Celsion Corporation

Good morning. My name is Olivia and I will be your operator today. At this time, I'd like to welcome you all to Celsius first quarter 2021 financial results conference call. All lines have now been placed on mute to prevent any background noise. Following the speaker's remarks, there will be a question and answer session. At that time, you may press star one on your phone to ask a question. Please keep in mind, if you are using a speakerphone, you must release your mute function to allow the signal to reach our equipment. Again, that is star 1 to ask a question during the Q&A session. At this time, I would like to turn the call over to Kim Golodetz. Please go ahead.

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Celsius Corporation's first quarter 2021 financial results and business update conference call. As has been CELCION's practice and as noted by the operator, prepared remarks will be followed by a question and answer session. During this call, management will be making forward-looking statements regarding CELCION's expectations and projections about future events. Generally, forward-looking statements can be identified by terminologies such as expects, anticipates, believes, or other similar expressions. These statements are based on current expectations, and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. This means results could change at any time, and the contemplated impact of COVID-19 on Celsius operations Financial results and outlook is the best estimate based on the information for today's discussion. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, May 14, 2021. CELCION undertakes no obligation to revise or update comments made during this call, except as required by law. With that said, I'd like to turn the call over to Michael Torduno, Chairman, CEO, and President. Michael?

Thank you for the introduction, Kim, and good morning, everyone. Joining me today are Jeffrey Church, our Chief Financial Officer, who will provide a review of CELCION's recent financial results, and Dr. Krishit Anwar, our Chief Science Officer, who will address questions regarding our recently announced vaccine initiative. Also on the call for the clinical Q&A is Dr. Nicholas Boris, our Chief Medical Officer. I'd like to start by saying I'm very pleased to report our progress during the first quarter and subsequent weeks of 2021. I want to relate to you that our confidence that Celsius is well positioned to achieve our development objectives during the remainder of this year and beyond is quite evident. It's clear to me and on the fundamentals our company is sound. Here are some reasons to support that. our lead clinical product platform technology, is based on proven science and is supported by compelling data from Gen 1, our first product on this platform, in the Ovation study, which includes our Phase I and Phase II studies in advanced ovarian cancer. Placine, a proprietary and smart adaptation of our TheraPlas technology, is a next-generation vaccine platform designed with multiple viral antigens and with an immune modifier, incorporated into a single plasmid. This is being evaluated for application as a vaccine platform which may hold the promise for significant advancements over the highly efficacious new generation of mRNA vaccines. Our very capable staff and research development team have shown extraordinary capability to expertly execute while following the rigors and demands of global drug development. These incredibly Professional individuals are being reinforced with a complement of individuals whose experience and achievements in immunology and vaccine development are well recognized in the industry. And last but not least, marking conditions permitted the company to be thoughtful in strengthening our balance sheet with straight stock financings with minimal impact to shareholders. We have smartly tapped into the equity capital markets during the first four months of this year, raising over $60 million. This ensures funds for a rock-solid balance sheet and cash sufficient to see us through all of our immediate and anticipated major milestones, including PFS or progression-free survival data from our Phase 2 Ovation 2 study. And so we move aggressively forward into 2021 with a great deal of confidence that the road ahead will be paved with value-creating announcements from Ovation 2, our Gen 1 in advanced ovarian cancer, and from our Da Vinci project. which is our plasmid DNA-based vaccine development initiative. I'd like to talk a little bit more about these two major programs. The foundation of GEN1, our DNA-based immuno-oncology candidate, is TheraPlas. The TheraPlas nanotechnology is proven as a means to transfect cells with DNA payloads coded for proteins of therapeutic value. Unlike viral delivery systems, that can only be administered once because of the body's immune response to the delivery system itself, TheraPlas is not subject to the neutralizing activity of the patient's immune system. It has been safely administered as many as 17 times weekly over a six-month period in our ovarian cancer clinical studies. To date, more than 100 patients have been treated with GEN1 in our clinical trials. The