Jeffrey Church - Chief Financial Officer and Senior Vice President, Corporate Business Strategy and Investor Relations Michael Tardugno - Executive Chairman, President and Chief Executive Officer Nicholas Borys - Vice President and Chief Medical Officer.

Jason McCarthy - Maxim Group Keith Markey - Griffin Securities, Inc. Swayampakula Ramakanth - H.C. Wainwright Barry Rubin - Arsenal Investments.

Good morning. My name is David and I will be your conference operator today. At this time, I would like to welcome you to Celsion’s Third Quarter 2016 Earnings Conference Call. All lines have now been placed on mute to prevent any background noise. Following the speakers’ remarks, there will be a question-and-answer session.

[Operator Instructions] At this time, I’d like to turn the call over to Mr. Jeffrey Church, Celsion’s Senior Vice President and Chief Financial Officer. Please proceed Mr. Church..

Thank you. Good morning, everyone, and thank you for joining us today to discuss our third quarter 2016 financial results, which we announced this morning before the market open.

Today’s call will be archived and the replay will be available beginning tomorrow and will remain available by phone until November 24, 2016, as well as available on Celsion’s website for 30 days.

Before we begin the call, we wish to inform participants that forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

You are cautioned that such forward-looking statements involve risk and uncertainties involving without limitation, the risk of clinical failures, delays or increased costs; unforeseen changes in the cost of our research and development activities, possible acquisition of other technologies, assets, or business and possible adverse action by customers, suppliers, competitors, regulatory authorities and other risks detailed from time to time in the company’s periodic reports filed, including our most recently filed Form 10-Q with the Securities and Exchange Commission.

At the conclusion of today’s formal remarks, we will open the call for questions. I’d now like to turn the call over to Mr. Michael Tardugno, Celsion’s Chairman, President and CEO.

Mike?.

Thank you, Jeff. Good morning, everyone, and thank you for taking the time to joins us this morning. Today I’m with Dr. Nicholas Borys, Celsion’s Chief Medical Officer and Jeffrey Church from whom we’ve just heard our Chief Financial Officer.

We’re delighted to have the opportunity to update you on our progress, which by any standard of measure, I hope you agree with the me has been substantial, not only this past quarter, but certainly over this past year.

For those you who follow Celsion, you know, that we’re an oncology focused development stage company with three platforms, two of which are product candidates at clinical stage.

Today’s call will focus on our two incredible important clinical trials, the OPTIMA study, our global Phase III trial of our tumor targeting dosage form of Doxorubicin, we call ThermoDox being studied in primary liver cancer, and the OVATION study, a Phase I dose-escalating trial of GEN-1, a gene-based therapeutic and newly diagnosed Phase III and IV ovarian cancer patients.

So let me start by saying, we could not be more pleased with our product portfolio our progress and the investments that we have been making in GEN-1 and ThermoDox.

Our neoadjuvant study in first line of ovarian cancer combining GEN-1 with standard of care therapy followed by debulking surgery is showing early, if not promising clinically meaningful tumor response that appears to be correlating very, very well with higher immune system activity in patients with stage three and four malignancies.

At the same time, data supporting the OPTIMA study become stronger, if not encounter vertical with each analysis, now for over four years, no matter whether conducted by Celsion or independently scrutinized.

ThermoDox in combination with radio frequency ablation standardized to a minimum of 45 minutes, a time in a role, where we now know this ablation technology is most effective in intermediate sized tumors. ThermoDox in combination with RFA has shown the potential for a period of outcome, imagine that.

Single dose of ThermoDox, our elegant heat sensitive liposomal dosage form of Doxorubicin is showing over 18-month survival in a large study group that we’ve been following for over 3.5 years. As I said before, both GEN-1 and ThermoDox are all encumbered assets both are being evaluated in some of the most prestigious research hospitals in the world.

Both are on studies that are professionally and rigorously managed, and both address potential billion-dollar market opportunities. I’d also say that both of these studies, there’s virtually no trial execution, CMC, or regulatory risk.

Both product candidates are in development in the sweet spot of Celsion’s competency, clinical stage development is what we do and I would submit to you is what we do very well. With our world clients U.S.

and international contract manufacturing partners like AMRI and Hisun are experiencing disciplined CROs [indiscernible] bio-clinical among others, some of the very best in this challenging industry. They have complete confidence in the execution of our studies. From a commercial standpoint, both trials address large unmet needs.

And if we are right, if either study demonstrates a meaningful clinical benefit. We expect global regulatory approval, rapid adoption and generous gross margins. So with that as an intro, I’d like to go into a little bit more detail starting with ThermoDox. ThermoDox as you know is our most advanced investigational product.

As currently, as I said in primary liver cancer, we’re also evaluating it with recurrent chest wall breast cancer. So, let me talk first about primary liver cancer study.

During the third quarter, we continue to execute on our Phase III OPTIMA study in primary liver cancer, mostly called a Hepatocellular Carcinoma, we use the acronym HCC, they’re all interchangeable.

The Phase III study, the goal of which is to evaluate the survival benefit of which ThermoDox in conjunction with optimized RFA standardized to a minimum of 45 minutes and to all investigators, all sites, all patients minimum 45 minutes for treating lesions 3 to 7 centimeters versus optimized RFA alone, control a 45 minutes of RFA plus minus ThermoDox.

