Good morning, and welcome to Celsion's Second Quarter 2022 Earnings Call. My name is Christina and I will be your operator today. At this time, I would like to remind everyone that this call is being recorded. I would now turn the call over to Monique Kosse of LifeSci Advisors. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Celsion's second quarter 2022 earnings call. Earlier today, Celsion issued a press release announcing financial results for the second quarter ended June 30, 2022. You may access that release on the company's website under the News & Investors tab. With us today are Michael Tardugno, Executive Chairman of the Board of Celsion; Corinne Le Goff, President and Chief Executive Officer; and members of Celsion's executive management team. Following management's prepared remarks, we will open the call for a question-and-answer session. During this call, management will be making forward-looking statements regarding Celsion'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 statement can be guaranteed and actual results may differ materially from such statements. In particular, there is significant uncertainty about the duration and impact of the ongoing COVID-19 pandemic, as well as the Russia-Ukraine conflict. This means results could change at any time and the contemplated impact of these events on Celsion's operations, financial results and outlook is the best estimate based on the information for today's discussion. Also, the content of this conference call is accurate only as of the date of the live broadcast today, August 15, 2022. Celsion undertakes no obligation to revise or update comments made during this call, except as required by law. With that, I would like to now turn the call over to Michael Tardugno, Executive Chairman of the Board. Michael?

Thank you, Monique. Good morning, everyone. I'm extraordinarily pleased to be here today with Dr. Corinne Le Goff, Celsion's new President and Chief Executive Officer. I'm also here with Jeffrey Church, our Chief Financial Officer; Dr. Nicholas Borys, our Chief Medical Officer; and Dr. Khursheed Anwer, our Chief Science Officer. I'd like to make a few opening remarks before handing the call over to Corinne who will be followed by Dr. Borys and Anwer for updates and by Jeffrey Church for a review of our second quarter financials. For the past 24 months, the company has undertaken a major transformation. It's a testament to the quality and commitment of our management and our employees that literally on cue, we've been able to rapidly reposition our development focus on what many believe is the future of medicine. That's immunology and the related immuno-oncology and vaccinology areas of product development. During the short period of time, and I'd say a nanosecond in a biotech quo, we have strengthened and expanded our technology platforms, strengthened and added depth to our research capabilities and responsibly strengthened our balance sheet. With our transformational strategy, now implemented the new Celsion is on a runway well into 2025. Now showing promise with impressive technology platforms and an outstanding and committed group of employees. The capstone all of this accomplishment was our announcement of a change in leadership last month. So without further ado, it is my great pleasure. And on behalf of the Board of Directors and after a long and detailed search to present to you, our new Chief Executive and President Dr. Corinne Le Goff. Corinne brings to the company an extraordinary sense of accomplishment, a stellar academic background experience in both big pharma and biotech and most importantly, and very important to the company unapproachable values. We look forward to her vision, her strategy, her drive, as she moves the company forward in this most exciting and transformational technology immunology. Corinne?

Thank you very much, Michael. It is a great pleasure and a privilege for me to be talking to our investors and analysts today. I have spent all my career leading large pharmaceutical organizations, driving corporate strategy and developing and prioritizing portfolios across many therapeutic areas, notably in oncology and immunology at companies like Roche and Amgen. Most recently, I was Chief Commercial Officer at Moderna where I led the deployment of commercial capabilities. My background gives me a good vantage point on Celsion recent developments in immuno-oncology and vaccines. I want to spend a few minutes to share with you why I decided to join Celsion at this present point of inflection for the company. There are three main reasons. First, it always starts with people. I am joining a savvy and senior executive team that has pivoted the company following the discontinuation last year of the ThermoDox Phase 3 program in liver cancer to focus on the development of a very promising plasma DNA approach with broad applicability in immunology. In the last three weeks, since I joined the company, I had a chance to meet the entire team, and I am impressed with the knowhow and expertise of our scientists and with the focus, the dedication and passion of all our employees. Second, Celsion is a platform company with a unique and very innovative plasma DNA technology platform. I can imagine that over a long-term horizon, we will create a new category of medicines based on our plasma DNA technology across the broad array of human diseases. We are studying in immune-oncology and infectious diseases, and we will continue to invest to fully characterize the platform and to advance the technological frontier of plasma DNA. At the same time, we will be investigating the addition of new…

