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Celsion Corporation (NASDAQ:CLSN)

Q4 2013 Earnings Conference Call

March 13, 2014 11:00 AM ET

Executives

Jeffrey Church - SVP and CFO

Michael Tardugno - President and CEO

Nicholas Borys - CMO

Analyst

Keith Markey - Griffin Securities

Reni Benjamin - H.C. Wainwright & Co

Operator

Good morning. My name is Joanne (Ph) and I will be your conference operator today. At this time, I would like to welcome everyone to the Celsion Corporation Fourth Quarter 2013 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions)

I would now like to turn the call over to Mr. Jeffrey Church, Senior VP and CFO, Mr. Church please go ahead.

Jeffrey Church

Thank you. Good morning, everyone, and thank you for joining us. Our 2013 financial results were released this morning before the market opened. We also filed our Form 10-K for the year ended December 31, 2013 at the same time. The Form 10-K is available on the SEC’s Edgar system, and the Company’s earnings release and Form 10-K are both available on our website. Today’s call will be archived, the replay beginning today at 2 PM Eastern, and will remain available by phone until Thursday, March 27, 2014; and will on our 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 risks and uncertainties including, 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 businesses; 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 with the Securities and Exchange Commission.

Following our formal remarks today, we will open the call for questions. I’d like to turn the call over to now to Mr. Michael Tardugno, President and CEO of Celsion. Mike?

Michael Tardugno

Thank you Jeff. Good morning, thank you for joining us, and for your interest in and support for Celsion. I'm joined today by Dr. Nick Borys, our Chief Medical Officer and by Jeff Church, from whom you’ve just heard, our Senior Vice President and Chief Financial Officer.

It’s good to be with you this morning to review the progress that our company has made in 2013, in a year which we all acknowledges as a critical one for Celsion, and to provide you with our outlook for 2014 and in particular I would like to largely focus on our recently announced OPTIMA Study .

Let me start by saying that 2013 was a year of recommitment. We have taken a number of major steps to position Celsion both financially and with a strong encouragement of the hepatocellular carcinoma research community, that’s HCC, to conduct - but has the potential to be our most important study today in HCC. I do say we are strongly encouraged by our clinical research data. We have a detailed roadmap. We may know more about the first-line treatment for this enormous population with the unmet need of intermediate stage HCC than just about any company on the planet. And it is worth this knowledge, that we have engineered our pivotal development program for ThermoDox, our lead drug candidate utilizing our proprietary tumor targeting heat sensitive lymphasomal technology that we exclusively licensed from Duke University.

So, as we announced last month, we’re moving forward with the OPTIMA Study, our Phase III trial in HCC, the OPTIMA Study is a well powered, two armed, double-blind, randomized study of ThermoDox combined with optimized RFA. We are going to define optimized RFA for you in a moment. And as we also announced late last month, we conducted a study with the enthusiastic support of our investigators and medical advisors worldwide.

And before going into the OPTIMA Study, I’d like to reflect on 2013 for a moment, and remind you of the three key priorities we promised to deliver on just a year ago. They are these. First, per protocol, and that the urging of our medical advisors and steering committee, we committed ourselves to conduct a thorough and comprehensive review of the data from the HEAT Study, our large randomized trial of ThermoDox in combination with simple RFA to treat HCC.

As I discussed, we used the learnings from this analysis to informally design the OPTIMA Study. Our second priority was to restructure, align our resources with our immediate mission and in doing so it significantly reduce expenses. I again reported this morning, that we completed our corporate restructuring in an efficient and effective manner. But we did not stop there. In addition we took actions to significantly strengthen our balance sheet by raising some $15 million over the last year. And then took steps to improve overall financing strategy generally. Church will cover this in more detail shortly.

Third, we implemented our strategic M&A program which capitalizes on Celsion’s development competencies and is designed to expand our research pipeline, reducing enterprise risk, increasing the probability of significant returns to our shareholders. We have been disciplined throughout our process this past year. Being mindful that no deal is better than a bad deal, I’m confident that this project has a potential for success.

