GlobeNewswire Inc | Nov 15, 2021 08:30AM EST

November 15, 2021

Balance Sheet Supports Focus onImmuno-Oncology andNext-Generation Vaccine Initiative

Conference Call Begins Todayat 11:00 a.m. Eastern Time

LAWRENCEVILLE, N.J., Nov. 15, 2021 (GLOBE NEWSWIRE) -- Celsion Corporation (NASDAQ: CLSN), a clinical-stage drug-development company focused on DNA-based immunotherapy and next-generation vaccines, today announced financial results for the three and nine months ended September 30, 2021, and provided an update on clinical development programs with GEN-1, a DNA-based interleukin-12 (IL-12) immunotherapy in Phase II clinical development for the treatment of advanced-stage ovarian cancer (Stage III/IV), and ThermoDox, a proprietary heat-activated liposomal encapsulation of doxorubicin under investigator-sponsored development for several cancer indications. In addition, Celsion has two feasibility-stage platform technologies for the development of novel nucleic acid-based immunotherapies and next-generation vaccines for infectious diseases.

GEN-1 continues to show momentum as patient enrollment nears 70% with full enrollment targeted by the first half of 2022. We are encouraged with surgical resection results at the 100 mg/m dose cohort in the Phase II OVATION 2 Study. From the first 36 patients with interval debulking surgery, 80% treated with GEN-1 at a dose of 100 mg/m plus neoadjuvant chemotherapy (NACT) had a complete tumor resection (R0), which indicates a microscopically margin-negative resection with no gross or microscopic tumor remaining in the tumor bed; this compares with 56% of patients in the control arm having R0 resections. These results are reasonably consistent with those reported from our earlier Phase I trials in advanced-stage ovarian cancer, said Michael H. Tardugno, Celsions chairman, president and chief executive officer.

At the International Vaccines Congress in October, Celsion announced results from preclinicalin vivostudies showing production of antibodies and cytotoxic T-cell response specific to the spike antigen of SARS-CoV-2 when immunizing BALB/c mice with our next-generation PLACCINE DNA vaccine, added Mr. Tardugno. Our goal over the next several quarters is to demonstrate the superiority of Celsions multicistronic DNA vaccine over current mRNA vaccines with respect to the quality of immune response (higher affinity of neutralizing antibodies, IgG titers and T-cell response) against multiple SARS-CoV-2 variants, longer duration of immune response and a stable product at lower temperatures.

Recent Developments

GEN-1 Immunotherapy

Interim Data Reported on the OVATION 2 Study. Interim clinical data from the first 36 patients who have undergone interval debulking surgery are as follows:

? 20 patients were treated with GEN-1 at a dose of 100 mg/m plus NACT, with 16 out of 20 patients (80%) having R0 resections. ? 16 patients were treated with NACT only, with 9 out of 16 patients (56%) having R0 resections. When combining these results with the surgical resection rates observed in the Company?s prior Phase Ib dose-escalation trial (the OVATION 1 Study), a ? population of patients with inclusion criteria identical to the OVATION 2 Study, the data reflect the strong dose-dependent efficacy of adding GEN-1 to NACT.

% Patients with R0 Resections0, 36, 47 mg/m of GEN-1 plus NACT n=22 50 %61, 79, 100 mg/m of GEN-1 plus NACT n=28 82 %

The objective response rate (ORR) as measured by Response Evaluation Criteria in Solid Tumors (RECIST) criteria for the 16 patients treated with ? NACT only were comparable, as expected, to the 20 patients treated with GEN-1 at a dose of 100 mg/m plus NACT, with both groups demonstrating an approximate 80% ORR.