Thanks very much Corinne. You're joining Celsion at a very exciting time. Starting with our OVATION 2 study, which supplements standard chemotherapy and surgery with our GEN-1 immunotherapy in patients with newly diagnosed advanced ovarian cancer. This Phase 1/2 study will meet our initial target of enrolling 110 subjects by the end of this month. Currently we are at 106 patients randomized from 20 centers throughout the United States and Canada. We will continue to enroll patients in order to make the data more robust. This is an important endpoint driven study, which means that our final readout will be based on the study accumulating about 80 PFS events. In our case, an event is a patient who experiences a progression of their cancer. In these patients, progressions are typically seen around one year after being randomized. We hope that GEN-1 will prolong that considerably. At this time about one-third of the PFS events have been reported. In newly diagnosed patients, time to cancer progression depends on genetic makeup of the patient and their cancers. Patients with a certain genetic makeup such as BRCA or HRD signature mutations do very well when they are given at relatively new drug called the PARP inhibitor. However, as Corinne mentioned, only about one half of patients are eligible. Our work with GEN-1 is focused on the patients who do not get a great benefit from the PARP inhibitors. Thus far with only 30% of the data reported, we are seeing the data favoring GEN-1. However, this is only 30% of the data and holds no statistical significance at this time. GEN-1 safety is continuously being evaluated and reported to our data safety monitoring board. And we are pleased that the patients are tolerating GEN-1 well. Most common toxicities related to GEN-1 are abdominal…

Thank you, Nick. Our progress with our proof of concept vaccine development program has been equally impressive. I'd like to invite Khursheed to make a few comments in this regard. Khursheed?

Thank you very much, Corinne. It is great to have you on Board at these exciting times in the company. Now regarding the vaccine program, we have been making steady progress in the development of our PLACCINE technology that is based on a plasmid DNA vector containing multiple antigens of one or more pathogens with an optional immune modulating agent and a DNA delivery system and an adjuvant. This DNA-based multivalent vaccine that is administered without the aid of a device or a virus is potentially advantageous over current vaccines in several ways, including the breadth of immune response, flexibility of the vaccine design, durability of the immune response, shelf life, and manufacturing. In our preclinical studies, a single plasmid -- PLACCINE vector containing the spike antigen of SARS-CoV-2 Alpha or Delta variant, or a combination of Alpha and Delta variant elicited strong IgG and T-cell responses upon intramuscular administration. The neutralizing activity of the IgG response was verified in a pseudo lentivirus cell-based assay. In a live viral challenge study in a mouse model of SARS-CoV-2 previously immunized with our Alpha or Delta variant vaccine, or the combination Alpha/Delta variant vaccine was safe and reduced viral burden in lung tissue by over 90%, demonstrating a robust protection from the vital exposure confirming our early results from a cell-based assay as mentioned above. The magnitude of IgG and neutralizing antibody response or T-cell response to single or dual variant vaccines was comparable to a commercial mRNA vaccine. In pseudo lentivirus assay, the dual antigen vaccine was equally effective against both Alpha and Delta variants. However, in comparison, the commercial vaccine was less effective against the highly mutated Delta variant. These results support our hypothesis that a dual variant vaccine has distinct advantages over a single variant vaccine. The durability studies in mice show the neutralizing antibody titer persist for at least five months, the study in progress and additional time points to be collected in the future. A three-month stability study shows the neutralizing activity of our PLACCINE vaccine is maintained at four degrees centigrade. Additional time points for this ongoing study are being collected in future. Based on this encouraging mouse data, we have begun immunization studies in non-human primates. Immunization of cynomolgus monkeys with a single Alpha variant vaccine administered as a single booster dose was safe and accompanied with IgG and neutralizing antibody responses that suggest our vaccine is working. At early time points, the IgG titers from Alpha variant vaccine were lower than that of a commercial vaccine administered side by side. The NHP study is still in progress for collection of the immune response data after a second boost. In parallel, we are continuing to conduct additional optimization studies for vector design; delivery efficiency, and adjutancy are in progress in an effort to continually improve our vaccine platform. Corinne?

Thank you, Khursheed for that very thorough overview. I'd like to turn the call over to Jeff Church who will review our second quarter financial results. Jeff?

