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IMNN US Equity

Imunon, Inc.Health Care · Pharmaceutical Preparations · CIK 749647 · FY ends Dec 31
$1.58
+0.00 (+0.00%)
USD · as of 2026-08-19 · marketstack

IMNN · 10-K · period ended 2020-12-31

← all IMNN documents
filed 2021-03-19 · EDGAR original ↗

Our rendering of the filing — original pagination and typography are not reproduced, and tables are reduced to their short label cells (the figures live on FA). Nothing is summarized: every line below is the filing's own text.

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10-K

1

form10-k.htm

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

(Mark

One)

For

the fiscal year ended December 31, 2020.

or

For

the transition period from _______ to _______

Commission

file number: 001-15911

CELSION

CORPORATION

(Exact

Name of Registrant as Specified in Its Charter)

(Address of Principal Executive Offices) (Zip Code)

Registrant’s

telephone number, including area code: (609) 896-9100

Securities

registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, Par Value $0.01 Per Share CLSN NASDAQ CAPITAL MARKET

Securities

registered pursuant to section 12(g) of the Act:

None

Indicate

by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

[ ] No [X]

Indicate

by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

[ ] No [X]

Indicate

by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports)

and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate

by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant

to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that

the Registrant was required to submit such files). Yes [X] No [ ]

Indicate

by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”,

“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ] Accelerated Filer [ ]

Non-accelerated Filer [ ] Smaller Reporting Company [X]

Emerging Growth Company [ ]

If

an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate

by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered

public accounting firm that prepared or issued its audit report. [ ]

Indicate

by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes

[ ] No [X]

The

aggregate market value of the common stock held by non-affiliates of the Registrant was approximately $121.8 million as of June

30, 2020 (the last business day of the Registrant’s most recently completed second fiscal quarter) based on the closing

sale price of $3.72 for the Registrant’s common stock on that date as reported by The Nasdaq Capital Market (“NASDAQ”).

For purposes of this calculation, shares of common stock held by directors, officers and stockholders who own greater than 10%

of the Registrant’s outstanding stock at June 30, 2020 were excluded. This determination of executive officers and directors

as affiliates is not necessarily a conclusive determination for any other purpose.

As

of March 18, 2021, 75,011,774 shares of the Registrant’s common stock were issued and outstanding.

DOCUMENTS

INCORPORATED BY REFERENCE

None

CELSION

CORPORATION

FORM

10-K

TABLE

OF CONTENTS

PART I

ITEM 1. BUSINESS 1

FORWARD-LOOKING STATEMENTS 1

OVERVIEW 2

IMMUNO-ONCOLOGY PROGRAM 2

THERAPLAS Technology Platform 2

Ovarian Cancer Overview 3

GEN-1 Immunotherapy 3

OVATION I Study 3

OVATION 2 Study 5

PLACCINE DNA VACCINE TECHNOLOGY PLATFORM 7

COVID-19 Vaccine Overview 7

Our Next Generation Vaccine Initiative 8

THERMODOX® DIRECTED CHEMOTHERAPY 9

THERMODOX® for the Treatment of Primary Liver Cancer 9

Primary Liver Cancer Overview 9

Celsion’s Approach 9

OPTIMA Study 10

Investigator-Sponsored Studies with ThermoDox® 12

BUSINESS STRATEGY AND DEVELOPMENT PLAN 13

RESEARCH AND DEVELOPMENT EXPENDITURES 13

GOVERNMENT REGULATION 14

MANUFACTURING AND SUPPLY 26

SALES AND MARKETING 26

PRODUCT LIABILITY AND INSURANCE 26

COMPETITION 27

ThermoDox ® 27

INTELLECTUAL PROPERTY 27

Patents and Proprietary Rights 27

EMPLOYEES 28

COMPANY INFORMATION 28

AVAILABLE INFORMATION 29

RECENT EVENTS 29

ITEM 1A. RISK FACTORS 29

ITEM 1B. UNRESOLVED STAFF COMMENTS 54

ITEM 2. PROPERTIES 54

ITEM 3. LEGAL PROCEEDINGS 55

ITEM 4. MINE SAFETY DISCLOSURES 55

i

CELSION

CORPORATION

FORM

10-K

TABLE

OF CONTENTS (continued)

PART II

Market for Our Common Stock 56

Record Holders 56

Dividend Policy 56

Securities Authorized for Issuance Under Equity Compensation Plans 56

Unregistered Shares of Equity Securities 56

Issuer Purchases of Equity Securities 56

ITEM 6. SELECTED FINANCIAL DATA 56

Overview 57

Business Plan 68

Financing Overview 70

Critical Accounting Policies and Estimates 73

Results of Operations 74

Financial Condition, Liquidity and Capital Resources 76

Off-Balance Sheet Arrangements 77

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 77

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 78

ITEM 9A. CONTROLS AND PROCEDURES 78

ITEM 9B. OTHER INFORMATION 78

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 79

ITEM 11. EXECUTIVE COMPENSATION 85

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 105

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 107

1. FINANCIAL STATEMENTS 107

2. FINANCIAL STATEMENT SCHEDULES 107

ii

PART

I

ITEM 1. BUSINESS

FORWARD-LOOKING

STATEMENTS

Certain

of the statements contained in this Annual Report on Form 10-K (this “Annual Report”) are forward-looking and constitute

forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities

Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition,

from time to time we may publish forward-looking statements relating to such matters as anticipated financial performance, business

prospects, technological developments, product pipelines, clinical trials and research and development activities, the adequacy

of capital reserves and anticipated operating results and cash expenditures, current and potential collaborations, strategic alternatives

and other aspects of our present and future business operations and similar matters that also constitute such forward-looking

statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s

actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of

activity, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other

things, unforeseen changes in the course of research and development activities and in clinical trials; possible changes in cost,

timing and progress of development, preclinical studies, clinical trials and regulatory submissions; our collaborators’

ability to obtain and maintain regulatory approval of any of our product candidates; possible changes in capital structure, financial

condition, future working capital needs and other financial items; changes in approaches to medical treatment; introduction of

new products by others; success or failure of our current or future collaboration arrangements, risks and uncertainties associated

with possible acquisitions of other technologies, assets or businesses; our ability to obtain additional funds for our operations;

our ability to obtain and maintain intellectual property protection for our technologies and product candidates and our ability

to operate our business without infringing the intellectual property rights of others; our reliance on third parties to conduct

preclinical studies or clinical trials; the rate and degree of market acceptance of any approved product candidates; possible

actions by customers, suppliers, strategic partners, potential strategic partners, competitors and regulatory authorities; compliance

with listing standards of The Nasdaq Capital Market; and those listed under “Risk Factors” below and elsewhere in

this Annual Report.

In

some cases, you can identify forward-looking statements by terminology such as “expect,” “anticipate,”

“estimate,” “plan,” “believe, “could,” “intend,” “predict”,

“may,” “should,” “will,” “would” and words of similar import regarding the Company’s

expectations. Forward-looking statements are only predictions. Actual events or results may differ materially. Although we believe

that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business and operations,

we cannot guarantee that actual results will not differ materially from our expectations. In evaluating such forward-looking statements,

you should specifically consider various factors, including the risks outlined under “Risk Factors.” The discussion

of risks and uncertainties set forth in this Annual Report is not necessarily a complete or exhaustive list of all risks facing

the Company at any particular point in time. We operate in a highly competitive, highly regulated and rapidly changing environment

and our business is in a state of evolution. Therefore, it is likely that new risks will emerge, and that the nature and elements

of existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein,

or to assess either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination

of factors, or new or altered factors, may cause results to differ materially from those contained in any forward-looking statement.

Except as required by law, we assume no obligation to revise or update any forward-looking statement that may be made from time

to time by us or on our behalf for any reason, even if new information becomes available in the future. Unless the context requires

otherwise or unless otherwise noted, all references in this Annual Report to “Celsion”, “the Company”,

“we”, “us”, or “our” are to Celsion Corporation, a Delaware corporation and its wholly owned

subsidiary, CLSN Laboratories, Inc., also a Delaware Corporation.

Trademarks

The

Celsion brand and product names, including but not limited to Celsion® and ThermoDox®, contained

in this document are trademarks, registered trademarks or service marks of Celsion Corporation or its subsidiary in the United

States (the “U.S.”) and certain other countries. This document also contains references to trademarks and service

marks of other companies that are the property of their respective owners.

OVERVIEW

Celsion

Corporation (“Celsion” and the “Company”) is a fully integrated, clinical stage biotechnology company

focused on advancing a portfolio of innovative treatments including DNA-based immunotherapies, next generation vaccines and directed

chemotherapies through clinical trials and eventual commercialization. The Company’s product pipeline includes GEN-1, a

DNA-based immunotherapy for the localized treatment of ovarian cancer and ThermoDox®, a proprietary heat-activated

liposomal encapsulation of doxorubicin, currently under investigator-sponsored development for several cancer indications. Celsion

has two feasibility stage platform technologies for the development of novel nucleic acid-based immunotherapies and next generation

vaccines and other anti-cancer DNA or RNA therapies. Both are novel synthetic, non-viral vectors with demonstrated capability

in nucleic acid cellular transfection.

IMMUNO-ONCOLOGY

Program

On

June 20, 2014, the Company completed the acquisition of substantially all of the assets of EGEN, a private company located in

Huntsville, Alabama. Pursuant to the Asset Purchase Agreement, CLSN Laboratories acquired all of EGEN’s right, title and

interest in substantially all of the assets of EGEN, including cash and cash equivalents, patents, trademarks and other intellectual

property rights, clinical data, certain contracts, licenses and permits, equipment, furniture, office equipment, furnishings,

supplies and other tangible personal property. A key asset acquired from EGEN was the TheraPlas technology platform. The first

drug candidate developed from this technology platform is GEN-1.