Now I would like to focus on ThermoDox and ThermoDox Phase III program for primary liver cancer. As many of you know we announced topline results from the HEAT Study just 14 months ago. The study was powered with 700 patients, utilizing a two arm one-to-one randomization scheme each subject undergoing our phase of first line procedure one arm with ThermoDox the other with RFA alone. What it clear is that the trial did not meet the primary endpoint of progression free survival for protocol however and again at the urging of our medical advisors we continue to follow up patients to determine an overall survival benefit which is the secondary endpoints of this study. And here doing a promise of ThermoDox and its potential. Our analysis shows that a key well bounded defined subgroup of 285 patients representing some 41% of the patients in each study with single HCC lesions ranging from 3 to 7 centimeters that were treated with RFA for greater than 45 minutes. This is what we call optimized RFA, treated for greater than 45 minutes. These patients benefit in a significantly longer median survival.

Improved survival appears to be true for RFA alone when conducted optimally and particularly true when optimized RFA is combined with ThermoDox. The outcome is potentially better by significant amount. In addition, when we looked at all the factors that contributed to this phenomenon multivariate analysis do not appear to discount this finding in any way. Now was to assure objectivity and sound science our analysis has not been conducted independently but rather they have included the involvement of our investigators and some of the most important leading researchers in liver cancer and work (Ph).

Our findings have been pressure tested at three international medical conferences and separately the subject of a symposium led by Professor Joseph Llovet, MD at the ILCA conference last September in Washington DC. ILCA is the International Liver Cancer Association focused exclusively on research in HCC. In it Professor Llovet name sounds familiar to you it’s because he was lead officer of the HCC Sorafenib paper and a distinguished researcher among his fellows in HCC.

Further in the most recent OS update announced this past January, two months ago, the patient subgroup treated in the ThermoDox arm whose RFA procedure led at longer than 45 minutes optimized RFA experienced the 55% improvement in overall survival with the Hazard Ratio of 0.64 and for [indiscernible] the P-value of significance of 0.0495. I will point out however, and we’re moving close to them and we have not reached the median overall survival for this subgroup just yet. We can very well reach then meeting in the next OS sweep which will occur in the next few months.

Notwithstanding this post-hoc analysis the data is striking and then it has remained consistent with each of the quarterly analysis in our hypothesis appears the strength and as the data matures our latest data and then we just talked just from the four quarterly overall survival data sweep since top line results were announced 14 months ago. The first OS data sweep was conducted at the end of March 2013, the second in June, the third in September and the most recent in December reported in January as I said. With each data set OS in the single lesion greater than 45 minute optimized RFA subgroup improves in both benefit and significance.

Moreover, these data are consistent with the mechanism of action of our heat activated liposomal technology or longer heating times activate drug release concentrated in the tumor margins and surrounding liver tissue. Let me just share a quick anecdote with you. Among our many reviews of the data with our investigators worldwide, Dr. Borys and I met with the Chinese contingent in Beijing. After all the data were presented and discussed, Professor Cheng Ming Wua, our Lead Principle Investigator in China and the author of the definitive academic textbooks on RFA in China step up to the market probably and call their colleagues saying “of course we should have known this”.

RFA has to be used within its design limits to larger tumors, larger tumors reading those greater than 3 centimeters what you can take from that is this. RFA works well for treating smaller tumors less than 3 centimeters but for larger lesions those that were included in our study greater than 3 cm longer ablation times are necessary for an effective outcome. Now to be clear and particular with this on any retrospective analysis and announce one of a positive efficacy signal even if statistically significant should be reviewed with caution and as I have pointed out consistently and I’ll point it out again before this conference call is over OS has not yet been reached in this and the median OS does not yet been reached in the study for this cohort.

That being said the clinical data generated has provided a valuable findings and insights, I suspect RFA practitioners will be changing their practice once the data is all out and we along with our investigators and experts believe that the strong survival trend warrants additional clinical development of ThermoDox in HCC to save at least.