Thank you, Corinne. Details of our second quarter 2022 financial results were included in the press release we issued this morning before the open and in our Form 10-Q, which we filed today before this call. Celsion ended the quarter with $48.1 million in cash, investments, and interest receivable as of June 30, 2022. Adding to our cash position, we anticipate an additional $3.5 million from the sale of our New Jersey net operating losses in the 2022 to 2024 timeframe. In April 2022, we announced a $7 million registered direct offering, which was priced at the market with no warrant coverage. We have sufficient capital resources to fund their operations into 2025 at our current spending rate. Cash used in operations for the six months ended 2022 was $13.4 million, which compared to $7.3 million in the first six months of 2021. It is important to note that this increase was driven primarily by a one-time expenditure in the first quarter of 2022 for the following: interest expense of $4.5 million related to the sale and subsequent redemption of $30 million of Series A and B convertible redeemable preferred stock, and another $100,000 in costs related to the special meeting of shareholders held in February 2022. As discussed in our last earnings call, the special meeting of shareholders was necessary to ensure that the company had an adequate number of authorized shares to continue funding its R&D initiatives. An increase in the number of authorized shares requires a change to a company's articles of incorporation. This change requires at least 50% of total outstanding shares to vote in favor of this action. Due to recent changes in how large brokerage firms like Charles Schwab and TD Ameritrade vote discretionary shares held by them in various customer accounts it has…

Thank you, Jeff. In closing, I would like to thank everyone for joining us today and I look forward to providing exciting updates in the quarters to come. With that, I would like now to open the call for Q&A.

. We'll take our first question from Emily Bodnar with H.C. Wainwright.

Hi, thanks for taking my questions and welcome to the team, Corinne. Maybe I'll start with a question for you and then I have a few follow-ups. But as the new CEO maybe discussed, if you have any updated goals for the company and the pipeline, and if you plan to put more of a focus on vaccine development, given your background at Moderna? Thanks.

Well, thank you very much, Emily. Yes. So as I said, for now it's a bit too early for me to start talking about strategy and future plans for the company. But as you might have heard during my recent remarks, I'm very enthusiastic about the plasmid DNA platform and what it has to offer both in immuno-oncology and in vaccine development. So we definitely -- we wait for the data to turn out obviously both in -- with the ovarian cancer program and the COVID-19 proof of concept program, but more to come in the next quarters for sure, Emily.

Okay, Corinne. And then, just a follow-up, could you maybe discuss if you're going to have any other data updates on the OVATION 2 study this year and what that might consist of? And then on the vaccine program, obviously the major vaccine players are beginning to evaluate boosters with the newer COVID variants like the Omicron variant. So maybe just talk about how you think your platform could compete with that, and if you plan to evaluate newer variants in the clinic. Thanks.

Okay. Yes. Thank you for that great questions. Maybe I'll comment on the last one first on vaccine, and then I'll ask Khursheed to add to what I'm saying. On the vaccine boosters program, yes, obviously, as you know, we are seeking a proof of concept with our PLACCINE COVID-19 program, right? So we do not intend at the moment to compete with the mRNA vaccines that are currently marketed. But maybe Khursheed you want to add to what I'm saying here?

Yes. I mean, I agree Corinne that this platform is for proof of concept and we are using SARS-CoV-2 for that purpose since reagents available, there's a regulatory path, but our intent is to develop a platform not to compete for SARS-CoV-2 vaccine. I would although, like to mention a point that as you are following our vaccine program for about maybe just under two years or so. We have been talking about going after multiple variants from a single plasmid or multiple antigens, and now it's great to see that the commercial players are also going after SARS strategy and hypothesis has been pretty much consistent with how the vaccine field is slowing. But clearly as Corinne said, we're developing platform technology using SARS-CoV-2 no intently compete, however, down the road if we do intend to use as a booster we don't rule that out for SARS-CoV-2.

Absolutely. Thank you, Khursheed. And on your first question, Emily, I'll ask Nick to comment on the availability of new data for the GEN-1 program.

Yes. Thanks very much for that question. As we mentioned in our prepared remarks, we're currently collecting the data we have about 30% of our primary endpoint data that's been collected. And our plan is to put that altogether and analyze it in front of our GOG partners and that we plan to do sometime in the fall. And once we get some direction from the partners, I think that the company may be interested in sharing that with the investors.

Go to our next question from Kumar Raja with Brookline Capital Markets.

Thanks for taking my questions and congratulations Corinne on joining the team. So first with regard to the OVATION trial, what should we expect in terms of the upper limit in terms of the number of patients that would be enrolled in the trial? Will you be stopping enrollment probably end of September? Or how should we think about that? And next with regard to the planned Phase 1/2 trials in combination with the checkpoint inhibitors, how should we think about sequencing there and what are your expectation in terms of the safety profile with the combination? Thank you.

Kumar, these are two really great questions. Thank you. I'll ask Nick to answer both of them, please.

