Good morning. My name is Bobby, and I will be your operator today. At this time, I would like to welcome you to the Celsion Corporation 's Third Quarter 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. Following the speaker's prepared remarks, there will be a question-and-answer session. , you may 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 HLA. Welcome to Celsion's Third Quarter 2021 financial results and business update call. As has been Celsion's practice and as noted by the operator, prepared remarks will be followed by a question-and-answer session. During today's call, management will be making forward-looking statements regarding Celsion 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 an -- there is significant uncertainty about the duration and impact of the COVID-19 pandemic. This means results could change at any time and the contemplated impact of COVID-19 on Celsion's 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, November 15th, 2021. Celsion 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 Tardugno, Chairman, CEO and President. Michael?

Thank you, Kim. Good morning, everyone. Joining me today are Jeffrey Church, our Chief Financial Officer, who will review Celsion's third quarter financial results in just a moment, Dr. Nicholas Borys, our Chief Medical Officer and Dr. Khursheed Anwer, our Chief Science Officer, will be available during the Q&A session to answer your questions regarding our work with GEN-1 and our vaccine initiative. During the third quarter, we continued to make progress with our leading research programs, utilizing our proprietary plasid -based technology. As you may note from our press releases, promising clinical observations were reported for our lead investigational product, GEN-1 and its potential. By recruiting the immune system, we expect our immuno -oncology agent to improve outcomes for patients with advanced ovarian cancer. Also note that our vaccine technology in preclinical data were presented during oral sessions at the International Vaccines Congress this last October, supporting our hypothesis for the immunization potential of PLACCINE are formulated DNA plasmid -based vaccine. A very strong balance sheet along with our ability to access sources of non - dilutive capital while Celsion to reach key milestones and complete our randomized Phase 2 study of GEN-1 through final readout in the report of proof-of-concept results for PLACCINE early next year without the immediate need for additional capital. Now, I'll briefly review these programs and provide an update on the important catalysts as we see them now. Celsion's in-depth understanding of plasmid technology and vector construction underlies our research focus and provides the basis for our 2 leading product platforms. TheraPlas, our first platform, is our synthetic non-viral DNA delivery platform. It has demonstrated its ability to deliver DNA plasmid repeatedly and successfully for successful cell transfection over extended periods of time, as much as 6 months in our Phase II study. GEN-1…

Thank you. Michael. Details of Celsion's third quarter, 2021 financial results were included in the press release we issued this morning and in our Form 10-Q, which we filed today before the market open ed. Celsion ended the third quarter of 2021 with $60.6 million in cash and investment securities, restricted cash, and accrued interest receivable. Over the past 3 years, and without any dilution to our stockholders, we have raised nearly $15 million from the sale of our New Jersey State net operating losses, which is equivalent to nearly 4 years of operating expenses. We have a further $5 million of unused New Jersey NOLs available for sale between 2022 and 2024. $1.5 million of which was approved last week by the New Jersey Economic Development Authority, per sale this year, which is expected to net the Company about $1.4 million. Coupled with future sales of unused New Jersey NOLs given our current spending plans, we believe we have sufficient capital resources to fund our operations through the end of 2024. We are in an excellent position with respect to liquidity to support us through several important value-creating milestones. Let me now turn to our review of our third quarter and year-to-date 2021 financial results. For the quarter ended September 30th, 2021, Celsion reported a net loss of $5.4 million, or $0.06 per share. This compares with a net loss of $8.1 million, or $0.24 per share, for the quarter ended September 30th, 2020. Operating expenses were $5.2 million in the third quarter of this year, which is up about $900,000 or 21 % from operating expenses of $4.3 million for the third quarter of 2020. Let me break this down by line item. Research and development expenses were $2.5 million for the third quarter of this year, as…

Thank you, Jeff. And then I just want to make a quick comment. Our industry -- certainly including us, our industry is seeing an enormous amount of litigation, for the most part meritless claims. The costs to us this year are quite high, and for many companies like us, the NOL insurance costs continued to increase. I think this meritless litigation is something that needs to be addressed through legislative action to our shareholders. We would encourage you to contact our legislators and let them know that this use of investor capital to defend against meritless claims is just outrageous, and that needs to be controlled through as some legislative action. With that, I want to say to our shareholders that I want you to know that we're driven by a commitment to bring new medicines to patients in the medical community. Supported by the daily work of our talented scientists, clinicians, and technical staff, we remain focused delivering against our research objectives and our drive to create value for our shareholders. With that overview of our business and our recent financial results, we are ready to open the call to questions. Would you do that for us, please, Operator?