The study will enroll up to 550 patients globally and up to 75 sites in North America, Europe, China, and Asia Pacific. The hypotheses for OPTIMA is supported with highly impressive and statistically significant subgroup data from the prior HEAT study, 700 patient evaluation of ThermoDox in combination with RFA.

While failing to meet it progression free survival endpoint or PFS endpoint, findings from the HEAT Study have greatly expanded our understanding of RFA and intermediate stage HCC of which I can say without question, without reservation, we now know more about RFA and early stage HCC than just about any other company on the planet.

It is this understanding that’s helped us to formulate where we considered to be a higher derisk to OPTIMA Study. I’ll give you some insight into that. This past August, we know its findings from the final retrospective look at overall survival in HEAT study.

The analysis showed that in the large wealth balanced subgroup of 285 patients, a group that was well tested with a multivariate analysis of presenting 41% of all the patients enrolled in HEAT study, a group that we have been following now for 3.5 years plus.

Treatment with a combination of ThermoDox and optimized RFA is provided a 54% risk improvement in overall survival compared to optimized RFA alone. Now few statistical junkies, the hazard [ph] ratio for this analysis was 0.65 [indiscernible].

Let’s say it again, after over four years, a group that faced final literature was predicted to have about 30-month survival. The median overall survival in the optimized RFA ThermoDox is still not reached the median.

Currently translating into two-year survival benefit over the control group, the optimized RFA a loan group, the final overall survival analysis projects greater than 80 months for ThermoDox plus optimized RFA group over 80 months.

And on the China – Chinese patient cohort of 223 patients those received optimized RFA treatment for minimum 45 minutes, they showed a 53% risk improvement in overall survival when treated with ThermoDox plus optimized RFA.

These findings were highlighted in late October at the Third Asian Conference on Tumor Ablation, or ACTA Conference by meeting one of our investigator and researcher, a person is associated with both our HEAT and OPTIMA studies there is Professor Won Young Tak of the Kyungpook National University Medical Center in South Korea.

Now why is this all important, when we look at the Chinese separately, China represents what is perhaps the most significant market opportunity for ThermoDox globally. It is approximately 50% of the 850,000 new cases diagnosed each year originated in China. OPTIMA is down enrolling patients at 14 sites in China.

So the growth rate for at least 200 patients which represents a minimum number required on the Chinese FDA to file the new drug application for that market. And in this market, I can say I hope you see the real side here, this larger future market for pharmaceuticals in the world will be the largest future markets for pharmaceuticals in the world.

I can that we’re well positioned. It is important to note that some of the ThermoDox program continues to be supported by a growing body of peer reviewed research. To this point in September, we made an exceedingly important announcement. We file the National Institutes of Health the NIH conducted an independent analysis and data from the HEAT study.

With last quarter’s analysis, the NIH under Dr. Bradford Wood, independently sought to retrospectively evaluate the correlation between RFA burn time or heating time as a function of tumor volume and the outcome in patients treated with ThermoDox.

One of the major conclusions was both statistically significant and very straight forward and that is this. As you increase the RFA burn time in patients that are treated with ThermoDox survival improves. As you increase the RFA burn time [indiscernible] and patients treated with ThermoDox survival improves.

As same is not true for patients treated with RFA alone.

The NIH’s independent assessment provides additional confirmatory support consisted with our own findings indicating that the use of RFA for more than 45 minutes in patients treated with ThermoDox can have a collative impact on reductions in tumor size and overall survival indications with primary liver cancer.

Now, we made this announcement only after the NIH’s internal peer review process supported these timings and this is a pure internal peer review timing and will be presented, as I said, as we said in our announcement during all sessions on Monday November 28 at the 102nd Scientific Assembly and Annual Meeting of the Radiological Society of North America, otherwise known as the RSNA that will be held in Chicago.

And there will be some detail data presented that supports the conclusions that we just mentioned.

We firmly believe that this analysis not only advances our understanding of ThermoDox and its potential curative implication and combination of a standardized RFA, it also strengthens our confidence in our ongoing Phase 3 OPTIMA study, and you should know we have successfully, I think as I said earlier, optimal supported product approval filings in all major markets, including China, Southeast Asia, South Korea, the European Union, Canada and the United States.

So at the risk of being redundant let me say it again, primary liver cancer or HCC represents the largest unmet need remaining in oncology and we remain committed to the continued exploration of ThermoDox’s full potential in this indication.

They are strongly encouraged by the progress of the OPTIMA study and remain on track cautiously to complete the trial by the end of the first quarter 2018 if not sooner with first interim efficacy we like to follow.

In addition to the OPTIMA study, we’re also advancing our development program in recurrent chest wall breast cancer; as we spoke earlier.

Please recall that the impetus from the data that was presented from our Phase 2 DIGNITY Study at the San Antonio Breast Cancer Symposium last summer demonstrated the compliance combined local response rate that is a partial and complete responses of almost 62% that not only valuable patients treated with ThermoDox plus hyperthermia microwave generated heat.

This is an extraordinary outcome by any standard of measure. I mean the results – particularly since all of these patients in the study will factor until two or three rounds of chemo then they felt surgery in many cases they certainly felt radiation.

