Delcath Systems Reports First Quarter 2024 Results and Business Highlights
Delcath Systems (Nasdaq: DCTH) reported its Q1 2024 financial results and business highlights on May 14, 2024. The company recognized $3.1 million in total revenue, a significant increase from $0.6 million in Q1 2023, driven by sales of HEPZATO KIT and CHEMOSAT. Delcath updated its U.S. center activation guidance to 20 by end of 2024, activated six new centers, and has five more preparing for activation. The company raised $7.0 million in a private placement and has cash reserves totaling $27.2 million.
Delcath appointed Martha S. Rook, Ph.D., as COO and received a permanent J-code and pass-through payment status for HEPZATO KIT from CMS effective April 1, 2024. Research and development expenses decreased to $3.7 million, while selling, general, and administrative expenses rose to $8.8 million, mainly due to commercial launch activities. The company also published pivotal Phase 3 FOCUS study results on HEPZATO KIT for treating unresectable metastatic Uveal Melanoma in the Annals of Surgical Oncology.
- Revenue for Q1 2024 increased to $3.1 million from $0.6 million in Q1 2023.
- Activated six new treatment centers and plans to have 20 centers by the end of 2024.
- Raised $7.0 million in a private placement, boosting cash reserves to $27.2 million.
- Appointed experienced industry leader Martha S. Rook, Ph.D., as COO.
- Received permanent J-code and transitional pass-through payment status for HEPZATO KIT from CMS.
- Published positive pivotal Phase 3 FOCUS study results for HEPZATO KIT.
- Research and development expenses were $3.7 million, showing a decrease primarily due to reduced clinical trial activities.
- Selling, general, and administrative expenses rose significantly to $8.8 million from $4.2 million in Q1 2023, driven by commercial launch activities.
Insights
Delcath Systems reported a notable increase in revenue for Q1 2024, reaching
However, it's important to consider the rise in selling, general and administrative expenses, which more than doubled compared to the previous year, primarily due to launch activities and an expanded commercial team. While the increased revenue and financing are positive signs, the higher expenses should be closely monitored to ensure they translate into sustainable growth.
For retail investors, the key takeaway is the strong revenue growth, offset by rising operational costs. The private placement shows strong investor confidence. Overall, the company's financial position appears to be improving, but the long-term impact will depend on controlling expenses and continuing revenue growth.
The publication of the Phase 3 FOCUS study results for HEPZATO KIT in the Annals of Surgical Oncology is a significant milestone. This study focuses on patients with unresectable metastatic uveal melanoma, a rare and aggressive cancer. The permanent, product-specific J-code (J9248) and the transitional pass-through payment status granted by CMS are important for improving the product's accessibility and reimbursement, potentially driving sales growth.
For investors, the validation of HEPZATO KIT through a peer-reviewed journal and favorable CMS reimbursement status indicates a positive outlook for the product's adoption and revenue potential. The strategic activation of new treatment centers further supports wider market penetration, which is essential for long-term growth.
This development highlights the company's commitment to advancing its oncology pipeline and could result in increased market share in the oncology space, benefiting patients and investors alike.
Delcath's aggressive expansion strategy, with a goal to activate 20 treatment centers by the end of 2024, indicates a strong push to increase market penetration and availability of HEPZATO KIT. The activation of six centers in Q1 2024, with additional centers in anticipation, demonstrates the company's proactive approach to meet market demand.
The recent $7.0 million private placement not only strengthens the company's financial position but also reflects confidence from existing investors and senior executives. This could signal a positive sentiment from insiders about the company's future prospects. However, the rise in administrative costs related to the commercial launch is a factor to watch, as it must be aligned with revenue growth for sustainable profitability.
Retail investors should note the company's clear strategy to expand its market presence and the potential for increased revenue from new centers. This expansion, coupled with the financial backing and insider confidence, suggests a positive trajectory, though execution risks remain.
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Recent Business Highlights
During and since the first quarter, Delcath:
- Recognized over
$2.0 million $1.1 million - Updated
U.S. center activation guidance from 15 active centers to a total of 20 active centers by the end of 2024; - Activated four treating centers during the first quarter with an additional two centers in April. A further five centers are accepting patient referrals in anticipation of activation;
- Raised
$7.0 million - Appointed Martha S. Rook, Ph.D, an experienced industry leader with more than 25 years of academic and industry experience, as Chief Operating Officer;
- Received a permanent, product-specific J-code (J9248) and transitional pass-through payment status for HEPZATO KIT from the Centers for Medicare & Medicaid Services (CMS) which became effective on April 1, 2024;
- Executed an amendment with Synerx Pharma, LLC and Mylan Teoranta for Delcath's supply of melphalan hydrochloride which extends the term of the original agreement to December 31, 2028; and
- Announced the publication of results from the pivotal Phase 3 FOCUS study of HEPZATO KIT in patients with unresectable metastatic Uveal Melanoma on May 4, 2024, in the journal Annals of Surgical Oncology.
