Imunon, Inc. (IMNN) Earnings Call Transcript

Good morning. My name is Casey, and I will be the operator today. At this time, I would like to turn -- I would like to welcome you to Celsion's clinical update conference call. [Operator Instructions] At this time, I would like to turn the conference over to Kim Golodetz. Please go ahead, ma'am.

Thank you and good morning, everyone. Welcome to Celsion Corporation's conference call to discuss the second preplanned interim analysis for the Phase III OPTIMA Study and next steps for the program. As has been Celsion's practice and as noted by the operator, prepared remarks will be by a question-and-answer session. Today's conference call will be archived, and the telephone replay will be available beginning later today through July 29, 2020. The webcast will be available for the next 90 days on Celsion's website. During this call, management will be making forward-looking statements regarding Celsion's expectations and projections about future events. Generally, forward-looking statements can be identified by terminologies such as expects, anticipates, believes or other similar expressions. These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, July 15, 2020. Celsion undertakes no obligation to revise or update comments made during this call, except as required by law. With that said, I'd like to turn the call over to Michael Tardugno, Celsion's Chairman, President and Chief Executive Officer. Michael?

Thank you, Kim, and thank you, everyone, for joining us this morning. Joining me on the call is Dr. Nicholas Borys, our Chief Medical Officer. I wanted to speak with you today personally on behalf of our employees and global research partners, who have given so much of themselves to our very important work with ThermoDox in primary liver cancer. On Monday morning, we were exceedingly disappointed to announce that following the review of the results from the second interim analysis, the data monitoring committee, which is independent, recommended that Celsion consider stopping the Phase III OPTIMA Study for futility, leaving the decision up to the company whether or not to do so. This recommendation was both unexpected and frankly, never anticipated by Celsion or advisers. It wasn't even suggested as a potential outcome-based on the supporting science, peer-reviewed collaborative research, or the trends that we noted coming from the trial itself. Leaving the decision to stop OPTIMA to Celsion, in our experience, is highly unusual and puts us in uncharted territory. But I think it goes to the heart of the issue facing the DMC at the time that being the DMC found that the prespecified boundary for stopping the trial for futility of 0.90 had been crossed, but only by a very narrow margin with a value of a 0.903. And with substantial amount of variability, the p-value being literally a flip of the coin at 0.524 and with no need for a risk-benefit assessment, since there were no safety concerns noted during the analysis, or frankly, during any other review of safety of ThermoDox. Our experience with ThermoDox is that has been safely administered to more than 700 patients treated in clinical trials. Now being unblinded, our first reaction was to ask for the results from the first analysis conducted in October in a relatively immature population and 128 deaths or 60% of the number needed for the final analysis. We noted -- what we noted were promising results. Saying it again, what we noted were promising results with a hazard ratio of 0.77 and curves looking very similar but with a lesser magnitude of effect to those that we saw at the approximate same time point in the HEAT Study subgroup. Call it the HEAT Study subgroup is the basis for the design of our OPTIMA trial. We further concluded that anyone assessing the results at that time -- at this time point, would have concluded the study held good promise. It's clear from the second review that the data suggests the last 25% or so of patients who died had a lesser treatment effect than the first 75%. It's also clear that if the data reviewed by the DMC are correct, there is but a very slim chance that the study will meet its prespecified target for success, that being a hazard ratio of 0.75 with a p-value of 0.042. Now before this company can make a determination whether to stop following patients, we need to do more work. In particular, to assure that the data input into the analysis was accurate and that there are no confounding factors. So far over the past few days, we've seen no smoking guns. We have, or are looking at, the following: we're assuring that the data randomization is correct. The regional results, including our data maturity assessment by countries is being made. That there's no product quality issues. We've evaluated stability results, analytical QC results and an assessment of the clinical batches that were used in the HEAT and the OPTIMA studies. We're also assessing survival and deaths by age of product and by manufacturer, meaning AMRI, our U.S. manufacturer; and Hyson, our Chinese manufacturer. So far, nothing. We are also looking at the percentage of patients having retreatments and comparing them in the HEAT and the OPTIMA study. We're looking for any improvements in RFA treatment that would impact the control patients. We're evaluating the post progression treatment regimens, including changes to the standard of care that would improve outcomes for the