Imunon, Inc. (IMNN) Earnings Call Transcript & Summary

Good morning, and welcome to the Celsion Corporation 2020 Annual Meeting of Shareholders. Except for historical information, certain statements made during this meeting are forward-looking statements involving significant risk and uncertainties. These risks and uncertainties include those related to the future financial position and business strategy of the company and are detailed in the company's filings with the Securities and Exchange Commission. I would now like to introduce Mr. Michael Tardugno, the Chairman of Celsion's Board of Directors.

Thank you, Jeff. Good morning, ladies and gentlemen. As the Chairman of the Board of Celsion Corporation, it is my pleasure to welcome all of you to our 2020 Annual Meeting of Shareholders. Unfortunately, due to the COVID-19 pandemic, we will be conducting a virtual annual meeting this year. Of course, we would rather meet in person and hope to do so at next year's annual meeting. After dialing in to the meeting this morning, you should have been provided a copy of our meeting agenda. It's our intention to conduct the meeting in accordance with this agenda. Only those individuals who are a shareholder in Celsion Corporation as of the record date, it's April 22, 2020. So only those individuals who are allowed to participate in this meeting of shareholders. I would like to note that as is our long-held practice, we have provided time for questions at the end of the meeting. Before proceeding to the business portion of the meeting, I would like to introduce the company's directors and executive officers who are present by phone today. Members of our Board of Directors are Dr. Augustine Chow; Mr. Robert Hooper; Dr. Alberto Martinez; Dr. Andreas Voss; and Dr. Donald Braun. Mr. Fred Fritz, our Audit Committee Chair is with us in person in the conference room here at Celsion today. And I can assure you, however, we are respecting the 6-foot distance for COVID safety purposes. I would also like to introduce members of Celsion's executive staff who are present by telephone. They include Dr. Khursheed Anwer, Celsion's Executive Vice President and Chief Scientific Officer; Dr. Nicholas Borys, Executive Vice President and Chief Medical Officer; Mr. Jeffrey Church, from whom you've just heard, our Executive Vice President and Chief Financial Officer and the Annual Meeting Secretary. Mr. Church is here with us today, also respecting the 6-foot distance. And the person who, among other responsibilities, puts in a great deal of time seeing to the details of this meeting, Mr. Timothy Tumminello, Celsion's Chief Accounting Officer. Finally, I would like to note that Mr. Jarrod Rhen, our engagement partner from WithumSmith+Brown, the company's independent public accountants, is also with us today. I will now ask Mr. Church to attend to certain procedural matters.

This meeting is being held pursuant to the notice mailed on April 29, 2020, to each shareholder of record of the company at the close of business on April 22, 2020, the record date fixed by the Board of Directors for determining the shareholders entitled to notice of and to vote at this meeting. I have a copy of the printed notice dated April 29, 2020, setting forth the time, place and purpose of this meeting. Unless there is an objection, I propose to dispense from the reading of the notice. I also have a complete list in alphabetical order of the record holders of our common stock as of close of business on April 22 -- I'm sorry, on April -- yes, April 22. The list shares the address of each shareholder and the number of shares registered in each shareholder's name. This list will be kept open for inspection throughout the meeting. And it shows that at the close of business on April 22, 2020, there were 29,257,101 shares of Celsion common stock outstanding. Finally, I have an affidavit of distribution signed by Joanne Vogel, Manager of Broadridge Financial Solutions showing that on May 4, 2020, she calls being mailed to each shareholder of record a copy of the meeting notice together with related proxy materials.

Mr. Church is directed to incorporate a copy of the notice together with the affidavit of mailing into the minute book of the company as a part of the minutes of this annual meeting. Prior to this meeting, the Board of Directors appointed Mr. Church as the inspector of elections. He has executed the oath of inspector of elections. We will file Mr. Church's oath with the material -- with the minutes of this meeting. Mr. Church will now make a poll of the shareholders represented here today in person or by proxy.