So with that now I would like to discuss the OPTIMA Study in more detail. This trial was designed as we said earlier, with extensive input from globally recognized HCC researchers and clinicians and after formal consultation with the U.S. FDA. It is a robust trial, make no mistake about it, we expect overall 550 patients globally, with up to 100 sites in North America, Europe, China, and Asia-Pacific.

In the two arms study, we are comparing ThermoDox in combination with optimized RFA, with RFA greater than 45 minutes, which will be standardized to a minimum of 45 minutes across the whole investigators versus optimized RFA alone. The primary endpoint is overall survival or less. The study is powered at 80% to showing all its improvement at 197 deaths with the peak going to 0.05. The statistical plan calls for two interim efficacy analyses by an independent data monitoring committee and can be stopped for efficacy gaining success at either 118 deaths or 158 deaths. And before you ask, the office trying to conduct these interim works is minimal less than 0.005.

The trial incorporates input from FDA but does not have a special protocol assessment or an SPA. That’s accepted in February with not a comment, we’re selecting our CROs, investigational drug is being manufactured, the DMC has been appointed, the CTAs are being at clinical trial agreements are being filed worldwide. All-in-all we have initiated the study and are hopeful to enroll our first patient in the coming month.

Now to ensure that the study design is sufficient to support registration, filing an NDA in local markets we have been meeting with other regulatory agencies. For example, we recently met with the China’s State Food & Drug Administration or the CFDA to discuss our study; that was Nick Borys and I. We discussed an outline of the study and our goals including a minimum patient enrolment required for ThermoDox as NDA should we be successful. We were very pleased with the outcome. And based on those discussions the company’s submitting next week an IND, an application which accelerates CFDA approval to begin the study in China. And with China as you know being the world’s largest HCC market with over 400,000 new patients each year, representing about 50% of the world’s infinites, the timely agreement to move forward with the study is a very important goal and objective for the company.

And like the Novartis, some of our better clinical programs and preclinical programs, in parallel with our efforts in HCC, we continue to advance ThermoDox in recurrent chest wall breast cancer, was very impressive if not remarkable results to date. To begin the study as you know has been a very difficult study to enroll. But I have to tell you, this management team refuses to give up on this study. How can we? This is a very needy population. These patients, these women, who have had a mastectomy, they failed two to three lines of chemotherapy, they will likely have failed radiation, and many of them are bravely facing the end of life.

And when you look at the data, the limited data that we have, how can we give up? To show, I mean in December, combined clinical study, data results from Celsion’s and from Duke University’s Phase I studies, open-label studies, presented by Dr. Hope Rugo of the University of California San Francisco, at the Premier San Antonio Breast Cancer Conference. The two similarly designed Phase I studies enrolled patients with highly resistant tumors found on the chest wall and who had progressed on previous therapy including chemotherapy, radiation therapy and hormone therapy.

ThermoDox plus mild hypothermia was evaluated in these patients in up to six cycles. There were 29 patients in the two trials, 11 in our Dignity study and 18 in the Duke study, against the punch lines. Of the 23 evaluable patients, a local response rate of over 60% was reported in 14, with five complete responses in highly refractive cancer. Five complete responses and nine partial responses. So we are now actively involving under the direction of Dr. Borys’ patients in the Dignity Phase II trial, with approximately 50% enrolled at five clinical sites. I’ll remind you this, in open-label study evaluating multiple cycles of ThermoDox plus hyperthermia in this refractory population with superficial recurrence. My view, in this population, even minimal tumor response might be considered to limp.

