Imunon, Inc.
Q1 2021 Earnings Call Transcript

Published: 14 May 2021

[Operator:]

Please stand by. Good morning. My name is Olivia and I will be your operator today. At this time, I'd like to welcome you all to Celsion’s 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 this time, I would like to turn the call over to Kim Golodetz. Please go ahead.

[Kim Golodetz:]

Thank you and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Celsion Corporation's first quarter 2021 financial results and business update conference call. As has been Celsion’s practice and as noted by the operator, prepared remarks will be followed by a question-and-answer session.

[Michael Tardugno:]

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 Celsion’s recent financial results; and Dr. Khursheed Anwer, 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 Borys, 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 Celsion 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 fundamental, our company is sound. Here are some reasons to support that. TheraPlas, our lead clinical product platform technology is based on proven science and is supported by compelling data from our - 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. PlaCCine, a proprietary and smart adaptation of our TheraPlas technology is a next generation vaccine platform designed with multiple viral antigens and within 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.

[Jeff Church:]

Thank you, Michael. Details of Celsion’s first quarter 2021 financial results are included in the press release we issued this morning and in our Form 10-Q which we filed today before the market opened. The company ended the first quarter with $54.6 million in cash and cash equivalents and a receivable for the sale of New Jersey net operating losses. We raised an additional $13.9 million in net proceeds from common stock sales during the early part of the second quarter. We also announced earlier this week that we received $1.85 million in net cash proceeds from selling approximately $2 million of our unused New Jersey net operating losses which is the receivable we booked at the end of the quarter. Over the past three years, we have sold $15 million of net operating losses equivalent to almost one full year of operating expenses without any dilution to our shareholders. And we have an additional $5 million of unused NOLs available to the company for sale in the future. At current spending levels, we have sufficient cash to fund operations through 2024. So, as Michael indicated, we have sufficient runway to see us through several value creating milestones. Let me now turn to a review of our first quarter financial results. For the quarter ended March 31, 2021, the company reported a net loss of $5.7 million or $0.09 per share. This compares to a net loss of $5.1 million or $0.20 per share for the quarter ended March 31, 2020. Operating expenses were $5.5 million in the first quarter of this year which is up $600,000 or 13% from the operating expenses of $4.9 million in the first quarter of 2020. Breaking this down by line item, research and development expenses were $2.6 million in the first quarter. This compared to $3.1 million a year ago. It's a decrease of about 16%. Clinical development costs for the Phase III OPTIMA study decrease by about $600,000 from the prior year quarter. Research and development costs associated with GEN-1 to support the OVATION II study as well as the development of the PLACCINE DNA vaccine technology platform increased to $1 million for the first quarter of 2021 compared to $900,000 for the same period last year. Other costs related to the company's clinical development programs decreased by $200,000 in the first quarter of this year due to lower regulatory and manufacturing costs primarily related to the ThermoDox program. General and administrative expenses were $2.9 million for the first quarter of 2021 compared to $1.8 million for the first quarter of 2020. This increase is primarily attributable to higher non-cash, I emphasize, non-cash stock compensation expense of $800,000, an increase in professional fees of $200,000 and an increase in premiums on our director and officers insurance. Net cash used for operating activities was $4.7 million for the first quarter of 2021 compared with $5 million for the comparable prior year period. Total cash provided by financing activities was approximately $40.5 million in the first quarter. This resulted from $39 million in net proceeds from the sale of common stock and $1.5 million from the exercise of common stock warrants. Before I turn the call back over to Michael, I wanted to highlight our recent proxy filing. The company's annual shareholders’ meeting is scheduled for Friday, June the 4th. And shareholders of record at the close of business on April 5 will be asked to vote on four proposals. Three of these proposals are routine and require only a plurality of votes cast in favor to pass. However, the past proposal three requires a favorable vote by more than 50% of the outstanding shares that outstanding shares stood at approximately 86.6 million shares on the record date. Proposal three will increase the number of authorized shares from 112.5 million shares currently to a proposed - 172.5 million shares. The Board of Directors and management believe the proposed increase in authorized shares will provide the company with the ability to support our future anticipated growth and will provide us with greater flexibility to consider and respond to business opportunities and needs as they arise which would include stock-based acquisition of new technologies or product development candidates as well as equity financings. The availability of additional shares will permit the company to undertake certain of these actions without the delay and expense associated with holding a special meeting of stockholders to obtain approval each time such an opportunity arises. With that, I'll turn the call back to Michael.

[Michael Tardugno:]

Thanks, Jeff. And I just want to say publicly your work to strengthen our balance sheet with a very investor-friendly approach is well appreciated.

