Benzinga | Nov 22, 2021 07:31AM EST

CLSN: OVATION 2 Trial Nears 70% of Target Enrollment

By David Bautz, PhD

NASDAQ:CLSN

READ THE FULL CLSN RESEARCH REPORT

Business Update

Ovation 2 Study Near 70% of Target Enrollment

Celsion Corporation (NASDAQ:CLSN) is currently conducting the OVATION 2 clinical trial of GEN-1 in patients with advanced ovarian cancer (Stage III/IV). It is a Phase 1/2 randomized, open label, multicenter trial to evaluate the safety, efficacy, and biological activity of intraperitoneal GEN-1 plus neoadjuvant chemotherapy (NACT), compared to NACT alone. Up to 110 patients are anticipated to be enrolled in the trial. The Phase 1 run-in portion of the study began with 14 patients receiving 100 mg/m2of GEN-1, as the highest amount of GEN-1 studied prior to this trial was 79 mg/m2. The primary endpoint is progression free survival (PFS), which will be evaluated following 80 PFS events or 16 months, whichever is longer. Secondary endpoints include clinical response (ORR), pathological response, surgical resection scores, biological response, and safety. The trial is designed with an 80% confidence interval for an observed PFS hazard ratio (HR) of 0.75, which would correspond to an approximately 33% improvement in risk for cancer progression when comparing GEN-1+NACT to NACT alone.

Thus far, over 70% of the projected 110 patients have been enrolled in the OVATION 2 trial. Interim clinical data from the first 36 patients who have undergone interval debulking surgery show that:

16/20 (80%) patients treated with GEN-1 (100 mg/m2) + NACT had a complete tumor resection (R0) following interval debulking surgery, compared to only 9/16 (56%) of patients receiving NACT only

Both cohorts of patients had similar ORR of approximately 80%

When combining the results seen thus far in the OVATION 2 trial with the results from the OVATION 1 trial (that included patients with identical inclusion criteria to the OVATION 2 trial), the data show that there appears to be a dose-dependent effect of adding GEN-1 to NACT.

During the third quarter conference call, management indicated that another update from the trial could be available within the next few weeks. We anticipate enrollment being completed in the OVATION 2 trial in the first half of 2022, which could lead to the data readout for the primary endpoint in the first half of 2023.

PLACCINE Technology Presented at International Vaccine Congress

In October 2021, Celsion's Executive Vice President and Chief Scientific Officer, Khursheed Anwer, PhD, presented at the International Vaccines Congress (presentation can be found here) on the company's PLACCINE technology, which is characterized by a single multi-cistronic DNA plasmid vector that can encode for multiple antigens, an immune modifier, and is administered with a synthetic delivery system. Additional potential advantages of the PLACCINE technology include the durability of immune response, storage stability 4C, and a decreased cost of manufacturing.

The following figure gives an overview of the multicistronic vector cassette that can be utilized for expression of up to four gene sequences. It contains optimized transcription elements and the cloning sites allows for rapid gene insertion and/or removal.

The company is currently investigating the possibility of expressing two or more SARS-CoV-2 antigens as a potential COVID-19 vaccine. The following image shows the construction of the vector cassette that expresses two different variants of the SARS-CoV-2 Spike protein and RT-PCR data showing the expression of the two spike protein variants.

Celsion's immediate goal with the COVID-19 vaccine is to validate the PLACCINE technology in preclinical trials using mRNA vaccines as competitors. Once positive data is obtained, the company will look for a development partner for COVID-19 clinical trials. In addition, should positive data be seen with the COVID-19 vaccine, the company expects to begin development of DNA plasmid vaccines against a range of infectious viral diseases.

Financial Update

On November 15, 2021, Celsion announced financial results for the third quarter of 2021. The company reported licensing revenue of $125,000 for the third quarters of 2021 and 2020. The revenue is derived from a technology development contract entered into in January 2013 with Hisun to support the development of ThermoDox in China. Hisun paid a non-refundable technology transfer fee of $5.0 million in the first quarter of 2013 and it has been recorded to deferred revenue and amortized over the ten-year term of the agreement.

R&D expenses for the third quarters of 2021 and 2020 were $2.5 million. G&A expenses in the third quarter of 2021 were $2.7 million, compared to $1.8 million for the third quarter of 2020. The increase was primarily due to higher non-cash stock-based compensation, increased legal and professional fees, and an increase in insurance premiums.

As of September 30, 2021, Celsion had approximately $60.6 million in cash, cash equivalents, and short-term investments. The company recently announced that the New Jersey Economic Development Authority has approved the sale of $1.5 million of its unused New Jersey net operating losses (NOLs) for tax year 2020. We estimate the company has sufficient capital to fund operations through 2024. As of November 12, 2021, the company had approximately 86.6 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of 95.8 million.

Conclusion

We look forward to an update from the OVATION 2 trial and are confident that the trends seen in the initial data will continue in regards to the percentage of patients that achieve R0 on resection. In addition, we look forward to additional updates on the PLACCINE technology and particularly data on the company's SARS-CoV-2 vaccine as a means of validating the technology. With no changes to our model our valuation remains at $3.50 per share.

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