UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
For
the fiscal year ended December 31, 2021.
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 ☒
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 ☒
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 ☒ 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 ☒ 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 ☒
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 ☒
The
aggregate market value of the common stock held by non-affiliates of the Registrant was approximately $109.9 million as of June 30, 2021
(the last business day of the Registrant’s most recently completed second fiscal quarter) based on the closing sale price of $19.05
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, 2021, were excluded. This determination of executive officers and directors as affiliates is not necessarily
a conclusive determination for any other purpose.
As
of March 30, 2022, 5,770,516 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
Celsion’s Approach 9
OPTIMA Study 10
Investigator-Sponsored Studies with ThermoDox® 11
BUSINESS STRATEGY AND DEVELOPMENT PLAN 11
RESEARCH AND DEVELOPMENT EXPENDITURES 12
GOVERNMENT REGULATION 12
MANUFACTURING AND SUPPLY 24
SALES AND MARKETING 24
PRODUCT LIABILITY AND INSURANCE 24
COMPETITION 24
ThermoDox ® 25
INTELLECTUAL PROPERTY 25
Patents and Proprietary Rights 25
EMPLOYEES 26
COMPANY INFORMATION 26
AVAILABLE INFORMATION 26
RECENT EVENTS 26
ITEM 1A. RISK FACTORS 27
ITEM 1B. UNRESOLVED STAFF COMMENTS 49
ITEM 2. PROPERTIES 50
ITEM 3. LEGAL PROCEEDINGS 50
ITEM 4. MINE SAFETY DISCLOSURES 50
i
CELSION
CORPORATION
FORM
10-K
TABLE
OF CONTENTS (continued)
PART II
Market for Our Common Stock 51
Record Holders 51
Dividend Policy 51
Securities Authorized for Issuance Under Equity Compensation Plans 51
Unregistered Sales of Equity Securities 51
Issuer Purchases of Equity Securities 51
ITEM 6. SELECTED FINANCIAL DATA 51
Overview 52
Business Plan 60
Financing Overview 62
Critical Accounting Policies and Estimates 65
Results of Operations 67
Financial Condition, Liquidity and Capital Resources 69
Off-Balance Sheet Arrangements 70
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 70
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 70
ITEM 9A. CONTROLS AND PROCEDURES 70
ITEM 9B. OTHER INFORMATION 71
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 71
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 72
ITEM 11. EXECUTIVE COMPENSATION 77
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 94
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 96
1. FINANCIAL STATEMENTS 96
2. FINANCIAL STATEMENT SCHEDULES 96
ii
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 subsidiaries, CLSN Laboratories, Inc., also a Delaware corporation and Celsion GmbH, a Swiss 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” or 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. ThermoDox®, Celsion’s proprietary heat-activated liposomal encapsulation
of doxorubicin, currently under investigator-sponsored development for several cancer indications, is being managed though Celsion’s
wholly owned subsidiary, Celsion GmbH. Additionally, 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, Inc., a privately held corporation 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 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 20,000 new cases of
ovarian cancer in the U.S. in 2021 with an estimated 13,000 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. The five-year survival rates for Stages III and IV are 39 percent and 17 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 encouraging 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, investigator assessed, 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
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.
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 2022. 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.
In
February 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 and also 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. Of the 34 patients enrolled in the trial, 27 patients have had their
interval debulking surgery with the following results:
● 58% of patients in the control arm had an R0 resection.
In
February 2022, the Company announced that following a pre-planned interim safety review of 81 as treated patients randomized in the OVATION
2 Study, the Data Safety Monitoring Board (DSMB) unanimously recommended that the OVATION 2 Study continue treating patients with the
dose of 100 mg/m2. The DSMB also determined that safety is satisfactory with an acceptable risk/benefit, and that patients
tolerate GEN-1 during a course of treatment that lasts up to six months. No dose-limiting toxicities were reported.
The
Company also announced that over 75% of the projected 110 patients have been enrolled in the OVATION 2 Study. Interim clinical data from
the first 39 patients who have undergone interval debulking surgery showed that the GEN-1 treatment arm is showing a 27% improvement
in R0 surgical resection rate over the control arm.
Through
March 15, 2022, 88 of 110 patients have been enrolled in the OVATION 2 study. To date no patient in the treatment arm of the phase 2
portion of the trial has received all 17 doses of the GEN-1 treatment as prescribed in the study protocol. Implications will be assessed
in conjunction with the primary end point, PFS, results.
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 TheraPlas
platform technology.
Celsion’s
PLACCINE DNA vaccine technology platform is characterized by a single multi-cistronic DNA plasmid vector expressing multiple pathogen
antigens delivered with a synthetic delivery system. We believe it is 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 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. Most 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
vaccine candidate comprises a single plasmid vector containing the DNA sequence encoding multiple SARS-CoV-2 antigens. 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. The synthetic polymeric DNA carrier is an important component of the vaccine
composition as it has the potential to facilitate the vaccine immunogenicity by improving vector delivery and, due to potential adjuvant
properties, attract professional immune cells to the site of vaccine delivery.
