Q1 2022 Celsion Corp Earnings Call
Oh yeah.
We're about to begin.
Good day, everyone and welcome to <unk> first quarter 2022 earnings call. My name is Alan I'll be your operator today at this time I'd like to remind everyone that this call is being recorded.
Ill turn the call over to MS. Many coffee of Lifesize advisors. Please go ahead ma'am.
Thank you Alan and good morning, everyone earlier today cellphone issued a press release announcing financial results for the first quarter ended March 31st 2022.
You may access that release on the company's website under the investors tab.
With us today are Michael Tuck in deal Chairman, CEO , and President of Celsius, and Jeff Church, Chief Financial Officer.
Following managements prepared remarks, we will open the call for a question and answer session.
During this call management will be making forward looking statements regarding cellphones expectations and projections about future events.
Generally forward looking statements can be identified by terminology, 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 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 disk.
Gotcha.
Also the content of this conference call is accurate only as of the date of the likewise cast today May 16 2022.
You'll see on 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 Tordella.
Chairman CEO and President Michael.
Thank you Monique.
Morning, everyone.
Joining Jeff and me today are Dr. Nicholas Borys, our Chief Medical Officer, and Christian Dr. Christian <unk>, our Chief Science Officer, both of whom.
Participate in the question and answer session at the end of the call.
Jeff Church of course will review, our Q1 financial results at the end of my prepared remarks.
Well, there's only been a few weeks since our year end earnings call. We have been busy as always and have much two on which to update you.
Our phase two clinical evaluation of Gen. One in advanced ovarian cancer continues to make important progress.
Does our preclinical proof of concept DNA plasmin vaccine initiative, which I'm delighted to say as far as exceeding our expectations.
Let me begin the call with our lead asset Gen. One.
Gen. One is being evaluated in a randomized phase II ovation two study a trial that combines gen. One with standard of care for newly diagnosed ovarian cancer patients with advanced disease.
Subjects are being actively recruited at 22 sites in the United States, and Canada and with over 85% patient accrual. We continue to expect to complete enrollment in the third quarter of this year John .
Gen. One comprises our unique approach to capturing the ability of interleukin 12.
IL 12.
Recruits the immune system in a number of very important ways to fight cancer without exposing the patients with serious systemic toxicities that have kept this promising therapy from the market for over 35 years.
The beauty of our approach is captured in our composition of matter patents.
And that is to harness the capability of the patient's own cells to safely produce therapeutic levels of IL 12 in the local region of the cancer doing so we.
We avoid the systemic complications like cytokine release syndrome for example, a life threatening systemic.
Tory reaction often associated with Super physiological levels of cytokines obtained following recombinant IL 12 treatment.
<unk> two is designed to evaluate Jens Lund promise in patients, whose cancer has too far advanced for immediate surgical removal and importantly, whose immune system has not yet been compromised by prior chemotherapy.
Our first line approach as you know requires patients because it takes more time in many cases.
To enroll a patient and to reach the primary endpoint, but if it makes the only.
It only makes sense to evaluate an immunotherapy in patients with an intact immune system.
Alright.
The progression free survival was improved by a meaningful number of months the patient's outlook for a longer life will almost certainly improve that's our goal.
Question, two is supported with exciting translational data encourage encouraging clinical observations from our phase one ovation study, it's clear that the drug mechanism works as designed.
Dose dependent evaluation of the presence of IL 12 in the fluid samples from the patient's abdomen. It shows a 25 fold increase.
And for interferon Gamma 60 fold increase interferon gamma by the way is an important protein in this complex meal, you've created by the cancer. It has shown to stimulate cytotoxic T cell activity and suppress tumor blood vessel formation starting to cancer.
Central nutrients it needs to continue to grow.
I mean, a suppressive biomarkers in the same patients are reduced by clinically significant amount as a see a 125 the cancer antigen closely associated with ovarian cancer tumor activities and a recognized prognostic indicator of disease progression.
Small patient numbers, but clinical observations nonetheless, all trend in the right direction in the ovation, one study, including a progression free survival.
Objective tumor responses surgical resection scores and chemotherapy response of course get all of the right direction.