results so far demonstrate excellent safety translational data that clearly show activation of a significant immune response, and dose-dependent improvement in clinical outcomes. Our Ovation 2 study of Gen 1 is an open-label randomized trial in treatment-naive advanced ovarian cancer patients. This is a subset of patients whose tumor burden is too great for immediate surgical intervention. Ovation 2 combines Gen 1 with the standard of care neoadjuvant chemotherapy. the goal of which is to shrink tumor mass and dry up as much as possible the fluid that accompanies the cancer to improve surgical results. Following neoadjuvant chemotherapy and eight weekly cycles of Gen 1 combined with neoadjuvant chemotherapy, patients undergo interval debulking surgery, which is then followed by three adjuvant cycles of chemotherapy and up to nine additional weekly Gen 1 treatments. That's 17 Gen 1 treatments once weekly over a six-month period. Our goal is to delay progression because you know that cancer progression portends a bleak outlook. The Ovation 2 study is designed with an 80% confidence interval for an observed PFS hazard ratio of 0.75, which would mean an approximate 30% improvement in the risk for cancer progression. The study is progressing with more than 40% of the anticipated 110 patients having been enrolled in the study. I do want to say, however, that April was not up to our expectations. Disappointing month in patient enrollments. We're not sure what was behind the blip, but we've seen to recover this month. That said, we're taking no chances in immediately following this call. Dr. Boris, our lead PI, Dr. Thacker, and I are meeting with a large group from the GOG Advisors Foundation. Our goal is to brainstorm with this group of ovarian cancer experts and to take advantage of our recent fast-track designation to ensure that we have significantly improved our timelines to reach regulatory approval. Fast-track designation from the FDA, among other things, supports an expedited path to market authorization. Now a little bit more about the GOG Foundation and the GOG advisors. A fast track designation, in fact, brought Gen 1 to the attention of the GOG Foundation. This is a non-profit organization with the purpose of promoting excellence in the quality and integrity of clinical and basic scientific research in the field of gynecologic malignancies. The organization is comprised of the leading gynecological oncologists in the United States and has a network of more than 400 trial sites. Clinical trials funded by the GOG Foundation have influenced the standard of care for numerous malignant gynecologic neoplasms. Our meeting with the GOG is the first of many designed to accelerate our path to regulatory approval, as I said. We're delighted that the Gen 1 has come to the GOG's attention and believe that the organization's involvement further validates the medical need and the purpose of our work. I mean, frankly, why wouldn't Gen 1 have come to their attention? We've been reporting compelling clinical data, with results today showing strong surgical outcomes. Ovation 2 study data now show R0 resections in 14 of 17 patients, or 82% in the treatment arm, compared with 7 of 13 patients, or 54% in the control arm. The control arm is comprised of neoadjuvant chemotherapy alone, which is the standard of care for this patient population. Physicians view R0 resections as a good predictor of survival, and at 82% R0 resections in the treatment arm, very encouraging thus far. These results also compare favorably with the R0 resection rates observed in our earlier Ovation 1 study, where we reported 87.5% R0 resection in the two highest dosing cohorts of this Phase 1 dosing escalation study. Note, historically, R0 rates, as reported in two large papers by Virgo and Kehoe, that neoadjuvant chemotherapy alone are approximately, R0 rates are approximately 50%, which is similar, as we're seeing, to the control arm in the Ovation 2 study. A comprehensive manuscript of the Ovation 1 trial is currently under review at a major oncology journal, and we hope to have it published in the near future. I think the data that we are presenting in the paper will speak for itself. One final Gen 1 note. Now, there's been growing attention from strategic fund managers and clinical investigators expressing an interest in combining Gen 1 with other approved and investigative treatment regimens like checkpoint inhibitors as well as Avastin. Avastin, you know, is a multibillion-dollar oncology drug used for second-line treatment of ovarian cancer patients. So we're very excited about the potential for combination with other agents, and we look forward to the prospect of providing Gen 1 and supporting the trial of Gen 1 with partners in upcoming months. Now I'd like to turn our attention to the Placene initiative. As I've said before, Placene is an adaptation of the TheraPlas technology platform, and it forms our second product platform initiative, Placene. this time leveraging the knowledge of our plasmid vector construction, combining that with our proprietary delivery technology, which is the subject of TheraPlas, together to unlock the potential of our novel multisistronic DNA plasmid