Celsion (CLSN) Zhejiang Hisun Enter ThermoDox Development Agreement

Celsion Corporation (Nasdaq: CLSN) and and Zhejiang Hisun Pharmaceutical Company Ltd. have entered into a technology development agreement for ThermoDox® for the greater China territory. Under the terms of the agreement, Hisun will pay $5 million to Celsion immediately, while Celsion will provide Hisun with support for its ThermoDox® manufacturing development program. This payment is non-refundable and comes in advance of Celsion's expected reporting of results from its pivotal Phase III trial (the HEAT Study) in hepatocellular carcinoma (HCC), also known as primary liver cancer later this month.

In addition, the companies anticipate signing an agreement in which Celsion provides Hisun an exclusive option to license ThermoDox® for the Greater China market, which includes China, Hong Kong and Macau. This option period will be secured by a second $5 million payment that must be received by Celsion from Hisun within 60 days after execution of the Technology Development Agreement. The key provisions of the anticipated license agreement have been negotiated and agreed to by the parties and provide a basis for a definitive contract. These provisions are:

• A credit of $10 million from the two payments ($5 million for the technology development agreement and $5 million for the exclusive option) toward a non-refundable upfront license payment of $25 million due to Celsion at signing of the definitive license agreement.
  
• An approximate 10 year total value to Celsion of well over several hundred million US dollars, which includes:
  • $55 million in upfront milestone and regulatory milestone payments within the next 18 months;
    
  • $45 million in milestone payments for reaching certain sales targets; and
    
  • Escalating double-digit royalties on net sales of ThermoDox® in the Greater China Territory.
• Hisun will serve as both the manufacturer and distributor of the ThermoDox® drug product for the Greater China Territory, and also take responsibility for local regulatory activities including submitting approvals in China to the state Food and Drug Administration (sFDA).

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