So building on the DIGNITY Study, we have been talking about our plans for the European focus study recalling the EU DIGNITY trial or EU DIGNITY Study.

Having just returned from [indiscernible] kickoff meeting among our investigators, I can tell you audience there is a great feel of anticipation, very anxious to beginning enroll patients into this trial.

And anticipate enrollment to begin this year if – it may slip into the first quarter of 2017 depending upon regulatory, a final regulatory approvals in various countries. We’re looking forward to provide you with updates and our progress, but I just want to remind you of quickly.

The study is designed to evaluate that complete impartial responses after six cycles of ThermoDox plus hyperthermia in combination with standard radiation treatment and another end point, secondary endpoint in this study is local regional tumor control.

Before we go onto your channel one GEN-1, I’d like to remind everybody that we are exploring ThermoDox’s potential outside of our primary trials. We have a number of pre-clinical programs that we’re supporting in various indications that a number of very prestigious institutions. One of the important clinical programs was announced early in October.

And we issued a press release indicating our support for Phase 1 study evaluating ThermoDox in combination with High Intensity Focused Ultrasound or HIFU or focus ultrasound, plus all of those acronyms and terms are interchangeable with this acoustic energy non-invasive acoustic heating energy that’s used to original design from OVATION now used as a hyperthermia device to activate ThermoDox in a study.

That’s being carried out as multi-disciplinary collaboration with Celsion and the research groups of Dr. AeRang Kim, at the Children’s National Medical Center and Dr. Brad Wood and Dr. Rosandra Kaplan at the National Institutes of Health. So we’re enrolling patients, children, and young adults, patients who have relapsed or refractory solid tumors.

It’s quite an honor for us. We couldn’t been more pleased to be a part of this program that’s been driven by collaborators who is confidence in ThermoDox is extraordinary.

Many of these physicians well, which is all the physicians I have spoke there, have been closed to our programs and our data for several years, I can only imagine the respect that they must have for ThermoDox to even consider as an experimental treatment option for children with cancer.

No doubt in my mind, but having spent time with our investigators in Europe recently investigators in Asia, this group with physicians in bevacizumab it’s very clear to me that the medical community cancelled [ph] it. And I’m confident that Wall Street will eventually ask.

So with that let me turn our attention on to GEN-1 our immuno-oncology candidate developed on our TheraPlas technology platform. GEN-1, as we call is a gene-mediated immunotherapeutic which results – recruits virtually all of the mechanisms of the immune system to fight cancer. But GEN-1 is well known it’s well characterized, effective agent.

I mean the active agent in GEN-1 is well known and well characterized. The active agent is a DNA plasmid that’s coded for cytokine Interlukin-12 or IL-12 is the plasmid for IL-12 is incorporated into our proprietary TheraPlas platform a non-viral nanoparticle delivery factor.

And this system is administered locally into a body cavity; it could be into the peritoneum as we are using with ovarian cancer onto the bladder potentially or even the cavity created by the surgical removal of a tumor mass.

These nanoparticles invade local regional cells, taking over the metabolic machinery of the cells turning each into a local factory to produce sustained amounts of therapeutically active IL-12.

So now we’ve got these cells when we administered locally we got these cells producing IL-12 with sustain and therapeutic quantities, now the question is, as I mentioned before. So how does IL-12 reflect immune systems. Let me talk about that a little bit. From a layman’s point of view, I think, I can communicate this activity quite well.

So IL-12 is an inflammatory protein or cytokines is considered by many to be a master switch of the immune system and recognized as one of the most powerful immune therapy in oncology, it functions, as I said on multiple levels. First, it takes the brakes off the immune system, it does regulate something called T-reg cells.

T-reg cells has the ability to marginally to inhibit the activities in the immune system. So it takes – it inhibits the production of T-reg cells taking the breaks off the immune system. Second, it up regulates the production of interferon. Interferon, in this case, is an anti vascular growth protein.

It inhibits the productions of blood vessels that support the growth of tumors. In certain report powers up and make consumer specific some immune activity, putting this of immune system into overdrive. I mean it sounds really terrific.

Does it? The problem however is, it is utility in the clinic in-patients has been limited by serious toxicity associated with this pharmacokinetics. It’s got a very short half way. Historically, the administered IL-12 short half way replenish frequent and very high doses and very high doses.

In high doses frequently IL-12 can be seriously toxic as we said.

GEN-1 on the other hand, as I described it, has specifically designed to overcome this limitation by promoting endogenous production of IL-12 in a controlled and localized manner, which is different from viral vectors, the beauty of our delivery system is that, it allows for repeated administration without interference from neutralizing antibodies, repeat administration and allows for long-term maintenance therapy, if indicated.

So far we’ve seen some impressive results. Most of it generated – early results generated in cooperation with the GOG, Gynecologic Oncology Group. In December of 2014, the last GOG study was completed in platinum resistant ovarian cancer patients, we announced those results earlier this year.

It demonstrated that this is a translational data by the way.

It demonstrated that internally administered GEN-1 appears to live up to this promise of turning on the multiple mechanisms of the immune system, cytology, histology and analytical results from a 17-patient trial confirmed the production of immunologically distinct IL-12 protein and is a localized by any tumor in its facility lasting up to a week left to a single treatment.

