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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning. At this time I would like to welcome everyone to the first-quarter investor conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. If you would like to ask a question during this time (OPERATOR INSTRUCTIONS).
At this time I would like to turn the conference over to Ms. Marilynn Meek, [of] the Financial Relations Board. You may begin your conference.
MARILYNN MEEK, FINANCIAL RELATIONS BOARD, CELSION CORPORATION: Good morning, everyone, and thank you for joining us for Celsion's conference call today. The call will be archived for replay April 20, 2007 at 2:00 PM until April 22, 2007. The replay can be accessed at 800-642-1687 or 706-645-9291, access code 0538 (technical difficulty). The call will also be available on the Company's website at www.celsion.com for 90 days after 2:00 PM on April 20, 2007.
On the call with us today is Michael Tardugno, President and CEO of Celsion. Management will give their opening remarks, and then we'll open the line for questions. Before we begin, Celsion wishes to [inform] the participants that forward-looking statements on this [call] are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties including without limitation unforeseen changes in the course of research and development activities and in clinical trials by others, possible acquisitions of other technologies, assets or businesses, possible actions by customers, suppliers, competitors and regulatory authorities and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.
With that said, I would now like to turn the call over to Mr. Michael Tardugno. Mike, please go ahead.
MICHAEL TARDUGNO, PRESIDENT AND CEO, CELSION CORPORATION: Good morning, all, and thank you for joining us today. As Marilynn said, I'm Michael Tardugno, your Company's President and CEO. I am here with Tony Deasey, Celsion's EVP and CFO, and Dr. Bill Hahne, our Vice President of R&D. We really do appreciate your participation on this call with such short notice.
Before starting, I do want to make a correction. This call is not our quarterly conference call; it's a special call to advise you of recent events in the Company. We will be holding our quarterly conference call; the date has yet to be established.
This is my second conference with you since joining the Company about three and one-half months ago, and I hope you will see it as another down payment on my promise to you to improve our communications with the owners of Celsion stock.
In today's call, I would like to cover three topics with you. First, a very important milestone in Celsion's transition from a medical device to an exciting oncology drug development company, which was revealed to you in our recent announcement that we have agreed on terms for the early sale of our Prolieve franchise to Boston Scientific.
Second, our proposal to authorize additional shares for the employee stock option program and, third, the importance of voting your shares at this year's annual meeting. Following my remarks, of course, we will take questions. I'd like to ask you to be candid and open with your questions. This is your opportunity to speak to management, and we're prepared to answer all of your questions to the best of our ability, to your satisfaction.
But before I get into the three topics that I just covered, I wanted to give you a brief update on our progress over the last three months. On our last conference call, which was my first conference call with you, I laid out a six-point plan that we would execute against over the near-term. By the near-term I mean for the next 12 to 15 months.
I'm pleased to advise you that we have made a great deal of progress. The credit for the progress goes to the team of dedicated employees here at Celsion, and for that I want to give them my sincere and personal thanks.
So let's recap our progress against the six points of the focus that I laid out in my first call. The first point is to eliminate undue risks to our oncology program and our financial plan. Since the beginning of the year we have taken the following actions to ensure that this point is being achieved. One, we settled the AMS lawsuit.
Second, we significantly reduced our forecasted expenses. We have developed and are working and measuring our progress against the budget that we believe will enable us to substantially complete our ThermoDox development program for primary liver cancer through an NDA submission, and our recurrent chest wall cancer program through Phase II/Phase III study. Lastly, we're taking the steps necessary to return compliance with the AMEX listing criteria.
The second point in our plan was to narrow our focus as a company to only those initiatives that drive shareholder value, namely our primary liver and recurrent chest wall cancer programs, and we have done that. In this area we have submitted our Phase III primary liver cancer protocol to the FDA for approval through the special protocol assessment process. We have accelerated our drug manufacturing and CMC efforts to ensure that when our pivotal study is approved, we will have a reliable supply of drug for the clinical program.
We are finalizing our Phase III execution strategy in determining the number and location of good clinical practice sites compliant with the regulations of the FDA, and we're optimizing both the number of sites and the locations of those signs to ensure that we both have an efficient clinical program as well as a cost-effective program.
We have initiated and enrolled our first patient in a study with the Cleveland Clinic in North Shore Long Island hospital. The goal of the study, as you recall from our last conference call, is to ensure that our commercially manufactured drug product, Single Vial, as we call it, performs identically to the three-vial formulation that's been in study.
The third point in our plan is to build our competencies in the critical areas of drug development, including clinical operations, analytical chemistry, regulatory affairs and quality assurance. Although I have no new additions to staff to announce, we continue to recruit and I expect to fill some key positions in the near future in regulatory affairs and clinical operations.
Ensuring that we have a culture in which delivering results, accepting accountability and being transparent with all of our constituents is the fourth point in our program. We are building this culture initially through our compensation plans on three fronts. First, we have implemented a merit review program that ties this year's and future salary increases to individual performance.
Second, future bonuses will only be earned by delivering results against clear, value-creating company objectives.
Third, we restructured our annual stock grants, stock-option grants, to clearly align employee and shareholder interests. I'll have more to say about the stock-option program later on in the call.
We're also committed, as the fifth point of our plan, to improve our candor and communications with our shareholders. Over the last three months, we have issued 10 press releases advising you of our progress in key business and actions such as presentations at key industry meetings and in our technology. Ensuring that you have the opportunity to vote on the sale of Prolieve assets is a further demonstration of our commitment to transparency with you, our stockholders.
Finally, the sixth point was to monetize our Prolieve assets, which I will now discuss with you in more detail. As you know, on Wednesday we announced that the Board of Directors has approved the sale of our Prolieve assets to Boston Scientific on terms that maintain the already agreed sale price of $60 million would allow Boston Scientific to pay the purchase price in three installments.
Although this was the focus of the release, the most important message in that release is that, consistent with our stated strategy, this transaction will allow us to fully focus all of our resources on the ThermoDox development program. This arrangement, while not ideal -- we would have liked to have had all of the payment upfront -- will substantially -- will immediately -- I'm sorry, will provide immediate nondilutive funding sufficient for us to make substantial progress with our Phase III clinical trials for primary liver cancer and our phase II/III trials in recurrent chest wall breast cancer.
The specifics of the deal have been filed in an 8-K and will also be included in the proxy statement, a preliminary version of which has been filed with the SEC, a copy of which will be sent to you once their review has been completed. In order to help you understand the transaction and management and the Board's rationale for improving the asset sale, I would like to outline the key elements of the deal for you.
First, again, the aggregate price for the sale of all Prolieve assets is $60 million. Payment …