Recent Questions Posed to Celsion Management

Many people have asked about the specific questions I recently sent (on 12/8 to be exact) to Celsion management. See below for these 14 questions, which includes one very recent addition to the list (for a total of 15 questions). During a recent discussion I had with Celsion CEO Michael Tardugno, he made clear that the company would seek to address them using the proper channels (i.e. a press release, conference call) in the near future, which complies with full disclosure rules amongst others. As I have said before, the management team has always been highly accessible and transparent to me, and I trust that they will address these questions.

1. Let’s put this issue to rest once and for all, if I may. Dr. Borys and Jeff Church recently (12/6 phone discussion) mentioned to me that the decision to pursue an additional interim look at the data was driven entirely by the company. Can you provide any additional clarity as to what specifically you meant when you said the company has “sufficient rationale” to do so in the PR? Many of us inferred from the PR that this was making an allusion to the strength of the data, and perhaps, being very close to the boundary.
2. The interim PR specifically said there would be no “statistical penalty” for doing another interim look. Many fellow shareholders with a strong grasp of statistics have stated that would be impossible, since alpha would have to be spent in another interim look. What exactly did you mean by this?
3. [This was sent to Mr. Tardugno on 12/20, following our discussion, of course, after the recent CEO letter was released with different verbiage around the statistical considerations of potential second interim analysis] It's clear from the recent CEO letter that the "no statistical penalty" verbiage from the interim PR was changed to "de minimis". I take this as reinforcing that the alpha penalty is negligible. Is the alpha spent on the next interim any less than the normal Lan-Demets because the company is able to "buy back" the alpha spent on the previous interim and redistribute it the new interim?
4. Without getting into details that you cannot provide, what is the high-level process for the company to seek an amendment to the SPA to conduct the additional interim look? How long should this process take, and will the company issue a PR when/if the SPA is amended?
5. Considering that doing another interim has real costs in terms of time, alpha, and potential global regulatory relationships, is it even worth doing another interim look, when final data would presumably be only 6 months away?
6. In your opinion, when would a second interim look take place (i.e., after how many events? 300? Etc.), considering the recent rate of PFS events? Is it within the realm of possibility that a second look would be dependent upon a specific number of OS events, rather than PFS events?
7. Is it within the realm of possibility that Thermodox hit its PFS endpoint at the interim, but the DMC nevertheless decided to recommend a continuation of the trial due to other factors?
8. Coming out of the interim analysis, are you still as confident as ever in the market potential of Thermodox, specifically in HCC?
9. If you had to play devil’s advocate and think of reasons why the HEAT trial would not succeed, what would it be? As I have made clear in prior assessments, my own devil’s advocate view is that intrahepatic distant mets unrelated to the local Thermodox effect, captured by virtue of the PFS endpoint, may put the trial at Jeopardy. Alternatively, some have mentioned improvements in RFA alone that may put the success of the trial at risk. What keeps you up at night most in thinking about potential scientific reasons why the HEAT trial would not succeed?
10. MANY shareholders, including myself, have wondered why the company recently raised money, particularly when only emphasizing on the Q3 call to have sufficient cash needs for the remainder of 2012? Obviously, we don’t want to “scrape the barrel”, but the company should have had a good cushion (~18M). While the company might argue that cash is needed to have “leverage in discussions with potential partners”, others would submit that the need for cash means a partnership is a long ways away. How do you reconcile those views?
11. You were quoted in the Q1 conference call as saying you were “confident” a 2nd deal could be made following the interim analysis. In hindsight, were you assuming a halt/early NDA in mind when you made that comment, or do you still think that elusive deal is within immediate reach now that the interim is complete?
12. When the topic of potential competition for Thermodox in liver cancer arises, I have to say that I disagree with the company’s assessment that there is nothing in the short or intermediate horizon to compete with Thermodox. As you know, in the STORM trial, Nexavar is being studied as an adjuvant to local ablation, with data I believe due by end of next year. Outside of Nexavar, the company must believe there is inevitably going to be competition between combination TACE + RFA treatment, particularly as doxorubicin-eluting beads (DEB) TACE becomes much more common. Is it not true that absent Thermodox, the standard of care is evolving to RFA plus TACE for the population being studied in the HEAT trial? Coming out of the symposium in Hong Kong with your clinical investigators, the company must have a further refined view of what Thermodox will be competing against in real-world clinical practice.
13. What is the status of the DIGNITY Trial, and what tradeoffs is the company considering in deciding to bring Thermodox to earlier line use vs. expanding to other cancers vs. keeping the protocol as planned originally?
14. What is the status of the MRI-HIFU bone mets trial? R&R, in a recent analyst report, put the start date at Q4 2012 for that trial, which is WAY off what the company has said previously. Where do you stand in the IND process? Is the hold-up entirely on Philips’ end due to questions around Sonalleve?
15. Lastly, while I know you may not be at liberty to speak to this, does the company have any comments about the recent Mangrove allegations of bribery? My own assessment is that standstill agreements of the kind offered to Mangrove are commonplace between companies and large shareholders. Those were some very harsh words, and the floor is yours to provide any additional comments.

Clearly, these questions can be prioritized in terms of those that shareholders probably care most about, but either way, I look forward to responses to as many of these as possible in upcoming releases from the company. I remain as confident as ever in the prospects of ThermoDox, and expect the company to execute with laser focus on hitting critical milestones in the next 12 months. Unquestionably, 2012 will be make or break for Celsion, and you can count that I will be covering the company with the same level of rigor as I have done before.

I hope all of you enjoy the holidays, and as always, please feel free to leave any questions or comments.

Best,
Siavoche