Well, we are further encouraged by the support that we received by the key opinion leaders in the field as we have said in the past the gynecologic oncology groups leadership expressing an interest in Gen. One is partnering with us to develop a registration strategy to improve gen one's time to market should of course, our trial be successful interests.
From another major comprehensive cancer Center has resulted in a phase II protocol combining gen. One with Avastin that was recently accepted by the FDA. We expect this phase II study will be partially supported with non dilutive grants.
All in.
The medical community's interest should provide gen. One with a substantial commercial springboard gotta should our study is successful.
And we continue to be excited about this progress potential would be meaningful for patients with ovarian and other intraperitoneal cancers. We look forward to completing enrollment in the eventual readout of PFS because all they should to later next year.
Now moving on to our proof of concept vaccines program as you know so all she had to recognize some of the potential limitations of the highly effective mrna vaccines well before the data supporting the emergency use authorization or EUA for COVID-19 was announced.
Among them, we can see the formulated plasma DNA approach that might have advantages in a number of areas and I'll just highlight three of them first the potential for waning protection of the as a function of time, we know that the protective capability of mrna vaccines as measured by neutralizing antibody titer.
Steadily worse out after six months.
I think a DNA vaccine could.
Improve that have a better durable durable protective capability over of mrna.
Second the inherent nature of a pathogen to rapidly evolve.
As we see with the many variants that are spun out of the wild type COVID-19 in a very short period of time.
The DNA vaccine has the potential to mitigate.
The this this problem associated with rapid evolution of the virus.
And lastly, a number three the minus 70 degrees storage temperature issue that makes global distribution challenging it's not expensive.
Yeah.
Our goal has been and is to demonstrate that our approach with vaccine based set of plasmid DNA incorporate into a synthetic delivery polymer and an adjuvant can address these limitations when compared to the authorized number.
Many vaccines a.
Our progress to accomplish this unless the 16 months theres been nothing short of remarkable.
We've designed and evaluated some 40 plasmid DNA vectors, some expressing a single Varian anther Gen. Other expressing antigens with up of multiple viral variants.
We've evaluated multiple trans Christmas transcriptional all of us in the gene expression cassette.
With a goal of enhancing plasmid gene expression activity.
We've evaluated multiple delivery formulations and vaccine adjuvant and refining the top candidates to improve vaccine immunogenicity.
We've leveraged our QC lab experience in bio SA capability to ensure our case, our ability to properly and timely evaluate in vitro and in vivo data from well design experiments from our in house five area.
In less than two years the progress we've made is undeniable.
Data from our early vaccine concepts was highlighted at the World vaccine Congress held in Washington D. C. In April these data foretell a platform that can allow for rapid design and development of a vaccine with our design capability to target one two or more different pathogen variance in a single vaccine formulations.
We presented preclinical data that has shown a single vaccine that elicits an immune response as measured by it antigen specific immunoglobulin G and neutralizing antibody levels against two variants.
Our confidence in the DNA approaches based on our long experience with their applause.
And our synthetic DNA platform.
And with the Gen. One we.
We know for example that DNA will actively producing I suggest for a week or more and perhaps even longer in skeletal muscle.
Hypothesize that longer time of expression will result in more durable protection against the subject pathogen, What's Hussein who also see.
We know that Gen. One is stable for up to five years at minus 20 degree C.
And workable for weeks at normal refrigeration temperatures, we expect to see the same from our vaccine formulation.
And we are moving the program forward quickly and anticipate having proof of concept data by the middle of this year mid 2022 from two COVID-19 Challenge studies that are currently in progress.
All subjects in the treatment arms and these studies will receive a minimum of two inoculations, a prime and a boost of our experimental vaccine candidates than the animals will be exposed to are challenged with the life COVID-19 virus.
The first study is a mouse model of evaluating two different doses of a vaccine candidate with a plasma DNA vector expressing both the alpha that's the D 614 G. Various.
European variant and the more advanced Delta vary than the second study.
Is where we're evaluating our vaccine candidate in a nonhuman primate model.
Evaluating two different doses of the candidates expressing antigens of a single variant the D 614 G. Various that's the European variant.
