Celsion entered into a registered direct offering in which it expects to receive gross proceeds of about $5 million. The company is leveraging heat-activated liposome drug delivery technology to deliver high concentrations of known chemotherapeutics to the lesion site.
Celsion also amended its development, product supply, and commercialization agreement with Yakult Honsha covering lead candidate Thermodox®. The candidate is a formulation of doxorubicin and is being investigated as a treatment for hepatocellular carcinoma (HCC) and recurrent chest wall (RCW) breast cancer.
Yakult Honsha will provide up to $4 million in an accelerated partial payment to Celsion of a future drug approval milestone. Celsion will receive $2 million immediately and the rest once Celsion is allowed to resume enrollment of Japanese patients in its Phase III trial, which is being conducted in the Japan. In consideration of these accelerated milestone payments from Yakult, Celsion agreed to reduce future drug approval milestone payments by approximately 40%.
In September 2010, Celsion reported that after reviewing data from 401 patients enrolled in its Phase III study for primary liver cancer, the Data Monitoring Committee (DMC) unanimously recommended that the trial continue to enroll patients in trials being conducted in Canada, China, Hong Kong, Italy, Korea, U.S., and Taiwan. DMC continues to independently assess safety in patients randomized at Japanese sites.
Radio frequency ablation (RFA) has become an increasingly common method for treating liver cancer. However, while RFA uses extremely high temperatures (80º to 100ºC) to ablate tumors, it may fail to treat the outer margins of larger tumors since temperatures in the periphery are not high enough to destroy the cancer cells.
Celsion’s ThermoDox treatment approach is designed to deliver high concentrations of doxorubicin directly to those cancer cells that survive RFA. In conjunction with ablating the center of the tumor, RFA simultaneously activates ThermoDox to release its encapsulated doxorubicin, killing the remaining viable cancer cells throughout the heated region including the tumor margins.
Celsion notes that its lysolipid thermally sensitive liposome technology is different from other liposomal technologies because it has a low heat-activated release of encapsulated chemotherapeutic agents right at the cancer site.
Commenting on the $5 million registered direct offer, Michael H. Tardugno, Celsion’s president and CEO, says, “We believe that we now have the financial runway sufficient to complete enrollment in our Phase III primary liver cancer trial, the HEAT study, as well as other related clinical and CMC milestones in 2011.”
According to securities purchase agreement, Celsion is selling 5,000 shares of 8% redeemable convertible preferred stock with a stated value of $1,000 and warrants to purchase up to 2,083,333 shares of common stock in a registered direct offering.
The convertible preferred stock and warrants will be sold in units, with each unit consisting of one share of convertible preferred stock and a warrant to purchase up to 416.6666 shares of common stock at an exercise price of $3.25 per share of common stock. The units are being offered and sold at a purchase price of $1,000 per unit. Each share of preferred stock is convertible into shares of common stock at an initial conversion price of $2.40 per share.
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