Additionally, dose dependent increases on interferon that we spoke about earlier and TNF or tumor necrosis factor cytokine indicate that IL-12 produced by GEN-1 to transact their cells as immunologically active. Importantly, the absence of overlapping toxicities, this study GEN-1 was combined with Doxil.

So the absence of overlapping toxicities allows for combination therapy with chemotherapeutics. You know, that initial target indication continues to be ovarian cancer further exists a need for new treatment options, if not an urgent need for new treatment options.

One quarter, a million new patients are diagnosed every year with [indiscernible] survival of less than 45%. And because of patient somatic in its early stages, patients are often diagnosed at difficult to manage stages three and four.

Our first trial on this indication, as we mentioned is the OVATION Study or OVATION initiated in quarter four last year in all patients approximately 15 are expected to be enrolled by the end of this year. OVATION is a Phase I dose-escalation trial in newly diagnosed patients stage three and four. These patients present with a great deal of disease.

In prior to debulking surgery are treated with multiple courses of platinum and taxane, the goal of which is to improve the surgical outcome by shrinking the – almost the disease tissue drying up the surrounding area. So to this regimen; taxane and platinum, we are adding every recycles of GEN-1 and that’s followed by debulking surgery.

The trial is designed to enroll three to six patients per cohort, increasing the dose 30% with each dose-escalation scores to evaluate safety and efficacy as well as to find an optimum dose for an upcoming registrational program evaluating GEN-1 in combination with Avastin and Doxil, in fact, when resistant acquired on refractory patients.

OVATION’s PI, the study that’s currently being conducted. OVATION’s PIs are currently treating up to six patients in the fourth cohort. This could be the final cohort we sooner will be – could be depending upon our review of translational data, assuming our new DLPs were first to study of the current dose study supported with translational data.

In the mean time, we reported very, I’d say, very, very encouraging results from the nine patients in the first three groups. We issued a press release this morning.

And from that press release, I would like to remind you this from the radiology reports in the first nine patients dose, one patient demonstrated a complete response by patients demonstrated that partial response and three patients demonstrated stable disease as measured by RECIST criteria.

This translates into every patient 100% of patients had showed disease control, 66% overall was – 56 overall response rate. Now from the surgical reports.

Eight patients had successful resections of their tumors, with four patients having an R0 resection, which indicates a microscopically margin-negative resection in which no gross or microscopic tumor remains in the tumor bed, and three patients with a R1 resection, indicating microscopic residual tumor.

One patient had an R2, indicating macroscopic residual tumor and one patient in the second cohort, however, was ineligible for debulking surgery due to a medical complication unrelated to the study or the study drug.

From the pathology reports of the eight surgically treated and evaluable patients, one patient demonstrated a pathological complete response. Three patients demonstrated a micro pathological response. four patients demonstrated a macroPR.

These data compare favorably to historical data, which indicate that pCRs or pathologically confirmed complete responses are typically seen in less than 7% of patients.

pCRs have been associated with a median overall survival of 72 months, which is more than three times longer – three years, I’m sorry, three years longer than those who do not experience a cPR. In addition, microPRs are seen in approximately 30% of patients, and are associated with a median overall survival of 38 months.

So between microPRs and the pCR that we witnessed from our study 50% of patients are experiencing this level of tumor controlled – tumor eradication of control.

From the laboratory reports, seven patients who completed treatment follow-up experienced a dramatic greater than 90% drop in their cancer antigen 125 protein levels as of their most recent study visit. The CA-125 is used to monitor certain cancers during and after treatment.

CA-125 is present in greater concentrations in ovarian cancer cells than in other cells. A 50% reduction in CA-125 is considered meaningful. We also reported initial translational data from the first two cohorts of the OVATION study this morning.

Tumor and blood samples collected before the start of the neoadjuvant chemotherapy and after the completion of GEN-1 treatment at debulking surgery are being analyzed for immune cell populations. Top line data demonstrates intriguing immunological changes in the tumor that are consistent with the activation of the immune system.

Specifically, in tumor tissue, there was an increase in cytotoxic CD8+ T-cell density in three out of four evaluable patients. There was a decrease in immunosuppressive FoxP3 T-cells, that’s a T-reg cells that I spoke of earlier in two out of those four patients.

And the ratio – this is an important ratio, ratio of CD8/FoxP3+ cells increased in all four evaluable patients, down regulating the in addition of the immune system, up regulating the activation of the immunologically active T-cells.

We also reported a high tumor infiltrating CD8 T-cell density, low FoxP3 T-cell density or high CD8/FoxP3 ratio demonstrating a potential shift in tumor environment to favoring immune system stimulation following chemotherapy. Now for the remaining two patients the post-treatment tumor tissue was not available. So we did not report on them.

One of the patients, there has been complete pathological response, so there was no tumor tissue to present – to provide post-treatment comparison. The other patient, as I mentioned earlier, was not eligible for debulking surgery.

Additional immune analysis of biological tissue including cytokine ELISA from the first two patient cohorts and a complete analysis of the two higher dose cohorts is in progress.

As as you can expect the clinical findings from the fourth cohort moving now as soon as they are available along with the comprehensive translational results from all four cohorts at the end of the study.

