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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Celsion Corporation    CLSN

CELSION CORPORATION

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CELSION : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

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08/14/2019 | 05:03pm EDT

Forward-Looking Statements




Statements and terms such as "expect", "anticipate", "estimate", "plan",
"believe" and words of similar import regarding our expectations as to the
development and effectiveness of our technologies, the potential demand for our
products, and other aspects of our present and future business operations,
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. 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, readers should specifically consider the
various factors contained in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2018 filed with the SEC on March 29, 2019, which
factors include, without limitation, plans and objectives of management for
future operations or programs or proposed new products or services; changes in
the course of research and development activities and in clinical trials;
possible changes in cost and timing of development and testing; possible changes
in capital structure, financial condition, working capital needs and other
financial items; changes in approaches to medical treatment; clinical trial
analysis and future plans relating thereto; our ability to realize the full
extent of the anticipated benefits of our acquisition of substantially all of
the assets of EGEN, Inc., including achieving operational cost savings and
synergies in light of any delays we may encounter in the integration process and
additional unforeseen expenses; introduction of new products by others; possible
licenses or acquisitions of other technologies, assets or businesses; and
possible actions by customers, suppliers, partners, competitors and regulatory
authorities. These and other risks and uncertainties could cause actual results
to differ materially from those indicated by forward-looking statements.



The discussion of risks and uncertainties set forth in this Quarterly Report on
Form 10-Q and in our most recent Annual Report on Form 10-K, as well as in other
filings with the SEC, is not 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 constantly
evolving. 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. We disclaim any obligation to revise or update any
forward-looking statement that may be made from time to time by us or on our
behalf.


Strategic and Clinical Overview




Celsion is a fully-integrated development clinical stage oncology drug company
focused on advancing innovative cancer treatments, including directed
chemotherapies, DNA-mediated immunotherapy and RNA based therapies. Our lead
product candidate is ThermoDox®, a proprietary heat-activated liposomal
encapsulation of doxorubicin, currently in a Phase III clinical trial for the
treatment of primary liver cancer (the "OPTIMA Study"). Second in our pipeline
is GEN-1, a DNA-mediated immunotherapy for the localized treatment of ovarian
cancer. These investigational products are based on technologies that provide
the platform for the future development of a range of therapeutics for
difficult-to-treat forms of cancer. The first technology is Lysolipid Thermally
Sensitive Liposomes, a heat sensitive liposomal based dosage form that targets
disease with known chemotherapeutics in the presence of mild heat. The second
technology is TheraPlas, a novel nucleic acid-based treatment for local
transfection of therapeutic DNA plasmids. With these technologies we are working
to develop and commercialize more efficient, effective and targeted oncology
therapies that maximize efficacy while minimizing side effects common to cancer
treatments.



ThermoDox®



ThermoDox® is being evaluated in a Phase III clinical trial for primary liver
cancer, which we call the OPTIMA Study, which was initiated in 2014. ThermoDox®
is a liposomal encapsulation of doxorubicin, an approved and frequently used
oncology drug for the treatment of a wide range of cancers. Localized heat at
hyperthermia temperatures (greater than 40° Celsius) releases the encapsulated
doxorubicin from the liposome enabling high concentrations of doxorubicin to be
deposited preferentially in and around the targeted tumor.



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The 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. HCC incidence globally is approximately 755,000 new cases
per year and is the third largest cancer indication globally. Approximately 30%
of newly diagnosed patients can be addressed with RFA.



On February 24, 2014, we announced that the United States Food and Drug
Administration (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 clinical trial called the HEAT Study (the "HEAT Study").
The OPTIMA Study is supported by a hypothesis developed from an overall survival
analysis of a large subgroup of patients from the HEAT Study.



The OPTIMA Study was designed with extensive input from globally recognized HCC
researchers and expert clinicians and after receiving formal written feedback
from the FDA. 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 this clinical trial is overall survival ("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").



Post-hoc data analysis from our earlier Phase III HEAT Study suggest 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 Hazard Ratio ("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).



While 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. We commissioned an
independent computational model at the University of South Carolina Medical
School. The results unequivocally indicate that longer RFA heating times
correlate with significant increases in doxorubicin concentration around the RFA
treated tissue. In addition, we conducted a prospective preclinical study in 22
pigs using two different manufacturers of RFA and human equivalent doses of
ThermoDox® that clearly support the relationship between increased heating
duration and doxorubicin concentrations.



We completed enrollment of 556 patients in the Phase III OPTIMA Study in August
2018. Data for the study will be reviewed as it matures up to two interim
analyses expected to be conducted in the second half of 2019 and in the first
half of 2020. We expect that the final efficacy analysis, if necessary, will be
completed in the first half of 2021. If the study proves to provide a clinically
meaningful improvement in overall survival, Celsion will immediately apply for
marketing authorization in the US, Europe and China. ThermoDox® has received
U.S. FDA Fast Track Designation and has been granted orphan drug designation for
primary liver cancer in both the U.S. and the EU. Additionally, the U.S. FDA has
provided ThermoDox® with a 505(b)(2) registration pathway. Subject to a
successful trial, the OPTIMA Study has been designed to support registration in
all key primary liver cancer markets. We fully expect to submit registrational
applications in the U.S., Europe and China. We expect to submit and believes
that applications will be accepted in South Korea, Taiwan and Vietnam, three
other significant markets for ThermoDox® if it were to receive approval in
Europe, China or the U.S.