[Jeff Church:]

Thank you.

[Michael Tardugno:]

I also want to just reemphasize what Jeff just noted, please vote your shares. As Jeff points out access to additional capital to support our research is dependent upon your approval to increase our authorized shares. It's never been easier to vote your shares. In your proxy, you have instructions on how to vote via the website. You can also mail in your ballot. And if you've lost your ballot, let me know if you have a pencil, please take down this number. You can call us. We'll get you another one, telephone number 609-896-9100 that’s 609-896-9100. Please do vote your shares. I want to close our prepared remarks today by underscoring that Celsion holds great potential to benefit patients in need and to create value for our shareholders. So as I've said - I've said often, we have a highly capable team of researchers and clinicians who are committed to bringing lifesaving medicines to market. While we look ahead to our anticipated accomplishments it's helpful to remind you of all of the assets that reside within your company. We have two versatile technology platforms and the exciting area, nucleic acid therapy and vaccination. Our competency spanned the scope of what's required to rigorously evaluate these drug and vaccine candidates. Our relationships with the regulatory authorities and medical advisers in the medical community both in and outside United States are as good as they get. And with smart spending and prudent cash management, we have sufficient capital to deliver on our promises. So with that overview of our business and our financials, I'd like to now open the call to questions. Olivia, would you open the lines please?

[Operator:]

Of course. Our first question is coming from Kumar Raja with Brookline Capital Markets. Please go ahead.

[Kumaraguru Raja:]

Thanks for taking my questions. First, with regard to the PLACCINE platform maybe you can tell us about what needs to be done, what stage are we right now, what needs to be done before it can be dosed in humans? And will this be an intramuscular injection? And what do we know about the expression of this - uptake of this plasmid as expression in those cells?

[Michael Tardugno:]

So, Khursheed Anwer is on the line. Khursheed, I want to say a couple of things about the - or to answer these questions and maybe you can finish up with some answers to the questions. So, we're still in early phase development, Kumar. The preclinical work that's ongoing as our goal is to establish proof-of-concept. And once we have sufficient proof-of-concept, our intention is to meet with the agency to discuss the requirements for an IND. And our expectation that is once we have an understanding of those IND requirements to complete the preclinical work to support a clinical program. We expect - our hope is to have a meeting with the agency late in the third early in the fourth quarter this year and to move forward with an IND application around the end of the year or early in the first quarter of next year. With regards to methods or routes of administration, we're very encouraged and we think that we’re evaluating multiple approaches. And with that, what I'd like to do is ask Khursheed to jump in. Khursheed?

[Khursheed Anwer:]

Great, thank you, Michael. Thank you, Kumar, for your question. Yes, as Michael said, we're developing vaccines that are based on route of delivery that could be easily and conveniently administered. So, we’re looking at intramuscular and also other routes such as subcutaneous and eventually intranasal as well. The intramuscular program is more - so injecting DNA, our formulated DNA in the muscle would lead to uptake by muscle cells. Both the muscle cells but also the DNA is taken up by - to the lymphatic system into the lymph node. We have seen that from our GEN-1 plasmid. So, essentially, we believe that muscle will express the protein on its surface through MHC Class 1 molecule that leads the helper cells and T-cell-mediated responses so these antigens could be secreted and then antigen-presenting cells could also pick it up and lead to the B-cell response, antibody response. And then the formulation could itself be taken by dendritic cells outside the muscle. So, it's a multiple cell types that could be involved in picking up the DNA and expressing the antigen and causing downstream immune responses.

[Michael Tardugno:]

Before - can I just - I just like to add a little bit more on it. So, the big breakdown here, Kumar, is what I spoke about in my prepared remarks. So, we have a single plasmid that's encoded with multiple promoters. It's encoded for actually four proteins, two of which form the basis for IL-12. And now we're seeing the expression of the subunit of the spike protein and also the M- antigen. This is a - I mean this is a breakthrough we think in plasma development. And if we're right, our next sequence of experiments to demonstrate the presence of antibodies and eventually neutralizing antibodies should tell us whether or not our proof-of-concept is ready to move forward into some pretty well-designed animal models. So, we're excited frankly to have this breakthrough that shows a single plasmid with this highly capable potential.

[Kumaraguru Raja:]

Okay, thanks. And moving on to GEN-1 in terms of enrollment, what kind of variations are you seeing in different sites? You talked about this a little bit in the prepared remarks. So how are you trying to optimize enrollment in these sites?