There was a total of 29,275,101 shares of the company's common stock outstanding as of the record date. Pursuant to our bylaws, a quorum for conduct of business at this annual meeting requires the present in person or by proxy of the holders of record of at least a majority of those shares. I am advised that a total of 20,709,739 shares of Celsion's common stock, which translates into 71% of our total outstanding shares is present and represented by proxy here today.

The majority of the issued and outstanding shares of common stock of the company entitled to vote at this meeting being present in person or represented by proxy, a quorum is present. I hereby declare the meeting to be lawfully and properly convened and confident to proceed to the transaction of business for which it has been called as stated in the meeting notice. Ladies and gentlemen, on behalf of the Board of Directors, I would like to express my appreciation to all shareholders and particularly those who are attending this virtual meeting and to those who have returned their proxies. It is one of my more gratifying task as Chairman of your Board of Directors to thank you for your loyalty and for your continued support. On your behalf, I would also like to express our gratitude to the company's Board of Directors, not only for their support and guidance, but also for their independence and commitment in its fiduciary responsibilities to our shareholders and to our employees. As you know, we've had a great deal of exciting news during the first half of 2020 for both of our lead programs. A ThermoDox Phase III OPTIMA Study for the treatment of newly diagnosed hepatocellular carcinoma, otherwise known as primary liver cancer, reached the prescribed number of events in April for our second preplanned interim efficacy data analysis to occur early in July. I will remind you that while our confidence is quite good for a positive result at this meeting of the DMC, this is not a binary event for the stuff. If a final analysis is needed in less than 9 months from now, it will be an even lower threshold for success with even a greater potential that ThermoDox will achieve the prespecified outcome of a 33% improvement in overall survival and become the transformative treatment for the largest unmet medical need remaining in oncology. So I'd like to imagine with me, if you will. A single dose of our ThermoDox added to a well-executed RFA procedure administered with an intent to cure in the fourth most deadly cancer on the planet. With this hypothesis and clinical trial design independently confirmed by the NIH, supported by some of the most important names in HCC research, approved by 14 regulatory agencies worldwide. Imagine the impact. I think we're really on to something. Equally important is the wave of ongoing positive news that we've reported regarding the development of GEN-1 for immunotherapeutic currently being evaluated in the OVATION 2 Study, a Phase I/II trial in newly diagnosed ovarian cancer patients. The potential, again, is awesome. Small numbers, I'll grant you, but the findings so far have been nothing short of dramatic in a cancer that strikes women at the peak of their lives. GEN-1's ability to harness an immune system response is clearly demonstrated in our translational research. The clinical findings so far are impressive. Small numbers, but impressive nonetheless. Our investigators are very anxious to move on to Phase II, and we will do so sooner than expected. In addition to our study release of positive clinical trial news, as I outlined in my letter to shareholders last March, after seeing the extraordinary volatility in signals of economic retrenchment, we smartly took steps to strengthen our financial position, the goal of which was to further assure that our cash run rate extends through the second quarter of 2021 and several key milestones. So it's with confidence they affirm Celsion's fundamentals continue to be strong. Our advanced clinical programs are directed to large patient populations with unmet medical needs and poor prognoses. We have sufficient cash to see the company through several important value creating milestones. And execution of our development programs has been with the utmost care and with a strategic focus. All supported with an extraordinarily talented and loyal staff. At this point, I'd like to recognize our research physicians and their staffs, our consultants and professional numbers of the CROs who are engaged in our studies and other development projects for their grace under pressure during this current pandemic and to let me know that their dedication is very much appreciated. Together, we navigated the COVID-19 challenges with a modest impact on our studies and our time lines. And with not a small measure of support from the payroll protection program, we avoided the potential for furloughing many of our employees. So I'd like to also convey our gratitude to the employees of Celsion for their dedication and tireless sacrifice. By any standard of measure, I report that this professional team of scientists and product development experts is the reason that we have the potential for breakthrough therapies, addressing some of the most difficult cancers of our generation. We are indeed lucky to have each and every one of them. With your affirmative vote on the proposal set forth in the proxy that allows us to strengthen our commitment to attract and retain the very best of human resources we set the stage, building on Celsion's sound fundamentals. I trust you'll find that our vision to be clear and that you can see that the months ahead have incredible potential and upside to be transformative, to build great value for you and to deliver innovative treatments for cancer patients around the world. And now to the business portion of our meeting. As a preliminary matter, I'd like to point out that most of you who return proxies authorizing the persons named in the proxy to vote on all proposals coming before the meeting. Those of you who signed into our virtual annual shareholder meeting and requested ballots can vote individually anytime during the meeting up until the polls are closed. The proxy statement mailed to each Celsion's shareholder with a notice of this meeting indicated that there will be 5 proposals to be acted upon today. The matters to be acted upon are #1, the election of 2 Class I directors, Dr. Chow and Mr. Fritz, each to serve until the Annual Meeting of Shareholders in 2023. Number two, the nonbinding advisory vote regarding the 2020 executive compensation program, often referred to as say-on-pay. Number three, a nonbinding advisory vote regarding the frequency by which advisory votes on say-on-pay will occur, either every year, every 2 years or every 3 years. Number four, a proposal to ratify the selection of WithumSmith+Brown as the company's independent public accountants for the fiscal year ending December 31, 2020. And number five, a proposal to approve and amend -- to approve an amendment to the company's 2018 Stock Incentive Plan. As indicated in the proxy statement, the Board has nominated Dr. Chow and Mr. Fritz to serve as Class I directors of the company. Under our classified Board of Directors, if elected, all Class I directors will serve until our annual meeting in 2023 or until their successors are elected and qualified. I'd like to request the motion.