On December 18, 2018, we announced that the DMC for the OPTIMA Study completed
its last scheduled review of all patients enrolled in the trial and unanimously
recommended that the OPTIMA Study continue according to protocol to its final
data readout. The DMC's recommendation was based on the Committee's assessment
of safety and data integrity of all patients randomized in the trial as of
October 4, 2018. The DMC reviewed study data at regular intervals throughout the
patient enrollment period, with the primary responsibilities of ensuring the
safety of all patients enrolled in the study, the quality of the data collected,
and the continued scientific validity of the study design. As part of its review
of all 556 patients enrolled into the trial, the DMC evaluated a quality matrix
relating to the total clinical data set, confirming the timely collection of
data, that all data are current as well as other data collection and quality
criteria.



30







On August 5, 2019, the Company announced that the prescribed number of events
has been reached for the first prespecified interim analysis of the OPTIMA Phase
III Study with ThermoDox® plus RFA in patients with HCC, or primary liver
cancer. Following preparation of the data, the first interim analysis will be
conducted by the Independent Data Monitoring Committee (iDMC). The Company
expects the iDMC meeting to occur by mid-October. This timeline is consistent
with the Company's stated expectations and is necessary to provide a full and
comprehensive data set that may represent the potential for a successful trial
outcome. Celsion expects to announce iDMC recommendations as soon as possible
after the meeting. In accordance with the statistical plan, this initial interim
analysis has a target of 118 events, or 60% of the total number required for the
final analysis. At the time of the data cutoff, the Company received reports of
128 events. The hazard ratio for success at 128 events is approximately 0.63,
which represents a 37% reduction in the risk of death compared with RFA alone
and is consistent with the 0.65 hazard ratio that was observed in the
prospective HEAT Study subgroup, which demonstrated a two-year overall survival
advantage and a median time to death of more than seven and a half years.



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 (CIO), 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 radiofrequency ablation (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 overall survival (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 is 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 lends support to the hypothesis underpinning
the OPTIMA Study.



The HEAT Study. On January 31, 2013, the Company announced that the HEAT Study,
ThermoDox® in combination with RFA, did not meet the primary endpoint, PFS, in
the Phase III clinical trial enrolling 701 patients with primary liver cancer.
This determination was made after conferring with the HEAT Study independent
DMC, that the HEAT Study did not meet the goal of demonstrating a clinically
meaningful improvement in progression free survival. In the trial, ThermoDox®
was well-tolerated with no unexpected serious adverse events. Following the
announcement of the HEAT Study results, we continued to follow patients for OS,
the secondary endpoint of the HEAT Study. We have conducted a comprehensive
analysis of the data from the HEAT Study to assess the future strategic value
and development strategy for ThermoDox®.



Acquisition of EGEN Assets


On June 20, 2014, we completed the acquisition of substantially all of the
assets of EGEN, which has changed its company name to EGWU, Inc. after the
closing of the acquisition ("EGEN"), pursuant to an Asset Purchase Agreement
dated as of June 6, 2014, by and between EGEN and Celsion (the "Asset Purchase
Agreement"). We acquired all of EGEN's right, title and interest in and to
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. In addition, CLSN
Laboratories assumed certain specified liabilities of EGEN, including the
liabilities arising out of the acquired contracts and other assets relating to
periods after the closing date.



At the time of the acquisition, the total purchase price for the asset
acquisition was up to $44.4 million, including potential future earnout payments
of up to $30.4 million contingent upon achievement of certain earnout milestones
set forth in the Asset Purchase Agreement. We paid approximately $3.0 million in
cash after the expense adjustment and issued 241,590 shares of our common stock
to EGEN. The shares of common stock were issued in a private transaction exempt
from registration under the Securities Act, pursuant to Section 4 (2) thereof.



On March 28, 2019, the Company entered into an amendment to the Asset Purchase
Agreement discussed in Note 8 (the "Amended Asset Purchase Agreement") with
EGWU, Inc. Pursuant to the Amended Asset Purchase Agreement, payment of the
earnout milestone liability related to the Ovarian Cancer Indication of $12.4
million has been modified. The Company has the option to make the payment as
follows:


a) $7.0 million in cash within 10 business days of achieving the milestone; or

b) $12.4 million in cash, common stock of the Company, or a combination of

     either, within one year of achieving the milestone.




31
The Company provided EGWU, Inc. 200,000 warrants to purchase common stock at a
strike price of $0.01 per warrant share as consideration for entering into this
amended agreement. The warrant shares have no expiration and were fair valued at
$2.00 using the closing price of a share of Celsion stock on the date of
issuance offset by the exercise price and recorded as a non-cash expense in the
income statement and were classified as equity on the balance sheet.



Acquired In-process Research and Development




Acquired in-process research and development (IPR&D) consists of EGEN's drug
technology platforms: TheraPlas and TheraSilence. The fair value of the IPR&D
drug technology platforms was estimated to be $24.2 million as of the
acquisition date. As of the closing of the acquisition, the IPR&D was considered
indefinite-lived intangible assets and will not be amortized. IPR&D is reviewed
for impairment at least annually as of our third quarter ended September 30, and
whenever events or changes in circumstances indicate that the carrying value of
the assets might not be recoverable. On December 31, 2016, the Company
determined one of its IPR&D assets related to its RNA delivery system was
impaired and wrote off its fair value, incurring a non-cash charge of $1.4
million during 2016. During its annual assessments on September 30, 2017 and
2018, the Company determined its IPR&D asset related to its glioblastoma
multiforme cancer (GBM) product candidate, originally fair valued at $9.4
million on the date of acquisition, was impaired and wrote this asset's carrying
value down to $2.4 million collectively after those two assessments, incurring
non-cash charges of $2.5 million and $4.5 million during 2017 and 2018,
respectively. At September 30, 2018 and 2017, the Company evaluated its IPR&D of
the ovarian cancer indication and concluded that it is not more likely than not
that the asset is impaired. As no other indicators of impairment existed during
the fourth quarter of 2018 and thus far in 2019, the Company concluded none of
the other IPR&D assets were impaired at December 31, 2018 and June 30, 2019. The
carrying amount of the ovarian cancer indication was $13.3 million at June
30,
2019 and December 31, 2018.