That said we recently reported from the Phase II that a local response rate of 80% has been observed in the five evaluable patients with refractory disease, notably two complete responses, two partial responses, and one patient was stable disease. With support of our press release, Dr. Rugo noted that this data is fairly but impressive, especially given the patient population and the consistency of results with the phase I studies demonstrated strong efficacy signals in this difficult to treat patient population. We are hopeful we continue to study and complete enrollment in a reasonable period of time. We have seen an uptick in enrollment frankly since the presentation of data in our recent press announcement showing the response rate set these impressive response rates. Another indication for ThermoDox may evolve some promises in brain cancer also known as GBM or Glioblastoma Multiforme. In January, this past January 2014, we formalized a development program for this indication. As a part of this effort we are supporting pre-clinical studies in collaboration with Dr. Costas Arvanitis at the Brigham and Women's Hospital and Harvard Medical School. Experiments will study the use of ThermoDox in combination with MR guided High Intensity Focused Ultrasound or HIFU to treat brain tumors, initially in animal models. 

So, that’s my report on our clinical and preclinical programs and now I want to turn to the balance sheet. In November, we increased our financial flexibility with the $20 million loan facility that Jeff Church brought to us. It’s an agreement with Hercules Technology Growth Capital and we ended the year with over $43 million of cash to fund future operations. And in January, this past January, we raised an additional $15 million through a registered direct offering at market price. Our fund raising efforts not only reflect the investments communities in our ThermoDox program and the future direction of the company but it also provides us with the resources to effectively implement our M&A strategy. I have to say we have full confidence in the ThermoDox program especially given how the program has developed over the last year. However, as I said previously, we recognized a need to expand our pipeline and reduce the risk and exposure inherent with the single program and so we are seeking to expand our pipeline through the strategic acquisition of new technologies and products that maybe both synergistic and complementary to our current product pipeline and our internal capabilities.

So, we continue to work closely with Cantor Fitzgerald to assist with the comprehensive and systematic review of merger and acquisition opportunities with the goal of identifying noble products or companies with near term value creation potential for Celsion to acquire. And before turning it over to Jeff, I would like to summarize my comments by saying our efforts over the past year has paved a way for our future growth. We are beginning 2014 well position to execute our clinical regulatory and corporate objectives. The compelling data merging from the HEAT study analysis provides a strong rational for continued investigation in primary liver cancer or HCC. With OPTIMA, we are moving forward with a well-designed trial and with the support of key industry experts and regulatory agencies, we are well funded with the clear strategic direction and committed to maximizing shareholder value and we are optimistic with our plans for the future.

Now, I will ask Jeff to provide an overview of our fourth quarter 2013 financial results, Jeff.

Jeff Church

Thank you, Mike. Starting with cash, we reported total cash and investments at December 31, 2013 of $43.1 million that compares to $23.1 million at the end of 2012, an increase of approximately $20 million. Subsequent with the year and we completed a $15 million registered direct common stock offering which was priced at the market with minimal warrant coverage. We entered 2014 with a very strong balance sheet with cash of approximately $57 million. In addition, we have another $15 million available to us under the loan facility with Hercules Technology Growth Capital announced in the fourth quarter of 2013. Our financing strategy puts us in the strong strategic position to continue the development of our heat sensitive liposome technology platform as well as to explore the acquisition of other promising clinical stage products.

Since the beginning of 2013, we have secured approximately $50 million and increased our financial flexibility in four strategic transactions. The most recent being the $15 million at the market registered direct offering in early 2014. In November, as Mike mentioned, we entered into a strategic loan facility agreement with Hercules that would allow up to $20 million in financing in multiple tranches. We drew down the first $5 million November and used $4 million to repay the outstanding obligation under our loan agreement with Oxford Finance and Horizon Technology Finance Corporation. We reviewed any additional funding provided under the agreement for working capital or to support our strategic acquisition initiatives. Net cash used for operation was $9.5 million in 2013 which compares to $22.3 million used to fund operations last year. This decrease was driven by the continued drop in operating expenses coupled with the $5 million nonrefundable cash payment received Hisun Pharmaceutical company in the first quarter of 2013.

Our lower operating costs are the result of the continuing downward trend in drug development expenses and the results from the corporate restructuring program, we announced in April 2013. Operating expenses decreased from $22.1 million in 2012 to under $16 million in the current year. This 30% reduction was in line with the guidance we’ve provided back in April.

Research and development cost were $9.4 million in 2013, $6.4 million lower when compared to the prior year due in large part to the completion of patient involvement in the HEAT study in the first half of 2012.