Mr. Chairman, I hereby move for the election of Dr. Chow and Mr. Fritz to serve as Class I directors of the company until the annual shareholders' meeting in 2023 or until their successes have been elected and qualified as set out in the company's proxy statement.

You have heard the motion. Is there a second?

I second the motion.

The Board recommends for the election of each of the Class I nominees for Director, each to serve until the company's Annual Meeting of Shareholders in 2023. Are there any questions or comments? The affirmative vote of a plurality of votes cast in this meeting in person or by proxy is required to elect the 2 nominees. The next item of business is to approve by a nonbinding advisory vote, the 2020 compensation program for the company's executive officers. I'd like to request the motion.

Mr. Chairman, I hereby move to approve by a nonbinding advisory vote, the 2020 compensation program for the company's executive officers.

You've heard the motion. Is there a second?

I second the motion.

The Board recommends for the approval of the 2020 executive compensation program. The next item of business is to approve, by a nonbinding advisory vote, the frequency by which future advisory votes on executive compensation will occur, either every year, every 2 years or every 3 years. I'd like to request a motion.

Mr. Chairman, I hereby move to approve, by a nonbonding advisory vote, the frequency by which future advisory votes on executive compensation will occur.

You've heard the motion. Is there a second?

I second the motion.

The Board recommends the frequency of future advisory votes on executive compensation to be every 3 years. Next on the agenda is ratification of the selection of WithumSmith+Brown, PC, to serve as our independent public accountants for the fiscal year ending December 31, 2020. I'd like to request the motion.

Mr. Chairman, I move that the appointment by the Board of Directors of WithumSmith+Brown to serve as Celsion's independent public accountants for the fiscal year ending December 31, 2020, be ratified and approved by the shareholders of the company.

You have heard the motion. Is there a second?

I second the motion.

The Board recommends for the ratification of the appointment of WithumSmith+Brown to serve as Celsion's independent registered public accountants for the fiscal year ending December 31, 2020. The affirmative vote of a majority of the shares of common stock present or in person or represented by proxy is required to ratify the selection of WithumSmith+Brown to serve as the company's registered public accountants. Are there any questions or comments? Please remember that Mr. Jarrod Rhen from Withum will have an opportunity to respond to any questions you may have on the company's 2019 financial statements a little later in the meeting. The last item of business to consider is a proposal to amend the Celsion Corporation 2018 Stock Incentive Plan by adding additional shares to the existing stock option pool. I'd like to request the motion.