THERAPLAS

Technology Platform

TheraPlas

is a technology platform for the delivery of DNA and mRNA therapeutics via synthetic non-viral carriers and is capable of providing

cell transfection for double-stranded DNA plasmids and large therapeutic RNA segments such as mRNA. There are two components of

the TheraPlas system, a plasmid DNA or mRNA payload encoding a therapeutic protein, and a delivery system. The delivery system

is designed to protect the DNA/mRNA from degradation and promote trafficking into cells and through intracellular compartments.

We designed the delivery system of TheraPlas by chemically modifying the low molecular weight polymer to improve its gene transfer

activity without increasing toxicity. We believe that TheraPlas may be a viable alternative to current approaches to gene delivery

due to several distinguishing characteristics, including enhanced molecular versatility that allows for complex modifications

to potentially improve activity and safety.

The

design of the TheraPlas delivery system is based on molecular functionalization of polyethyleneimine (PEI), a cationic delivery

polymer with a distinct ability to escape from the endosomes due to heavy protonation. The transfection activity and toxicity

of PEI is tightly coupled to its molecular weight; therefore, the clinical application of PEI is limited. We have used molecular

functionalization strategies to improve the activity of low molecular weight PEIs without augmenting their cytotoxicity. In one

instance, chemical conjugation of a low molecular weight branched BPEI1800 with cholesterol and polyethylene glycol (PEG) to form

PEG-PEI-Cholesterol (PPC) dramatically improved the transfection activity of BPEI1800 following in vivo delivery. Together, the

cholesterol and PEG modifications produced approximately 20-fold enhancement in transfection activity. Biodistribution studies

following intraperitoneal or subcutaneous administration of DNA/PPC nanocomplexes showed DNA delivery localized primarily at the

injection site with only small amount escaping into the systemic circulation. PPC is the delivery component of our lead TheraPlas

product, GEN-1, which is in clinical development for the treatment of ovarian cancer. The PPC manufacturing process has been scaled

up from bench scale (1-2 g) to 0.6Kg, and several current Good Manufacturing Practice (“cGMP”) lots have been produced

with reproducible quality.

We

believe that TheraPlas has emerged as a viable alternative to current approaches due to several distinguishing characteristics

such as strong molecular versatility that may allow for complex modifications to potentially improve activity and safety with

little difficulty. The biocompatibility of these polymers reduces the risk of adverse immune response, thus allowing for repeated

administration. Compared to naked DNA or cationic lipids, TheraPlas is generally safer, more efficient, and cost effective. We

believe that these advantages place Celsion in a strong position to capitalize on this technology platform.

Ovarian

Cancer Overview

Ovarian

cancer is the most lethal of gynecological malignancies among women with an overall five-year survival rate of 45%. This poor

outcome is due in part to the lack of effective prevention and early detection strategies. There were approximately 22,000 new

cases of ovarian cancer in the U.S. in 2014 with an estimated 14,000 deaths. Mortality rates for ovarian cancer declined very

little in the last forty years due to the unavailability of detection tests and improved treatments. Most women with ovarian cancer

are not diagnosed until Stages III or IV, when the disease has spread outside the pelvis to the abdomen and areas beyond causing

swelling and pain, where the five-year survival rates are 25 - 41 percent and 11 percent, respectively. First-line chemotherapy

regimens are typically platinum-based combination therapies. Although this first line of treatment has an approximate 80 percent

response rate, 55 to 75 percent of women will develop recurrent ovarian cancer within two years and ultimately will not respond

to platinum therapy. Patients whose cancer recurs or progresses after initially responding to surgery and first-line chemotherapy

have been divided into one of the two groups based on the time from completion of platinum therapy to disease recurrence or progression.

This time period is referred to as platinum-free interval. The platinum-sensitive group has a platinum-free interval of longer

than six months. This group generally responds to additional treatment with platinum-based therapies. The platinum-resistant group

has a platinum-free interval of shorter than six months and is resistant to additional platinum-based treatments. Pegylated liposomal

doxorubicin, topotecan, and Avastin are the only approved second-line therapies for platinum-resistant ovarian cancer. The overall

response rate for these therapies is 10 to 20 percent with median overall survival (“OS”) of eleven to twelve months.

Immunotherapy is an attractive novel approach for the treatment of ovarian cancer particularly since ovarian cancers are considered

immunogenic tumors. IL-12 is one of the most active cytokines for the induction of potent anti-cancer immunity acting through

the induction of T-lymphocyte and natural killer cell proliferation. The precedence for a therapeutic role of IL-12 in ovarian

cancer is based on epidemiologic and preclinical data.

GEN-1

Immunotherapy

GEN-1

is a DNA-based immunotherapeutic product candidate for the localized treatment of ovarian cancer by intraperitoneally administering

an Interleukin-12 (“IL-12”) plasmid formulated with our proprietary TheraPlas delivery system. In this DNA-based approach,

the immunotherapy is combined with a standard chemotherapy drug, which can potentially achieve better clinical outcomes than with

chemotherapy alone. We believe that increases in IL-12 concentrations at tumor sites for several days after a single administration

could create a potent immune environment against tumor activity and that a direct killing of the tumor with concomitant use of

cytotoxic chemotherapy could result in a more robust and durable antitumor response than chemotherapy alone. We believe the rationale

for local therapy with GEN-1 is based on the following:

● Local therapy is ideal for long-term maintenance therapy.

