Good morning. My name is David and I will be your conference operator today. At this time, I would like to welcome you to Celsion’s Third Quarter 2016 Earnings Conference Call. All lines have now been placed on mute to prevent any background noise. Following the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I’d like to turn the call over to Mr. Jeffrey Church, Celsion’s Senior Vice President and Chief Financial Officer. Please proceed Mr. Church.

Thank you. Good morning, everyone, and thank you for joining us today to discuss our third quarter 2016 financial results, which we announced this morning before the market open. Today’s call will be archived and the replay will be available beginning tomorrow and will remain available by phone until November 24, 2016, as well as available on Celsion’s website for 30 days. Before we begin the call, we wish to inform participants that forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risk and uncertainties involving without limitation, the risk of clinical failures, delays or increased costs; unforeseen changes in the cost of our research and development activities, possible acquisition of other technologies, assets, or business and possible adverse action by customers, suppliers, competitors, regulatory authorities and other risks detailed from time to time in the company’s periodic reports filed, including our most recently filed Form 10-Q with the Securities and Exchange Commission. At the conclusion of today’s formal remarks, we will open the call for questions. I’d now like to turn the call over to Mr. Michael Tardugno, Celsion’s Chairman, President and CEO. Mike?

Thank you, Jeff. Good morning, everyone, and thank you for taking the time to joins us this morning. Today I’m with Dr. Nicholas Borys, Celsion’s Chief Medical Officer and Jeffrey Church from whom we’ve just heard our Chief Financial Officer. We’re delighted to have the opportunity to update you on our progress, which by any standard of measure, I hope you agree with the me has been substantial, not only this past quarter, but certainly over this past year. For those you who follow Celsion, you know, that we’re an oncology focused development stage company with three platforms, two of which are product candidates at clinical stage. Today’s call will focus on our two incredible important clinical trials, the OPTIMA study, our global Phase III trial of our tumor targeting dosage form of Doxorubicin, we call ThermoDox being studied in primary liver cancer, and the OVATION study, a Phase I dose-escalating trial of GEN-1, a gene-based therapeutic and newly diagnosed Phase III and IV ovarian cancer patients. So let me start by saying, we could not be more pleased with our product portfolio our progress and the investments that we have been making in GEN-1 and ThermoDox. Our neoadjuvant study in first line of ovarian cancer combining GEN-1 with standard of care therapy followed by debulking surgery is showing early, if not promising clinically meaningful tumor response that appears to be correlating very, very well with higher immune system activity in patients with stage three and four malignancies. At the same time, data supporting the OPTIMA study become stronger, if not encounter vertical with each analysis, now for over four years, no matter whether conducted by Celsion or independently scrutinized. ThermoDox in combination with radio frequency ablation standardized to a minimum of 45 minutes, a time in a role, where…

Thank you, Mike. We continue to operate in an efficient manner with a focus on advancing our two leading product candidates. We ended the third quarter with $27 million of cash compared to $20 million in cash at the end of 2015. Cash used for operations in the first nine months of 2016 was $13.7 million, compared to $16.9 million in the same period last year, that’s a reduction of 20%. This $3.2 million decrease was the result of cost reduction efforts implemented last year, a tighter product development focus and prudent cash management. We operated with a lean organizational with only 22 full-time equivalent employees, over 75% of our spending is directed to research and development activities. We expect our quarterly cash utilization for operations to be approximately $4 million to $4.5 million for the balance of the year. As we look forward, we believe that maintaining a strong balance sheet is important to our shareholders and to the continued strong development momentum we’ve built. In June, and as we mentioned last call, we completed a registry direct offering yielding gross proceeds of $6 million. We were hopeful of raising more capital in these difficult markets. We were also mindful of dilution to shareholders. So we opted for the current structure. The offering was completed with one institutional investor who has an option to acquire additional $6 million if their share price would improve. We continue to monitor our tax expenditures to ensure the most efficient uses of cash to create shareholder value and project that our cash will support operations in the second quarter of 2017. We will need to strengthen our balance sheet by accessing with ample equity markets, smart utilization of our asset market facility, as well as through potential strategic investments in collaboration. For the…

Thanks, Jeff, for your comprehensive overview. I’ve got to say, on behalf of the shareholders, nobody have done this better than we did. So now the conclusion of our prepared remarks, I would like to ask the operator to open the lines for your questions. I would ask that you limit the number to number of questions to no more than two to provide everyone an opportunity to participate. So, operator, you could open up the lines please?