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. 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.
On
September 2, 2021, the Company announced results from preclinical in vivo studies
showing production of antibodies and cytotoxic T-cell response specific to the spike antigen of SARS-CoV-2 when immunizing BALB/c mice
with the Company’s next-generation PLACCINE DNA vaccine platform. Moreover, the antibodies to SARS-CoV-2 spike antigen prevented
the infection of cultured cells in a viral neutralization assay. The production of antibodies predicts the ability of PLACCINE to protect
against SARS-CoV-2 exposure, and the elicitation of cytotoxic T-cell response shows the vaccine’s potential to eradicate cells
infected with SARS-CoV-2. These findings demonstrate the potential immunogenicity of Celsion’s PLACCINE DNA vaccine, which is intended
to provide broad-spectrum protection and resistance against variants by incorporating multiple viral antigens, to improve vaccine stability
at storage temperatures of 4oC and above, and to facilitate cheaper and easier
manufacturing.
On
January 31, 2022, the Company announced it had engaged BIOQUAL, Inc., a preclinical testing contract research organization, to conduct
a non-human primate (NHP) challenge study with Celsion’s DNA-based approach for a SARS-CoV-2 vaccine. The NHP pilot study follows
the generation of encouraging mouse data and will evaluate the Company’s lead vaccine formulations for safety, immunogenicity and
protection against SARS-CoV-2. In completed preclinical studies, Celsion demonstrated safe and efficient immune responses including IgG
response, neutralizing antibodies and T-cell responses that parallel the activity of commercial vaccines following intramuscular (IM)
administration of novel vaccine compositions expressing a single viral antigen. In addition, vector development has shown promise of
neutralizing activity against a range of SARS-CoV-2 variants. Celsion’s novel DNA-based vaccines have been based on a simple intramuscular
injection that does not require viral encapsulation or special equipment for administration.
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.
Investigator
sponsored THERMODOX® for the Treatment of Various Cancers
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.
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 is 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 renewed 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®:
BUSINESS
STRATEGY AND DEVELOPMENT PLAN
We
have not generated and do not expect to generate any revenue from product sales in the next several years, if at all. An element of our
business strategy has been to pursue, as resources permit, the research and development of a range of product candidates for a variety
of indications. We may also evaluate licensing products from third parties to expand our current product pipeline. This is intended to
allow us to diversify the risks associated with our research and development expenditures. To the extent we are unable to maintain a
broad range of product candidates, our dependence on the success of one or a few product candidates would increase and results such as
those announced in relation to the OPTIMA Study in February 2021 will have a more significant impact on our financial prospects, financial
condition, and market value. We may also consider and evaluate strategic alternatives, including investment in, or acquisition of, complementary
businesses, technologies, or products. As demonstrated by the HEAT Study and OPTIMA Study results, drug research and development is an
inherently uncertain process and there is a high risk of failure at every stage prior to approval. The timing and the outcome of clinical
results are extremely difficult to predict. The success or failure of any preclinical development and clinical trial can have a disproportionately
positive or negative impact on our results of operations, financial condition, prospects, and market value.
Our
current business strategy includes the possibility of entering into collaborative arrangements with third parties to complete the development
and commercialization of our product candidates. In the event that third parties take over the clinical trial process for one or more
of our product candidates, the estimated completion date would largely be under the control of that third party rather than us. We cannot
forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements,
in whole or in part, and how such arrangements would affect our development plan or capital requirements. We may also apply for subsidies,
grants or government or agency-sponsored studies that could reduce our development costs. However we cannot forecast with any degree
of certainty whether we will be selected to receive any subsidy, grant or governmental funding.
We
had $56.9 million in cash and cash equivalents, short-term investments, interest receivable, net proceeds on the sale of net operating
losses and restricted cash as of December 31, 2021. Given our current development plans, we anticipate our current cash resources will
be sufficient to fund our operations and financial commitments through the end of 2024.
As
a result of the risks and uncertainties discussed in this Annual Report, among others, we are unable to estimate the duration and completion
costs of our research and development projects or when, if ever, and to what extent we will receive cash inflows from the commercialization
and sale of a product if one of our product candidates receives regulatory approval for marketing, if at all. Our inability to complete
any of our research and development activities, preclinical studies or clinical trials in a timely manner or our failure to enter into
collaborative agreements when appropriate could significantly increase our capital requirements and could adversely impact our liquidity.
While our estimated future capital requirements are uncertain and could increase or decrease as a result of many factors, including the
extent to which we choose to advance our research and development activities, preclinical studies and clinical trials, or whether we
are in a position to pursue manufacturing or commercialization activities, we will need significant additional capital to progress our
product candidates through development and clinical trials, obtain regulatory approvals and manufacture and commercialize approved products,
if any. We do not know whether we will be able to access additional capital when needed or on terms favorable to us or our stockholders.
Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our
business. See Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations of
this Annual Report for additional information regarding the Company’s financial condition, liquidity and capital resources.
RESEARCH
AND DEVELOPMENT EXPENDITURES
We