control arm patients. And we're evaluating the impact, if any, of COVID-19 on deaths, particularly at clinical sites in China and Southeast Asia. Once we have completed these analyses, we can plot a course forward. At this point, I believe we see 3 options. First, we can continue to follow patients to the final number of deaths, which is 197. Second, we could stop the study for futility. Or more likely, we can evaluate the next 8 to 10 patient deaths to determine if there is a material change in the study's trajectory and then decide. Now we do not have a time line to complete this analysis, but we are working diligently to do so. I want to caution you, and it's important for you to understand that unless we find a reason, rationale and a change in trajectory, the chance for a successful study is quite unlikely. I want to be careful to say, however, that an unsuccessful study does not mean a failed drug. ThermoDox, we know, has great potential for utility in oncology. Our investigators and researchers remain confident in its promise at Oxford and at the NIH, and at the National Children's Hospital and at Utrecht Medical school in the Netherlands, even after hearing the news from Dr. Borys, clinical research goes on at these institutions with confidence, and we intend to continue to support it. Meanwhile, we are taking appropriate steps to ensure that the company is well positioned regardless of our decision going forward with ThermoDox. On the financial side, we are eliminating all nonessential ThermoDox expenses and expect to save some $9 million to $10 million over the next 18 months. Our plans will ensure that we have capital sufficient to complete enrollment of the Phase II OVATION 2 Study. OVATION 2 is evaluating GEN-1, our novel and exciting gene mediated immunotherapy in advanced ovarian cancer. This study is based on very promising translational data that demonstrate effective recruitment of the immune system in response to the secretion of IL-12 promoted by GEN-1. You will recall that GEN-1 is a formulation of our proprietary synthetic nonviral transfection platform, TheraPlas, which, in this case, incorporates DNA plasmids that are quoted for the cytokine eterleukin 12 or IL-12. The OVATION 2 Study combines GEN-1 with the standard-of-care neoadjuvant chemotherapy. Patients in newly diagnosed -- are newly diagnosed with Stage III and IV ovarian cancer. Neoadjuvant chemotherapy is designed to shrink and drive the tumor mass to better ensure optimal surgical removal after 3 cycles of chemotherapy. Innovation 2, neoadjuvant chemotherapy is combined with weekly cycles of GEN-1. Patients then undergo interval debulking surgery, followed by 3 additional cycles of chemotherapy, plus weekly cycles of GEN-1. Our objective in this study is to delay progression because we know that progression foretells a bleak future for these women who, for the most part, are at the peak of their lives. In late May, we announced the data safety monitoring Board recommended that the Phase II portion of the study proceed with a dose of 100-milligram per meter square. The DSMB also determined that patients tolerate up to 17 doses of GEN-1 during a course of treatment that lasts up to 6 months. No dose-limiting toxicities were reported. The OVATION 2 Study is an open-label one-to-one randomized trial, 80% powered to show a 33% improvement in progression-free survival, its primary endpoint. If you recall, additional news this year regarding GEN-1 that we published. In March, GEN-1, in ovarian cancer, was granted orphan designation status by the EMA, the European Medical -- Medicines Agency, demonstrating both the need and the initial promise of GEN-1. GEN-1 had previously received a similar designation from the FDA in the United States. The second announcement, pulling Phase I data from our prior Phase I study with 12 randomized patients treated in the Phase I portion of the OVATION II Study. In mid-March, we announced highly encouraging dose-dependent tumor response and surgical score results. And in late March, we announced a strong PFS, progression-free survival, treatment effect comparing OVATION 1 patients versus a statistically validated synthetic control arm provided by the global highly reputable CRO Medidata. Now with the additional cash resources deployed from ThermoDox trial, we are accelerating the Phase II portion of the OVATION 2 Study. We now expect to begin enrollment in August, which is 3 months earlier than previously announced. Before we open the call to your questions, I'd like to remind you that Celsion is in excellent financial shape, unaudited at the end of the second quarter. Net of our venture loan, which we may choose to pay off, Celsion's cash and equivalents are approximately $17.5 million. In addition, this year, we expect to receive $1.9 million from the sale of our 2019 New Jersey state net operating losses. Given our cost reductions, these funds provide us with a runway through 2021 and should allow us to complete enrollment of the OVATION 2 Study in ovarian cancer. All in all, in spite of this setback, we believe that we continue to have a strong company, one that has shown a great deal of capability to execute high-quality clinical research on a global scale and with the potential to create value for our patients, the medical community and our shareholders. Now with those prepared comments completed, I'd like to open the call to your questions. Operator?