Covenants Not To Compete



Pursuant to the EGEN Purchase Agreement, EGEN provided certain covenants
("Covenant Not To Compete") to the Company whereby EGEN agreed, during the
period ending on the seventh anniversary of the closing date of the acquisition
on June 20, 2014, not to enter into any business, directly or indirectly, which
competes with the business of the Company nor will it contact, solicit or
approach any of the employees of the Company for purposes of offering
employment. The Covenant Not to Compete, which was valued at approximately $1.6
million at the date of the EGEN asset acquisition, has a definitive life and is
amortized on a straight-line basis over its life of 7 years. The Company
recognized amortization expense of $56,829 in each of the three-month periods
ended June 30, 2019 and 2018. The Company recognized amortization expense of
$113,658 in each of the six-month periods ended June 30, 2019 and 2018. The
carrying value of the Covenant Not to Compete was $454,634, net of $1,136,580,
as of June 30, 2019. The carrying value of the Covenant Not to Compete was
$568,929, net of $1,022,922 in accumulated amortization expense, as of December
31, 2018.



Goodwill



The purchase price exceeded the estimated fair value of the net assets acquired
by approximately $2.0 million which was recorded as Goodwill. Goodwill
represents the difference between the total purchase price for the net assets
purchased from EGEN and the aggregate fair values of tangible and intangible
assets acquired, less liabilities assumed. Goodwill is reviewed for impairment
at least annually as of our third quarter ending on September 30 or sooner if we
believe indicators of impairment exist. As of September 30, 2018, we concluded
that the Company's fair value exceeded its carrying value therefore "it is not
more likely than not" that the Goodwill was impaired. As no other indicators of
impairment existed during the fourth quarter of 2018 and thus far in 2019, the
Company concluded it is "not more likely than not" Goodwill was impaired.



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GEN-1


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.



? Loco-regional production of the potent cytokine IL-12 avoids toxicities and

poor pharmacokinetics associated with systemic delivery of recombinant IL-12;

? Persistent local delivery of IL-12 lasts up to one week and dosing can be

    repeated; and

  ? Ideal for long-term maintenance therapy.




OVATION Study



In February 2015, we announced that the FDA accepted, without objection, the
Phase Ib dose-escalation clinical trial of GEN-1 in combination with the
standard of care in neo-adjuvant ovarian cancer (the "OVATION Study"). On
September 30, 2015, we announced enrollment of the first patient in the OVATION
Study. The OVATION Study was designed (i) to identify a safe, tolerable and
potentially therapeutically active dose of GEN-1 by recruiting and maximizing an
immune response and (ii) to enroll three to six patients per dose level to
evaluate safety and efficacy and attempt to define an optimal dose for a
follow-on Phase II study. In addition, the OVATION Study establishes 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 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 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 Study who
completed treatment. On October 3, 2017 and again on March 2, 2109, we announced
final clinical and translational research data from the OVATION Study, a Phase
Ib dose escalating clinical trial combining GEN-1 with the standard of care for
the treatment of newly-diagnosed patients with advanced Stage III/IV ovarian
cancer who will undergo neoadjuvant chemotherapy followed by interval debulking
surgery.



The Company reported positive clinical data from the first fourteen patients who
have completed treatment in the OVATION Study. GEN-1 plus standard chemotherapy
produced positive clinical results, with no dose limiting toxicities and
positive dose dependent efficacy signals which correlate well with positive
surgical outcomes. The OVATION Study evaluated escalating doses of GEN-1 (36
mg/m2, 47 mg/m2, 61 mg/m2 and 79 mg/m2) administered intraperitoneally in
combination with three cycles of neoadjuvant chemotherapy prior to interval
debulking surgery, followed by three cycles of NAC in the treatment of newly
diagnosed patients with Stage III/IV ovarian cancer.



In this Phase IB dose-escalation study, the 14 patients who were evaluable for
response demonstrated median PFS of 21 months in patients treated per protocol
and 17.1 months for the intent-to-treat 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. In addition, 100% of
patients administered NAC plus the two higher doses of GEN-1 experienced an
objective tumor response (defined as a partial or complete response) compared to
only 60% of patients given the two lower doses. Pathological changes were
assessed as part of the study, with the density of markers measured in tissue
sections assessed via immunohistochemistry staining. Dose-limiting toxicity was
not reached in the OVATION I Study.



33







OVATION 2 Study



On November 13, 2017, the Company filed its Phase I/II clinical trial protocol
with the U.S. Food and Drug Administration 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 130 patient randomized Phase II study. The
study protocol is summarized below:



  ? Open label, 1:1 randomized design

? Enrollment up to 130 patients with Stage III/IV ovarian cancer patients at ten

U.S. centers

? Primary endpoint of improvement in progression-free survival (PFS) comparing

GEN-1 with neoadjuvant chemotherapy versus neoadjuvant chemotherapy alone.





Because of the risks and uncertainties discussed in this Annual Report on Form
10-K, 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. 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, development activities, preclinical studies and
clinical trials, or if we are in a position to pursue manufacturing or
commercialization activities, we will need significant additional capital to
develop 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.



TheraPlas Technology Platform. TheraPlas is a technology platform for the
delivery of DNA and messenger RNA ("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/RNA 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 TheraPlas is a viable
alternative to current approaches to gene delivery due to several distinguishing
characteristics, including enhanced molecular versatility that allows for
complex modifications to improve activity and safety.