This experiment included arm that will be followed for a minimum of six months the goal of which is to establish the protective capability of our vaccine candidate in six months and beyond.
Durability results will be available late in the fourth quarter of this year. Importantly. This study also has an mrna comparator arm.
And we look forward to the data.
Now, let me move on to some of the work that we've been doing operationally to ensure and enhance our development capabilities.
Yeah.
First we are making a minority investment in a small private company that offers an array of gene editing gene modulation and other expression tools and services. This company has the technology to rapidly design and development plasma DNA antigen vectors for both our vaccines and our immuno oncology interests with this release.
<unk> seven we have a successful proof of concept.
We expect to have the capability to construct and develop vaccines against a range of vaccine targets and their eventual variance.
Along the same lines, we are executing plans for in house plasma manufacturing.
And we're doing this economically this capability will cover our clinical needs for both Gen. One.
And plasmid products, while providing both at a cost and a flexibility and with flexibility advantages to successfully enter the commercial markets are kind of silly of course successful trials and regulatory approvals.
I'll close my prepared remarks by saying that our balance sheet is strong.
With over 47 million in cash at the end of the first quarter add to that the net proceeds from our equity raise in April a six and a half million and nearly three and a half million in planned future sales of our state of New Jersey net operating losses, we have a cash position that carries us well beyond the PFS readout for our phase two ovarian.
Cancer study and among other anticipated important value creating milestones.
We are excited and excited by the opportunity before us and believe we are on the path towards scientific and commercial success with two potential block Buster approaches where strategically and methodically building the capabilities internally for success deepening our D bench and manufacturing capabilities along with a.
Our longer term view that our approach has meaningful commercial opportunity with that now.
I'll turn the call over to Jeff Church for a review of our financials, Jeff. Thank you Michael details of our first quarter 2022 financial results were included in the press release, we issued this morning and in our Form 10-Q, which we filed today for this call.
<unk> ended the quarter with $47.3 million in cash short term investment and interest receivable as of March 31, 2022 in April we raised an additional $6 5 million in net proceeds from the sale of equity. This offering was done at the market and had no warrant.
Also adding to our cash position, we anticipate an additional three and a half million in sale proceeds.
Our new Jersey net operating losses in the 2022 'twenty 'twenty three time frame. We believe we are in an excellent position with respect to liquidity to support us through several important value, creating milestones we have sufficient capital resources to fund our operations into the second quarter of 2025 at current spending projections.
Let me now turn to a review of our quarterly financial results for the quarter ended March 31, 2022, Chelsea I reported a net loss of $10 $5 million compared to a net loss of $5 $7 million in the comparable prior year quarter.
The loss in the current quarter is not typical and should not be annualized because a number of one time expenses were incurred which related primarily to the special shareholders meeting in February 2022.
Operating expenses were $6 million for the first quarter of 2022, which represented eight.
$500000 or 8% increase from the $5 5 million in 2021.
Research and development expenses were $3 1 million for the first quarter of 2022.
Also an increase of about half a million dollars or 20% from the $2 6 million in the comparable period in 2021.
These costs were primarily associated with the development of Gen. One to support the ovation two study as well as development of the platform DNA vaccine technology platform, which increased to $1 $9 million in the first quarter of this year compared to one 4 million in the same three month period in 2021 cost.
He added with our now close Optimist study $100000 in each of the first quarters in 2022 and 2021.
Other clinical and regulatory costs were $800000 for the first quarter of the 2022 and 600000 in the prior year quarter.
General and administrative expenses were $2 $9 million in each of the first quarters of this year and last year.
Lower non cash stock compensation expense of approximately $400000 was offset by higher salaries and benefits higher professional fees and higher director and officers insurance premiums.
Non operating expenses increased to $4.6 million in the first quarter of 2022, which compared to $300000 in the comparable prior year interest expense increased by four and a half million dollars, resulting from the sale and then the subsequent redemption of $30 million of series, a and B convertible with.
Nimble preferred stock during the first quarter of 2022.
With that I'll now turn the call back to Michael Thank you Jeff.
There's always a little dog.