OVATION

I Study. In February 2015, we announced that the U.S. Food and Drug Administration (“FDA”) accepted, without

objection, the Phase I dose-escalation clinical trial of GEN-1 in combination with the standard of care in neoadjuvant ovarian

cancer (the “OVATION I Study”). On September 30, 2015, we announced enrollment of the first patient in the OVATION

I Study. The OVATION I Study was designed to:

(iii) attempt to define an optimal dose for a follow-on Phase I/II study.

In

addition, the OVATION I Study established a unique opportunity to assess how cytokine-based compounds such as GEN-1, directly

affect ovarian cancer cells and the tumor microenvironment in newly diagnosed ovarian cancer patients. The study was designed

to characterize the nature of the immune response triggered by GEN-1 at various levels of the patients’ immune system, including:

We

initiated the OVATION I Study at four clinical sites at the University of Alabama at Birmingham, Oklahoma University Medical Center,

Washington University in St. Louis, and the Medical College of Wisconsin. During 2016 and 2017, we announced data from the first

fourteen patients in the OVATION I Study. On October 3, 2017, we announced final translational research and clinical data from

the OVATION I Study.

Key

translational research findings from all evaluable patients are consistent with the earlier reports from partial analysis of the

data and are summarized below:

The

Company also reported positive clinical data from the first fourteen patients who completed treatment in the OVATION I Study.

GEN-1 plus standard chemotherapy produced no dose limiting toxicities and positive dose dependent efficacy signals which correlate

well with positive surgical outcomes as summarized below:

On

March 2, 2019, the Company announced final progression free survival (“PFS”) results from the OVATION I Study. Median

PFS in patients treated per protocol (n=14) was 21 months and was 17.1 months for the intent-to-treat (“ITT”) population

(n=18) for all dose cohorts, including three patients who dropped out of the study after 13 days or less, and two patients who

did not receive full NAC and GEN-1 cycles. Under the current standard of care, in women with Stage III/IV ovarian cancer undergoing

NAC, their disease progresses within about 12 months on average. The results from the OVATION I Study support continued evaluation

of GEN-1 based on promising tumor response, as reported in the PFS data, and the ability for surgeons to completely remove visible

tumor at interval debulking surgery. GEN-1 was well tolerated, and no dose-limiting toxicities were detected. Intraperitoneal

administration of GEN-1 was feasible with broad patient acceptance.

OVATION

2 Study. The Company held an Advisory Board Meeting on September 27, 2017 with the clinical investigators and scientific

experts including those from Roswell Park Cancer Institute, Vanderbilt University Medical School, and M.D. Anderson Cancer Center

to review and finalize clinical, translational research and safety data from the OVATION I Study in order to determine the next

steps forward for our GEN-1 immunotherapy program.

On

November 13, 2017, the Company filed its Phase I/II clinical trial protocol with the FDA for GEN-1 for the localized treatment

of ovarian cancer. The protocol is designed with a single dose escalation phase to 100 mg/m2 to identify a safe and tolerable

dose of GEN-1 while maximizing an immune response. The Phase I portion of the study will be followed by a continuation at the

selected dose in approximately 110 patients randomized Phase II study.

In

the OVATION 2 Study, patients in the GEN-1 treatment arm will receive GEN-1 plus chemotherapy pre- and post-interval debulking

surgery (“IDS”). The OVATION 2 Study will include up to 110 patients with Stage III/IV ovarian cancer, with 12 to

15 patients in the Phase I portion and up to 95 patients in Phase II. The study is powered to show a 33% improvement in the primary

endpoint, PFS, when comparing GEN-1 with neoadjuvant + adjuvant chemotherapy versus neoadjuvant + adjuvant chemotherapy alone.

The PFS primary analysis will be conducted after at least 80 events have been observed or after all patients have been followed

for at least 16 months, whichever is later.

In

March 2020, the Company announced encouraging initial clinical data from the first 15 patients enrolled in the Phase I portion

of the OVATION 2 Study for patients newly diagnosed with Stage III and IV ovarian cancer. The OVATION 2 Study combines GEN-1,

the Company’s IL-12 gene-mediated immunotherapy, with standard-of-care neoadjuvant chemotherapy (NACT). Following NACT,

patients undergo interval debulking surgery (IDS), followed by three additional cycles of chemotherapy.

GEN-1

plus standard NACT produced positive dose-dependent efficacy results, with no dose-limiting toxicities, which correlates well

with successful surgical outcomes as summarized below:

% of Patients with R0 Resections

On

March 23, 2020, the Company announced that the European Medicines Agency (the “EMA”) Committee for Orphan Medicinal

Products (“COMP”) has recommended that GEN-1 be designated as an orphan medicinal product for the treatment of ovarian

cancer. GEN-1 is an IL-12 DNA plasmid vector encased in a non-viral nanoparticle delivery system, which enables cell transfection

followed by persistent, local secretion of the IL-12 protein. GEN-1 previously received orphan designation from the FDA.