Technology Development and Licensing Agreements. Our current efforts and
resources are applied on the development and commercialization of cancer drugs
including tumor-targeting chemotherapy treatments using focused heat energy in
combination with heat-activated drug delivery systems, immunotherapies and
RNA-based therapies.



On August 8, 2016, we signed the GEN-1 Agreement with Hisun to pursue an
expanded partnership for the technology transfer relating to the clinical and
commercial manufacture and supply of GEN-1, Celsion's proprietary gene mediated,
IL-12 immunotherapy, for the China territory, with the option to expand into
other countries in the rest of the world after all necessary regulatory
approvals are obtained. The GEN-1 Agreement will help to support supply for both
ongoing and planned clinical studies in the U.S. and for potential future
studies of GEN-1 in China. GEN-1 is currently being evaluated by Celsion in
first line ovarian cancer patients.



In June 2012, Celsion and Hisun signed a long-term commercial supply agreement
for the production of ThermoDox®. Hisun is one the largest manufacturers of
chemotherapy agents globally, including doxorubicin. In July 2013, the
ThermoDox® collaboration was expanded to focus on next generation liposomal
formulation development with the goal of creating safer, more efficacious
versions of marketed cancer chemotherapeutics. During 2015, Hisun successfully
completed the manufacture of three registration batches for ThermoDox® and has
obtained regulatory approvals to supply ThermoDox® to participating clinical
trial sites in all of the countries of South East Asia and North America, as
well as to the European Union countries allowing for early access to ThermoDox®.
The future manufacturing of clinical and commercial supplies by Hisun will
result in a cost structure allowing Celsion to profitably access all global
markets, including third world countries, and help accelerate the Company's
product development program in China for ThermoDox® in primary liver cancer and
other approved indications.



34







Business Plan


As a clinical stage biopharmaceutical company, our business and our ability to
execute our strategy to achieve our corporate goals are subject to numerous
risks and uncertainties. Material risks and uncertainties relating to our
business and our industry are described in "Part II, Item 1A. Risk Factors" in
this Quarterly Report on Form 10-Q.



Since inception, the Company has incurred substantial operating losses,
principally from expenses associated with the Company's research and development
programs, clinical trials conducted in connection with the Company's product
candidates, and applications and submissions to the FDA. We have not generated
significant revenue and have incurred significant net losses in each year since
our inception. As of June 30, 2019, we have incurred approximately $282 million
of cumulative net losses. As of June 30, 2019, we had approximately $21.8
million in cash, investment securities and interest receivable. We have
substantial future capital requirements to continue our research and development
activities and advance our product candidates through various development
stages. The Company believes these expenditures are essential for the
commercialization of its technologies.



The Company expects its operating losses to continue for the foreseeable future
as it continues its product development efforts and when it undertakes marketing
and sales activities. The Company's ability to achieve profitability is
dependent upon its ability to obtain governmental approvals, produce, and market
and sell its new product candidates. There can be no assurance that the Company
will be able to commercialize its technology successfully or that profitability
will ever be achieved. The operating results of the Company have fluctuated
significantly in the past. We have substantial future capital requirements
associated with our continued research and development activities and to advance
our product candidates through various stages of development. The Company
believes these expenditures are essential for the commercialization of its
technologies.



The actual amount of funds the Company will need to operate is subject to many
factors, some of which are beyond the Company's control. These factors include
the following:



  ? the progress of research activities;

  ? the number and scope of research programs;

  ? the progress of preclinical and clinical development activities;

? the progress of the development efforts of parties with whom the Company has

entered into research and development agreements;

? the costs associated with additional clinical trials of product candidates;

? the ability to maintain current research and development licensing

arrangements and to establish new research and development and licensing

    arrangements;

  ? the ability to achieve milestones under licensing arrangements;

  ? the costs involved in prosecuting and enforcing patent claims and other
    intellectual property rights; and

  ? the costs and timing of regulatory approvals.




The Company has based its estimate on assumptions that may prove to be wrong.
The Company may need to obtain additional funds sooner or in greater amounts
than it currently anticipates. Potential sources of financing include strategic
relationships, public or private sales of the Company's shares or debt and other
sources. If the Company raises funds by selling additional shares of common
stock or other securities convertible into common stock, the ownership interest
of existing stockholders may be diluted.



35







With $21.8 million in cash, investment securities and interest receivable at
June 30, 2019 coupled with future sales of the Company's New Jersey NOL's and,
as more fully described in Note 11, the remaining availability under the Capitol
on Demand™ with JonesTrading Institutional Services LLC and the common stock
purchase agreement with Aspire Capital Fund LLC, the Company believes it has
sufficient capital resources to fund its operations into the first quarter of
2021. The Company will be required to obtain additional funding to continue
development of its current product candidates within the anticipated time
periods, if at all, and to continue to fund operations.



Financing Overview



Equity and Debt Financings



During 2018 and thus far in 2019, we entered into a $10 million loan facility
and we issued a total of 3.7 million shares of common stock in the following
equity transactions for an aggregate $5.5 million in gross proceeds.



? On June 27, 2018, the Company entered into the Horizon Credit Agreement with

Horizon that provided $10 million in new capital. The Company drew down $10

million upon closing of the Horizon Credit Agreement on June 27, 2018. The

Company anticipates that it will use the funding provided under the Horizon

Credit Agreement for working capital and advancement of its product pipeline.

The obligations under the Horizon Credit Agreement are secured by a

first-priority security interest in substantially all assets of Celsion other

than intellectual property assets. The obligations will bear interest at a

rate calculated based on one-month LIBOR plus 7.625%. Payments under the loan

agreement are interest only for the first twenty-four (24) months after loan

closing, followed by a 24-month amortization period of principal and interest

through the scheduled maturity date.

