous activities undertaken to enhance enrollment in our Global Phase III HCC trial. We believe that the additional sites added to the trial during the first half of the year, coupled with other outreach efforts to our clinical sites and principal investigators, will help ensure the completion of enrollment by the end of the year. These one-time expenditures are expected to pay dividends in the second half of 2010. We expect our monthly use of cash to approximate $1 million per month over the second half of 2010. The Company ended the quarter with $5.7 million in cash and investments at June 30, 2010.
In closing I'd like say that we will continue to progress our research programs and make certain the news flow properly reflects our accomplishments in bringing ThermoDox to market. We are executing well designed clinical programs, paving the way for "fastest path" regulatory submissions. We are positioned with a promising new drug which, by any standard or measure, has the potential to become one of the most significant treatments for what is arguably the largest unaddressed cancer in the world.
Our strategy is clear and we are achieving results on all fronts. Celsion is stable and focused. Thanks to our dedicated staff, the second quarter of 2010 was extremely productive, as I'm confident, your Company will continue to be.
Sincerely,
Michael H. Tardugno
President and CEO