Our continued strong business suggest to us in expanding throughout the – at the current therapeutic dose may be the appropriate strategy to accelerate development we’ll see and we have more data to review particularly translational data before you make a decision with regards to expanding the current trial.

But in the mean time, however, our current clinical strategy combines GEN-1 with Avastin and Doxil in platinum-resistant patients – a platinum-refractory patients, as I mentioned.

Now preclinical data showing extraordinary tumor inhibition was presented at the AACR showing that the three drug combination demonstrated statistically significant greater than 98% reduction in tumor burden as compared to control and a statistically significant greater than 92% reduction in tumor burden as compared to the combination of Avastin and Doxil alone enduring interest in preclinical results, supportive of our plans to move forward with a trial in this population of platinum-resistant refractory patients.

Assuming we have a dose from the OVATION Study, we remain on track to file an IND submission for this Phase I/II clinical trial by the end of this year. In support of our strategy to develop GEN-1 as a global therapy, I mentioned this last time, I thought it would be more speaking to again.

We announced an agreement past four, five months ago with Hisun pharmaceutical company for the production and the global supply of GEN-1.

The agreement provides for technology transfer, clinical and commercial supply that prices to Celsion that will allow us to enter virtually every world in the market with an expectation of significant gross margins.

Move to high synergized, I’ve said earlier, was very, very carefully considered from our past work with them, we now Hisum to be a company was state-of-the-art manufacturing some of the best personalization in my career and with excellent – in excellent quality reputation.

In return for a deal with neoadjuvant to Celsion and to our shareholders, we’ve committed a certain percentage, a percentage certain, let me say that way, of our commercial volume once GEN-1 is approved. So in summary, GEN-1 is one of the most exciting areas of therapeutic development in our generation and of convinced.

Our early results treating Phase III and IV ovarian cancer patients is quite a remarkable. As the data shows, our future trails are the possibility of combining GEN-1 with one of the most successful oncologics Avastin, a $6 billion drug, and we’re positioning GEN-1’s cost structure to support global markets.

So with those comments, I’d like to now turn the call over to Jeff Church who will review our financial results.

Jeff?.

Thank you, Mike. We continue to operate in an efficient manner with a focus on advancing our two leading product candidates. We ended the third quarter with $27 million of cash compared to $20 million in cash at the end of 2015.

Cash used for operations in the first nine months of 2016 was $13.7 million, compared to $16.9 million in the same period last year, that’s a reduction of 20%. This $3.2 million decrease was the result of cost reduction efforts implemented last year, a tighter product development focus and prudent cash management.

We operated with a lean organizational with only 22 full-time equivalent employees, over 75% of our spending is directed to research and development activities. We expect our quarterly cash utilization for operations to be approximately $4 million to $4.5 million for the balance of the year.

As we look forward, we believe that maintaining a strong balance sheet is important to our shareholders and to the continued strong development momentum we’ve built. In June, and as we mentioned last call, we completed a registry direct offering yielding gross proceeds of $6 million. We were hopeful of raising more capital in these difficult markets.

We were also mindful of dilution to shareholders. So we opted for the current structure. The offering was completed with one institutional investor who has an option to acquire additional $6 million if their share price would improve.

We continue to monitor our tax expenditures to ensure the most efficient uses of cash to create shareholder value and project that our cash will support operations in the second quarter of 2017.

We will need to strengthen our balance sheet by accessing with ample equity markets, smart utilization of our asset market facility, as well as through potential strategic investments in collaboration.

For the third quarter ended September 30, 2016, we reported a net loss of $6.4 million, or $0.22 per share, and that compares to a net loss of $4.3 million, or $0.19 per share in the third quarter of 2015.

For the nine-month period ended September 30, 2016, we reported a net loss of $16.7 million, or $0.66 per share, that compares to $16.9 million loss, or $0.79 per share in the same per of 2015.

We continue to evaluate our current organizational structure and aligned our resources and clinical programs with our near-term development objectives, tightened our development focus on ThermoDox, one in the OPTIMA study and we’ll continue to advance GEN-1 in ovarian cancer.

We have to realize additional cost reductions in operational – through reductions in operational costs moving forward in the balance of 2016 and into 2017. Research and development cost was $4.2 million in the third quarter of 2016 compared to $2.9 million last year. R&D costs were $11 million in both nine months periods in 2016 as well as 2015.

Our research expenditures for the remainder of this year and into 2017 will be focused on the continued enrollment and treatment of patients in the Phase III OPTIMA study and the enrollment of patients in our ovarian cancer study is GEN-1. General and administrative expenses remain flat at $1.5 million for the third quarter of 2016 and 2015.

G&A costs were down $400,000, or 8% in the first nine months of this year compared to the same period last year.

This decrease was primarily the result of lower insurance premiums, lower personnel and operating costs, resulting from the reorganization and staff reductions announced in the second-half of 2015, and a tighter clinical development focus, as I mentioned earlier. With that, I would like to now turn the call back to Mike..

Thanks, Jeff, for your comprehensive overview. I’ve got to say, on behalf of the shareholders, nobody have done this better than we did. So now the conclusion of our prepared remarks, I would like to ask the operator to open the lines for your questions.

I would ask that you limit the number to number of questions to no more than two to provide everyone an opportunity to participate.

So, operator, you could open up the lines please?.