We'll pause for just a moment to allow everyone the opportunity to signal for questions. And our first question comes from Kumar Raja with Brookline Capital Markets.

Hi. Thanks for taking my questions and congratulations on all the progress. Looks like you are doing well in terms of the enrollment for the Ovation trial. In terms of the clinical trial sites, what are you seeing there in terms of patient recruitment? Is it back to the levels that was before the COVID-19? What are you seeing there and how is it different from different centers? And in terms of this 110 to 130, where do you think you will end up in that range?

So, can -- I would like to answer the second question first, if you don't mind. This is a Phase II study. Our goal here is to use the data to power Phase III. The statistical plan is designed with a max -- with up to 130 patients. But our -- this is an event-driven study. We're looking for 80 events, frankly to have data sufficient to -- 16 months on trial to have data sufficient to be able to power the pivotal trial. Where do we expect to be? I am hopeful that we'll be north of 110 patients. The more experience we have with this investigational product, the more confidence we have in the design of the Phase III study. With regards to patient enrollment, we've seen some ups and downs is my comment, I'm going to ask Nick to comment on this also. When -- at the height of the COVID-19, the original variant, whether it was the European or the wild-type variant, we saw a challenge enrolling patients. More recently this past summer when the Delta variant raised its head, we saw some reluctance for patients to join our study. I think we're seeing a pick up now and I just, I guess from -- that's my point of view. Nick, you have any comments on that?

Thank you, Mike. As you probably can guess, the pandemic has had an impact on patient recruitment in all cancer studies and patients are hesitant to go in for screening. And also, as you know, in ovarian cancer, one of the problems with ovarian cancer is that there isn't really a good screening process, it's just basically picked up sometimes just through ambiguous symptoms. So, as Michael said, we saw an uptick in our enrollment during the summer when people were feeling good and safe going back to their physicians for checkups. Then the second wave hit in the fall, and we've seen a decrease. More recently, we are now getting reports from our hospitals that there's staffing problems at the centers, but we still continue to enroll our patients. And I think a pretty good rate compared to overall. We're optimistic to meet our timelines as Michael mentioned before. And I have to say that pretty well 90 % of our sites are in fact enrolling patients actively, so we're getting very good participation.

Okay. And in terms of the DNA vaccine, what are the next steps there? And are you looking for external funding to move that forward?

We have sufficient capital to support our proof-of-concept work. We have applied for grants from various government agencies, and we'll applied for more, if we think that's important is validation of our work, whether or not we'll be successful. Obviously, we can't predict that but we think it's important to apply for government funding. But bottom line is, we have sufficient capital to take us through a proof-of-concept. With regards to what is left to do, Dr. Anwer is on the line. Got to appreciate. Do you want to pick up the rest of the question, please?

Thank you, Michael. Sure. Our proof-of-concept objectives are to demonstrate that from a single DNA-based plasmid, you can express antigen for 2 different strains of a virus. We've been modeling SARS COVID 2 as a benchmark because there's commercial products out there for competitive purpose. Our goal for next couple of quarters is to demonstrate from a single vector, you can generate neutralizing antibodies, EIGG, and detailed responses against 2 strains of SARS - CoV -2 and in a neutralization, asset demonstrate that the single vector antigen is effective against 2 strains versus a vaccine that's designed for a single strain only. So that's the key thing. DNA inherently had better stability than mRNA, so we have to demonstrate the stability advantage through experimentation, as Michael had said earlier, that DNA expresses for long period of time from skeletal muscle, as opposed to mRNA. Our hypothesis that you'll be able to demonstrate durability of immune response from our vectors as to mRNA. You have some of the key objectives that are ahead of us in terms of demonstrating POC. Let me just jump in and say, Khursheed, would it be accurate to say that our current vector, like the most recent construct is showing its ability to be able to produce the antigens for which it's coated. And now, we're looking for ways to optimize the activity of that factors. Is that reasonable to say? Correct. Yes, sir. Reasonable to say.