[Operator Instructions] And our first question comes from Justin Kim with Oppenheimer & Company

I know your possession of the unblinded analysis is still early, but can you talk to any correlative features observed between PFS and OS and any insight on the observations on the changes to median PFS during the DSM reviews?

Yes. So with regards to the median PFS, we reported that earlier, median PFS in the -- at this last analysis, I believe, was 17.4 months. We previously reported -- I want to -- I just kind of want to finish. Previously reported at the first analysis, a median time to progression, when you pool the 2 arms, of 17.3 months. And in the HEAT Study prospective subgroup, the 285 patients, all of whom received 45 minutes of RFA, when we pulled those 2 arms, I believe the median time to progression was 16.8 or 16.9 months. With regards to your question, is there a correlation of -- at this point, in the -- at the second interim analysis between OS and PFS. As you know, we reported the Kaplan-Meier demonstrates a hazard ratio of 0.903 or an approximate 10% reduction in risk for death. While PFS does not, at least in our initial review, and these are not centrally reviewed CT scans. These are investigative -- this is investigative reported PFS, there does not appear to be a correlation. PFS does not, at least, initially show initial review, any significant separation between the 2 arms. And Justin, I have to tell you, this is not a surprise to us. PFS, although it has some -- directionally, some support for OS, not only in our prior studies and our research, but also in many studies conducted by large pharma that preceded us, PFS is not shown to be a -- to be a true indicator, a good -- that correlates well with overall survival.

Okay. Got it. And it's great to see an acceleration to the OVATION 2 time line. Can you just remind us sort of what steps are required ahead of that initiation in August?

So you'll recall that the OVATION 2 Study is designed as a Phase I/II study. The Phase I portion evaluated a dose escalation from the prior Phase I study. To accomplish that, we initiated approximately 12 investigator sites and enrolled 12 patients. Those sites plus 3 more that have been initiated, there's approximately 15 investigator sites in the United States there. Contracts are signed. Our IRBs have approved the study, some of whom have treated patients are up and ready to go. We plan over the next 4 months to add 10 more sites, 8 in the United States and 2 in Canada for a total of 25 sites. Our product has been made and is sufficient to treat approximately 35 patients in a study now that will add approximately 104 more patients to the 18 that have been randomized in the Phase I portion. We're in process of initiating manufacturing. Everything is set up, ready to go, the supplies are there of the balance of the clinical supplies that are necessary to support the additional 65 patients, half of whom will be in a control arm, by the way, 65 patients or so, 70 patients possibly to round out the study. So we are ready to go. Dr. Borys, is convening an investigator meeting here in the next few weeks, to once again review the protocol to ensure everybody's on board, to welcome the new sites and to kick this thing off as quickly as possible.

We'll take our next question from Kumar Raja with Brookline Capital Markets.

And I'm also dispirited by the setback. So with regard to the options of either continuing until the 197 deaths or stopping for futility for -- or waiting for additional 8 to 10 patients' death, how does that impact financial in terms of finance, what sort of spending are we looking at based on that?

So your question was, how does that affect financing?