Of course. [Operator Instructions] And we’ll take our first question from Jason McCarthy. Your line is open, sir..

Hi, guys. Thanks for taking the questions. I have two. First, for OPTIMA. Can you give us a sense of the percent of enrollment that you’ve achieved so far, and has China coming on board accelerated the enrollment in any way – in any way in your view? And my second question is, they’re expecting the fourth cohort to be treated by the end of the year.

When do you think we can see that total dataset, particularly the immunological dataset, including expression levels of IL-12 and interferon gamma and other biomarkers of – that you would associate with a positive anti-tumor immune response? Thanks for taking the question..

Sure. So regards to question number one, on the study, it’s about 40% enrolled. I believe the 550-patient trial, you can do the math yourself, I’m not giving our numbers.

And I think what’s most encouraging, Jason is the, the wait of enrollment continues to pick up across all of our territories, I mean, uniformly picking up as the results from the HEAT study begin to make a big impression on our investigators and particularly know what the supporting data from the NIH. With regards to the – I’m going to ask Dr.

Borys to chip in on – a little bit on this answer too. But with regards to China, it has been a probably one of the most difficult jobs to bring on this side done in China than we have experienced in our time in clinical development.

Some of it is that most of the – the majority of it has to do with the – I’ll try to focus that the CFDA and I think the regulatory bodies generally in China are having on ensuring that clinical sites in China are properly prepared to conduct studies consistent with GPC, consistent with the standard – the global standards for conducting quality trials.

And we certainly appreciate that. We support that effort absolutely, just taken us a bit more time than we anticipated – quite a bit more time than we anticipated bringing the sites on. But we’re – for the most part we’re indefatigable. We and our CRO partner invented help and the proactively determined to enroll the centers that we’ve identified.

I think, we believe we’ve identified 15, the vast majority in those are either, we have now begun to enroll patients and we believe at a pretty good clip are about to join this study.

I think, do you have any other comments on that, Nick?.

Yes, I agree. In China what we’re seeing is an increase in the quality of the work that we’re doing, but in turn it makes it a little bit slower to get the site started.

Our investigators are just as enthusiastic as they were in our HEAT study, which means that once we do get them on board, there are better qualified, just as enthusiastic, and hopefully we get the benefit in terms of the rate of enrollment. So we’re very optimistic about getting good enrollment from China..

And I’d like to add something to that question, if you don’t mind, Jason.

So on Friday, Nick and I are leaving for Vietnam and then to China after that to meet with the CFDA just to give them an update on the status of our trial and the results that we’ve – in China to give them an update on the results, the most recent results that we’ve seen from the HEAT study along with this independent analysis that was conducted by the NIH.

They have shown a great deal of interest in our clinical program, as you can imagine. Primary liver cancer in China is almost epidemic.

The hospitals that we go to are, for the most part, whole the lot of our patients in this – at this stage many of these patients have no option other than surgery, which consumes a lot of hospital and healthcare resources interventional approaches and including something like intervention approaching that mediates the delivery of a drug like doxorubicin or ThermoDox is very interesting and well supported by the regulatory authorities in China, so we’re delighted we asked for a meeting just about a week ago, and they said come on.

So we’re jumping on plane to visit with them. The second and very important part of this visit to Far East is the meeting with the Ministry of Health and in Vietnam, but we had the good fortune to meeting with a number of investigators from Vietnam about seven or eight months ago.

And after some rigorous feasibility work are convinced that these sites in Vietnam would be valuable additions to our trial.

Over the last few months, we’ve I think for the most part completed all the regulatory applications and now are initiating site started for four centers, excuse me, so big opportunity we believe to increase enrollment rates as a function of expanding our trial into Vietnam, but we’re going to watch it very carefully it will be our first experience in Vietnam.

So that’s why both Dr. Borys and myself will be there. Actually meeting with the MOH, the Ministry of Health on Sunday. The government works on Sunday in Vietnam.

So, I would – now turning to a GEN-1, so let me expand a little bit also, I hope I’m not taking too much time with my answers, but I think it’s important that you understand all of the background here. So we are in the fourth cohort, we believe this will be the fourth and final group for a lot of reasons.

I believe this is the – now we are at the third escalation from the original 36 milligrams per meter squared dose each escalation increased by 30%. So we’ve treated the first three patients in the six in the final dose.

Those patients are evaluable the DMC or the DSMB will be meeting at the end of this month to allow us to continue the roll the next three patients will be the final group to be in the fourth cohort that six patients in the last cohort this trial.

The treatment time is four and expect and we expect and all recruited and dosing to start before the end of the year. The treatment time encompasses weekly doses, I believe there’s eight doses of GEN-1 followed by the debulking surgery.

So, if we are right they will probably complete the surgical treatment on these patients in the first or second week of February thereabouts will be collecting tissue samples, but to compare with the baseline samples that are taken as the patients enroll in around the second or so week of February this is reasonably predictable once we’re on study and the treatment regimen is weekly.

And then followed by surgery so and then it takes about just looking at the timelines for translational data. It takes anywhere from four to six weeks following the submission of the samples to Roswell Park for the translation data analysis.

So, all that said with that kind of background you can expect I would say March-ish for top line data from the translation analysis the final report is probably in April..

Okay, great. Thank you very much Michael..

Thank you..