? On August 31, 2018, the Company entered into the Aspire Purchase Agreement

with Aspire Capital Fund which provides that, upon the terms and subject to

the conditions and limitations set forth therein, Aspire Capital is committed

to purchase up to an aggregate of $15.0 million of shares of the Company's

common stock over the 24-month term of the Aspire Purchase Agreement. On

October 12, 2018, the Company filed with the SEC a prospectus supplement to

the 2018 Shelf Registration Statement registering all of the shares of common

stock that may be offered to Aspire Capital from time to time. The timing and

amount of sales of the Company's common stock to Aspire Capital. Aspire

Capital has no right to require any sales by the Company but is obligated to

make purchases from the Company as directed by the Company in accordance with

the Purchase Agreement. There are no limitations on use of proceeds, financial

or business covenants, restrictions on future funding, rights of first

refusal, participation rights, penalties or liquidated damages in the Purchase

Agreement. In consideration for entering into the Purchase Agreement,

concurrently with the execution of the Purchase Agreement, the Company issued

to Aspire Capital 164,835 Commitment Shares. The Aspire Purchase Agreement may

be terminated by the Company at any time, at its discretion, without any cost

to the Company. Any proceeds from the Company receives under the Aspire

Purchase Agreement are expected to be used for working capital and general

corporate purposes. During 2018 and as of June 30, 2019, the Company sold and

issued an aggregate of 2.2 million shares under the Purchase Agreement,

receiving approximately $4.5 million.

? On October 29, 2018, the Company and certain investors holding warrants to

purchase 1.6 million shares collectively of the Company's common stock

received in the February 27, 2017 Public Offering and the October 2017

Underwritten Offering, entered into warrant exchange agreements whereby the

Company issued 820,714 shares collectively of common stock to these investors

in exchange for the warrants. After the warrant exchange, warrants outstanding

totaled 1.6 million with a weighted average exercise price of $5.75 per share.

Approximately 1.2 million of these outstanding warrants with a strike price of

$6.20 per share expired on April 4, 2019.

? On December 4, 2018, the Company entered into a new Capital on DemandTM Sales

Agreement with JonesTrading Institutional Services LLC, as sales agent

("JonesTrading"), pursuant to which the Company may offer and sell, from time

to time, through JonesTrading shares of common stock having an aggregate

offering price of up to $16.0 million. The Company intends to use the net

proceeds from the offering, if any, for general corporate purposes, including

research and development activities, capital expenditures and working capital.

The Company is not obligated to sell any common stock under the Capital on

Demand Agreement and, subject to the terms and conditions of the Capital on

Demand Agreement, JonesTrading will use commercially reasonable efforts,

consistent with its normal trading and sales practices and applicable state

and federal law, rules and regulations and the rules of The Nasdaq Capital

Market, to sell common stock from time to time based upon the Company's

instructions, including any price, time or size limits or other customary

parameters or conditions the Company may impose. Under the Capital on Demand

Agreement, JonesTrading may sell common stock by any method deemed to be an

"at the market offering" as defined in Rule 415 promulgated under the

Securities Act of 1933, as amended. The Capital on Demand Agreement will

terminate upon the earlier of (i) the sale of all shares of our common stock

subject to the Sales Agreement, and (ii) the termination of the Capital on

Demand Agreement by JonesTrading or Celsion. The Capital on Demand Agreement

may be terminated by JonesTrading or the Company at any time upon 10 days'

notice to the other party, or by JonesTrading at any time in certain

circumstances, including the occurrence of a material adverse change in the

Company. During 2018 and as of June 30, 2019, the Company sold and issued an

aggregate of 259,961 shares under the Capital on Demand Agreement, receiving

    approximately $0.6 million.




36






Significant Accounting Policies




Our significant accounting policies are more fully described in Note 1 to our
consolidated financial statements included in our 2018 Annual Report on Form
10-K for the year ended December 31, 2018 filed with the SEC on March 29, 2019.



In February 2016, the FASB issued Accounting Standards Update No. 2016-02,
"Leases" - Topic 842 (ASC Topic 842), which requires that lessees recognize
assets and liabilities for leases with lease terms greater than twelve months in
the statement of financial position. Leases will be classified as either finance
or operating, with classification affecting the pattern of expense recognition
in the income statement. This update also requires improved disclosures to help
users of financial statements better understand the amount, timing and
uncertainty of cash flows arising from leases. The update became effective for
fiscal years beginning after December 15, 2018, including interim reporting
periods within that reporting period. The FASB subsequently issued the following
amendments to ASC Topic 842, which have the same effective date and transition
date of January 1, 2019:


? ASU No. 2018-10, Codification Improvements to Topic 842, Leases, which amends

certain narrow aspects of the guidance issued in ASU 2016-02; and

? ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which allows for a

transition approach to initially apply ASU 2016-02 at the adoption date and

recognize a cumulative-effect adjustment to the opening balance of retained

earnings in the period of adoption as well as an additional practical

expedient for lessors to not separate non-lease components from the associated

    lease component.



We adopted Topic ASC 842 effective January 1, 2019 and elected to apply the
available practical expedients and implement internal controls to enable the
preparation of financial information on adoption. We have identified all of our
leases which consist of the New Jersey corporate office lease and the Alabama
lab facility lease and we estimate the adoption of this standard will result in
the recognition of right-of-use assets of approximately $1.4, related operating
lease liabilities of $1.5 million and reduced other liabilities by approximately
$0.1 million on the consolidated balance sheets as of January 1, 2019 of
approximately $1.5 million related to our operating lease commitments, with no
material impact to the opening balance of retained earnings. See Note 15 for
further discussions regarding the adoption of ASC Topic 842.