On

March 26, 2020, the Company announced with Medidata, a Dassault Systèmes company, that examining matched patient data provided

by Medidata in a synthetic control arm (“SCA”) with results from the Company’s completed Phase Ib dose-escalating

OVATION I Study showed positive results in progression-free survival (“PFS”). The hazard ratio (“HR”)

was 0.53 in the ITT group, showing strong signals of efficacy. Celsion believes these data may warrant consideration of strategies

to accelerate the clinical development program for GEN-1 in newly diagnosed, advanced ovarian cancer patients by the FDA. In its

March 2019 discussion with Celsion, the FDA noted that preliminary findings from the Phase Ib OVATION I Study were exciting but

lacked a control group to evaluate GEN-1’s independent impact on impressive tumor response, surgical results and PFS. The

FDA encouraged the Company to continue its GEN-1 development program and consult with FDA with new findings that may have a bearing

on designations such as Fast Track and Breakthrough Therapy.

SCAs

have the potential to revolutionize clinical trials in certain oncology indications and some other diseases where a randomized

control is not ethical or practical. SCAs are formed by carefully selecting control patients from historical clinical trials to

match the demographic and disease characteristics of the patients treated with the new investigational product. SCAs have been

shown to mimic the results of traditional randomized controls so that the treatment effects of an investigational product can

be visible by comparison to the SCA. SCAs can help advance the scientific validity of single arm trials, and in certain indications,

reduce time and cost, and expose fewer patients to placebos or existing standard-of-care treatments that might not be effective

for them.

On

July 27, 2020, the Company announced the randomization of the first two patients in the Phase II portion of the OVATION 2 Study

with GEN-1 in advanced ovarian cancer. The Company anticipates completing enrollment of up to 110 patients in the second half

of 2021. Because this is an open-label study, the Company intends to provide clinical updates throughout the course of treatment

including response rates and surgical resection scores.

On

February 22, 2021, the Company announced that it has received Fast Track designation from the FDA for GEN-1, its DNA-mediated

IL-12 immunotherapy currently in Phase II development for the treatment of advanced ovarian cancer.

On

February 25, 2021, the Company provided an update on the OVATION 2 Study. The Company reported that approximately one-third, or

34 patients, of the anticipated 110 patients had been enrolled into the OVATION 2 Study, of which 20 are in the treatment arm

and 14 are in the control. Currently, 27 patients have had their interval debulking surgery with the following results:

● 7 of 12 patients, or 58%, of patients in the control arm had an R0 resection.

The

Company further reported that 22 clinical sites in the U.S. and Canada have been initiated, with three more sites expected to

be added by the end of the first quarter. Clinical investigators met in early February 2021 in a virtual meeting and expressed

excitement about the potential for GEN-1 to treat advanced ovarian cancer and, despite the challenges and earlier delays posed

by the COVID-19 pandemic, they remain committed to completing enrollment in the study during the second half of 2021.

PLACCINE

DNA VACCINE TECHNOLOGY PLATFORM

In

January 2021, the Company announced the filing of a provisional U.S. patent application for a novel DNA-based, investigational

vaccine for preventing or treating infections from a broad range of infectious agents including the coronavirus disease using

its PLACCINE DNA vaccine technology platform (“PLACCINE”). The provisional patent covers a family of novel composition

of multi-cistronic vectors and polymeric nanoparticles that comprise the PLACCINE DNA vaccine platform technology for preventing

or treating infectious agents that have the potential for global pandemics, including the SARS-CoV-2 virus and its variations,

using the Company’s platform technology.

Celsion’s

PLACCINE DNA vaccine technology platform is characterized by a single multi-cistronic DNA plasmid vector expressing multiple pathogen

antigens along with a potent immune modifier and delivered with a synthetic delivery system. It is easily adaptable to creating

vaccines for a multitude of pathogens, including emerging pathogens leading to pandemics as well as infectious diseases that have

yet to be effectively addressed with current vaccine technologies. This flexible vaccine platform is well supported by an already

established supply chain to produce any plasmid vector and its assembly into a respective vaccine formulation.

PLACCINE

is an extension of the Company’s synthetic, non-viral TheraPlas delivery technology currently in a Phase II trial for the

treatment of late-stage ovarian cancer with GEN-1. Celsion’s proprietary multifunctional DNA vaccine technology concept

is built on the flexible PLACCINE technology platform that is amenable to rapidly responding to the SARS-CoV-2 virus, as well

as possible future mutations of SARS-CoV-2, other future pandemics, emerging bioterrorism threats, and novel infectious diseases.

Celsion’s extensive experience with TheraPlas suggests that the PLACCINE-based nanoparticles are stable at storage temperatures

of 4oC to 25oC, making vaccines developed on this platform easily suitable for broad world-wide distribution.

Celsion’s

vaccine approach is designed to optimize the quality of the immune response dictating the efficiency of pathogen clearance and

patient recovery. Celsion has taken a multivalent approach in an effort to generate an even more robust immune response that not

only results in a strong neutralizing antibody response, but also a more robust and durable T-cell response. Delivered with Celsion’s

synthetic polymeric system, the proprietary DNA plasmid is protected from degradation and its cellular uptake is facilitated.