Okay. And in terms of using GEN-1 immunotherapy for other oncology indication, what efforts are being done in that front and when can we get an update there?

I think we're optimistic that once we show in this Phase II study some positive results, and we fully expect to do so, that any intraperitoneal cavity cancer is a target for us. We haven't decided on which, but any of them could be an immediate target. And that would include the broaden range from colorectal cancers to liver cancers to maybe pancreatic cancers. But Khursheed, can you expand more on that please?

Yes, sure. The product that we're developing, GEN-1, as you know, this is for intraperitoneal delivery and by moving this product, you can make IL-12, gamma and favorable immune changes in the peritoneal environment. Obviously, right now, we're going after ovarian cancer because over 90 % of ovarian cancer patients are metastasized into the peritoneal cavity and the disease local is the result of depth, so you control that. Along the same line, there are some other GI cancers, at least about somewhere between 25 % to 30 % of different GI cancers also metastasize to the peritoneal cavity. And these include gastric cancer, liver cancer as Michael said, pancreatic cancer, colon cancer with the same principle, and these cancer are also immunogenic. That would be our really next goal. We have demonstrated in animal models that activity of GEN-1 against these GI, GYN cancer. As Michael said, once we approve cancer, with ovarian cancer, then I think that cancer would be almost like parallel for other cancers, should demonstrated immune response to local control of disease with ovarian would be very likely that we could go after one of these GI cancer that we just mentioned to you earlier.

Thanks so much for taking my questions. I look forward to the updates.

Thank you.

And our next question comes from David Bautz with Zacks Small Cap Research.

Good morning, everybody. So, my first question is for the OVATION study. It's a technical question. So, when a patient is said to have no residual disease, is that based on the surgeon's opinion or is that somehow quantified?

Thanks very much for that question. Yes, it is quantified on 2 levels. Number 1, yeah, it's based on the surgeon's evaluation of what the -- if there's any residual disease left in the cavity and from tissue that sent to pathology for review to see if there's any disease left. Those 2 play into that role. And then on top of that, we're also looking at overall response from the CT findings and the final pathological report. And, as you know, historically, R0 where the surgeon feels that they completely removed the disease, is typically found in most large studies at around 50 % of the time. And in our studies so far, very consistently, we are seeing in our 0 response in 75 % of the time. And this is probably our biggest topic of discussion in our PI meetings.

Okay. Great. Thanks for that. And as far as releasing additional data from the study, when do you expect to do that? Will it be at the next quarterly update call or will it be sometime it between that?

Sometime in between that. We're hopeful to be able to collect enough information supported by the investigators. There are investigator-reported results to be able to collect enough information to provide an update probably within the next few weeks.

Okay. Sounds good. And lastly on the COVID vaccine, it sounds like you're leaning more towards developing a multi-strain vaccine versus the multi-antigen vaccine. Am I understanding that correctly or is that still up in the air?

You have it correct, Christian you want to talk about that a little bit, please.

Yes. David, as you remember correctly, our global overall objective is to develop a vaccine against 2 antigens and an antivirus with immune modifier to improve the quality. However, for last 6, 7 months, as this SARS-CoV-2 pandemic is emerging and things have been changing, we all have learned that actually this trend, change modification, the virus is also equally important. You may have in a population a dominant strain and then an emerging stream. So, we feel that seeing the conditions the way the virus is developing, it might be more prudent at this stage to develop the technology for 2 strains, where you can quickly target the prevalent and an emerging strain that would be the need of the hour at this stage. Now, however, for multiple antigen approach that you had mentioned, we have demonstrated the construction of a multi-systronic plasmid from where we have shown the expression of spike antigen and M antigen. And plus, we also have shown from the same single plasmid that you can express IL-12, so indeed the construction of a multi-systronic vector with -- at least multiple genes, 2 genes for SARS-CoV-2 sub-unit gene trial 12, 4 genes were successfully. So, we do have that eventual goal, if you demonstrate the activity against 2 strains of SARS-CoV-2 that feed up the hour. We can certainly build on it. 2 antigens, it's the same thing. 2 genes are there so you could have 2 different antigens. And also, certain viruses are difficult to handle. RSV, HIV, there's no vaccine effective at this stage. We believe that if you could co-express an immune modifier with the same plasmid, which we have shown IL-12 can be, that could really address some of those challenges in difficult to handle pathogens. So, it's an incremental approach. To a sense right now that's more what's needed, and down the road, we've built our technology with going into 2 antigens and immune modifiers, so.