We’ll take our next question from Keith Markey. Your line is open..

Good morning everybody..

Good morning Keith..

Good morning Keith..

Thanks for taking my question.

I saw that you had a presentation in South Korea recently and I was wondering was that to help to attract additional patients to your clinical trials or to perhaps get additional sites up and and running?.

Yes, I want to comment and then Nick Borys was there for conference and he can give you some observations and what our objectives are.

So, I mean typically all of the conferences where there is any interest in international procedures for new chemotherapies we do provide a [indiscernible] our goal is twofold, one is to encourage physicians who are treating patients who would be eligible for the study to refer to our trial that’s important.

I think the second though and also very important we’ve earned a great deal about RFA and in ThermoDox of course.

Although particularly about RFA, as it relates to treating intermediate state tumors, I would say this only with a little bit of modesty as we brought a group of probably some 75 investigators together in our prior study, many of whom are continue on the OPTIMA study.

Who are changing the way in which RFA is being used to treat patients around the world. So we like to be – it’s important for us to be there. We like to be a part of it. We believe that the information that’s being presented at the various conferences and symposia is important to the standard of care of medicine without any additional clinical trials.

Also there’s a recent paper maybe you want to mention the cohort paper and the importance. So I’m going to try over the Nick to give you some observations from the ACTA Conference..

The ACTA conference was the Asian Conference on Tumor Ablation it was attended by several hundred practitioners, researchers, investigators in tumor ablation and the paper that was presented just to be clear to everybody. This was an invited paper.

The ablation community is very closely watching our OPTIMA study just as everyone here is and on the call is. And they’re looking for more data going into the future and they’re very interested in the follow-up data that Mike mentioned in regards to the NIH presentation that will be at the RSNA in a few weeks.

In regards to some additional data that is supporting how we see ThermoDox there was a paper that Mike has alluded to by Dr.

Goldberg who is a leader in the ablation technology who’s always presented data on [indiscernible] therapies with ablation and he pointed out in some very interesting animal studies that there is a relationship between the time of heating or thermal dosing to tumors with treatment such as ThermoDox and outcome.

So we are getting a very clear picture over the mechanism of how our drug works why that 45 minutes is so important and why ThermoDox plays into this. And the bottom line is it looks like that this is a immunotherapeutic effect.

So, I don’t want to take up too much more time, but if anybody’s interested we can always give you the references to that paper for your own perusal. So, I hope that answers your question..

Very much. So. Thank You yes I would like to get the paper. Thanks. My second question is….

Can I just summarize a couple of points and Keith if you don’t mind..

Sir..

So we got now go work that bring in enrollments indicating that the increased heating times are associated with better outcomes, in a preclinical model we’ve got the NIH who has conducted a value metric analysis for tumors versus burn time or heating time and the clinical outcomes plus, minus ThermoDox highly supportive of our study.

We’ve have completed the final subgroup analysis final overall survival analysis of the patients involved in the heat study, and now after four years from enrollment, longer than four years from enrollment have fallen for 3.5 years. The data I think is unarguable. We can challenge it as we have in any way you want it.

But we are looking at a study our OPTIMA that is highly de-risk. And now we are excited to get this study enrolled in it and the results made available..

Great, thank you. And then I had a second question and that is your R&D expenditures increased in the third quarter, and I assume it had a lot to do with expanding or starting up the clinics in China to a certain extent and increasing the enrollment in the trial.

I was just wondering, does that look like, it’s a number that’s going to continue at about that pace for a little bit, or should we see that coming down now that the sites in China are pretty much up and running?.

Keith, this is Jeff. Last year in that R&D category, we incurred expenses relative to making the clinical supplies necessary, so that’s behind us. What we’re seeing now is, as you mentioned, an increase in the enrollment, it really across the entire globe with the new sites coming on in China. We expect that number to remain pretty much where it is.

Moving forward, as we said, we maintained a operating – really operating cash utilization in the $4 million to $4.5 million and expect it to maintain that level moving forward into 2017..

Yes..

And we’ll take our next question from Swayampakula Ramakanth. Your line is open..

Thank you. Just a couple of quick questions. One is, can you tell us a little bit about your DIGNITY studies, where they are, what is the progress you’re making? And the second question is just a little high-level strategic set kind of question.

With increasing interest in immo-oncology and how those drugs are also getting to be seen as potential therapies for HCC, how do you ThermoDox to be competitive again such therapies? Thanks..

Okay. Thank you for the questions RK. So let me start with DIGNITY. We just left Europe two weeks ago, in Europe there attended the study, of course, we hosted it in Europe, where the majority of our investigators are. The – we’ve made a great deal of progress actually in this study up and running.

We have identified now on to five institutions who will participate in the trial. All the institutions will be – were using the same heating platform technology that has been standardized by us to make sure that all of the heating devices, this is device called [indiscernible] manufactured by a company called Med-Logics.

All the devices are standardized and we actually pay for the standardization to ensure that all of them are functioning in a similar – in almost exactly the same way. We’ve – obviously, we built the infrastructure for this study. We’ve gotten full approval in Italy for the study. We’re expecting regulatory approval in the Czech Republic, the next year.

That will be followed by a FX committee review. I think, we’re ready to go through the most part now for clinical trial payments to be finalized with – on these early sites, and we have to make a decision yet on the PI for Poland.