Yes. Thank you again for those questions. In terms of when we hope to achieve meeting our 130 patient milestone that we're certainly setting. As I mentioned again in the prepared remarks we hope to reach a 110 by the end of this month, within the next few weeks. And depending on the enrollment rate reaching a 130, which would give us a much more robust data platform to look at that would take perhaps another three months or so, and again, depending on the enrollment rate. Going on to your next question in regards to combining GEN-1 with immune checkpoint inhibitors. So this is a new area for GEN-1. The way the study is designed is that we're going to have a safety run-in of GEN-1 in combination with a standard dose of the checkpoint inhibitors that were found to be safe. And then we will escalate the dosing according to the safety signals and hopefully announce a safe dose early next year after we start the trial.

Okay. I mean in terms of the safety profile with Avastin what's the expectation there? Thank you.

In terms of a safety profile with Avastin, we do not anticipate any overlapping toxicities as you know, with Avastin, you worry about blood pressure change in cardiovascular. Also, as we try to emphasize with the key advantage of GEN-1, this is a local regional applied treatment. So Avastin is IV, GEN-1 is given intraperitoneally, so there's little drug, drug interaction to be anticipated. So again, we're following a very similar course as with our other studies. We're going to start off with a run-in, safety run-in to look at the initial patients from a DSMB point of view, establish a safe dose and then continue the study from there.

. We'll take our next question from David Bautz with Zacks Small-Cap Research.

Hey, good morning, everyone, and thanks for the update this morning. So I've got two questions about the PLACCINE technology. For the first one, when do you anticipate the next results from the non-human primate study and what types of data should we expect at that time? And then, in addition to COVID, what are the other indications is the company considering for applying the PLACCINE technology to?

Thank you very much, David, for your question. So I'm going to ask Khursheed to comment on both of your questions. But let me -- before I let Khursheed answer, let me say a few things about the development of the platform. Obviously, we are developing the PLACCINE technology as a platform. COVID-19 is a proof of concept. So you are right to ask questions about possible other antigens besides COVID-19. Khursheed, would you like to take the questions, please?

Yes. Thank you, David for your question. I mean, NHP study is an investigational study, and we have two more cohorts to go. And clearly at the end of this study, which is somewhere around by the fourth quarter or so this year, we anticipate to establish immunogenicity of our vaccines in non-human primate. Certainly, we have a very solid mouse data. There's also evidence in so far from this NHP study that vaccine is immunogenic. We would like to further and also is -- in terms of neutralizing antibody has been elicited. We would like to further show that it protects the animal against the vital challenge -- life vital challenge. So evidence of immunogenicity, some durability data, protection against the virus, these are the things we would like to show. And as you know, that NHP studies are kind of stepping a stone towards human clinical trials, and there would be enormous accomplishment to demonstrate that. Along the side, in our preclinical level, we will be continuing to show stability shelf life at four degree centigrade, and also durability in -- from our mouse study complementary to NHP study. And the second question was any additional pathogen, exactly. I mean, that's a great question because we're not married to SARS-CoV-2. It's a proof of concept pathogen we pick because of the pandemic. But clearly since our vaccines are designed in a way that it can have different antigens, but also molecular boosters, molecular adjuvants. So certainly, we could go after more difficult to handle pathogens such as HIV, RSV, where maybe additional component such as epitopes, immune epitopes will be perhaps more important than just an antigen. Monkeypox is another pathogen that we could test our technology that's being developed with SARS-CoV-2 to go against some of those pathogens. And it depends how the -- I mean, these days the pandemics would come many epidemics. We will take a case-by-case basis, but certainly difficult to treat -- difficult to develop vaccines such as RSV and HIV would be one of the target Monkeypox. And flu, of course, every year we have four variants of flu vaccine. And so that's an ideal candidate for putting multiple variants for flu vaccine to single vaccine that's also potential target.

So David, if I can comment further, you hear that obviously sky's limit potentially, but what we are doing first and is that we continue to work on the formulation of the platform, so that we can optimize the immunogenicity of the vector and the persistency, right? As I said in my remarks, we are trying to develop what could be the future of vaccines.

All right. Great. I appreciate your taking the questions this morning.

Thank you.

As there are no further questions at this time, I'll turn the call back to the company for any closing comments.

Thank you. I'll closeout this call. I hope all of you on the line found to be very informative. It certainly represents as you can see the commitment to our research, I call it probable. Hope you feel it too. I'll remind you that our fundamentals are strong as Corinne pointed out and getting stronger. Under her leadership, we expect the future to hold great promise for patients, for the medical community, for our shareholders. And we look forward; I look forward to participating in these calls with the management team. And my promise to you is that we will keep you informed on our future developments and the progress of the company, in this very, very exciting transition to kind of what we believe is the future of medicine under this terrific leadership. So I thank you all very much. I hope you have a wonderful day.

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