Delcath Systems Reports Fourth Quarter and Full Year 2023 Results and Provides Business Update
- Delcath Systems, Inc. increases its 2024 Treatment Site Activation Guidance to 20 sites.
- The company reports recent business highlights and financial results for the fourth quarter and full year ended December 31, 2023.
- Delcath achieved significant milestones, including the first commercial use of HEPZATO KIT™ and site activations.
- The company updated its site activation guidance to a total of 20 active sites by the end of 2024.
- Delcath received CMS approval for a product-specific J-code and transitional pass-through payment status for HEPZATO.
- The company finalized its patient access program and launched websites to support the commercial launch of HEPZATO KIT.
- Delcath raised $7.0 million in a private placement transaction with accredited investors.
- Martha S. Rook, Ph.D., was appointed as Chief Operating Officer.
- Independent investigators published studies on CHEMOSAT® Hepatic Delivery System and clinical studies on quality of life after melphalan hepatic perfusion.
- Delcath had cash equivalents of $32.5 million as of December 31, 2023.
- Total revenue for Q4 and FY 2023 was approximately $0.5 million and $2.1 million, respectively.
- Research and development expenses were $4.7 million for Q4 2023 and $17.5 million for FY 2023.
- Selling, general, and administrative expenses increased to $7.0 million for Q4 2023 and $22.1 million for FY 2023.
- None.
Insights
The recent update from Delcath Systems, Inc. regarding the first commercial use of HEPZATO KIT™ for metastatic uveal melanoma (mUM) and the establishment of a product-specific J-code by CMS marks a significant milestone in interventional oncology. The increased survival rate demonstrated by the CHEMOSAT® Hepatic Delivery System for Melphalan percutaneous hepatic perfusion (PHP) compared to Selective Internal Radiation Therapy (SIRT) in a retrospective comparative study indicates a potential shift in treatment paradigms. From a clinical perspective, the adoption of this technology could lead to a change in standard care practices for liver cancers, which may result in improved patient outcomes and survival rates.
Moreover, the patient access program and the corresponding websites are important for patient education and access to this innovative treatment. The successful completion of preceptorships and the planned activation of 20 treatment sites by year-end suggest an aggressive expansion strategy that could enhance patient reach. However, the long-term success of this treatment will depend on continued positive clinical outcomes and cost-effectiveness analyses compared to existing treatments.
From a financial standpoint, Delcath's recent private placement raising $7.0 million, primarily from existing investors and senior management, signals confidence in the company's future prospects. The funding is critical for supporting the commercialization efforts of HEPZATO KIT™ in the U.S. market. However, the reported revenues show a slight decrease year-over-year, which may raise concerns among stakeholders regarding the current market penetration and revenue growth.
The allocation of resources towards marketing and commercial personnel, as evidenced by the increased selling, general and administrative expenses, is a strategic move to bolster the commercial launch. The company's cash reserves, bolstered by the recent financing, will be instrumental in sustaining operations. Investors should monitor the execution of the commercial strategy and the subsequent impact on revenue generation in the coming quarters.
Delcath's strategic focus on increasing treatment site activations and securing a CMS J-code for HEPZATO is a positive development for market penetration. The J-code facilitates smoother billing processes for healthcare providers, potentially accelerating adoption. The aggressive training and activation of new sites are indicative of a strong go-to-market strategy, which could lead to increased market share in the interventional oncology space. However, the market response to HEPZATO KIT™ and the competitive landscape will be key determinants of the company's performance. It will be important to track how quickly and effectively Delcath can convert site activations into tangible sales growth, as well as how the oncology community responds to the published clinical data.
Increases 2024 Treatment Site Activation Guidance to 20 Sites
Recent Business Highlights
During and since the fourth quarter, Delcath:
- Announced the first commercial use of HEPZATO KIT™ for the treatment of metastatic uveal melanoma (mUM) at Moffitt Cancer Center;
- Activated three treating sites which are fully trained to treat commercial patients with a fourth expected to be active before the end of the first quarter and an additional three sites expected to become active in the first few weeks of the second quarter of 2024;
- Updated site activation guidance from 15 active sites to a total of 20 active sites by the end of 2024;
- Received notification that a permanent, product-specific J-code (J9248) and transitional pass-through payment status for HEPZATO, was established by the Centers for Medicare & Medicaid Services (CMS) and will become effective on April 1, 2024;
- Finalized its patient access program and launched websites relating to the HEPZATO KIT, including HEPZATOKIT.com, HEPZATOKITREMS.com, and HEPZATOKITACCESS.com, to support the commercial launch;
- Raised
$7.0 million - Appointed Martha S. Rook, Ph.D as Chief Operating Officer on March 18, 2024. Ms. Rook is an experienced industry leader who brings more than 25 years of academic and industry experience in molecular biology, diagnostics development, biologics process development and combination products manufacturing; and
- Announced publication by independent investigators of:
- A retrospective comparative study of CHEMOSAT® Hepatic Delivery System for Melphalan percutaneous hepatic perfusion (PHP) and Selective Internal Radiation Therapy (SIRT) citing a statistically significant difference in median overall survival with 301 days for SIRT and 516 days for PHP; and
- A clinical study entitled "Quality of Life After Melphalan Hepatic Perfusion for Uveal Melanoma" in which the authors concluded utilizing Delcath's CHEMOSAT to administer high-dose melphalan to the liver is well tolerated by patients and does not negatively affect their quality of life.
