[CELSION LOGO]                [CELSION LETTERHEAD]


June 11, 2002

Dear Celsion Shareholder:

        First, we want to thank those of you who responded to our last letter of
November 30, 2001 by writing or calling us with your comments. Your enthusiasm
is terrific. It reminds us constantly of the potential value of Celsion's
technologies and of the importance of bringing the products that we presently
have under development to market as rapidly as possible, to permit patients to
share the promise of our technologies.

        In today's letter, we want to focus on important new developments in
Celsion's financial strategy, as well as our efforts to gain FDA approval to
market our Microfocus BPH 800 Microwave Urethroplasty(TM) system in the United
States. We also want to bring you up to date on the good progress Celsion has
made on all six 2002 milestones presented to shareholders at the Annual
Shareholders Meeting of February 15.

FINANCIAL STRATEGY

        Market conditions these past six months have been difficult, both for
investors and for companies seeking to raise capital, and the medical technology
sector has been no exception. At Celsion, these market conditions have led
management to review core strategies. For example, two years ago we decided to
bring our Microwave Urethroplasty(TM) BPH system to market by ourselves, and to
finance this commercialization effort primarily by raising additional equity
capital. Since the time of that decision, stock prices have declined to well
below private market values, and dramatically below prices reflected in recent
transactions involving companies offering minimally invasive treatments for BPH.
In light of these intervening events, Celsion management has concluded that its
earlier decision requires reexamination.

        Consequently, we have engaged the investment-banking firm of Legg Mason
to explore alternatives for our BPH business. We have placed no constraints on
Legg Mason's exploration, and anticipate that alternatives may include
recruiting a strategic partner to assist in marketing or commercializing our BPH
system, or even selling this segment of our business, as well as continuing on
our current course of bringing the Microwave Urethroplasty(TM) system to market
on our own. We also have requested that Legg Mason advise us on other issues
relative to our current capital structure.

        In the interim, we decided to raise only $2 million in additional
private capital, an amount that we believe will be sufficient to meet Celsion's
liquidity requirements for the next six months, but considerably less than we
might have sought to raise under different market conditions and strategic
assumptions. With approximately $4 million presently in the bank, we believe
that our cash resources should be adequate to fund our planned activities
through the remainder of calendar 2002.

BENIGN PROSTATIC HYPERPLASIA TREATMENT

        In March of this year, Celsion reported the results of its pivotal Phase
II BPH clinical trial. We surpassed our goal of delivering to participants in
the trial at least the same improvement in AUA symptom scores as had been
achieved by Proscar(TM). The improvement experienced by our patients was, on
average, twice that experienced by patients treated with Proscar(TM), the
comparative treatment for the Phase II trial.



        As we previously have reported, we had expected to submit these data
(which followed all patients in the trial for a period of three months) to the
Food and Drug Administration by the end of March. This was to be the third and
last module of our PMA submission. We were quite disappointed when, at our
pre-submission meeting in March, the FDA suggested that we defer submitting
patient data at least until the FDA had completed and closed the first two
modules, and perhaps until we had collected 12-month data.

        Since that meeting, Celsion has responded to FDA comments on the first
two modules, and we presently are awaiting any further comments. The FDA has
asked Celsion to prepare a statistical analysis of both the data from our
completed Phase I trial and the six-month results from the Phase II trial. The
FDA could use this analysis to predict 12-month results. The FDA has indicated
that it intends to review this report to determine whether Celsion will be asked
to submit with six or 12 months of data. There is no reason to believe that
patient data in the Phase II trial will be worse after six or twelve months.
Celsion expects to submit its statistical analysis to the FDA by the end of
June.

        If Celsion is required to provide 12-month data in connection with its
PMA submission, and assuming no further inquiries, we anticipate that the FDA
could grant final approval before the end of the first quarter of calendar 2003.
Under this timetable, we presently anticipate that product launch could occur
early in the second quarter of calendar 2003. Alternatively, if Celsion is
allowed to submit six-month data, we anticipate that FDA approval could come
during the autumn of 2002, with product launch still possible by December 31,
2002. This, of course, would be very close to Celsion's previously announced
timetable for product launch. Under any scenario, Celsion expects to be ready to
launch its Microwave Urethroplasty(TM) system immediately upon FDA approval of
the PMA.