technology. So what's unique about this vector, this DNA plasmid vector? Well, it's comprised of DNA, first of all, more stable than mRNA. This non-integrating nucleic acid API is shown to function throughout the life cycle of the transfected cells. Also, the construct is multi-cistronic, a term you may have heard, meaning that the plasmid is encoded for multiple proteins. In the case of our COVID-19 vaccine design, included are the following, the S or spike protein. This is the sole protein, by the way. The current mRNA vaccines rely on to develop immunity to the COVID-19 vaccine. Relying on one antigen, the S protein, as we've heard from the CDC and medical experts alike, causes concern that viral variants may ultimately evade immunity acquired by the vaccination. So our design also includes A code for the M or membrane protein of the COVID-19 virus representing a backup strategy in the event that the S protein is no longer recognized by the body's immune system. And also, as I mentioned earlier, our design includes the code for IL-12, a potent immune system recruiting cytokine. Recruiting the immune system at the same time providing two antigens, a primary and a backup. we believe is a powerful combination. In summary, our design includes three proteins, two of which are viral antigens, and one is an immune system accelerator. Our approach, as described in our provisional patent filing, has the potential to be advantageous to the commercially available mRNA vaccines in a number of ways. Let me spell these out for you. First, our multisistronic, multiple antigen approach reduces the possibility, as I pointed out, that virus variants, like those from South Africa or the United Kingdom or others, will escape vaccine-dependent immunity. Second, because the DNA plasmid may function throughout the life cycle of transfected cells, the durability of response may improve memory T cell activation, establishing a longer-lasting immunity. Third, the concomitant... expression of IL-12 along with the presence of antigens and its well-established capability to recruit the immune system may result in a higher quality vaccine. And the last point I'd like to make is Placine offers improved stability. We know this. The stability at commercially viable temperatures has been demonstrated with Gen 1, our lyophilized DNA nanoparticles. We've shown they can be successfully stored at refrigerated temperatures for extended period of times and at ambient temperature or room temperatures for very workable periods. This is very important when considering the various environments of a global pandemic. See, we're late to the party. And you may be asking, why now? Since the current mRNA approaches are so effective, what is our chance of commercial success? These are two very important and fundamental questions, and I'll try to answer them with our plan. First, our immediate goal is to validate our vector and delivery technology hypothesis in preclinical studies using the mRNA vaccines as comparators, as standards. demonstrate the capability of our DNA multisystronic approach and its projected advantages. Once our hypothesis is proven, if there is a commercial possibility, we intend to seek development partners for COVID-19 clinical trials. Second, and more importantly, once our hypothesis is proven, we'll begin development of vaccines to address a broad range of other infectious viral agents, for example, hepatitis C, or herpes simplex, or even the seasonal influenza, among others. Third, and this is something that excites us, I believe, and our advisors and our researchers the most, we may be on the horizon of a real breakthrough. Combining antigens with IL-12 has the potential to be both prophylactic and therapeutic. The development of vaccine technology that has the potential to be truly therapeutic could revolutionize the world of treating infectious disease. Our progress so far is quite encouraging. As I mentioned, we've submitted a provisional patent. We have established a research platform. We've recruited scientists with expertise and experience in vaccinology and immunology. We've established relationships with high-profile medical and scientific advisors. We've developed analytical methods necessary to evaluate the progress of our work. We've developed strategic partners that will support wide-ranging vector development, and we've demonstrated in vitro that our multi-systronic, that's the multi-protein vector design, will produce proteins it is designed to express. Most importantly, and I'm very happy to report, that in vitro work with our third-generation vector has shown that an S1 antigen An M1 antigen and the IL-12 protein can be successfully expressed from a single plasmid incorporated into one of our proprietary delivery platforms. We should know soon if antibodies specific to the antigens are expressed in mouse models. In the same mouse models that were used in the development of the COVID-19 vaccines that many of you may have already received. So from our perspective, this is very exciting folks. Hopefully there's much more to come on these developments in the near future. We promise to keep you updated. Now with that, I'll turn the call over to Jeff.