COVID-19

Vaccine Overview

Emerging

data from the recent literature indicates that the quality of the immune response as opposed to its absolute magnitude is what

dictates SARS-CoV-2 viral clearance and recovery and that an ineffective or non-neutralizing enhanced antibody response might

actually exacerbate disease. The first-generation COVID-19 vaccines were developed for rapid production and deployment and were

not optimized for generating cellular responses that result in effective viral clearance. Though early data has indicated some

of these vaccines to be over 95% effective, these first-generation vaccines were primarily designed to generate a strong antibody

response and, while they have been shown to provide prophylactic protection against disease, the durability of this protection

is currently unclear. The vast majority of these vaccines have been specifically developed to target the SARS-CoV-2 Spike (S)

protein (antigen), though it is known that restricting a vaccine to a sole viral antigen creates selection pressure that can serve

to facilitate the emergence of viral resistance. Indeed, even prior to full vaccine rollout, it has been observed that the S protein

is a locus for rapid evolutionary and functional change as evidenced by the D614G, Y453F, 501Y.V2, and VUI-202012/01 mutations/deletions.

This propensity for mutation of the S protein leads to future risk of efficacy reduction over time as these mutations accumulate.

Our

Next Generation Vaccine Initiative

Celsion’s

next generation vaccine initiative stands at the confluence of immunotherapy and immunogenicity and envisions delivery, on a single

plasmid, multiple SARS-CoV-2 antigens in conjunction with a potent immune modifier, interleukin-12 (IL-12), which directs a TH-1

immune response, stimulates T-cell immunity, and also promises the promotion of humoral immunity (antibody response). While most

COVID-19 vaccines in late-stage clinical development are monovalent (S protein antigen only), Celsion has taken this multivalent

approach in an effort to generate an even more robust immune response that not only results in a strong neutralizing antibody

response, but also a more robust and durable T-cell response.

Celsion’s

vaccine candidate approach comprises a single plasmid vector containing the DNA sequence encoding the cytokine IL-12 and multiple

SARS-CoV-2 antigens, including S antigen in combination with the membrane (M) or nucleocapsid (N) antigen. Delivery will be evaluated

intramuscularly, intradermally, or subcutaneously with a non-viral synthetic DNA delivery carrier that facilitates vector delivery

into the cells of the injected tissue and has potential immune adjuvant properties. Unique designs and formulations of Celsion

vaccine candidates may offer several potential key advantages.

Future

vaccine technology will need to address viral mutations and the challenges of efficient manufacturing, distribution, and storage.

We believe an adaptation of our TheraPlas technology, PLACCINE, has the potential to meet these challenges. Our approach is described

in our provisional patent filing and is summarized as a DNA vaccine technology platform characterized by a single plasmid DNA

with multiple coding regions. The plasmid vector is designed to express multiple pathogen antigens along with a potent immune

modifier. It is delivered via a synthetic delivery system and has the potential to be easily modified to create vaccines against

a multitude of infectious diseases, addressing:

We

are conducting preliminary research associated with our recently announced proprietary DNA vaccine platform provisional patent

filing. At the same time, we are redoubling our efforts and R&D resources in our immuno-oncology and next generation vaccine

program.

THERMODOX®

- DIRECTED CHEMOTHERAPY

Liposomes

are manufactured submicroscopic vesicles consisting of a discrete aqueous central compartment surrounded by a membrane bilayer

composed of naturally occurring lipids. Conventional liposomes have been designed and manufactured to carry drugs and increase

residence time, thus allowing the drugs to remain in the bloodstream for extended periods of time before they are removed from

the body. However, the current existing liposomal formulations of cancer drugs and liposomal cancer drugs under development do

not provide for the immediate release of the drug and the direct targeting of organ specific tumors, two important characteristics

that are required for improving the efficacy of cancer drugs such as doxorubicin. A team of research scientists at Duke University

developed a heat-sensitive liposome that rapidly changes its structure when heated to a threshold minimum temperature of 39.5o

to 42o Celsius. Heating creates channels in the liposome bilayer that allow an encapsulated drug to rapidly disperse into

the surrounding tissue. This novel, heat-activated liposomal technology is differentiated from other liposomes through its unique

low heat-activated release of encapsulated chemotherapeutic agents. We are able to use several available focused-heat technologies,

such as radiofrequency ablation (“RFA”), microwave energy and high intensity focused ultrasound (“HIFU”),

to activate the release of drugs from our novel heat sensitive liposomes.

THERMODOX®

for the Treatment of Primary Liver Cancer

Primary

Liver Cancer Overview

Hepatocellular

carcinoma (“HCC”) is one of the most common and deadliest forms of cancer worldwide. It ranks as the third most common

solid tumor cancer. It is estimated that up to 90% of liver cancer patients will die within five years of diagnosis. The incidence

of primary liver cancer is approximately 35,000 cases per year in the U.S., approximately 65,000 cases per year in Europe and

is increasing at approximately 2-3% per year worldwide. Global incidence (per 2017 GLOBALCAN statistics) is reported at 755,000

cases. The World Health Organization (the “WHO”) has projected that HCC will be the most prevalent form of cancer

by 2030. HCC is commonly diagnosed in patients with longstanding hepatic disease and cirrhosis (primarily due to hepatitis C in

the U.S., Japan and Europe and hepatitis B in Asia).