Publication of OVATION 1 Study in the Journal of Clinical Cancer Research. In July 2021, the Company announced the publication of data from its Phase 1b OVATION 1 Study with GEN-1 in combination with NACT in patients with advanced ovarian cancer inClinical Cancer Research,a journal of theAmerican Association for Cancer Research. The study, authored by Premel H. Thaker, M.D.etal.and titled GEN-1 in Combination with Neoadjuvant Chemotherapy for Patients with Advanced Epithelial Ovarian Cancer: A Phase I Dose-Escalation Study, is availablehere. Dr. Thaker, Professor of Gynecologic Oncology and Director ofGynecologic Oncology Clinical Researchat theWashington University School of Medicine inSt. Louis, is the study chair for the OVATION program.

The OVATION 1 Study enrolled 18 patients with newly diagnosed stage IIIC and IV epithelial ovarian cancer in a standard 3+3 dose-escalation design testing four GEN-1 doses (36 mg/m2, 47 mg/m2, 61 mg/m2and 79 mg/m2) in combination with NACT (carboplatin-paclitaxel). There were 15 patients evaluable for safety, and 14 underwent interval debulking and were evaluable for RECIST.

As previously reported, there were no dose-limiting toxicities. As shown in the chart below, in the two highest doses of GEN-1 the objective response rate was 100% and the R0 resection rate was 88%. Newly published data show the CRS, which was analyzed in this paper for the first time, was 50% in the two highest doses of GEN-1, compared with 28% from a major publication evaluating CRS scoring.

Clinical Responses:Tumor Response, Surgical Outcome, Pathological Response and Chemotherapy Response Score with NAC/GEN-1Escalating Doses

Cohort Cohort Cohort Cohort 1 2 3 4 Total 36 mg/ 47 mg/ 61 mg/ 79 mg/mRadiographic (n) m^2 m^2 m^2 ^2Response CR 2 1 0 0 1 Tumor Response PR 10 0 3 3 4 SD 2 2 0 0 0 Objective Response 67 % 100 %Rate R0 9 2 0 2 5 Surgical Outcome R1 3 1 2 0 0 R2 2 0 1 1 0 R0 Resection Rate 33 % 88 % cPR 1 1 0 0 0 Pathological Micro 8 1 2 1 4 Response Macro 5 1 1 2 1 cPR/Micro Rate 60 % 63 % CRS 3 5 1 0 2 2 Chemotherapy CRS 2 5 2 1 0 2 Response Score CRS 1 4 0 2 1 1 CRS 3 Rate 17 % 50 %

Translational Responses:IL-12 andIFN-Levels, Response to Immune-Suppressive Agents;Ratio of CD8+ Cells to Immune Suppressive Agents

A dose-dependent increase in immunostimulatory cytokines IL-12 and its ? downstream cytokine IFN-? in ascitic fluid. The anticancer effects of these cytokines are widely recognized in human malignancies. ? The proportion of myeloid dendritic cells in the peritoneal fluid trended higher (3.1-fold) accompanied by a similar 3.0-fold rise in CD8+ cells. GEN-1 appeared to reduce four immunosuppressive signals (Foxp3, IDO1, PD-1 ? and PD-L1) within the tumor microenvironment, a trend not seen with NAC therapy alone. ? GEN-1 appeared to stimulate the body?s immune system through the production of CD4 and CD8 cells. GEN-1 gene therapy was associated with an apparent increase in the cytotoxic state of T cells within the tumor microenvironment as indicated ? by the increases in the ratios of CD8+/CD4+ and CD8+/Treg cells. Indeed, higher CD8+/CD4+ T cell and CD8+/Treg ratios are considered prognostic for prolonged survival.

Vaccine Initiative

Vaccine Advisory Board Expanded.In July 2021, the Company announced the addition of Dan H. Barouch, M.D., Ph.D. and Luke D. Handke, Ph.D. to its Vaccine Advisory Board (VAB). They joined Britt A. Glaunsinger, Ph.D. and Xinzhen Yang, M.D., Ph.D. on the VAB, which was formed in February 2021.