With the initiation of the optimist study in the first half of this year in 2014, and the continued evaluation of ThermoDox in these study, we expect research and development cost to increase in 2014.

G&A expenses were relatively constant at $6.5 million in 2013 compared to prior year levels as result of the corporate restructuring program implemented last year. For the full year 2013, the Company reported a net loss of $12.9 million compared to a net loss of $26.6 million in the full year 2012.

The company reported a loss from operations totaling 8.3 million which was all set by a noncash charge of $4.6 million related to a deem dividend from the beneficial conversion feature associated with the preferred stock financing, we completed in February 2013.

I will now turn the call back to Mike.

Mike Tardugno

Clear report Jeff, thank you. On behalf of all this there is still [indiscernible] company has been terrific. So, as moving forward and focused on its future as you can tell, we have completed our comprehensive analysis of the HEAT study. We are now with our collaborators partners and regulators to discuss our findings and based on those discussions we are moving forward with our pivotal optimist study.

There was strong balance sheet and the flexibility to consider a number of strategic options. Our partnerships continue and remain strong. We commit ourselves to critically important work and look forward to reporting our progress as we have this year as we have throughout past years.

We hope to create value for our shareholders and most importantly make a significant differences in the lives of cancer patients and their families. As always, we greatly appreciate your interest in the company and we look forward to updating you on our continued progress.

Operator, we’ll go to questions to the audience, I’d like to ask you to keep limits to your questions to one with a follow up if you would please to give everyone a chance to get answers.

Operator, please open the line.

Question-and-Answer Session

Operator

(Operator Instructions) We’ll hear first from Keith Markey with Griffin Securities.

Keith Markey - Griffin Securities

It’s very good news about your clinical progress. I was just wondering if you could tell us about what the accelerated approval in China is going to mean to you for instance will the Chinese FDA make a decision independent from the U.S. FDA.

Mike Tardugno

Could you repeat that last part of your sentence please?

Keith Markey - Griffin Securities

For instance I was wondering if that Chinese regulatory agency would make their determination independent of the FDA, the U.S. FDA.

Jeffrey Church

Well, let me answer that second part first. That’s yet to be seen. I mean there are multiple avenues from NDA separation in China that we’ve talked about in the past. One avenue is for a multinational company that is not headquartered in China to file an NDA that’s a fairly lengthy process. It takes a long review and it involves a complete review of the CNC process and the application along with clinical data.

There are other avenues that include companies like ours having a local presence, legal entity presence in China and even a faster path for an NDA in partnering with a company at domestic pharmaceutical company like Hisun, one of our manufacturing partners in China.

It’s still so far us to tell which avenue we would take. Certainly we’d like to take the fastest way out. But the fact is if it includes a domestic partner would require us to negotiate terms for commercial license with that partner that we believe represents fair value for our shareholders.

That’s some of the complexities in the multiple pathway is to get an approval. As far as the clinical trial agreement approval which is separate from an NDA that to conduct a clinical trial successfully before you can submit an NDA. There are multiple pathways there too. The pathway that we have chosen to take was recommended to us by the deputy director of CDE the center for drug evaluation of the FDA [indiscernible] our CRO and manufacturing partner Hisun and that would see FDA early in January. The CD outlined for us an accelerated pathway which could there is no promises that we’re dealing with a regulatory body and so there never really can be any chances. But it could accelerate the review and approval of our clinical trial application through something known as an IND Investigational New Drug to process that we did not use the last time because it wasn’t available in our application, because it was not available to us. Assuming INDs accepted to go through little bit if a bureaucratic review before the ultimate evaluation is made by CDA. But assuming the IND route is made available to us, it will shorten the approval time by a significant amount.

You may recall the heat study approval took one of reasons why there was likely time to enroll a study but the clinical trial in China was compromised by a number of political events and some financial disaster in China, think it to this about 14 months, 16 months to finally not only get approval but enroll our first study sight from the time we had approval from the U.S. FDA. Our hope is to cut that in less than half taking the IND route with the support of the CDE.

