Delcath Systems Closes $7 Million Private Placement

Rhea-AI Summary

Delcath Systems, Inc. closes a private placement, selling 876,627 shares of common stock and 1,008,102 pre-funded warrants, raising approximately $7 million. The company plans to use the proceeds for working capital and general corporate purposes.

Insights

Financial Analyst

The private placement conducted by Delcath Systems, Inc. is significant as it directly affects the company's capital structure and liquidity. By issuing shares and pre-funded warrants at a specified price, Delcath has raised approximately $7 million, which is intended for working capital and other corporate purposes. This influx of capital is essential for the company's operations, especially as it pertains to the high costs associated with the development and commercialization of medical treatments.

Investors should note the immediate exercisability of the pre-funded warrants at a nominal price, which could lead to a potential dilution of the common stock in the future. This dilution might impact the stock price negatively in the short term. However, if the capital is deployed effectively to accelerate the company's growth or to fund research and development that leads to successful treatments, the long-term value of the company could increase.

The fact that the securities have not been registered under the Securities Act of 1933 indicates that they are subject to certain restrictions on resale, which might limit their liquidity. However, the commitment to file registration statements for the resale of these securities could alleviate some concerns regarding their future liquidity.

Legal Expert

The legal implications of a private placement transaction such as this one are multifaceted. For one, the sale of unregistered securities is subject to regulatory compliance with the SEC, which includes the filing of registration statements for the resale of the common stock and the shares issuable upon the exercise of the pre-funded warrants. This ensures that the company is adhering to the legal requirements for such transactions and provides a pathway for investors to eventually liquidate their holdings, albeit with certain conditions and timelines.

It is also important to highlight that the press release explicitly states that this shall not constitute an offer to sell or a solicitation of an offer to buy these securities. This kind of language is standard to avoid the inadvertent violation of securities law, particularly the rules regarding public offerings and communications with potential investors.

Market Research Analyst

From a market perspective, Delcath's strategic decision to engage in a private placement with accredited investors, executives and board members suggests a vote of confidence from those closely associated with the company. This could be perceived positively by the market as insider participation often signals a strong belief in the company's future prospects. However, it's essential to assess the broader industry context. Interventional oncology is a competitive and research-intensive field and the success of such companies is heavily dependent on their ability to innovate and navigate the regulatory landscape.

The impact on the stock market will likely be determined by Delcath's subsequent use of the raised funds. If the capital is utilized to achieve milestones that enhance the company's product pipeline or market position, it could lead to increased investor interest and a positive reevaluation of the stock. Conversely, if the investment does not yield tangible results, or if the market perceives the move as merely a stop-gap measure to cover operational deficits, the reaction could be less favorable.

NEW YORK, March 20, 2024 /PRNewswire/ -- Delcath Systems, Inc. (Nasdaq: DCTH), an interventional oncology company focused on the treatment of primary and metastatic cancers of the liver, confirmed the closing of the previously announced private placement with certain accredited investors comprised of existing investors, Delcath Executives and members of its Board of Directors, for a private placement transaction (the "Private Placement").

Delcath issued and sold 876,627 shares of its common stock (the "Common Stock") at a price per share of $3.72, and, to certain investors, in lieu of shares of Common Stock, 1,008,102 pre-funded warrants to purchase up to 1,008,102 shares of Common Stock (the "Pre-Funded Warrants") at a price per Pre-Funded Warrant of $3.71. The Pre-Funded Warrants have an exercise price of $0.01 per share of Common Stock, be immediately exercisable and remain exercisable until exercised in full.

Delcath received gross proceeds from the Private Placement of approximately $7 million before deducting offering expenses payable by Delcath. Delcath intends to use the net proceeds from the Private Placement for working capital purposes and other general corporate purposes.

The securities to be sold in the Private Placement, including the shares of common stock underlying the Pre-Funded Warrants, have not been registered under the Securities Act of 1933, as amended, or state securities laws as of the time of issuance and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission ("SEC") or an applicable exemption from such registration requirements. Delcath has agreed to file one or more registration statements with the SEC registering the resale of the Common Stock and the shares issuable upon exercise of the Pre-Funded Warrants purchased in the Private Placement.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Delcath Systems, Inc.