Dr. Barouch is the principal investigator at the Barouch Laboratory, Director of the Center for Virology and Vaccine Research at Beth Israel Deaconess Medical Center and William Bosworth Castle Professor of Medicine at Harvard Medical School. In addition, he is a key participant in the Bill & Melinda Gates Foundation Collaboration for AIDS Vaccine Discovery, the National Institutes of Health Martin Delaney HIV-1 Cure Collaboratoryand the Ragon Institute of MGH, MIT and Harvard. Dr. Barouch and his team were instrumental in developing the vector, a variant of an adenovirus called Ad26, that was used to make single-dose vaccines for HIV, tuberculosis and Zika, and ultimately, in conjunction with Johnson & Johnson researchers, SARS-CoV-2. He has authored numerous peer-reviewed articles.

Dr. Handke is a highly skilled molecular biologist and microbiologist with a decade of pharmaceutical industry experience including nine years with Pfizers Vaccine Research and Early Development Unit. At Pfizer he served as molecular biology lead on an early phase viral vaccine program and was the lead reviewer of data sources and literature citations for licensure application for the Trumenba meningococcal group B vaccine in the U.S. and in Europe. He began his career in vaccine research at Wyeth. He is co-author and co-inventor on various patent applications for a protein-based RSV vaccine and a SARS-CoV-2 detection assay and authored 10 peer-reviewed publications including six as first author. Dr. Handke is currently a Senior Scientist at the University of Nebraska Medical Center in Omaha. In addition to serving on the VAB, Dr. Handke will provide consulting services to Celsion in connection with its vaccine-development program, which involves DNA-based vectors in combination with proprietary non-viral cellular delivery agents. He also will advise Celsion as it advances this program into human clinical studies.

Results fromIn Vivo Studies with PLACCINE DNA Vaccine Platform Indicate Immune Response Against SARS-Cov-2. In September 2021, the Company announced results from preclinicalin vivostudies 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 Companys 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 vaccines potential to eradicate cells infected with SARS-CoV-2. These findings demonstrate the potential immunogenicity of Celsions PLACCINE DNA vaccine, which is hypothesized 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.Celsionreported these data at theInternational Vaccines Conferencein October 2021.

Agreement with Hainan Poly Pharm to Manufacture Celsions DNA-based Vaccine. In September 2021, the Company announced an amendment to its existing contract manufacturing agreement with Hainan Poly Pharm Co. Ltd., a generics manufacturer dedicated to providing therapeutic-value products and services to patients and customers around the world, to include development work for the Companys investigational DNA-based COVID-19 vaccine. Under the terms of the amended agreement, Poly Pharm will manufacture clinical batches and, if approved for use, will also manufacture commercial batches for Celsions vaccine based on its TheraPlas technology. Poly Pharm is experienced with chemistry, manufacturing and controls (CMC), process development and good manufacturing processes (cGMP), including process optimization and manufacturing services to help customers advance new drug development projects. Its sites and pharmaceutical compounds have been approved by theU.S. Food and Drug Administration(FDA), theEuropean Medicines Agency(EMA), ChinasNational Medical Products Administration(NMPA) and theWorld Health Organization(WHO).

Oral Presentation on Celsions Ongoing Work with DNA-based Vaccines at International Vaccines Congress. In October 2021, the Company announced thatKhursheed Anwer, Ph.D., executive vice president and chief science officer, presented at theInternational Vaccines Congress. Dr. Anwers presentation was titled Immunogenicity of DNA Vaccines based on Multicistronic Vectors and Synthetic DNA Delivery Systems and can be viewedhere. Dr. Anwerdiscussed ongoing proof-of-concept studies in SARS-CoV-2 with the Companys DNA-based vaccine approach utilizing its PLACCINE platform. PLACCINE, Celsions proprietary design for DNA vectors, encompasses molecular elements designed to improve the immune response by targeting multiple antigens of a pathogen or multiple mutants of the same antigen.Dr. Anweralso reviewed the PLACCINE technology and the production of a family of DNA vaccine vectors expressing one or more SARS-CoV-2 surface antigens as a proof-of-concept target, verified vector composition and demonstrated expression of the encoded genes.