TEMPERATURE SENSITIVE LIPOSOMES

        On March 28, 2002, Celsion filed an IND with the FDA to test its
doxorubicin laden, heat-activated liposome in the treatment of prostate cancer.
In this application, Celsion will use its Microfocus BPH 800 equipment to
provide heat to trigger release, at the cancer site, of doxorubicin, a common
cancer drug, encapsulated in the Celsion's heat-activated liposome. The FDA has
already reviewed this IND, and Celsion has received and responded to FDA
comments. We are hopeful that, by the end of July, Celsion will be cleared to
begin a Phase I human trial. The Phase I trial will take place at Roswell Park
Cancer Institute in Buffalo, New York.

        Celsion has also supplied its doxorubicin laden, heat-activated liposome
to the National Institutes of Health. NIH is currently performing tests on large
animals to determine whether our liposome formulation can enhance the results
from using heat to ablate cancer tumors in the liver. NIH trials using heat only
to ablate liver cancer are already underway. If the large animal studies are
satisfactory, NIH expects to revise its protocols to include Celsion's liposome.

BREAST CANCER TREATMENT SYSTEM

        During the first five months of this year we presented papers outlining
the results of our Phase I breast cancer trial at breast surgeons' conferences
in Las Vegas, Miami and Boston. The results to date have been very encouraging.

        The Phase II clinical trial presently is underway and is being carried
out under two protocols. The first (IIA) is designed to reduce the size of large
tumors and allow surgeons to perform lumpectomies where mastectomies previously
would have been indicated. To date, we have treated six patients under this
protocol and, in every case, have generated cell kill and significantly reduced
the size of the tumor.






        In the second protocol (IIB), our objective is to ablate small tumors
completely, thereby enabling the surgeon to remove only the dead tumor rather
than performing a lumpectomy. Thus far, we have treated 21 patients with
escalating doses (temperature and duration) of heat and, at the highest dose
level, have achieved our goal of ablating the tumor and killing cancerous cells
in the surrounding tissues. In each of these cases, pathology performed on the
tissue excised in the lumpectomy subsequent to the treatment has revealed a
total absence of viable cancer cells in the surrounding tissues (the margins).
If Celsion is able to demonstrate similar results in additional patients, the
Celsion treatment system could represent a significant breakthrough technology
in the treatment of breast cancer.

        We have been authorized to conduct the Phase II breast cancer trial at
ten sites. Of these, five presently are operational, and we have entered into
contracts with three more, which are expected to be operational by mid-summer.
We anticipate that the final two sites will to be operational in the fall.

GENE THERAPY

        We continue to make good progress on this long-term development project.
Dr. Gloria Li, at Sloan-Kettering, has succeeded in engineering a
temperature-sensitive viral vector as a means for delivering its genetic
biological modifier to treatment sites. As we previously have reported,
Sloan-Kettering has demonstrated that this genetic biological modifier is
capable of eliminating a tumor's ability to repair DNA damage. If this
biological modifier is successfully developed it has the potential to
substantially reduce the radiation and chemotherapy dose required to treat
cancerous tumors. Currently, we are conducting the pre-clinical studies that are
necessary for the filing of an IND. We anticipate that we will file this IND
late in 2003.

CONCLUSION

        As outlined above, we believe that Celsion is well on its way to an
excellent and productive year. We know these are difficult times for all
investors, but as we wait for overall market conditions to improve, management
at Celsion is adding significantly to the long-term value of our company.


      /s/ MAX E. LINK                                 /s/ AUGUSTINE Y. CHEUNG

      Max E. Link                                     Augustine Y. Cheung
      Chairman                                        President & C.E.O.