August 20, 2001
Dear Shareholder:
We have had a very productive seven months since our last report.
1. BENIGN PROSTATIC HYPERPLASIA (BPH) PIVOTAL PHASE II CLINICAL TRIALS HAVE
BEEN EXPANDED TO TEN SITES WITH ACCELERATED PATIENT ENROLLMENT.
The final clinical (Pivotal Phase II) BPH study on 160 patients (120 of
whom have been or will be treated with Celsion's investigational system
and 40 with the drug Proscar) is currently underway at the following
sites:
1. Montefiore Medical Center, New York
2. Regional Urology (LA), Shreveport, Louisiana
3. Pacific Urology Institute, Santa Monica, CA*
4. Urology Associates of North Texas, Arlington, TX**
5. University of Maryland, Baltimore, MD
6. Dr. Raymond Fay, San Francisco, CA
7. Urology San Antonio, San Antonio, TX*
8. Kansas City Urology Care, Kansas City, MO**
9. Research Associates in Urology, West Orange, NJ*
10. Nevada Urology Associates, Reno, NV*
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* Part of the Linked Urology Research Group.
** Part of America's Doctors.
We expect that three additional sites will be active by the end of
August.
Early in 2001 we concluded that the clinical sites we were selecting
would not generate an adequate volume of patients to enable us to
complete the trial within the timeframe that we had previously
indicated. As a result, we changed our selection criteria to focus on
office-based clinical sites with high patient volumes. More recently we
have concentrated our efforts in two national, clinical trial
groups--America's Doctors (indicated above by *) and the Linked Urology
Research Group (indicated above by **). As a result of this change, our
current sites employ over 150 urologists and collectively treat in
excess of 20,000 patients each month.
Additionally, we recognized that we needed to bolster our clinical
management resources and, therefore, formed a four-member dedicated
group to manage the BPH Pivotal Phase II Clinical Trials. These two
strategic decisions, together with the hiring of Dan Reale as President
of the BPH Division, have resulted in a dramatic increase in patient
enrollment. We began the BPH Phase II Clinical Trials in October 2000
and through July 31, 2001 we had treated 18 patients. By the end of
August, we expect to more than double that number and, on the assumption
that we will continue to increase our momentum, we anticipate that we
could complete enrollment by the end of October. This would enable us to
submit our application for premarketing approval (PMA) to the Food and
Drug Administration (FDA) early in 2002 and, if the FDA finds the
application adequate, could result in approval by the spring/early
summer of 2002.
2. CELSION'S BREAST CANCER PIVOTAL PHASE II CLINICAL TRIALS ARE UNDERWAY
AND THREE PATIENTS HAVE BEEN TREATED.
Given our limited cash and personnel resources and the proximity of our
BPH product to commercialization, we decided, early this year, to focus
our clinical resources towards completion of the BPH clinical trials.
This having been said, the Company's Breast Cancer Pivotal Phase II
Clinical Trials are underway at Columbia Breast Surgery Medical Center,
FL, where one patient has been treated, and Halle Martin Luther Breast
Center at Halle in Germany, which has treated two patients.
We are currently in negotiations with ten excellent additional sites,
one of which, Oklahoma University, is in the final stages of its
Institutional Review Board (IRB) approval process. Two protocols will be
tested at each location; the first is designed to ablate (kill) small
breast cancer tumors using heat alone. The second is designed to
downsize large breast cancer tumors using a combination of heat and
chemotherapy, thus allowing a surgeon to perform a lumpectomy rather
than a mastectomy, thereby preserving the affected breast.
3. CELSION/DUKE UNIVERSITY HEAT ACTIVATED LIPOSOMES
We continue to make progress on the development of a cancer drug using
the Heat Activated Liposome technology that we licensed from Duke
University. We have successfully encapsulated a well known cancer drug-
Doxorubicin-our first production batch has been manufactured and we are
in the midst of large animal toxicity studies, being conducted at
Roswell Park Cancer Institute in Buffalo, New York, to determine a safe
dosage for use in human clinical trials. If all goes well, we should
complete these trials by the end of October, which would enable us to
file an Investigational New Drug (IND) application for the compound by
the end of this calendar year. Assuming the FDA approval process runs
its normal course, we could commence human Phase I clinical trials on
this new drug early in 2002.