Corporate Developments

Presentations at Three Healthcare Investment Conferences. Celsion management made presentations at the following investment conferences in October:

Chardan?s 5^th Annual Genetic Medicines Conference. Michael H. Tardugno, ? Celsion?s chairman, president and chief executive officer, and Khursheed Anwer, Ph.D., Celsion?s chief scientific officer, participated in a fireside chat. ? LD Micro Main Event. Jeffrey W. Church, Celsion?s chief financial officer, presented virtually. Alliance Global Partners? Virtual Healthcare Conference. Mr. Tardugno ? participated in an oncology focused panel discussion moderated by James Molloy, Research Analyst.

Third Quarter Financial Results

For the quarter ended September 30, 2021, Celsion reported a net loss of $5.4 million ($0.06 per share), compared with a net loss of $8.1 million ($0.24 per share) in the same period of 2020. Operating expenses were $5.2 million in the third quarter of 2021, which represented a $0.9 million (21%) increase from $4.3 million in the same period of 2020.

The Company ended the third quarter of 2021 with $60.6 million in cash, investment securities, restricted cash and accrued interest receivable.Coupled with future sales of unused New Jersey NOLs, the Company believes it has sufficient capital resources to fund its operations through the end of 2024.

Research and development (R&D) expenses were $2.5 million in the third quarter of 2021, consistent with $2.5 million reported in the third quarter of 2020. Costs associated with the OVATION 2 Study were $0.2 million in each of the third quarters of 2021 and 2020. R&D costs associated with both the development of GEN-1 to support the OVATION 2 Study and the development of the PLACCINE DNA technology platform increased to $1.1 million in the third quarter of 2021, compared with $0.7 million in the same period of 2020. Clinical development costs for the Phase III OPTIMA Study decreased $0.3 million to $0.2 million in the third quarter of 2021, compared with $0.5 million in the third quarter of 2020, due to the discontinuation of this 556-patient trial in the first quarter of 2021. Other costs related to clinical supplies and regulatory support for the Companys clinical development programs decreased to $1.0 million in the third quarter of 2021 from $1.1 million in the third quarter of 2020, largely driven by higher manufacturing costs for GEN-1 clinical supplies for the Phase II portion of the OVATION 2 Study, offset by lower regulatory and manufacturing costs related to the OPTIMA Study.

General and administrative expenses were $2.7 million in the third quarter of 2021, compared with $1.8 million in the same period of 2020. The $0.9 million increase was primarily attributable to higher non-cash stock-compensation expense ($0.2 million), an increase in legal and professional fees ($0.6 million) and an increase in Directors and Officers insurance premiums ($0.1 million).

Non-operating expenses of $0.3 million in the third quarter of 2021 decreased from $3.9 million in the third quarter of 2020 due to (i) a non-cash charge of $1.1 million for the change in valuation of the earn-out milestone liability for the GEN-1 ovarian product candidate recognized in the third quarter of 2020 compared with a $0.3 million non-cash charge recognized in the current quarter; (ii) a non-cash charge of $2.4 million related to the impairment of certain in-process research and development assets related to the development of the Companys glioblastoma multiforme (GBM) cancer product candidate in the third quarter of 2020; and (ii) lower interest expense of $0.4 million on the Companys debt facilities in the current quarter, compared with the comparable prior year period. In June 2021, the Company entered into a new $10.0 million loan facility with SVB, with a portion of the proceeds used to retire all outstanding indebtedness under the Companys venture debt facility entered in late June 2018 with Horizon Technology Finance Corporation.

Nine Month Financial Results

For the nine months ended September 30, 2021, the Company reported a net loss of $16.5 million ($0.21 per share), compared with a net loss of $18.5 million ($0.62 per share) in the same period of 2020. Operating expenses were $15.9 million during the first nine months of 2021, which represented a $1.8 million (13%) increase from $14.1 million in the same period of 2020.

