Celsion's founder buys rights to Adaptive Phased Array technology to further develop breast cancer treatment

By E. Janene Geiss

Philadelphia, Jan. 17 - Celsion Corp. announced Tuesday that founder and chief scientific officer Augustine Cheung has resigned his positions and acquired 100% of the outstanding shares of Celsion Ltd., a wholly owned Canadian subsidiary that holds the license and assets associated with the company's Adaptive Phased Array technology.

Cheung agreed to purchase the shares of Celsion Ltd. for $1.5 million with the hopes of further developing Adaptive Phased Array technology to treat breast cancer, according to a company news release.

The technology is licensed from Massachusetts Institute of Technology, officials said.

Cheung has committed to pay Celsion a royalty of up to an additional $18.5 million on future sales of products developed on the Adaptive Phased Array technology platform, officials said.

Celsion said it has agreed to defer receipt of the initial $1.5 million over a period of up to 78 months.

Cheung has secured the deferred payment with a pledge of 1.5 million shares of his own Celsion stock and has committed to obtain additional funding through selling up to 80% of his holding to a capital pool company on the Toronto Venture Exchange. He said he would later seek additional funding through a listing on the Toronto Stock Exchange.

"I have decided to leave Celsion to take advantage of the opportunity to develop the Adaptive Phased Array technology. When we established our current strategy in 2001, to move from a primary focus of device development to drug development, I was aware that a new and different type of expertise would be needed to lead the company into the future," Cheung said in the release.

That is why Lawrence Olanoff was named the new president and chief executive officer of Celsion in July 2005, Cheung said.

"When I founded Celsion, my goal was to make microwave technology an important component in the treatment of breast and other cancers. Over the years Celsion has seen promising results from several clinical studies involving microwave thermotherapy but has lacked the resources to bring those technologies to market in addition to the development of its other projects. I intend to optimize the Adaptive Phased Array technology and further demonstrate its clinical efficacy," Cheung said.

Celsion said the transaction is in line with its strategy to divest its medical device technologies and is consistent with its commitment to focus entirely on drug development.

Celsion, based in Columbia, Md., is a biotechnology company dedicated to the development and commercialization of heat-activated treatment systems for cancer.

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