In August 2018, the SEC issued a final rule to simplify certain disclosure
requirements. In addition, the amendments expanded the disclosure requirements
on the analysis of stockholders' equity for interim financial statements. In
August and September 2018, further amendments were issued to provide
implementation guidance on adoption of the SEC rule and transition guidance for
the new interim stockholders' equity disclosure. We adopted this amended
guidance in the first quarter of 2019. The adoption of this amended guidance
resulted in us disclosing the Condensed Consolidated Statements of Changes in
Stockholders' Equity for the three-month and six-month periods ending June
30,
2019 and 2018.


Material risks and uncertainties relating to our business and our industry are
described in "Item 1A. Risk Factors" under "Part II: Other Information" included
herein. As a clinical stage biopharmaceutical company, our business and our
ability to execute our strategy to achieve our corporate goals are subject to
numerous risks and uncertainties. Please refer to Note 3 of the Financial
Statements contained in this Form 10-Q. Also refer to Item IA, Risk Factors,
including, but not limited to, "We will need to raise substantial additional
capital to fund our planned future operations, and we may be unable to secure
such capital without dilutive financing transactions. If we are not able to
raise additional capital, we may not be able to complete the development,
testing and commercialization of our product candidates."



37






As a clinical stage biopharmaceutical company, our business and our ability to
execute our strategy to achieve our corporate goals are subject to numerous
risks and uncertainties. Material risks and uncertainties relating to our
business and our industry are described in "Item 1A. Risk Factors" under "Part
II: Other Information" included herein.



FINANCIAL REVIEW FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018


Results of Operations



For the three months ended June 30, 2019, our net loss was $5.9 million compared
to a net loss of $8.2 million for the same period of 2018. For the six months
ended June 30, 2019, our net loss was $8.3 million compared to a net loss of
$12.7 million for the same period of 2018.



With $21.8 million in cash, investment securities and interest receivable at
June 30, 2019 coupled with future sales of the Company's New Jersey NOL's and,
as more fully described in Note 11, the remaining availability under the Capitol
on Demand™ with JonesTrading Institutional Services LLC and the common stock
purchase agreement with Aspire Capital Fund LLC, the Company believes it has
sufficient capital resources to fund its operations into the first quarter
of
2021.



                                                          Three Months Ended June 30,
                                             (In thousands)             

Change Increase (Decrease)

                                           2019           2018                                  %
Licensing Revenue:                      $      125$      125     $            -                  - %

Operating Expenses:
Clinical Research                            2,327          3,149               (822 )            (26.1 )%
Chemistry, Manufacturing and Controls        1,231          1,445               (214 )            (14.8 )%
Research and development expenses            3,558          4,594             (1,036 )            (22.6 )%
General and administrative expenses          2,137          3,542             (1,405 )            (39.7 )%
Total operating expenses                     5,695          8,136          
  (2,441 )            (30.0 )%
Loss from operations                    $   (5,570 )$   (8,011 )$        2,441               30.5 %




                                                           Six Months Ended June 30,
                                             (In thousands)             

Change Increase (Decrease)

                                           2019           2018                                  %
Licensing Revenue:                      $      250$      250     $            -                  - %

Operating Expenses:
Clinical Research                            4,108          5,032               (924 )            (18.4 )%
Chemistry, Manufacturing and Controls        2,218          2,303                (85 )            (23.9 )%
Research and development expenses            6,326          7,335             (1,009 )            (13.8 )%
General and administrative expenses          4,354          5,207               (853 )            (16.4 )%
Total operating expenses                    10,680         12,542          
  (1,862 )            (14.8 )%
Loss from operations                    $  (10,430 )$  (12,292 )$        1,862               15.5 %




38






Comparison of the Three Months Ended June 30, 2019 and 2018



Licensing Revenue



In January 2013, we entered into a technology development contract with Hisun,
pursuant to which Hisun paid us a non-refundable technology transfer fee of $5.0
million to support our development of ThermoDox® in the China territory. The
$5.0 million received as a non-refundable payment from Hisun in the first
quarter 2013 has been recorded to deferred revenue and will be amortized over
the ten-year term of the agreement; therefore, we recorded deferred revenue of
$125,000 in each of the second quarters of 2019 and 2018.



Research and Development Expenses

Research and development ("R&D") expenses decreased by $1.0 million to $3.6
million in the second quarter of 2019 from $4.6 million in the same period of
2018. Costs associated with the OPTIMA Study decreased by $0.8 million to $1.2
million in the second quarter of 2019 compared to $2.0 million in the same
period of 2018. This decrease resulted from the completion of enrollment for the
OPTIMA Study during the third quarter of 2018. Costs associated the OVATION 2
Study of $0.1 million in the second quarter of 2019 were consistent with the
same period of 2018. Regulatory costs were $0.4 million in the second quarter of
2019 compared to $0.1 million in the same period of 2018. Other clinical costs
decreased by $0.4 million to $0.6 million in the second quarter of 2019 compared
to $1.0 million in the same period of 2018. Costs associated with the production
of ThermoDox® were $0.4 million in each of the second quarters of 2019 and 2018.
R&D costs associated with the development of GEN-1 to support the OVATION
Studies decreased by $0.2 million to $0.8 million the second quarter of 2019
compared to $1.0 million in the same period of 2018.



General and Administrative Expenses

General and administrative expenses decreased to $2.1 million in the second
quarter of 2019 compared to $3.5 million in the same period of 2018. This
decrease is mostly attributable to a decrease in personnel costs of
approximately $1.6 million which included a $1.8 million decrease in non-cash
stock compensation expense partially offset by an increase in personnel in the
second quarter of 2019 compared to the same period of 2018.