Net cash used for operating activities was $11.1 million in the first nine months of 2021, compared with $11.9 million in the same period in 2020. This was in line with the Companys projected cash utilization for 2021 of approximately $17 million, or an average of approximately $4.25 million per quarter. Cash provided by financing activities of $54.8 million during the first nine months of 2021 was derived from equity offerings in January 2021 and April 2021, the $10 million loan facility with SVB in June 2021 and the sale of the Companys unused New Jersey NOLs in May 2021.

Research and development expenses decreased $0.9 million to $7.6 million in the first nine months of 2021 from $8.5 million in the comparable prior-year period. Costs associated with the OVATION 2 Study increased to $1.0 million in the first nine months of 2021 compared to $0.7 million in the same period of 2020. The Company initiated enrollment in the Phase 2 portion of the study during the third quarter of 2020. R&D costs associated with the development of GEN-1 to support the OVATION 2 Study as well as development of the PLACCINE DNA technology platform increased to $3.1 million in the first nine months of 2021, compared with $2.3 million in the comparable 2020 period. Costs for the Phase III OPTIMA Study decreased $1.2 million to $0.6 million in the first nine months of 2021, compared with $1.8 million in the first nine months of 2020, due to the discontinuation of this trial in the first quarter of 2021. Other costs related to clinical supplies and regulatory support for the Companys clinical development programs decreased $0.8 million to $2.9 million in the first nine months of 2021, compared with the same prior-year period due to lower regulatory and manufacturing costs for the discontinued Phase III OPTIMA Study.

General and administrative expenses were $8.3 million in the first nine months of 2021, compared with $5.5 million in the same period of 2020. The $2.8 million increase was primarily attributable to higher non-cash stock-compensation expense ($1.0 million), an increase in legal and professional fees ($1.4 million) and an increase in Directors and Officers insurance premiums ($0.2 million).

Other expenses during the first nine months of 2021 included a non-cash charge of $0.3 million for the change in valuation of the earn-out milestone liability for the GEN-1 ovarian product candidate, compared with a non-cash charge of $1.4 million during the comparable prior-year period and a non-cash charge of $2.4 million related to the impairment of certain in-process research and development assets related to the development of the Companys GBM cancer product candidate in the third quarter of 2020. In connection with the Companys venture debt facilities, the Company incurred interest expense of $0.5 million during the first nine months of 2021, compared with $1.1 million during the same period in 2020. In June 2021, the Company entered into a new $10.0 million loan facility with SVB, with a portion of the proceeds used to retire all outstanding indebtedness under the Companys venture debt facility with Horizon Technology Finance Corporation.

Conference Call

The Company will host a conference call to provide a business update, discuss its third quarter 2021 financial results and answer questions at 11:00 a.m. ET today. To participate in the call, please dial 1-800-353-6461(Toll-Free/North America) or +1-334-323-0501 (International/Toll) and ask for the Celsion Corporation Third Quarter 2021 Earnings Call (Conference Code: 4154518). The call will also be broadcast live on the internet at www.celsion.com. The call will be archived for replay through December 1, 2021. The replay can be accessed at +1-719-457-0820 or 888-203-1112 using Conference ID: 4154518. An audio replay will also be available on the Company's website, www.celsion.com, for 90 days after 2:00 p.m. ET on November 15, 2021.

About Celsion Corporation

Celsion is a fully integrated, clinical-stage biotechnology company focused on advancing a portfolio of innovative cancer treatments, including immunotherapies and DNA-based therapies, and a platform for the development of nucleic acid vaccines currently focused on SARS-CoV-2. The companys product pipeline includes GEN-1, a DNA-based immunotherapy for the localized treatment of ovarian cancer. Celsion also has two feasibility-stage platform technologies for the development of novel nucleic acid-based immunotherapies and other anticancer DNA or RNA therapies. Both are novel synthetic, non-viral vectors with demonstrated capability in nucleic acid cellular transfection. For more information on Celsion, visit www.celsion.com.

