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Business Update
DSMB Recommends to Continue Dosing Patients in OVATION 2 Study
On February 17, 2022, Celsion Corporation (NASDAQ:CLSN) announced that following a pre-planned interim safety review of 81 as-treated patients in the Phase 1/2 OVATION 2 study of GEN-1 (the company's lead immunotherapy development product) in advanced stage (Stage III/IV) ovarian cancer, the data safety monitoring board (DSMB) has unanimously recommended that patients continue to be treated in the study at a dose of 100 mg/m2. The DSMB also concluded that there is an acceptable risk/benefit safety profile for GEN-1, and that patients tolerate up to 17 doses during a six-month treatment course. More than 80% of the projected 110 patients have been enrolled in the OVATION 2 trial. A maximum of 130 patients will be enrolled if time allows. The company has indicated that enrollment will conclude by the end of August 2022. During the fourth quarter conference call, management indicated that the company will be putting an insert into USA Today newspapers in all markets where the OVATION 2 study is being conducted as a means to help enhance recruitment into the study. The primary endpoint of progression-free survival (PFS) will be reported after 80 PFS events occur, or 16 months median time on study, whichever comes first. We anticipate topline data in the third quarter of 2023.
Celsion previously reported that Interim clinical data from the open-label study shows that for the first 39 patients who have undergone interval debulking surgery, treatment with GEN-1 resulted in a 27% improvement in R0 surgical resection rate over the control arm. R0 refers to a complete tumor resection in which there is no evidence of macroscopic or microscopic tumor in the tumor bed. Long-term survival of ovarian cancer patients is correlated with R0 resection (Viral et al., 2021).
GEN-1
IL-12 is a broad-acting immune stimulatory molecule that showed remarkable promise in preclinical studies in the 1990's. However, this activity was never recapitulated in the clinical following the systemic administration of IL-12 due to severe side effects and the molecules short half-life. In an effort to develop an alternative approach to IL-12 delivery, a gene-based IL-12 therapeutic was formulated that produced locally increased concentrations of IL-12 and IFN-γ but did not produce systemic toxicity in a mouse model of ovarian cancer (Fewell et al., 2005; Fewell et al., 2009). These experiments provided proof-of-concept for Celsion's TheraPlas technology, which consists of a plasmid DNA payload encoding a therapeutic protein and a delivery system. GEN-1 (formerly EGEN-001), the company's lead development product based on the TheraPlas technology, comprises a plasmid encoding human IL-12 coupled to a non-viral DNA delivery system, polyethyleneglycol-polyethyleneimine-cholesterol (PPC). The compound forms nanoparticles that are approximately 150 nm in diameter, protect the plasmid from degradation after administration, and aid in getting the plasmid across the cell membrane. The composition of GEN-1 is shown in the following figure.
Multiple preclinical studies of GEN-1 showed that it could be utilized in combination with different ovarian cancer treatments to increase their efficacy, leading to significant reductions in tumor burden. Previous clinical trials of GEN-1 showed that the drug was well tolerated and potentiated the activity of various chemotherapy agents, including the OVATION 1 study, in which a total of 18 patients received increasing doses of GEN-1 (36, 47, 61, 79 mg/m2). Tumor response was associated with higher doses of GEN-1, and in the highest dose cohort 100% of patients had a complete or partial response and 88% achieved R0 resection.
Non-Human Primate Study of SARS-CoV-2 Vaccine Candidate to Initiate
In January 2022, Celsion announced that BIOQUAL, Inc. has been engaged to conduct a non-human primate (NHP) challenge study with the company's DNA-based approach for a SARS-CoV-2 vaccine. We anticipate the NHP studies getting underway imminently. The company also announced that completed preclinical studies in mice showed that its single viral antigen vaccine candidates were safe and generated efficient immune responses following intramuscular administration, including neutralizing antibodies and T cell response that were on par with the activities of commercial vaccines. In addition, the vaccine candidates have shown neutralizing activity against multiple SARS-CoV-2 variants.
The NHP study is a five-arm study that has three objectives: 1) confirm that the same positive response that was seen in mice is seen in NHPs; 2) determine how the DNA vaccine compares to the mRNA vaccine; and 3) determine the durability of response with the DNA vaccine. The study consists of a control group, a group receiving an mRNA SARS-CoV-2 vaccine, two cohorts each receiving a different dose of Celsion's DNA vaccine candidate, and a fifth cohort that will be challenged with SARS-CoV-2 after six months. Comparisons regarding antibody titer will be made between the mRNA vaccine and DNA vaccine cohorts, with those animals being challenged with SARS-CoV-2 after antibody levels been built up. At the six-month mark, the fifth cohort that received the DNA vaccine will be challenged with SARS-CoV-2 to determine durability of response.
Financial Update
On March 31, 2022, Celsion announced financial results for 2021. The company reported $500,000 in technology development and licensing revenue in both 2021 and 2020. This stems from a non-refundable technology transfer fee of $5 million paid by Hisun in January 2013 to support the development of ThermoDox® in China that was recorded as deferred revenue and is being amortized over the ten-year term of the agreement.
In 2021, the company reported a net loss of $20.8 million, or $3.83 per share, compared with a net loss of $21.5 million, or $10.08 per share, in 2020. R&D expenses in 2021 were $10.6 million, compared to $11.3 million in 2020. The decrease was primarily due to decreased costs associated with the OPTIMA study, which was halted due to futility in July 2020, and decreased CMC costs, partially offset by an increase in costs associated with the PLACCINE DNA technology. G&A expenses in 2021 were $10.9 million, compared to $7.6 million in 2020. The increase was primarily due to higher non-cash stock-based compensation, increased professional fees, and increased insurance.
Celsion exited 2021 with approximately $56.9 million in cash, cash equivalents, restricted cash, short-term investments, and interest receivable. Subsequent to the end of the year, the company received $1.4 million in non-dilutive funding from the sale of New Jersey State net operating losses. We estimate that the company has sufficient capital to fund operations through 2024. Following a 1-15 reverse stock split on March 1, 2022, the company currently has approximately 5.8 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 6.4 million.
Conclusion
We are glad to see that the DSMB has recommended that dosing continue for patients in the ongoing OVATION 2 trial and we look forward to additional updates regarding completion of enrollment in the third quarter of 2022. We look forward to results from the NHP study of the company's SARS-CoV-2 vaccine, which could serve as a nice proof-of-concept for the PLACCINE technology. After accounting for the recent reverse stock split, our valuation is now $37 per share.
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