"We have made tremendous progress since the January launch of HEPZATO KIT in the US," said Gerard Michel, Delcath's Chief Executive Officer. "We have successfully secured a product specific J-Code and, with over 90 preceptorships completed by healthcare professionals across approximately 20 institutions in the US, are on track to train and activate 20 sites by year end. Furthermore, we have strengthened our balance sheet with additional investment from senior management and existing investors. I am proud of the team's success in providing access to a new treatment for patients suffering from metastatic uveal melanoma."
Fourth Quarter and Full Year 2023 Results
Cash, cash equivalents and investment totaled
Total revenue for the quarter and year-ended December 31, 2023, was approximately
Research and development expenses for the quarter and year-ended December 31, 2023, were
Selling, general and administrative expenses for the quarter and year-ended December 31, 2023, increased to
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:
Ben Shamsian
Lytham Partners
646-829-9701
shamsian@lythampartners.com
DELCATH SYSTEMS, INC. Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data) | |||
December 31, | December 31, | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 12,646 | $ 7,671 | |
Restricted cash | 50 | 4,151 | |
Short-term investments | 19,808 | — | |
Accounts receivable, net | 241 | 366 | |
Inventories | 3,322 | 1,998 | |
Prepaid expenses and other current assets | 1,091 | 1,969 | |
Total current assets | 37,158 | 16,155 | |
Property, plant and equipment, net | 1,352 | 1,422 | |
Right-of-use assets | 103 | 285 | |
Total assets | $ 38,613 | $ 17,862 | |
Liabilities and Stockholders' Equity (Deficit) | |||
Current liabilities | |||
Accounts payable | $ 1,012 | $ 2,018 | |
Accrued expenses | 5,249 | 4,685 | |
Lease liabilities, current | 37 | 186 | |
Loan payable, current | 5,239 | 7,846 | |
Convertible notes payable, current | 4,911 | — | |
Total current liabilities | 16,448 | 14,735 | |
Warrant Liability | 5,548 | — | |
Other liabilities, non-current | 840 | 1,144 | |
Loan payable, non-current | — | 3,070 | |
Convertible notes payable, non-current | — | 4,772 | |
Total liabilities | 22,836 | 23,721 | |
Commitments and contingencies | |||
Stockholders' equity (deficit) | |||
Preferred stock, | — | — | |
Common stock, | 228 | 100 | |
Additional paid-in capital | 520,576 | 451,608 | |
Accumulated deficit | (505,162) | (457,484) | |
Accumulated other comprehensive income (loss) | 135 | (83) | |
Total stockholders' equity (deficit) | 15,777 | (5,859) | |
Total liabilities and stockholders' equity | $ 38,613 | $ 17,862 | |
DELCATH SYSTEMS, INC. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (in thousands, except share and per share data) | |||||||
Three months ended December 31, | Year ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Product revenue | $ 539 | $ 639 | $ 2,065 | $ 2,548 | |||
Other revenue | — | — | — | 171 | |||
Total revenues | 539 | 639 | 2,065 | 2,719 | |||
Cost of goods sold | (171) | (237) | (635) | (686) | |||
Gross profit | 368 | 402 | 1,430 | 2,033 | |||
Operating expenses: | |||||||
Research and development expenses | 4,709 | 4,431 | 17,502 | 18,583 | |||
Selling, general and administrative expenses | 6,963 | 3,826 | 22,110 | 17,303 | |||
Total operating expenses | 11,672 | 8,257 | 39,612 | 35,886 | |||
Operating loss | (11,304) | (7,855) | (38,182) | (33,853) | |||
Change in fair value of warrant liability | 226 | — | (7,998) | — | |||
Interest income (expense), net | 15 | (645) | (1,439) | (2,685) | |||
Other income (expense) | (73) | 28 | (59) | 30 | |||
Net loss | (11,136) | (8,472) | (47,678) | (36,508) | |||
Other comprehensive income: | |||||||
Unrealized gain (loss) on investments | 157 | — | 157 | — | |||
Foreign currency translation adjustments | 37 | (19) | 61 | 101 | |||
Total other comprehensive loss | $ (10,942) | $ (8,491) | $ (47,460) | $ (36,407) | |||
Common share data: | |||||||
Basic and diluted loss per common share | $ (0.48) | $ (0.86) | $ (2.94) | $ (4.12) | |||
Weighted average number of basic and diluted shares outstanding | 23,088,685 | 9,871,669 | 16,229,931 | 8,864,615 | |||
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SOURCE Delcath Systems, Inc.
FAQ
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