I think -- and just one of the -- as Dr. Anwer points out is there -- our hypothesis that a single DNA plasmid can produce more than one protein or antigens along with an immune system modifier is not compromised at all by this minor change in direction, which we think is more urgent. And maybe more attractive to a collaborator be able to demonstrate the capability for more than one variant of the disease. And so, I mean, this is just a proof-of-concept. The variance that we ultimately may end up with could be different than those that are currently being evaluated in the existing construct. And that really is the beauty of this technology; the ability to rapidly adapt the vector construct for the most prevailing medical issue.

So, it sounds like you're -- are you limited to just 2 antigens or proteins from different strains that you can express?

No. I think that was pretty clear in Khursheed 's comments that we've shown proof of concept with as many as 4 proteins; 2 antigens, and the 2 sub-unit proteins for IL-12.

Okay. All right, great. I appreciate you taking the questions.

Thank you. Thank you for asking.

. Our next question will come from Mike Worth with Celsion.

Hello, Mike.

How are you doing, sir. I was wondering if you guys had any update from you guys or the FDA as far as the fast-track designation goes.

Fast-track designation was granted based on an application that we submitted over the summer. That was granted the OVATION 2 study. While in our study of ovarian cancer generally with GEN-1, has been granted fast-track along with orphan designation. Orphan designation in the U.S. and Europe provides us with, among many other things, an exclusive market from a regulatory standpoint in the U.S. and Europe of 7 years and 10 years. Fast-tack, of course, recognizes the importance of finding therapeutics for some very serious and unaddressed medical needs, in this case it's ovarian cancer, but it's not granted on that basis alone. The FDA -- we provide the FDA with evidence that -- some early evidence that the approach that we're taking has some potential, I would say a great deal of potential, to provide an improvement in the treatment of these patients. A disease that has a -- is relatively high unmet medical need has some urgency for a therapy or a cure. Along with data that suggests that the work that we're doing has a potential to be successful as required for the FDA to grant us track, which has been granted for this program.

Right. So, is it -- so the updates will come at the end of each phase or is there a way that it's good to go by the end of Phase 2 if the data shows promising that it's currently showing? That's more with the questions.

I get you. So, fast-track provides the Company with the opportunity, an ongoing opportunity, to interface with the agency on questions as they come up during the course of development, and certainly on the design of the clinical trials, including the discussion of surrogate endpoints that could give us a faster or a quicker means to be able to evaluate the drug's effectiveness. Along with as I said, study design, I think we're considering various approaches to reduce the amount of time in the clinic to demonstrate efficacy. Those -- that's kind of ongoing. Ultimately, the value, of course, for Fast Track ends up at the at the approvals are the NDA, in this case a BLA stage, where the fast-track designation allows the FDA to consider our priority review for your application which reduces the review time by a substantial amount. So, I hope that answers your question.

Thank you, sir.

Thank you.

And that concludes our question-and-answer session. I will turn the call back over to A - Michael Tardugno for closing remarks.

Thanks, all of you, for joining our conference call this morning, and for those who have asked questions, we really do appreciate your questions, It gives an opportunity to expand more on the work that we're doing. And related to the questions or concerns that you may have, we encourage more questions, and I'm sure we'll continue to get them as our studies progress. But again, I want to thank all of you for your time this morning. I've trust we've conveyed our excitement about the potential GEN-1 and our PLACCINE vaccine development platform, for which we have a great deal of hope, given the number of infectious agents for which there is no real immunotherapy vaccine available. We look forward to keeping you informed on our progress, and perhaps seeing some of you in San Francisco in person. As we understand it now, JP Morgan Healthcare Conference will be held in -person during the second week of January. And if you are attending and wish to speak with us, please we can make arrangements through our IR firm by contacting N.J. to schedule a meeting. So, with that, we'll conclude this conference call and thank you all very much.

Thank you. This concludes today's call. You may now disconnect.