Keith Markey - Griffin Securities

Great, thank you for that.

Mike Tardugno

That answers your question?

Keith Markey - Griffin Securities

Yes absolutely, I am sorry I misspoke when I said NDA. I am a little ahead of the game there. One last question…

Mike Tardugno

We like to be there.

Keith Markey - Griffin Securities

Yeah I am sure, one last question along the same lines can you just lay out what you see as the regulatory path for the dignity oriented research program that you are working on, the recurrent chest wall breast cancer.

Mike Tardugno

I think the regulatory pathway unusually we don’t have an answer to that, an absolute answer to your question. I think our regulatory pathway will really be a function to strengthen the data, with any luck we’d be able to complete enrollment into this relatively small our Phase 2 trial the data continues to hold up. I am sure Dr. Borys is going to want to meet with, FDA to review this data and charter path forward; I think that’s your intention, Nick you want to comment?

Nick Borys

I think number one a regulatory point of view we want to establish strong data for the indication and then based on the fact that this is a relatively rare indication, it’s a drug indication, it’s in high in the U.S., perhaps we can revisit that with the FDA at a later date and discuss the data and see what’s the best path forward.

Operator

(Operator Instructions). We’ll go next to Reni Benjamin with H.C. Wainwright.

Reni Benjamin - H.C. Wainwright & Co

Can you talk to us a little bit about the wordings from the HEAT study in terms of variability in procedure and not just the mandating 45 minutes worth of our day but anything else that you might have learned and you will be trying to control that more in the upcoming OPTIMA study?

Mike Tardugno

I think Dr. Borys will answer that, but I want to make a comment before he does, we did we learned quite a bit and my sense is that once the data is published from the HEAT study that there will be quite a bit if reflection in the current standard of practice, maybe ultimately evolving into a standard of care and that standardizes particularly in patients who have lesions that are greater than three centimeters. While we know this procedure can be effective, to recall the assumption that we made based on historical information, this is a median time to step in this population three to seven centimeters.

And we forecasted to be with our medical experts and from the data we forecasted to be 30 months. Under the watchful eye of our monitors and in our protocol we see that simple RFA has a median time that’s quite a bit more than that. And when you use optimized RFA the median time without ThermoDox is even better. And we add ThermoDox it’s our hypothesis that we’ll see even a better outcome.

So we’re very mindful of how important this aspect is to the success of future trial, Nick has engaged one of our leading experts to write the guidance document that each and every one of our investigators will be required to review some web based training, we will document that training and document the understanding of it with an online system, which will become a permanent part of the clinical study trial, master trial.

So we’re very conscious of it, we have learned a lot. Like I said in my opening comments we may know more about how to treat patients in this category three to seven centimeters which we know frequency aberration to any company on the planet. So, are you going to take all the thunder there Nick?

Nicholas Borys

I almost did. The learnings from RFA from the HEAT study will be the subject of a number of papers I mean we could talk for a very long time on what we’ve learned from there. But the key ones are the ones that Mike mentioned. The number one what I think is important for you to know is that what we learned is that if you apply the RFA treatment whether you’re in China or Italy or the US for at least 45 minutes the patient will benefit. So what we learned is that now we have a data driven approach to how we manage RFA and so when we apply that we feel confident that we’re going to see good outcomes in the study and so before the RFAs, there were publications on the importance of multiple overlapping ablations and timing to those ablations but they were not data driven, and now our protocol is based on that data so that’s why we have this confidence.

Reni Benjamin - H.C. Wainwright & Co

And I guess this is a follow up to the accelerated strategy in China, you’re talking about the IND, this new path forward, is it should we be considering it as a separate clinical trial altogether that can move at its own pace and can secure approval on its own or is it part of the optimal study and depends on the entire trial and the entire enrollment.

