Celsion, an oncology drug development company, and Zhejiang Hisun Pharmaceutical, a Chinese pharmaceutical company, have entered into a technology development agreement for ThermoDox for the Greater China territory. 

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 HEAT study in hepatocellular carcinoma (HCC) later this month. ThermoDox is a proprietary heat-activated liposomal encapsulation of doxorubicin, an approved and frequently used oncology drug for the treatment of a wide range of cancers.

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 include:

• 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 U.S. 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
  • 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).

"Pursuing this arrangement with Hisun allows us to evaluate the fastest path to the China market, potentially the largest opportunity in the world for ThermoDox. A long-term partnership will provide the greatest synergies with respect to sales, marketing, distribution and manufacturing, which could ensure significant value to the ThermoDox asset," said Michael H. Tardugno, president and CEO of Celsion. "In addition, this partnership provides Hisun and Celsion with immediate access to an accelerated pathway for sFDA review and approval of ThermoDox, a business strategy with exceptional potential to serve China's HCC population, and strong, uncompromised economics for both parties."

The HEAT study is being conducted under a FDA Special Protocol Assessment, has received FDA Fast Track designation and has been designated as a Priority Trial for liver cancer by the National Institutes of Health. The EMA has confirmed the HEAT study is acceptable as a basis for submission of a marketing authorization application.  ThermoDox has been granted orphan drug designation in both the U.S. and Europe.  In addition to meeting the FDA and EMA enrollment objectives, the HEAT study has also enrolled a sufficient number of patients to support registration filings in China, South Korea and Taiwan.