At

an early stage, the standard first line treatment for liver cancer is surgical resection of the tumor. Up to 80% of patients are

ineligible for surgery or transplantation at time of diagnosis because early-stage liver cancer generally has few symptoms and

when finally detected the tumor frequently is too large for surgical resection. There are few alternative treatments since radiation

therapy and chemotherapy are largely ineffective in treating liver cancer. For tumors generally up to 5 centimeters in diameter,

RFA has emerged as the standard of care treatment which directly destroys the tumor tissue through the application of high temperatures

administered by a probe inserted into the core of the tumor. Local recurrence rates after RFA directly correlate to the size of

the tumor. For tumors 3 cm or smaller in diameter the recurrence rate has been reported to be 10 – 20%; however, for tumors

greater than 3 cm, local recurrence rates of 40% or higher have been observed.

Celsion’s

Approach

While

RFA uses extremely high temperatures (greater than 90° Celsius) to ablate the tumor, it may fail to treat micro-metastases

in the outer margins of the ablation zone because temperatures in the periphery may not be high enough to destroy cancer cells.

Our ThermoDox® treatment approach is designed to utilize the ability of RFA devices to ablate the center of the tumor while

simultaneously thermally activating our ThermoDox® liposome to release its encapsulated doxorubicin to kill any remaining

viable cancer cells throughout the heated region, including the ablation margins. This novel treatment approach is intended to

deliver the drug directly to those cancer cells that survive RFA. This approach is designed to increase the delivery of the doxorubicin

at the desired tumor site while potentially reducing drug exposure distant to the tumor site.

OPTIMA

Study

The

OPTIMA Study represents an evaluation of ThermoDox® in combination with a first line therapy, RFA, for newly diagnosed,

intermediate stage HCC patients. The OPTIMA Study was designed to enroll up to 550 patients globally at approximately 65 clinical

sites in the U.S., Canada, European Union (EU), China and other countries in the Asia-Pacific region and will evaluate ThermoDox®

in combination with standardized RFA, which will require a minimum of 45 minutes across all investigators and clinical sites

for treating lesions three to seven centimeters, versus standardized RFA alone. The primary endpoint for the OPTIMA Study is OS,

and the secondary endpoints are progression free survival and safety. The statistical plan calls for two interim efficacy analyses

by an independent Data Monitoring Committee (“DMC”).

On

February 24, 2014, we announced that the FDA provided clearance for the OPTIMA Study, which is a pivotal, double-blind, placebo-controlled

Phase III trial of ThermoDox®, in combination with standardized RFA, for the treatment of primary liver cancer.

The trial design of the OPTIMA Study is based on the comprehensive analysis of data from an earlier Phase III clinical trial called

the HEAT Study (the “HEAT Study”). The OPTIMA Study is supported by a hypothesis developed from an OS analysis of

a large subgroup of patients from the HEAT Study.

Post-hoc

data analysis from our earlier Phase III HEAT Study suggests that ThermoDox® may substantially improve OS, when

compared to the control group, in patients if their lesions undergo a 45-minute RFA procedure standardized for a lesion greater

than 3 cm in diameter. Data from nine OS sweeps have been conducted since the top line progression free survival PFS data from

the HEAT Study were announced in January 2013, with each data set demonstrating substantial improvement in clinical benefit over

the control group with statistical significance. On August 15, 2016, we announced updated results from its final retrospective

OS analysis of the data from the HEAT Study. These results demonstrated that in a large, well bounded, subgroup of patients with

a single lesion (n=285, 41% of the HEAT Study patients), treatment with a combination of ThermoDox® and optimized

RFA provided an average 54% risk improvement in OS compared to optimized RFA alone. The HR at this analysis is 0.65 (95% CI 0.45

- 0.94) with a p-value of 0.02. Median OS for the ThermoDox® group has been reached which translates into a two-year

survival benefit over the optimized RFA group (projected to be greater than 80 months for the ThermoDox® plus optimized

RFA group compared to less than 60 months projection for the optimized RFA only group). This information should be viewed with

caution since it is based on a retrospective analysis of a subgroup.

We

also conducted additional analyses that further strengthen the evidence for the HEAT Study subgroup.

On

August 13, 2019, the Company announced that results from an independent analysis of the Company’s ThermoDox®

HEAT Study conducted by the National Institutes of Health (NIH) were published in the peer-reviewed publication, Journal

of Vascular and Interventional Radiology. The analysis was conducted by the intramural research program of the NIH and the

NIH Center for Interventional Oncology, with the full data set from the Company’s HEAT Study. The analysis evaluated the

full data set to determine if there was a correlation between baseline tumor volume and RFA heating time (minutes/tumor volume

in milliliters), with or without ThermoDox® treatment, for patients with HCC. The NIH analysis was conducted under

the direction of Dr. Bradford Wood, MD, Director, NIH Center for Interventional Oncology and Chief, NIH Clinical Center Interventional

Radiology.