Celsion GmbH is Celsions wholly owned, special purpose subsidiary based in Zug, Switzerland. Celsion GmbH is responsible for supporting studies of ThermoDox, a proprietary heat-activated liposomal encapsulation of doxorubicin, is under investigator-sponsored development for several cancer indications. For more information on Celsion GmbH, visit www.celsiongmbh.com.

Celsion wishes to inform readers that forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.Readers are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, unforeseen changes in the course of research and development activities and in clinical trials; the uncertainties of and difficulties in analyzing interim clinical data; the significant expense, time, and risk of failure of conducting clinical trials; the need for Celsion to evaluate its future development plans; possible acquisitions or licenses of other technologies, assets or businesses; possible actions by customers, suppliers, competitors, regulatory authorities; and other risks detailed from time to time in Celsion's periodic reports and prospectuses filed with the Securities and Exchange Commission.Celsion assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

Celsion Investor Contact

Jeffrey W. Church609-482-2455jchurch@celsion.com

LHA Investor Relations

Kim Sutton Golodetz212-838-3777kgolodetz@lhai.com

[Tables to Follow]

Celsion CorporationCondensed Statements of Operations(in thousands except per share amounts)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Licensing $ 125 $ 125 $ 375 $ 375 revenue Operating expenses:Research and 2,468 2,492 7,633 8,534 developmentGeneral and 2,719 1,793 8,258 5,533 administrativeTotaloperating 5,187 4,285 15,891 14,067 expenses Loss from (5,062 ) (4,160 ) (15,516 ) (13,692 )operations Other income (expense):(Loss) fromchange invaluation of (257 ) (1,100 ) (327 ) (1,397 )earn-outmilestoneliabilityImpairment ofin-process - (2,370 ) - (2,370 )research anddevelopmentLoss on debt - - (235 ) - extinguishmentInterestexpense,investment (92 ) (442 ) (470 ) (1,012 )income andother income(expense), netTotal otherincome (349 ) (3,912 ) (1,032 ) (4,779 )(expense), net Net loss $ (5,411 ) $ (8,072 ) $ (16,548 ) $ (18,471 ) Net loss per common shareBasic and $ (0.06 ) $ (0.24 ) $ (0.21 ) $ (0.62 )diluted Weightedaverage shares outstandingBasic and 86,558 34,112 79,668 29,935 diluted

Celsion CorporationSelected Balance Sheet Information(in thousands)

September December 30, 2021 31, 2020 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 25,649 $ 17,164 Investment securities and interest receivable 28,903 - on investment securitiesAdvances, deposits on clinical programs and 2,213 1,661 other current assetsTotal current assets 56,765 18,825 Property and equipment 486 295 Other assets Deferred tax asset - 1,845 Restricted cash invested in money market 6,000 - accountIn-process research and development 13,366 13,366 Goodwill 1,976 1,976 Operating lease right-of-use assets, deposits 876 1,220 and other assetsTotal other assets 22,218 18,407 Total assets $ 79,469 $ 37,527 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities Accounts payable and accrued liabilities $ 5,441 $ 4,703 Notes payable ? current portion - 1,117 Operating lease liability ? current portion 534 433 Deferred revenue - current portion 500 500 Total current liabilities 6,475 6,753 Earn-out milestone liability 7,345 7,018 Notes payable ? noncurrent portion 5,809 3,935 Deferred revenue ? noncurrent portion 125 500 Operating lease liability ? noncurrent portion 373 710 Total liabilities 20,127 18,916 Stockholders? equity Common stock 866 407 Additional paid-in capital 387,107 330,289 Accumulated other comprehensive gain (loss) 2 - Accumulated deficit (328,548 ) (312,000 ) 59,427 18,696 Less: Treasury stock (85 ) (85 )Total stockholders? equity 59,342 18,611 Total liabilities and stockholders? equity $ 79,469 $ 37,527

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