All that said is, our expectation is that, we will begin to bring sites up and enrolling patients of almost as we are – actually as we are speaking. We’re starting with Italy. Our hope is to have a first patient enroll this year, if not this year or early next year.

We think we have enough understanding of the incidence in the number of patients that these physicians see to be able to project about an 18 to 24 months enrollment period. So if you share with me that, we enroll the first patient, say, January of next year, it will be a two-year enrollment period. The study has a simultaneous two-stage approach.

We will be looking for efficacy and utility after 24 patients are treated. But we expect to be able to report the first interim from this trial in about 12 months afterwards up and running. So that’s the status of the DIGNITY study.

And given the current markets, I have to say, given the current markets, we would like to move faster with the DIGNITY program. I think, we’ve been wise and being very deliberate in getting the stuff – study up and running with regards to vis-à-vis our use of cash.

With regards to in middle oncology and its implications for our program, well, I’m going to make a statement and I’d like to turn it over to Nick. But the beauty of our trial in primary liver cancer is just this is, we are evaluating patients who are newly diagnosed, evaluating ThermoDox in patients who are newly diagnosed.

My sense is regardless of the therapeutics that are being developed to treat this disease, if a tumor can be removed surgically, or if the tumor mass can be treated with lethal amount of heat, it will be done so, regardless of any of the follow-on therapeutics. I guess, that all antigen oncology, if you can cut it down to two.

The substitute for surgery in this case would be an interventional procedure like RFA. I think in our discussions with the medical community and we know just about every important opinion in our primary cancer research – primary liver cancer research. This interventional procedure is not going to go away.

As assumingly, we had – regardless of the therapeutics we are evolving, assuming we have a successful trial. And it’s beginning to look more and more like that that’s going to happen. The addition of ThermoDox to this interventional procedure, I think will become routine.

So, we are very hopeful that the additional therapeutics and develop for these patients recurrence relapse. It’s always an issue that has to be dealt with patients to present, who would not initially be treated with an intervention procedure or surgery, certainly deserve better therapeutics that are available to them now.

So we don’t see any confidence frankly with regards to developments immune-oncology or other agents for a primary liver cancer. Would you have any thoughts on that Nick..

Yes as I was alluding to in the response to Keith marketed for.

We do see an immunological component as our mechanism for the ThermoDox and the OPTIMA study and we like to take full advantage of that data and look at that more carefully, but also as you probably know we are very excited about the future of immunotherapy, as you can see that in our GEN-1 program, but the issue with immunotherapy is there’s very few drugs out there that work as a model therapy or in other words as a single agent.

And that there are going to very well be possibilities in the future where combination therapies will be the best way to go and ACC that’s a very difficult cancer and there are very few model therapies that are effective in cancer. So. Anything can be said about immunotherapies. So I think we’re pretty excited about that.

We welcome further development in that area. And we think we’re going to be a big part of that..

Thank you, gentlemen..

Thank you..

So, in interest to find we are, operator we’ll take one more question if there’s a question or two be had..

All right. We will take our last question from a Barry Rubin. Your line is open..

Good morning Mr. Tardugno. Thank you for a great progress in the company..

Thank you, Barry..

Before I asked my no time though there will be essence before I guess my one question I just want to give a shout out to Mr. Jeff Church he is most kind to return my calls promptly. He spends more than enough time and he’s a wonderful asset to the company..

He certainly is..

Barry Rubin:.

-:.

The symposium you are talking about is, it is an annual event. It’s in San Antonio, it’s called the San Antonio Breast Cancer Conference. I don’t think, we will have anything new to present at that trial, I mean, at that conference, Barry..

Okay.

When – on the RCW, when is your next data, is that sometime next year?.

Yes. As I mentioned earlier, we will begin enrolling patients in the European DIGNITY study, if not before the end of the year, certainly, right after the first of the year. Our sense is, it’s an open label trial, and the patients are immediately valuable.

Our sense is that, we may have enough information to be able to participate in the 2017 San Antonio Breast Cancer Conference..

All right. Thanks an awful lot..

Thank you. So there are any other last questions, I can move on now to just a few closing comments here. First, I want to thank everybody on the call for taking the time to be with us. We did put a good deal of time to preparing our remarks. I hope you can see that, your company is making a good deal of progress here.

We now have three clinical trials to our – active, the third one is about ready to start off, it takes enormous amount of energy to get third one up.

At the same time, we’re being very mindful of our cash position and our need to raise cash is, Jeff Church pointed out, we’ve been careful with raising enough money to keep us going without being overly affected by some of the challenges right now with our share price largely due – our sense is largely due to some uncertainty in the markets, and a lot of pressure in the biotech space.

But we have – hopefully, we have presented to you this morning a company that is using its cash wisely to progress – to – now certainly will be treating very important trials in some of the most important cancers of our life time.

So with that I want to thank you again as our trials and programs and events, we will look forward to the opportunity to keep you informed.

We value your continued support of our goal and that’s simply this is to deliver an innovative oncology therapeutics to address some of these very difficult, and is, I said earlier, important cancers of our life tech. So thank you very much. We look forward to speaking with you in about three months..

This does conclude today’s program. Thank you all for your participation and you may disconnect at any time..