Change in Earn-out Milestone Liability and Warrant Expense

The total aggregate purchase price for the acquisition of assets from EGEN
included potential future earn-out payments contingent upon achievement of
certain milestones. The difference between the aggregate $30.4 million in future
earn-out payments and the $13.9 million included in the fair value of the
acquisition consideration at June 20, 2014 was based on the Company's
risk-adjusted assessment of each milestone and utilizing a discount rate based
on the estimated time to achieve the milestone. These milestone payments are
fair valued at the end of each quarter and any change in their value is
recognized in the condensed consolidated financial statements.



On March 28, 2019, the Company and EGWU, Inc, entered into the Amended Asset
Purchase Agreement discussed in Note 8. Pursuant to the Amended Asset Purchase
Agreement, payment of the earnout milestone liability related to the Ovarian
Cancer Indication of $12.4 million has been modified. The Company has the option
to make the payment as follows:



a) $7.0 million in cash within 10 business days of achieving the milestone; or

b) $12.4 million in cash, common stock of the Company, or a combination of

     either, within one year of achieving the milestone.




The Company provided EGWU, Inc. 200,000 warrants to purchase common stock at a
strike price of $0.01 per warrant share as consideration for entering into the
amended agreement. These warrant shares have no expiration and were fair valued
at $2.00 using the closing price of a share of Celsion stock on the date of
issuance offset by the exercise price and recorded as an expense in the income
statement and were classified as equity on the balance sheet.



39






At March 31, 2019, the Company fair valued the earn-out milestone liability at
$5.8 million. At June 30, 2019, the Company fair valued the earnout milestone
liability at $5.9 million and recognized a non-cash charge of $0.1 million
during the three months ended June 30, 2019 as a result of the change in fair
value of the earnout milestone liability at December 31, 2018. In assessing the
earnout milestone liability at June 30, 2019, the Company the fair valued each
of the two payment options per the Amended Asset Purchase Agreement and weighted
them at 80% and 20% probability for the $7.0 million and the $12.4 million
payments, respectively.



As of June 30, 2018, and March 31, 2018, the Company fair valued these
milestones at $13.1 million and $12.8 million, respectively, and recognized a
non-cash charge of $0.3 million during the three months ended June 30, 2018 as a
result of the change in the fair value of these milestones from March 31, 2018.



Investment income and interest expense

The Company realized $0.1 million of interest income from its short-term investments during each of the second quarters of 2019 and 2018.




The Company entered into a new loan facility with Horizon Technology Finance
Corporation on June 27, 2018. In connection with this debt facility the Company
incurred $0.3 million in interest expense in the second quarter of 2019.
Interest expense was insignificant during the same period of 2018.



Comparison of the Six Months Ended June 30, 2019 and 2018



Licensing Revenue



In January 2013, we entered into a technology development contract with Hisun,
pursuant to which Hisun paid us a non-refundable technology transfer fee of $5.0
million to support our development of ThermoDox® in the China territory. The
$5.0 million received as a non-refundable payment from Hisun in the first
quarter 2013 has been recorded to deferred revenue and will be amortized over
the ten-year term of the agreement; therefore, we recorded deferred revenue of
$250,000 in each of the six months ended June 30, 2019 and 2018.



Research and Development Expenses

Research and development ("R&D") expenses decreased by $1.0 million to $6.3
million in the six months ended June 30, 2019 from $7.3 million in the same
period of 2018. Costs associated with the OPTIMA Study decreased by $1.2 million
to $2.1 million in the six months ended June 30, 2019 compared to $3.3 million
in the same period of 2018. This decrease resulted from the completion of
enrollment for the OPTIMA Study during the third quarter of 2018. Costs
associated the OVATION 2 Study of $0.2 million in the six months ended June 30,
2019 were consistent with the same period of 2018. Regulatory costs were $0.6
million in the six months ended June 30, 2019 compared to $0.2 million in the
same period of 2018. Other clinical costs decreased by $0.2 million to $1.2
million in the six months ended June 30, 2019 compared to $1.4 million in the
same period of 2018. Costs associated with the production of ThermoDox® were
$0.7 million in each of the six months ended June 30, 2019 and 2018. R&D costs
associated with the development of GEN-1 to support the OVATION Studies
decreased by $0.1 million to $1.5 million in the six months ended June 30, 2019
compared to $1.6 million in the same period of 2018.



General and Administrative Expenses




General and administrative expenses decreased to $4.4 million in the six months
ended June 30, 2019 compared to $5.2 million in the same period of 2018. This
decrease is mostly attributable to a decrease in personnel costs of
approximately $1.6 million which included a $1.5 million decrease in non-cash
stock compensation expense partially offset by an increase in personnel in the
six months ended June 30, 2019 compared to the same period of 2018.



40






Change in Earn-out Milestone Liability and Warrant Expense

The total aggregate purchase price for the acquisition of assets from EGEN
included potential future earn-out payments contingent upon achievement of
certain milestones. The difference between the aggregate $30.4 million in future
earn-out payments and the $13.9 million included in the fair value of the
acquisition consideration at June 20, 2014 was based on the Company's
risk-adjusted assessment of each milestone and utilizing a discount rate based
on the estimated time to achieve the milestone. These milestone payments are
fair valued at the end of each quarter and any change in their value is
recognized in the condensed consolidated financial statements.



On March 28, 2019, the Company and EGWU, Inc, entered into an amendment to the
Asset Purchase Agreement discussed in Note 8. Pursuant to the Amended Asset
Purchase Agreement, payment of the earnout milestone liability related to the
Ovarian Cancer Indication of $12.4 million has been modified. The Company has
the option to make the payment as follows:



a) $7.0 million in cash within 10 business days of achieving the milestone; or

b) $12.4 million in cash, common stock of the Company, or a combination of

     either, within one year of achieving the milestone.