Of course. [Operator Instructions] And we’ll take our first question from Jason McCarthy. Your line is open, sir.

Hi, guys. Thanks for taking the questions. I have two. First, for OPTIMA. Can you give us a sense of the percent of enrollment that you’ve achieved so far, and has China coming on board accelerated the enrollment in any way – in any way in your view? And my second question is, they’re expecting the fourth cohort to be treated by the end of the year. When do you think we can see that total dataset, particularly the immunological dataset, including expression levels of IL-12 and interferon gamma and other biomarkers of – that you would associate with a positive anti-tumor immune response? Thanks for taking the question.

Sure. So regards to question number one, on the study, it’s about 40% enrolled. I believe the 550-patient trial, you can do the math yourself, I’m not giving our numbers. And I think what’s most encouraging, Jason is the, the wait of enrollment continues to pick up across all of our territories, I mean, uniformly picking up as the results from the HEAT study begin to make a big impression on our investigators and particularly know what the supporting data from the NIH. With regards to the – I’m going to ask Dr. Borys to chip in on – a little bit on this answer too. But with regards to China, it has been a probably one of the most difficult jobs to bring on this side done in China than we have experienced in our time in clinical development. Some of it is that most of the – the majority of it has to do with the – I’ll try to focus that the CFDA and I think the regulatory bodies generally in China are having on ensuring that clinical sites in China are properly prepared to conduct studies consistent with GPC, consistent with the standard – the global standards for conducting quality trials. And we certainly appreciate that. We support that effort absolutely, just taken us a bit more time than we anticipated – quite a bit more time than we anticipated bringing the sites on. But we’re – for the most part we’re indefatigable. We and our CRO partner invented help and the proactively determined to enroll the centers that we’ve identified. I think, we believe we’ve identified 15, the vast majority in those are either, we have now begun to enroll patients and we believe at a pretty good clip are about to join this study. I think, do you have any other comments on that, Nick?

Yes, I agree. In China what we’re seeing is an increase in the quality of the work that we’re doing, but in turn it makes it a little bit slower to get the site started. Our investigators are just as enthusiastic as they were in our HEAT study, which means that once we do get them on board, there are better qualified, just as enthusiastic, and hopefully we get the benefit in terms of the rate of enrollment. So we’re very optimistic about getting good enrollment from China.

And I’d like to add something to that question, if you don’t mind, Jason. So on Friday, Nick and I are leaving for Vietnam and then to China after that to meet with the CFDA just to give them an update on the status of our trial and the results that we’ve – in China to give them an update on the results, the most recent results that we’ve seen from the HEAT study along with this independent analysis that was conducted by the NIH. They have shown a great deal of interest in our clinical program, as you can imagine. Primary liver cancer in China is almost epidemic. The hospitals that we go to are, for the most part, whole the lot of our patients in this – at this stage many of these patients have no option other than surgery, which consumes a lot of hospital and healthcare resources interventional approaches and including something like intervention approaching that mediates the delivery of a drug like doxorubicin or ThermoDox is very interesting and well supported by the regulatory authorities in China, so we’re delighted we asked for a meeting just about a week ago, and they said come on. So we’re jumping on plane to visit with them. The second and very important part of this visit to Far East is the meeting with the Ministry of Health and in Vietnam, but we had the good fortune to meeting with a number of investigators from Vietnam about seven or eight months ago. And after some rigorous feasibility work are convinced that these sites in Vietnam would be valuable additions to our trial. Over the last few months, we’ve I think for the most part completed all the regulatory applications and now are initiating site started for four centers, excuse…

Okay, great. Thank you very much Michael.

Thank you.

We’ll take our next question from Keith Markey. Your line is open.

Good morning everybody.

Good morning Keith.

Good morning Keith.

Thanks for taking my question. I saw that you had a presentation in South Korea recently and I was wondering was that to help to attract additional patients to your clinical trials or to perhaps get additional sites up and and running?