Now I'd like to thank everyone, our patients coalition shareholders and board members for their unwavering support as we proceed in our goal of developing our platform technologies therapy class and gene mediated immunotherapy in Pliocene, our vaccine initiative, we look forward to providing you with exciting updates and with that I'd like to now open the call for questions and answer.
Operator.
Thank you, Sir if you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Once again that is star one if you'd like to ask a question.
We'll take our first question from Emily Wagner with H C Wainwright.
Hi, Thanks.
Yeah.
Good morning, Kevin Good morning.
Do you plan on providing any other R&D already election rates or our data this year.
So he has to work client and then could you just maybe put in context the type rate twice that of the person that improvement that you've seen so far in the ovation two study and how that makes you more confident in hitting the PFS endpoint.
The 27% improvement is in our zero resection scores right.
That's what you Doug.
Sure.
I'd like to give Dr. Dr divorced.
Thanks, very much for that question Emily.
So I guess through your question is how does that translate into our confidence number one we we get that data directly from the surgeons that are doing that are involved in the study and that's something that they haven't.
Experienced in their routine practice, so they're very happy to see these patients are have such a nice response as a result after the surgery and there is data in the literature to show that patients with our zero also do better long term right now we're at a point in our study that.
Only the PFS data is just starting to come in we just have a just a handful of that data at this point, we're monitoring out throughout the year and once it comes to a to a point that the company feels that there is robust data for public release, that's what I guess, we will show it but theres different conferences and meetings coming up and we meet with our investor.
Gators the regularly to review the data and and we hope to share that with you soon.
Yeah, and Emily just back to your question.
Our zero reporting.
Investigators become confident in the results from the surgery, we compile it.
All were likely to release some more data later this year.
But the PFS data the final P. S. F. PFS data is not due until sometime mid next year.
I apologize for stumbling here, a little bit as you probably can tell from my voice I have a sinus infection.
It's not COVID-19, we arguably tested me multiple times this morning.
Oh, I hope not [laughter].
And just one other question.
Well done while none of US study one line of therapy are you planning to evaluate.
But kind of.
The more post platinum lobbying or.
And then starkey.
I believe this is Nick Borys again, Oh I'll take that question as well that study is going to be very much modeled after our current ovation. Two study as Mike mentioned in his introductory remarks, the idea of adding avastin or bevacizumab to Gen. One.
It is data that we developed from our Huntsville development program and it was very exciting. So once we show some activity and safety and efficacy with Gen. One by itself. In addition to standard chemotherapy in first line treatment, adding some other.
Technologies to it could only enhance it so we hope to prove that in the near future by the addition of a vast and so we're pretty excited about that.
Yeah.
Okay, great. Thanks for taking the question.
Sure.
Emma.
All right next we'll go to Kumar, Russia with Brookline capital.
Uh huh.
Uh huh.
Hi, I'm sure been due for Kumar.
That's when the update.
So for the COVID-19 vaccine program what are the next steps for potential approval.
Are you thinking in terms of conducting clinical trials or you know can you share some timelines that thank you.
And good question so in the end.
I'm delighted to respond to this one.
So our initial thought.
Was that.
Evaluating what we perceive to be some of the limitations of the messenger RNA approach and again this is before data.
Before the emergency use authorization application.
We Oh you understood that there is some there would be some potential.
Limitations that I outlined three of them.
Oh.
<unk> temperature that's a.
Commercial issue.
A rapidly evolving variant and the relative and flexibility of our.
Developing.
Related mrna.
Specific vaccines.
And so.
We we thought it was important for the company not knowing what we know about DNA vaccine.
The DNA plasmid approach are important for the company to.
Evaluate what we thought was a potential mrna better.
So we embarked on this program initiative to develop the <unk>.
Or to a proof of concept.
To evaluate whether I have our hypotheses were correct or not.
When we believe that we will show and these are areas of limitation that improve at a improvement in the vaccine.
And and so on.
As a small company like ours are coming up against the Big Juggernauts, who have been in in.
In the market.
A COVID-19 vaccine it'd be very difficult for us to do that a lot of.
So we're hoping that once we have proof of concept.
Through these NH Pea studies that will.
Have a.
Collaborator co developer.
For the.
Our ongoing clinical program.
But more importantly, once we once we have a <unk>.