The Company provided EGWU, Inc. 200,000 warrants to purchase common stock at a
strike price of $0.01 per warrant share as consideration for entering into the
amended agreement. These warrants shares have no expiration and were fair valued
at $2.00 using the closing price of a share of Celsion stock on the date of
issuance offset by the exercise price and recorded as an expense in the income
statement and were classified as equity on the balance sheet.



At December 31, 2018, the Company fair valued the earn-out milestone liability
at $8.9 million. At June 30, 2019, the Company fair valued the earnout milestone
liability at $5.9 million and recognized a non-cash benefit of $3.0 million
during the six months ended June 30, 2019 as a result of the change in fair
value of the earnout milestone liability at December 31, 2018. In assessing the
earnout milestone liability at June 30, 2019, the Company the fair valued each
of the two payment options per the Amended Asset Purchase Agreement and weighted
them at 80% and 20% probability for the $7.0 million and the $12.4 million
payments, respectively.



As of June 30, 2018, and December 31, 2017, the Company fair valued these
milestones at $13.1 million and $12.5 million, respectively, and recognized a
non-cash charge of $547,324 during the six months ended June 30, 2018 as a
result of the change in the fair value of these milestones from December 31,
2017.


Investment income and interest expense

The Company realized $0.3 million and $0.1 million of interest income from its short-term investments during the six months ended June 30, 2019 and 2018.




The Company entered into a new loan facility with Horizon Technology Finance
Corporation on June 27, 2018. In connection with this debt facility the Company
incurred $0.7 million in interest expense in the six months ended June 30, 2019.
Interest expense was insignificant during the same period of 2018.



Financial Condition, Liquidity and Capital Resources

Since inception we have incurred significant losses and negative cash flows from
operations. We have financed our operations primarily through the net proceeds
from the sales of equity, credit facilities and amounts received under our
product licensing agreement with Yakult and our technology development agreement
with Hisun. The process of developing and commercializing ThermoDox®, GEN-1 and
other product candidates and technologies requires significant research and
development work and clinical trial studies, as well as significant
manufacturing and process development efforts. We expect these activities,
together with our general and administrative expenses to result in significant
operating losses for the foreseeable future. Our expenses have significantly and
regularly exceeded our revenue, and we had an accumulated deficit of $282
million at June 30, 2019.



At June 30, 2019 we had total current assets of $23.1 million (including cash,
cash equivalents and short-term investments and related interest receivable on
short-term investments of $21.8 million) and current liabilities of $6.6
million, resulting in net working capital of $15.2 million. At December 31, 2018
we had total current assets of $28.1 million (including cash, cash equivalents
and short-term investments and related interest receivable on short-term
investments of $27.7 million) and current liabilities of $6.1 million, resulting
in net working capital of $22.0 million. We have substantial future capital
requirements to continue our research and development activities and advance our
product candidates through various development stages. The Company believes
these expenditures are essential for the commercialization of its technologies.



41






Net cash used in operating activities for the first six months of 2019 was $10.2
million. Net cash used in investing activities was $1.6 million during the first
six months of 2019 as the Company invested liquid funds into short-term
investments. Net cash provided by financing activities was $4.5 million during
the first six months of 2019 from net proceeds received through the sale of our
common stock under the common stock purchase and sales facilities with Aspire
Capital Fund, LLC. and JonesTrading International, LLC.



We expect to seek additional capital through further public or private equity
offerings, debt financing, additional strategic alliance and licensing
arrangements, collaborative arrangements, or some combination of these financing
alternatives. If we raise additional funds through the issuance of equity
securities, the percentage ownership of our stockholders could be significantly
diluted, and the newly issued equity securities may have rights, preferences, or
privileges senior to those of the holders of our common stock. If we raise funds
through the issuance of debt securities, those securities may have rights,
preferences, and privileges senior to those of our common stock. If we seek
strategic alliances, licenses, or other alternative arrangements, such as
arrangements with collaborative partners or others, we may need to relinquish
rights to certain of our existing or future technologies, product candidates, or
products we would otherwise seek to develop or commercialize on our own, or to
license the rights to our technologies, product candidates, or products on terms
that are not favorable to us. The overall status of the economic climate could
also result in the terms of any equity offering, debt financing, or alliance,
license, or other arrangement being even less favorable to us and our
stockholders than if the overall economic climate were stronger. We also will
continue to look for government sponsored research collaborations and grants to
help offset future anticipated losses from operations and, to a lesser extent,
interest income.



If adequate funds are not available through either the capital markets,
strategic alliances, or collaborators, we may be required to delay or, reduce
the scope of, or terminate our research, development, clinical programs,
manufacturing, or commercialization efforts, or effect additional changes to our
facilities or personnel, or obtain funds through other arrangements that may
require us to relinquish some of our assets or rights to certain of our existing
or future technologies, product candidates, or products on terms not favorable
to us.


Off-Balance Sheet Arrangements and Contractual Obligations

None.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2019 0,51 M
EBIT 2019 -21,7 M
Net income 2019 -15,5 M
Debt 2019 -
Yield 2019 -
P/E ratio 2019 -2,34x
P/E ratio 2020 -2,05x
Capi. / Sales2019 75,5x
Capi. / Sales2020 77,0x
Capitalization 38,5 M
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Managers
NameTitle
Michael H. Tardugno Chairman, President & Chief Executive Officer
Jeffrey Wayne Church CFO, Secretary & SVP-Investor Relations
Nicholas Borys Chief Medical Officer & Senior Vice President
Khursheed Anwer Chief Scientific Officer & Executive VP
Pok Yu Chow Independent Director
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