"We continue to make steady progress in the training and activation of new treatment centers which is a testament to both the emerging role of HEPZATO in the treatment of patients with metastatic uveal melanoma and the capability and dedication of our field force," said Gerard Michel, Delcath's Chief Executive Officer. "We are committed to expanding the availability of HEPZATO to patients in need and I am confident that we will reach our goal of 20 treating centers by the end of 2024."
First Quarter 2024 Results
Cash, cash equivalents and investment totaled
Total revenue for the quarter ended March 31, 2024 was
Research and development expenses for the quarter ended March 31, 2024, were
Selling, general and administrative expenses for the quarter ended March 31, 2024, were
Conference Call Information
To participate in this event, dial in approximately 5 to 10 minutes before the beginning of the call.
Event Date: | Tuesday, May 14, 2024 |
Time: | 8:30 AM Eastern Time |
Participant Numbers | |
Toll Free: | 1-833-630-1960 |
International: | 1-412-317-1841 |
Webcast: | |
Conference Replay | |
US Toll Free: | 1-877-344-7529 |
International Toll: | 1-412-317-0088 |
Replay Access Code: | 9490444 |
End Date: | May 21, 2024 |
About Delcath Systems, Inc., HEPZATO KIT and CHEMOSAT
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
In
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. 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.
Investor Relations Contact:
Westwicke Partners
investorrelations@delcath.com
DELCATH SYSTEMS, INC. | |||
Condensed Consolidated Balance Sheets | |||
(Unaudited) | |||
(in thousands, except share and per share data) | |||
March 31, | December 31, | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 11,760 | $ 12,646 | |
Restricted cash | 50 | 50 | |
Short-term investments | 15,360 | 19,808 | |
Accounts receivable, net | 1,564 | 241 | |
Inventory | 3,634 | 3,322 | |
Prepaid expenses and other current assets | 1,278 | 1,091 | |
Total current assets | 33,646 | 37,158 | |
Property, plant and equipment, net | 1,336 | 1,352 | |
Right-of-use assets | 1,117 | 103 | |
Total assets | $ 36,099 | $ 38,613 | |
Liabilities and Stockholders' Equity | |||
Current liabilities | |||
Accounts payable | $ 1,487 | $ 1,012 | |
Accrued expenses | 4,395 | 5,249 | |
Lease liabilities, current | 102 | 37 | |
Loan payable | 2,408 | 5,239 | |
Convertible notes payable | 4,949 | 4,911 | |
Total current liabilities | 13,341 | 16,448 | |
Warrant liability | 6,160 | 5,548 | |
Lease Liabilities, non-current | 1,016 | — | |
Other liabilities, non-current | 962 | 840 | |
Total liabilities | 21,479 | 22,836 | |
Commitments and contingencies | |||
Stockholders' equity | |||
Preferred stock, | — | — | |
Common stock, | 254 | 228 | |
Additional paid-in capital | 530,482 | 520,576 | |
Accumulated deficit | (516,273) | (505,162) | |
Accumulated other comprehensive loss | 157 | 135 | |
Total stockholders' equity | 14,620 | 15,777 | |
Total liabilities and stockholders' equity | $ 36,099 | $ 38,613 | |
DELCATH SYSTEMS, INC. | |||
Condensed Consolidated Statements of Operations and Comprehensive Loss | |||
(Unaudited) | |||
(in thousands, except share and per share data) | |||
Three months ended March 31, | |||
2024 | 2023 | ||
Product revenue | $ 3,139 | $ 597 | |
Other revenue | — | — | |
Total revenues | 3,139 | 597 | |
Cost of goods sold | (903) | (181) | |
Gross profit | 2,236 | 416 | |
Operating expenses: | |||
Research and development expenses | 3,700 | 4,576 | |
Selling, general and administrative expenses | 8,814 | 4,165 | |
Total operating expenses | 12,514 | 8,741 | |
Operating loss | (10,278) | (8,325) | |
Change in fair value of warrant liability | (612) | — | |
Interest expense, net | (199) | (688) | |
Other (expense) income | (22) | 13 | |
Net loss | (11,111) | (9,000) | |
Other comprehensive (loss) income: | |||
Unrealized gain on investments | 8 | — | |
Foreign currency translation adjustments | 14 | 19 | |
Total comprehensive loss | $ (11,089) | $ (8,981) | |
Common share data: | |||
Basic and diluted loss per common share | $ (0.45) | $ (0.77) | |
Weighted average number of basic and diluted shares outstanding | 24,887,180 | 11,622,384 | |
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SOURCE Delcath Systems, Inc.
FAQ
What were Delcath Systems' Q1 2024 earnings?
What is the revenue increase for Delcath Systems in Q1 2024 compared to Q1 2023?
How many new treatment centers did Delcath Systems activate in Q1 2024?
What is Delcath Systems' goal for U.S. center activations by the end of 2024?
How much did Delcath Systems raise in the recent private placement transaction?
What are Delcath Systems' cash reserves as of March 31, 2024?
Who is the new Chief Operating Officer of Delcath Systems?
What is the significance of the J-code received by Delcath Systems for HEPZATO KIT?
What were Delcath Systems' research and development expenses for Q1 2024?
Why did Delcath Systems' selling, general, and administrative expenses increase in Q1 2024?