Stablish this platform capability of a DNA approach.
We look to evaluate.
And develop vaccines for other unaddressed passengers.
So that's really our goal is to establish the platform.
Hum.
Develop a relationship with a deep pockets large pharma who's worked in the area of <unk>.
Vaccine commercialization and to evaluate the development of of vaccines for other unaddressed.
Potentially pandemic pathogens.
Okay. Thank you yeah that was useful.
And just one last question, what kind of share with regard to the Commodore studies ongoing in bladder cancer.
Thank you.
Yeah. So what I can tell you for the I just left the NIH I spent some time with her.
Investigators there last week.
Well the program is not I mean that clinical program has not yet been initiated.
Preclinical data supporting a bladder cancer trial is.
Is quite robust they are very very interesting, we expect that the NIH on the support from the company. We will begin a bladder cancer trial early next week or early next year.
Okay.
Okay. Thank you.
Taking my questions.
Yeah.
Alright, and next we'll go to David Bautz with Zacks small cap research.
Like David Hey, Good morning, everyone and thanks for the update this morning.
So I got the two questions on the Plessey technology I'm. The first one is do you anticipate a superior or any type of different T cell response to our DNA vaccine as compared to the mrna vaccine.
And then kind of following up on next steps do you foresee any type of CMC issues manufacturing issues that will need to be handled before the vaccine can move into the clinic.
But.
Christian do you want to take the first part of that question. Please.
Sure So and DNA is David historically known to elicit very potent image.
M. A C class one response, which is really a T cell response.
So that's that's clearly a one advantage.
We expect to have.
More potent T cell response also mrna also.
So did that second is the durability of gene expression.
From DNA is much longer than.
And then MRO name irrespective of the antigen or the gene. So we anticipate a longer exposure of the gene to a DNA approach versus MRO knee could also maintained a prolonged T cell response that normally means off earlier on.
The kinetics. So these are the two lunches advantages to more potent and more durable goods.
With the DNA approach.
Okay said cover the question for you David I can they can address the CMC portion of that if you'd like.
Yeah, no that was good for the first part.
On the CMC side, we do have a oh well developed supply chain are actually supporting our Gen. One program, we have a manufacturer of plasmids.
And the polymers for formulating the the Gen. One Gen one therapy.
Along with the.
Our fill and finish operation that's quite a robust. These are all third party operations.
We expect to be able to leverage those relationships to produce a commercial vaccine in the meantime.
As I mentioned in my remarks, we're developing an in house capability to produce plasmids, probably that in sufficient quantities to support a commercial launch.
In all cases, we will have to we have to increase our capacity or the licensee or our collaborator would have to increase their capacity to support a global launch.
But we do have in place the capability to be able to.
Produce significant quantities of a.
Of all of our formulated vaccine.
Alright sounds good thanks for taking the questions.
Thank you.
Yeah.
Alright, it looks like we have no further question at this time, so I'd like to turn it back over to Mr. Michael Junior for any closing remarks.
Okay, well again I want to thank everyone for joining us today on the call. This morning.
I hope you see from our remarks that the company is making a great deal of progress.
Bolton our M. R gene made a gene mediated immuno oncology program in ovarian cancer.
Very exciting results to date closing in on completing enrollment in this important randomized phase two study the study that would give us a great deal of information with regards to next steps for a registrational program and beyond.
And as I pointed out earlier.
The progress, we're making remarkable progress, we're making in advancing our vaccine initiatives through proof of concept now coming to fruition.
As we're expecting data from our <unk>.
Challenge Studies later this later this year.
But all in all we're very very excited with the progress that the company is making we hope that you are too and we look forward to keeping you informed and updated as events occur. Thank you very much and have a good day.
And that does conclude today's conference we thank everyone again for their participation.
[music].
Yeah.
Yeah.
Yeah.
[music].
Uh huh.
Okay.
[music].
Yeah.
Yeah.
[music].
Yeah.
Hum.
Yeah.
[music].
Okay.
[music].
Yeah.
Okay.
Okay.
[music].
Okay.
Yeah.
[music].
Yeah.
[music].
Yes.
[music].
Yeah.
[music].
Yeah.
[music].
Okay.
[music].