Yes, I want to comment and then Nick Borys was there for conference and he can give you some observations and what our objectives are. So, I mean typically all of the conferences where there is any interest in international procedures for new chemotherapies we do provide a [indiscernible] our goal is twofold, one is to encourage physicians who are treating patients who would be eligible for the study to refer to our trial that’s important. I think the second though and also very important we’ve earned a great deal about RFA and in ThermoDox of course. Although particularly about RFA, as it relates to treating intermediate state tumors, I would say this only with a little bit of modesty as we brought a group of probably some 75 investigators together in our prior study, many of whom are continue on the OPTIMA study. Who are changing the way in which RFA is being used to treat patients around the world. So we like to be – it’s important for us to be there. We like to be a part of it. We believe that the information that’s being presented at the various conferences and symposia is important to the standard of care of medicine without any additional clinical trials. Also there’s a recent paper maybe you want to mention the cohort paper and the importance. So I’m going to try over the Nick to give you some observations from the ACTA Conference.

The ACTA conference was the Asian Conference on Tumor Ablation it was attended by several hundred practitioners, researchers, investigators in tumor ablation and the paper that was presented just to be clear to everybody. This was an invited paper. The ablation community is very closely watching our OPTIMA study just as everyone here is and on the call is. And they’re looking for more data going into the future and they’re very interested in the follow-up data that Mike mentioned in regards to the NIH presentation that will be at the RSNA in a few weeks. In regards to some additional data that is supporting how we see ThermoDox there was a paper that Mike has alluded to by Dr. Goldberg who is a leader in the ablation technology who’s always presented data on [indiscernible] therapies with ablation and he pointed out in some very interesting animal studies that there is a relationship between the time of heating or thermal dosing to tumors with treatment such as ThermoDox and outcome. So we are getting a very clear picture over the mechanism of how our drug works why that 45 minutes is so important and why ThermoDox plays into this. And the bottom line is it looks like that this is a immunotherapeutic effect. So, I don’t want to take up too much more time, but if anybody’s interested we can always give you the references to that paper for your own perusal. So, I hope that answers your question.

Very much. So. Thank You yes I would like to get the paper. Thanks. My second question is…

Can I just summarize a couple of points and Keith if you don’t mind.

Sir.

So we got now go work that bring in enrollments indicating that the increased heating times are associated with better outcomes, in a preclinical model we’ve got the NIH who has conducted a value metric analysis for tumors versus burn time or heating time and the clinical outcomes plus, minus ThermoDox highly supportive of our study. We’ve have completed the final subgroup analysis final overall survival analysis of the patients involved in the heat study, and now after four years from enrollment, longer than four years from enrollment have fallen for 3.5 years. The data I think is unarguable. We can challenge it as we have in any way you want it. But we are looking at a study our OPTIMA that is highly de-risk. And now we are excited to get this study enrolled in it and the results made available.

Great, thank you. And then I had a second question and that is your R&D expenditures increased in the third quarter, and I assume it had a lot to do with expanding or starting up the clinics in China to a certain extent and increasing the enrollment in the trial. I was just wondering, does that look like, it’s a number that’s going to continue at about that pace for a little bit, or should we see that coming down now that the sites in China are pretty much up and running?

Keith, this is Jeff. Last year in that R&D category, we incurred expenses relative to making the clinical supplies necessary, so that’s behind us. What we’re seeing now is, as you mentioned, an increase in the enrollment, it really across the entire globe with the new sites coming on in China. We expect that number to remain pretty much where it is. Moving forward, as we said, we maintained a operating – really operating cash utilization in the $4 million to $4.5 million and expect it to maintain that level moving forward into 2017.

Yes.

And we’ll take our next question from Swayampakula Ramakanth. Your line is open.

Thank you. Just a couple of quick questions. One is, can you tell us a little bit about your DIGNITY studies, where they are, what is the progress you’re making? And the second question is just a little high-level strategic set kind of question. With increasing interest in immo-oncology and how those drugs are also getting to be seen as potential therapies for HCC, how do you ThermoDox to be competitive again such therapies? Thanks.