Michael Tardugno

That’s a good question, I don’t know that it’s really clear to us whether or not we can consider the China, Chinese cohort independently in this global trial and submit an application without the full data set to the Chinese government. We certainly would like to explore that further and it’s been part of our discussion, it’s just not clear to me, based on the response that we can say with assurance that that’s a probability or a possibility. I think we do understand that if we were to partner with the domestic Chinese company and commercial with a domestic Chinese company and that’s a real if on a kind of commercial side, because we want to make sure that we are getting the best from a branded marketing capability for this important new drug in every region of the world including China the biggest market, so we’d have to have licensed terms and confidence in the capability of a domestic Chinese company to bring some of that to market in a very responsible fashion. So assuming we can do that, that path that you just alluded to, where we could, focus on the Chinese cohort independently may become a reality. More likely, however, I want you count that this as in that more likely however we will complete the study, as a part of completing the study we’ll assure that we have a minimum of 200 patients required by the Chinese government for submission. And based on the totality of the data submit an application to the Chinese government. If this is a faster path, we’ll do it, but we won’t make any compromise on the ultimate value of our products in order to get a faster response from China, at least that’s my point of view at this stage.

Operator

(Operator Instructions) We’ll go next to Ken Pulley (Ph), private investor.

Unidentified Analyst

I just wanted to first say I’m really impressed by the level of commitment that management has displayed to try and get ThermoDox approved. You don’t really see that a lot of times with a lot of companies. So one area that I have concerns with is the movement for an acquisition of other companies. And my concern is this, given the limited resources that the company has on hand right now and I know you guys done a lot of funding and so forth. I’m not so sure if that’s necessarily the right approach, and where I’m coming from on that is that as a shareholder who’s held Celsion for quite a long time, we’d experienced significant dilutions and reverse stock (indiscernible) and if ThermoDox is the wave of the future I just have concerns that that’s necessarily going out after a company is diverting resources and time to getting the drug approved that we know is going to be successful if that’s the case and I’d like you to just discuss that a little bit more detail if possible.

Michael Tardugno

I am happy to do that, well first let me thank you for your long time support of the company Ken, you know it’s people like you who make it easy for us to get up in the morning and come to work maybe that support that back and this is the rigors of this business sometimes can be challenging knowing that there are people like you behind us makes a job all that much more attractive for worthwhile. So, we didn’t take this idea of expanding our pipeline lightly I want you to know that. And frankly if there was assurances, high assurances that ThermoDox absolutely with clinically would be successful we likely would have been take this path. But clinical research and in spite of the value of and the quality and the efficacy of our drug, clinical research sometimes does not result in initially and sometimes even if there are many times, even if the drug works although results in a positive outcome at least not initially. We have seen what that can do to this company frankly and so a negative outcome can be devastating for our shareholders, for our employees certainly substantial punishments even if the percentage of the chance is small.

So, I just want to assure that we have been very careful about all the types of companies that we are looking at all in oncology. We have been careful to setup what we think are the right requirements for consideration. Companies had a measure of resources to the company to support the incremental research but very importantly we are focused on, we are focusing on research and technology and maybe not entirely companies but maybe just products, we believe would be accretive and that it would bring more value to the company on their own merit and that accretive value, additional value to the company and should be sufficient to support the research for that product on its own, so that’s how we think about it. I can promise you that we will not a make a deal to make a deal; we will not make a deal that we don’t believe is in the best interest of the company and our shareholders. But we are looking for value creating opportunity and as I said earlier in my comments this is shared by our Board is that no deal is better than a bad deal. I hope that answers your question and again thank you for long time support for the company.

Unidentified Analyst

That does answer my question. The follow-up question is, are you guys looking at a partnership possibly for the breast cancer with major pharmaceutical companies, is that on the list too?

Michael Tardugno

It certainly would be I think it’s premature given the limited data study, impressive but limited data set, I think it’s something that we would bring to the top of our priority list completing a phase II trial with impressive results; I think we begin to market if we have to market the program in a business development strategy, yes.

Unidentified Analyst

Yes, thank you for taking time and I know you guys are working hard and I know it’s difficult process getting drugs approved and I don’t know think we would be as far without your level of commitment and your team as well. So, thank you for taking the time and taking the call and the question.