Delcath Systems, Inc. is an interventional oncology company focused on the treatment of primary and metastatic liver cancers. The company's proprietary products, HEPZATO KIT (Hepzato (melphalan) for Injection/Hepatic Delivery System) and CHEMOSAT® Hepatic Delivery System for Melphalan percutaneous hepatic perfusion (PHP) are designed to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects during a PHP procedure.

In the United States, HEPZATO KIT is considered a combination drug and device product and is regulated and approved for sale as a drug by the FDA. HEPZATO KIT is comprised of the chemotherapeutic drug melphalan and Delcath's proprietary Hepatic Delivery System (HDS). The HDS is used to surgically isolate the liver while simultaneously filtrating hepatic venous blood during melphalan infusion and washout. The use of the HDS results in loco-regional delivery of a relatively high melphalan dose, which can potentially induce a clinically meaningful tumor response with minimal hepatotoxicity and reduce systemic exposure. HEPZATO KIT is approved in the United States as a liver-directed treatment for adult patients with metastatic uveal melanoma (mUM) with unresectable hepatic metastases affecting less than 50% of the liver and no extrahepatic disease, or extrahepatic disease limited to the bone, lymph nodes, subcutaneous tissues, or lung that is amenable to resection or radiation. Please see the full Prescribing Information, including BOXED WARNING for the HEPZATO KIT.

In Europe, the device-only configuration of the HDS is regulated as a Class III medical device and is approved for sale under the trade name CHEMOSAT Hepatic Delivery System for Melphalan, or CHEMOSAT, where it has been used in the conduct of percutaneous hepatic perfusion procedures at major medical centers to treat a wide range of cancers of the liver.

Safe Harbor / Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by the Company or on its behalf. This press release contains forward-looking statements, which are subject to certain risks and uncertainties, that can cause actual results to differ materially from those described, in particular, the statements regarding our Private Placement and expected gross proceeds and the expected uses of the proceeds from the Private Placement. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that may cause such differences include, but are not limited to, uncertainties relating to: the Company's commercialization plans and its ability to successfully commercialize the HEPZATO KIT; the Company's successful management of the HEPZATO KIT supply chain, including securing adequate supply of critical components necessary to manufacture and assemble the HEPZATO KIT; successful FDA inspections of the facilities of the Company and those of its third-party suppliers/manufacturers; the Company's successful implementation and management of the HEPZATO KIT Risk Evaluation and Mitigation Strategy; the potential benefits of the HEPZATO KIT as a treatment for patients with primary and metastatic disease in the liver; the Company's ability to obtain reimbursement for the HEPZATO KIT; and the Company's ability to successfully enter into any necessary purchase and sale agreements with users of the HEPZATO KIT. For additional information about these factors, and others that may impact the Company, please see the Company's filings with the Securities and Exchange Commission, including those on Forms 10-K, 10-Q, and 8-K. However, new risk factors and uncertainties may emerge from time to time, and it is not possible to predict all risk factors and uncertainties. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date they are made.

Contact:

Investor Relations Contact:
Ben Shamsian
Lytham Partners
646-829-9701
shamsian@lythampartners.com

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SOURCE Delcath Systems, Inc.

FAQ

What is the recent private placement news about Delcath Systems, Inc. (DCTH)?

Delcath Systems, Inc. confirmed the closing of a private placement with accredited investors, selling 876,627 shares of common stock and 1,008,102 pre-funded warrants, raising approximately $7 million.

How many shares of common stock did Delcath sell in the private placement?

Delcath sold 876,627 shares of its common stock in the private placement.

What is the price per share of the common stock sold in the private placement?

The price per share of the common stock sold in the private placement was $3.72.

How much were the pre-funded warrants sold for in the private placement?

The pre-funded warrants were sold for $3.71 per warrant, with an exercise price of $0.01 per share of common stock.

How much gross proceeds did Delcath receive from the private placement?

Delcath received approximately $7 million in gross proceeds from the private placement.