The

article titled, “RFA Duration Per Tumor Volume May Correlate with Overall Survival in Solitary Hepatocellular Carcinoma

Patients Treated with RFA Plus Lyso-thermosensitive Liposomal Doxorubicin,” discussed the NIH analysis of results from

437 patients in the HEAT Study (all patients with a single lesion representing 62.4% of the study population). The key finding

was that increased RFA heating time per tumor volume significantly improved OS in patients with single-lesion HCC who were treated

with RFA plus ThermoDox®, compared to patients treated with RFA alone. A one-unit increase in RFA duration per

tumor volume was shown to result in about a 20% improvement in OS for patients administered ThermoDox®, compared

to RFA alone. The authors conclude that increasing RFA heating time in combination with ThermoDox® significantly

improves OS and establishes an improvement of over two years versus the control arm when the heating time per milliliter of tumor

is greater than 2.5 minutes. This finding was consistent with the Company’s own results, which defined the optimized

RFA procedure as a 45-minute treatment for tumors with a diameter of 3 centimeters. Thus, the NIH analysis lent support

to the hypothesis underpinning the OPTIMA Study.

In

August 2018, the Company announced that the OPTIMA Study was fully enrolled. On August 5, 2019, the Company announced that the

prescribed number of OS events had been reached for the first prespecified interim analysis of the OPTIMA Phase III Study. Following

preparation of the data, the first interim analysis was conducted by the DMC. The DMC’s pre-planned interim efficacy review

followed 128 patient events, or deaths, which occurred in August 2019. On November 4, 2019, the Company announced that the DMC

unanimously recommended the OPTIMA Study continue according to protocol. The recommendation was based on a review of blinded safety

and data integrity from 556 patients enrolled in the OPTIMA Study. Data presented demonstrated that PFS and OS data appeared to

be tracking with patient data observed at a similar point in the Company’s subgroup of patients followed prospectively in

the earlier Phase III HEAT Study, upon which the OPTIMA Study was based.

On April 15, 2020, the Company announced that

the prescribed minimum number of events of 158 patient deaths had been reached for the second pre-specified interim analysis of

the OPTIMA Phase III Study. The hazard ratio for success at 158 deaths is 0.70, which represents a 30% reduction in the risk of

death compared with RFA alone. On July 13, 2020, the Company announced that it has received a recommendation from the DMC to consider

stopping the global OPTIMA Study. The recommendation was made following the second pre-planned interim safety and efficacy analysis

by the DMC on July 9, 2020. The DMC analysis found that the pre-specified boundary for stopping the trial for futility of 0.900

was crossed with an actual value of 0.903. However, the 2-sided p-value of 0.524 for this analysis provides uncertainty, subsequently,

the DMC left the final decision of whether or not to stop the OPTIMA Study to Celsion. There were no safety concerns noted during

the interim analysis. The Company followed the advice of the DMC considered its options either to stop the study

or continue to follow patients after a thorough review of the data, and an evaluation of our probability of success.

On

August 4, 2020, the Company issued a press release announcing it would continue following patients for OS, noting that

the unexpected and marginally crossed futility boundary, suggested by the Kaplan-Meier analysis at the second interim analysis

on July 9, 2020, may be associated with a data maturity issue. On October 12, 2020, the Company provided an update on the ongoing

data analysis from its Phase III OPTIMA Study with ThermoDox® as well as growing interest among clinical investigators

in conducting studies with ThermoDox® as a monotherapy or in combination with other therapies.

On

February 11, 2021, the Company provided a final update on the Phase III OPTIMA Study and the decision to stop following patients

in the Study. Independent analyses conducted by a global biometrics contract research organization and the NIH, did not find any

evidence of significance or factors that would justify continuing to follow patients for OS. Therefore, the Company notified

all clinical sites to discontinue following patients. The OPTIMA Study database of 556 patients will now be frozen at 185

patient deaths. While the analyses did identify certain patient subgroups that appear to have had a clinical benefit, the Company

concluded that it would not be in its best interest to pursue these retrospective findings as the regulatory hurdles supporting

further discussion will be significant.

Investigator-Sponsored

Studies with ThermoDox®

Celsion

continues working closely and supporting investigations by others throughout the world in breast cancer, pancreatic cancer and

in solid tumors in children. Following inquiries from the NIH, we intend to renew our Cooperative Research and Development Agreement

(CRADA) with the Institute at a nominal cost, one goal of which is to pursue their interest in a study of ThermoDox®

to treat patients with bladder cancer. Importantly, Celsion is developing a business model to support these investigator-sponsored

studies in a manner that will not interfere with the Company’s focus on our GEN-1 program and vaccine development initiative.

Below

are summaries of several investigator-sponsored studies using ThermoDox®:

Source: SEC EDGAR (public domain) · 10-K for the period ended 2020-12-31, filed 2021-03-19 · accession 0001493152-21-006382

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