Michael Tardugno

Okay. You are very kind. Thank you on behalf of all of us. Operator, we have time for one more question please.

Operator

And we will take that question from Bob Green also a Private Investor.

Unidentified Analyst

Two quick questions, you move into the OPTIMA study, will you wait for the overall survival, median survival for the HEAT study before we move forward?

Michael Tardugno

So, Bob, we are very, very close to the median, I think I wanted to point out the meeting because numbers could wobble but could they wobble so much so that we would not consider the OPTIMA study. I think the chances of that are very, very slim to none, data is very impressive. So, I want to know committing funds to a study is done on an incremental basis. We are initiating the study based on what we see which think is very impressive. It’s impressive to our investigators. It is impressive to the medical and scientific community globally. It’s been accepted by the regulatory community, I think that strong validation I wanted to write back but goodness knows if there is something very unusual highly unexpected that would cause us to rethink whether or not we want to continue with the OPTIMA study. We would always be honest with you and with ourselves and we consider continuing.

Unidentified Analyst

What numbers represent overall survival in the HEAT, you are looking for mediums?

Michael Tardugno

So, what we currently have is extraordinary, also we are talking about a subgroup from each study with the subgroup of patients who have single lesions in the range we treat 3 and 7 centimeters who have been treated with RFA for greater than let’s call it optimum they’ve been treated with an optimized RFA that’s RFA greater than 45 minutes. And the rationale behind that is RFA is good to treat small tumors it works alone treat smaller tumors to treat larger tumors you have to ablate with overlapping ablations which extends the time to heat and kill these tumors. So in that subgroup single lesions between 3 and 7 centimeters greater than 45 minutes radiofrequency ablation and we are seeing an improvement in the arm over the arm that is RFA optimized RFA alone and we add ThermoDox we’re seeing an improvement of 55% in months that’s almost two years, in months that’s almost two years, in months that’s almost over 24 months.

Unidentified Analyst

I guess again ask the question right out because [indiscernible]

Michael Tardugno

That’s a big deal I mean that’s the big deal and let me just say this. Sorafenib Nexavar which is the only approved drug for HCC it was approved for late stage advanced stage disease was approved on less than three months benefit. So we have powered the OPTIMA study to reflect a clinically relevant outcome but with a huge safety margin between what we’re observing in this cohort 25% improvement and what we think could be a blockbuster outcome.

Unidentified Analyst

Okay, one last question in the new study in the OPTIMA study you’re going to have the DMC look at stuff at 118 patient desk (Ph), was that right?

Michael Tardugno

Yes. So we plan to there is no absolute assurances but we plan part of our trial submission look at the data at two staffing points before the final analysis one in 118 tests and the next one in 158 test.

Unidentified Analyst

Yes I just wanted to verify…

Michael Tardugno

So there are two opportunities before the final data to stop the study for efficacy if we show significant clinical benefit and there will be the purview (Ph) of the DMC.

Unidentified Analyst

I just wanted to verify those numbers. The number of desk for the median overall survival in the HEAT were almost there I was wondering what those numbers were looking or what numbers were addressed again?

Michael Tardugno

So the median so at the larger it’s a larger study so that there is 285 patients in the median it would be [indiscernible] so the median is probably close to 250 patients.

Unidentified Analyst

Okay.

Michael Tardugno

There is 227 now I think. So [indiscernible] then they’re almost two of those numbers I mean in the 1 million ballpark we think the latest report was based on 227 patients I believe if you get to the median we need about 20 more or so.

Operator

That will conclude our question-and-answer session for today. I’d like to turn the call back to our speakers for any additional or closing comments.

Michael Tardugno

So I want to thank all of you for joining us this morning and the conference call. As you can see the company continues to move forward. We are very, very enthusiastic about the future of the company and we look forward to continuing to update you on these quarterly calls. Thank you very much and have a good day.

Operator

That will conclude today’s conference. Thank you all once again for your participation you may now disconnect.

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