Okay. Thank you for the questions RK. So let me start with DIGNITY. We just left Europe two weeks ago, in Europe there attended the study, of course, we hosted it in Europe, where the majority of our investigators are. The – we’ve made a great deal of progress actually in this study up and running. We have identified now on to five institutions who will participate in the trial. All the institutions will be – were using the same heating platform technology that has been standardized by us to make sure that all of the heating devices, this is device called [indiscernible] manufactured by a company called Med-Logics. All the devices are standardized and we actually pay for the standardization to ensure that all of them are functioning in a similar – in almost exactly the same way. We’ve – obviously, we built the infrastructure for this study. We’ve gotten full approval in Italy for the study. We’re expecting regulatory approval in the Czech Republic, the next year. That will be followed by a FX committee review. I think, we’re ready to go through the most part now for clinical trial payments to be finalized with – on these early sites, and we have to make a decision yet on the PI for Poland. All that said is, our expectation is that, we will begin to bring sites up and enrolling patients of almost as we are – actually as we are speaking. We’re starting with Italy. Our hope is to have a first patient enroll this year, if not this year or early next year. We think we have enough understanding of the incidence in the number of patients that these physicians see to be able to project about an 18 to 24 months enrollment period. So if…

Yes as I was alluding to in the response to Keith marketed for. We do see an immunological component as our mechanism for the ThermoDox and the OPTIMA study and we like to take full advantage of that data and look at that more carefully, but also as you probably know we are very excited about the future of immunotherapy, as you can see that in our GEN-1 program, but the issue with immunotherapy is there’s very few drugs out there that work as a model therapy or in other words as a single agent. And that there are going to very well be possibilities in the future where combination therapies will be the best way to go and ACC that’s a very difficult cancer and there are very few model therapies that are effective in cancer. So. Anything can be said about immunotherapies. So I think we’re pretty excited about that. We welcome further development in that area. And we think we’re going to be a big part of that.

Thank you, gentlemen.

Thank you.

So, in interest to find we are, operator we’ll take one more question if there’s a question or two be had.

All right. We will take our last question from a Barry Rubin. Your line is open.

Good morning Mr. Tardugno. Thank you for a great progress in the company.

Thank you, Barry.

Before I asked my no time though there will be essence before I guess my one question I just want to give a shout out to Mr. Jeff Church he is most kind to return my calls promptly. He spends more than enough time and he’s a wonderful asset to the company.

He certainly is.

Are you are you - is there going to be a breast cancer symposium this year usually in December, if so are you going to attend?

The symposium you are talking about is, it is an annual event. It’s in San Antonio, it’s called the San Antonio Breast Cancer Conference. I don’t think, we will have anything new to present at that trial, I mean, at that conference, Barry.

Okay. When – on the RCW, when is your next data, is that sometime next year?

Yes. As I mentioned earlier, we will begin enrolling patients in the European DIGNITY study, if not before the end of the year, certainly, right after the first of the year. Our sense is, it’s an open label trial, and the patients are immediately valuable. Our sense is that, we may have enough information to be able to participate in the 2017 San Antonio Breast Cancer Conference.

All right. Thanks an awful lot.

Thank you. So there are any other last questions, I can move on now to just a few closing comments here. First, I want to thank everybody on the call for taking the time to be with us. We did put a good deal of time to preparing our remarks. I hope you can see that, your company is making a good deal of progress here. We now have three clinical trials to our – active, the third one is about ready to start off, it takes enormous amount of energy to get third one up. At the same time, we’re being very mindful of our cash position and our need to raise cash is, Jeff Church pointed out, we’ve been careful with raising enough money to keep us going without being overly affected by some of the challenges right now with our share price largely due – our sense is largely due to some uncertainty in the markets, and a lot of pressure in the biotech space. But we have – hopefully, we have presented to you this morning a company that is using its cash wisely to progress – to – now certainly will be treating very important trials in some of the most important cancers of our life time. So with that I want to thank you again as our trials and programs and events, we will look forward to the opportunity to keep you informed. We value your continued support of our goal and that’s simply this is to deliver an innovative oncology therapeutics to address some of these very difficult, and is, I said earlier, important cancers of our life tech. So thank you very much. We look forward to speaking with you in about three months.

This does conclude today’s program. Thank you all for your participation and you may disconnect at any time.