Mr. Chairman, I hereby move to approve the amendment to Celsion Corporation's 2018 Stock Incentive Plan.

You've heard the motion. Is there a second?

I second the motion.

The Board recommends for the approval of the amendment to the Celsion Corporation 2018 Stock Incentive Plan. The affirmative vote of the majority of the votes cast of the company's common stock is required to improve this proposal. If any shareholder would like to vote on these 5 matters, I suggest that you vote your shares now. [Voting]

If you've already sent in your proxy, there's no need to cast a ballot, unless you wish to change the selection that you made on your proxy. Proxy holders will vote your shares as indicated on the proxy that you've already provided to us. If there are any shareholders who desire to vote your shares who have not yet voted, please do so now. [Voting]

After the shares are voted and accounted for, I declare the polls closed. As the votes are being counted, I want to share a few more thoughts. Steps are taken last year across the business to lay a strong foundation for success in 2020 and beyond and position Celsion to deliver important new medicines for patients while delivering significant value to our shareholders. The company has never been in better shape. We have 2 high potential investigational drugs in late stage clinical studies both addressing major global markets. Both are based on 2 innovative nanoparticle-based technology platforms, each having the potential to address a wide range of cancers and the potential to incorporate a broad range of therapeutics. Our lead drug candidate, ThermoDox, effectively provides targeted delivery of doxorubicin. In combination with radio frequency ablation, ThermoDox addresses the known and well acknowledged limitations of radio frequency ablation in the treatment of primary liver cancer. We now know that when standardized for dwell time and number of lesions, patients given ThermoDox in conjunction with properly administered RFA demonstrated remarkable 2-year improvement in overall survival as demonstrated in the 285-patient prospective subgroup from our previous HEAT Study. And if we're right, if either this analysis or at the final analysis, if it's needed, projected for the first quarter of 2021, you will be witnessed to and participate in a transformational event in medicine and in business unlike any other. Our second investigational candidate, GEN-1, a drug developed and engineered for the localized delivery of IL-12, that's interleukin 12. An incredibly powerful pro modulator of the immune system, GEN-1 addresses IL-12's toxicities in a unique and elegant way. It unmasks the cancer to make it the subject of the immune system's purpose, and recruits its adaptive and innate elements making tumors hot and exposing them to the cytotoxic effects of T cells, all while suppressing the ability of the cancer to promote blood vessel growth. So no wonder that biologists call it the master switch of the immune system. With OVATION 1, our neoadjuvant study in newly diagnosed ovarian cancer Phase Ib completed, initial findings are not only clinically meaningful, they are supported by impressive translational data as I mentioned earlier. OVATION 2, our Phase I/II study, has completed Phase I portion of the trial at 100 milligrams per meter squared. Clinical data from the first 15 patients in the study were announced in the first quarter of 2020. These data were based on small numbers when pulled with prior study patients, continue to substantiate our confidence in GEN-1 and our continued investment in clinical development. I'm pleased to announce this morning that we will be initiating our Phase II trial, the OVATION 2 Study in August, 3 months earlier than previously announced. Both ThermoDox and GEN-1 represent billion-dollar market opportunities. ThermoDox is being developed for the treatment of newly diagnosed nonresectable liver cancer patients. Our initial market assessment suggests an addressable population of approximately 200,000 patients globally or 25% of the global HCC incidents. GEN-1 too is being developed for the treatment of newly diagnosed patients, in this case, Stage III and IV ovarian cancer patients. We believe that for immunotherapy, first-line treatment is exceedingly important when their immune system has not been the subject -- has not been subjected to repeated assault by chemotherapy. GEN-1 is being evaluated in combination with the current standard of care as neoadjuvant chemotherapy. It suggests an addressable global market of over 100,000 patients. You have a financially strong company with a clean kept table. Investors taking a position of Celsion today can see us as a unique investment opportunity, a pure-play for our science, our drug technologies and our exceptionally well-managed clinical programs. Let me emphasize again what I said in my opening statement. We entered 2020 with sound fundamentals, a company focused on its mission to bring promising new oncology drugs successfully to the rigors of clinical trials and regulatory review. With 1 exciting program in HCC and the legacy of oncology, and 1 in ovarian cancer in the future of medicine, we move forward with great potential. I'd like to conclude my remarks by saying that I'm confident Celsion has the leadership, the technology and the experience to maximize our opportunities and to shape our future. We expect the next couple of years to be both exciting and extremely rewarding. On behalf of my fellow directors and the employees of Celsion, I want to thank you again for your past and continued support of your company. Now we have some time available for a few questions.