[Michael Tardugno:]

Yes, so, I think pareto is a concept that's not unique to mathematics. I mean it’s just - it plays itself well in virtually every clinical study that we've been involved with. So, we get about 80% of our patients from about 20% of the sites. We currently have 23 sites are active, one more in Canada to be activated. Our goal with the discussion with the GEOG Advisers this afternoon is to explore if there are other network - other opportunities within their network to add additional sites. The recruiting trajectory - l mean, call it that up until the last two months, March and April, had been very encouraging. There is - there are some discussion among our investigators that the - that COVID-19, some of the restrictions associated with controls that hospitals been put into place and maybe some of the anxiety among patients is limiting the number of patients that they've seen. So, as I said, we've seen a disappointing April. But May seems to be rebounding very nicely. So I'm going to ask Dr. Borys to comment here. But I think we're very much back on track to complete enrollment before the end of the year. And we've got about 60 or more patients to recruit in that time period. About 65 patients recruited in that time period. And we think the chances of us achieving that objective are pretty good. So, Nick?

[Nicholas Borys:]

Yes, the only thing I could add to Mr. Tardugno’s comments are that we are also in discussions with employing professional agencies that specialize in patient recruitment to do direct patient outreach. And also, we're working directly with investigators. We're now increasing our frequency that we communicate with sites, provide more information about the studies. And it's also as Michael mentioned in his prepared remarks, once some more data comes out into the field regarding the activity of GEN-1 in our OVATION 1 studies. We think that that will gain more attention not only with our investigators but also with potential patients. So, with all those activities going on, I think we're going to see a nice bump in our recruitment as time goes on.

[Michael Tardugno:]

Yes, we don't want to leave you with the impression that we are facing a study that is failing by any means. I think I just want to point out, the trials and tribulations of recruiting patients particularly in this COVID-19 environment are not unique to the company. And we think, I mean, honestly, Kumar, we think we understand these dynamics and we don't expect any significant delays in getting this study fully enrolled.

[Kumaraguru Raja:]

Okay. And finally with regards to GEN-1 and combination plans, what preclinical data or data analytic measure do we have with regard to, you know, combination with Avastin or with the immuno-oncology agents? And initially, what would be the plans in terms of, you know, moving forward with this combination? Thank you.

[Michael Tardugno:]

So okay, Khursheed, I think you'd be very excited to talk about our - some of our combination data, preclinical data.

[Khursheed Anwer:]

Yes, of course. Kumar, so we have done some extensive preclinical investigation of combination therapies or genuine combination with chemotherapeutic agents have been published and that form the basis of the ongoing study. With Avastin, we found really interesting results with Avastin by itself at multiple doses was effective in controlling the growth of ovarian cancer in mouse - in a mouse model. When we combined the GEN-1 the synergistic response and in fact at much lower doses of Avastin we got good response that could perhaps down the road suggest that Avastin dose could be lowered. But clearly, there is a convincing data in multiple clearly, there’s a convincing data in multiple set of experiments that Avastin plus GEN-1 combination is synergistic chemotherapy we have shown before. There are some data with checkpoint inhibitors, so not with us, but with IL-12 in different forms of delivery has been shown to synergize. So, I think the point here is that if a GEN-1 treatment of intraperitoneal cavity with ovarian cancer, we have seen a conversion of a very immunosuppressive, highly immunosuppressive environment into immunostimulatory. Now, that would be conducive to any immunotherapeutic agents that require that condition, for example, checkpoint inhibitors in areas where they don't work. It's because to live in a suppressive environment, T cells are not there, they're not active. So, we have still don’t know the IL-12 does that. So, I think based on these immune profiles that we have seen with OVATION data, some of these combinations are logical such as checkpoint inhibitors and Avastin, as I told you, we have data ourselves. So, these are the possible avenues or venues where we could be thinking about developing GEN-1 down the road beyond the chemotherapy combination that's in progress.

[Kumaraguru Raja:]

Thank you so much.

[Michael Tardugno:]

Thank you, Kumar.

[Operator:]

Thank you. That will conclude today's question-and-answer session. Mr. Tardugno, at this time, I will turn the conference back to you for any final remarks.

[Michael Tardugno:]

Thank you, Olivia. I just want to say again thank you all for your time this morning. At Celsion, we continue to be driven by our commitment to bring new medicines and now, vaccines, to patients in need. And this is exemplified by the work of our talented scientists and clinicians and our technical staff and our support people. We are fully committed and we absolutely appreciate the support of our investors and the investment community. We look forward to keeping you apprised of our progress throughout the year. And we'll speak to you again when we report our 2021 second quarter financial results in August. In the meantime, don't forget, we have our Annual Shareholder Meeting on June the 4th. Please do vote your shares. Thank you very much. Have a good day.

[Operator:]

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