4. CELSION/SLOAN-KETTERING GENE THERAPY
Dr. Gloria Li at Memorial Sloan-Kettering has successfully developed a
temperature activated, gene-based, biological modifier. The modifier is
expressed by an increase in temperature induced by Celsion's focused
heat at the tumor site. The activated modifier is intended to eliminate
the tumor cells' ability to repair DNA damage when they are treated with
radiation or chemotherapy. Clinically, the use of the biological
modifier is intended to enhance significantly the efficacy and reduce
drastically the amount, and thus the toxicity, of required radiation and
chemotherapy. Thus far, researchers at Sloan-Kettering have successfully
demonstrated the concept in small animals. They are currently conducting
an efficacy study using human tumors in mice and are preparing to
commence large animal toxicity studies. Celsion is in active discussion
with clinicians at Memorial Sloan-Kettering regarding the design of
clinical trials in order to file an IND application for the "biological
modifier" and begin patient studies. While this development is still a
long way from commercialization, the initial results show great promise.
5. CASH POSITION
As we accelerate our clinical trials to commercialize our various
businesses we have increased our cash "burn rate" to an average of
$650,000 per month. At the end of June our cash balance was $4.6MM,
which implies that we have sufficient cash to take us through the end of
this calendar year and to complete several significant milestones. As we
indicated at the Annual Meeting, we intend to raise additional funds in
the fall of this year. We are exploring a wide variety of avenues
including strategic alliances and various equity infusions.
6. OTHER DEVELOPMENTS
There have been several other positive developments in the business.
STRATEGIC ALLIANCES
In mid-May, we signed a Memorandum of Understanding with Inabata, a
Japanese trading company 30% owned by Sumitomo Corporation, to explore
opportunities to develop our business in Asia and Japan. So far, we are
delighted with our relationship, which has generated several potential
business opportunities. We are presently negotiating with several
Japanese pharmaceutical companies to license our BPH and temperature
sensitive liposome technologies for Japan. While there is no assurance
that these negotiations will be successfully concluded, we are
encouraged that our technology has generated a high level of interest
among potential medical and pharmaceutical partners. We are also
discussing with Inabata manufacturing and distribution opportunities in
China.
PERSONNEL We have made three significant additions to our senior staff:
First, we hired Dan Reale as President of the BPH Division. Dan is a
seasoned entrepreneurial executive, who has spent his entire career in
the medical products industry largely with three successful bio-medical
start-ups. Dan's focus and energy will act as a catalyst as we work to
bring our BPH product to market in the middle of 2002.
Next, we reassigned Kurt O'Neill, our former Controller, to manage our
clinical programs. Kurt has been instrumental in signing up the new
clinical sites and working with the sites' clinical personnel to
expedite the enrollment of patients.
Finally, we added Dr. Kris Venkat to our Board of Directors and engaged
him to work with us to develop our pharmaceutical business. Kris has
vast experience in the pharmaceutical field and will work with
management to develop an operating plan and identify and negotiate with
potential strategic partners for this business.
* * *
We recognize that our communication over the last seven months has been less
frequent than may have been desired by you, our shareholders. In the future,
we expect to issue a shareholder letter each quarter and, additionally, to
host a quarterly shareholder conference call. The first of these calls has
been scheduled for August 28, 2001 at 10:00 a.m. Eastern Daylight Savings
Time. If you wish to participate please call 952 556 2803 (or toll free 877
679 9049) and register ten minutes before the call. A recording of the call
may be accessed between 11 a.m. on August 28, 2001 and 11 a.m. August 29,
2001 at 703 326 3020 (or toll free 800 615 3210) with an access code of 547
1289.
To conclude, we are making excellent progress on many fronts, and we believe
that we will meet several major milestones in the second half of the year.
We feel confident that, as we clear each milestone, the market will
recognize the value Celsion has within its reach.
Thank you for your continued support.
/s/ SPENCER J. VOLK /s/ AUGUSTINE Y. CHEUNG
Spencer J. Volk Augustine Y. Cheung
President Chairman and Founder
Chief Executive Officer Chief Scientific Officer |