[Operator Instructions] We have one question. Question is on what date might we know the results for the OPTIMA Study interim analysis? I want to respond to that by saying that the DMC meeting has been set as we indicated in our quarterly conference call early in July. We have not given a specific date, however, and that's largely discussed, there always is some uncertainty in reporting the results. It may take a little bit more time to properly set the size and provide the company with feedback. So we're going to stick with our original announcement that early in July, we expect to provide the results from the interim analysis. Are there any other questions? I'll remind you, Jarrod Rhen from Withum is here and available to take any questions that you may have concerning the 2019 financial statements. Okay. There being no other questions. I will now ask Mr. Church, the annual meeting secretary to present the results of the voting on the 5 proposals from the meeting today.

The inspector's report shows the following results. For proposal 1, the election of Class 1 directors, having received at least a plurality of the votes cast in this meeting with each director receiving over 92% of the votes cast, Dr. Chow and Mr. Fritz have been reelected to the company's Board of Directors. Proposal #2, approval by nonbinding advisory vote of the 2020 compensation program for the company's executive officers, with 6.1 million votes for, 907,000 against and 132,000 votes abstaining. The total number of votes for proposal is 86% of the total number of shares of common stock present or in person and represented by proxy. Therefore, the proposal has been approved. Proposal #3, approval by a nonbinding advisory vote regarding the frequency by which advisory votes on the company's executive compensation program will occur, every year, every 2 years or every 3 years. The number of votes for the proposal to conduct an advisory vote on the company's executive compensation program every 3 years received the highest number of votes, 47% of the total number of shares of common stock present or in person or represented by proxy. Therefore, the proposal to conduct a nonbinding advisory vote on the company's executive compensation program every 3 years has been approved. Ratification of WithumSmith+Brown to serve as the company's independent public accountants for the fiscal year ending December 31, 2020. 19.5 votes for proposal #4, 582,000 votes against and 619,000 votes of abstaining.

Mr. Church may ask you to repeat the votes for, please?

19.5 million.

Thank you.

The proposal to ratify the appointment of WithumSmith+Brown to serve as the company's independent public accountants for the fiscal year ending December 31, 2020, having received the affirmative vote of a majority of shares, 94%, represented in person or by proxy at this meeting has been approved. Proposal #5, approval of the amendment to the Celsion Corporation 2018 Stock Incentive Plan. The votes for totaled 5.2 million; the votes against, 2.3 million; and votes abstaining, 71,000. The number of votes for the proposal is 69% of the total number of shares present in person or represented by proxy at this meeting. Therefore, the proposal #5 has been approved.

Thank you, Mr. Church, and thank you to all of those who voted today or submitted your vote by proxy. So at this point, I want to ask if there is any other business that come before this meeting. There being no further business, I want to obtain a motion to adjourn.

Mr. Chairman, I move that this meeting be adjourned.

Is there a second?

I second the motion.

Motion to adjourn has been made and seconded. There has been no objection. Therefore, this meeting is adjourned. Ladies and gentlemen, I thank you for your attendance today and for your continued support of our most important research. Thank you.