On November 9, 2021 Delcath Systems, Inc. (Nasdaq: DCTH), an interventional oncology company focused on the treatment of rare primary and metastatic cancers of the liver, reported business highlights and financial results for the third quarter ended September 30, 2021 (Press release, Delcath Systems, NOV 9, 2021, View Source [SID1234595228]).
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Recent Business Highlights
During and since the third quarter Delcath:
Entered a debt facility with Avenue Venture Opportunities Fund, L.P. providing up to $20 million with an initial $15 million funded at closing,
Submitted to and received approval from the FDA for an expanded access protocol for the use of HEPZATO Kit (melphalan hydrochloride for injection/hepatic delivery system) in the treatment of patients with liver dominant metastatic ocular melanoma,
Updated guidance of the Class 2 resubmission of the NDA to mid-year from the end of the first quarter,
Hired 3 senior executives in clinical operations, regulatory and medical affairs to support the resubmission of the NDA and further clinical development of HEPZATO, and
Announced it will host a comprehensive Investor Update event on Thursday, December 2nd, from 10:00am ET – 1:00pm ET covering FOCUS trial results as well as development plans for the use of HEPZATO in the treatment of patients with intrahepatic cholangiocarcinoma and colorectal cancer.
In addition, during the third quarter independent investigators:
Presented three abstracts on the use of Chemosat Hepatic Delivery System with Melphalan in the treatment of metastatic ocular melanoma (mOM) at the 2021 Cardiovascular and Interventional Radiological Society of Europe conference (CIRSE) including,
Safety and toxicity of combining hepatic percutaneous perfusion with ipilimumab plus nivolumab in advanced uveal melanoma: phase 1b of the CHOPIN Trial1
Long-term results of percutaneous hepatic perfusion with melphalan in patients with unresectable liver metastases from uveal melanoma: a multicenter retrospective study2
Safety and efficacy of chemosaturation with percutaneous hepatic perfusion of melphalan for metastatic uveal melanoma: an 8-year retrospective study of 250 interventions in 81 patients3
Published Repeated percutaneous hepatic perfusion with melphalan can maintain long-term response in patients with liver cancers4 in the journal Cardiovascular and Interventional Radiology.
"It’s very exciting to see the initial results of the CHOPIN Trial. These early results in the first trial to combine percutaneous hepatic perfusion with combination immunotherapy show promise with no dose limiting toxicities observed to date. The significant disease control and repeatability of the procedure with limited cumulative toxicity observed in these recent publications is consistent with what we have seen documented from other institutions," said Dr. Johnny John, SVP Clinical Operations and Medical Affairs.
"During the quarter we strengthened our balance sheet and added senior personnel to the Delcath team," said Gerard Michel, CEO of Delcath. "With the additional capital and senior leadership, Delcath has the required resources to accomplish its strategic priorities – the filing of the HEPZATO NDA in mid-2022, preparing for the subsequent US launch when approved, and expanding the development of HEPZATO into additional areas of high unmet need."
Financial Results:
Income Statement Highlights.
Product revenue for the three months ended September 30, 2021 was approximately $522 thousand, compared to $466 thousand for the prior year period from our sales of CHEMOSAT procedures in Europe. Selling, general and administrative expenses were approximately $4.0 million compared to $2.0 million in the prior year quarter. Research and development expenses for the quarter were $3.0 million compared to $3.3 million in the prior year quarter. Total operating expenses for the quarter were $7.0 million compared with $5.3 million in the prior year quarter. Expenses for the quarter included approximately $2.5 million of stock option expense compared to no stock option expense in the prior year quarter.
The Company recorded a net loss for the three months ended September 30, 2021, of $7.1 million, compared to a net loss of $5.0 million for the same period in 2020.
Balance Sheet Highlights.
On September 30, 2021, we had cash, cash equivalents and restricted cash totaling $29 million, as compared to cash, cash equivalents and restricted cash totaling $11.1 million at September 30, 2020. During the three months ended September 30, 2021 and September 30, 2020, we used $16.2 million and $17.8 million, respectively, of cash in our operating activities.
On August 6, 2021 we closed a $20 million venture debt financing transaction with Avenue Venture Opportunities Fund, L.P. ("Avenue Venture Fund"), at which time an initial $15 million tranche of the loan was funded, including $4 million funded into a restricted account to be released upon achievement of certain milestones. The Company may request an additional $5 million tranche of the loan between October 1, 2022 and December 31, 2022, the funding of which will be at Avenue Venture Fund’s discretion.
Also, on August 6, 2021, we amended two existing convertible notes through an extension of the term of the notes until 2024 and lowered the conversion factor in consideration for the notes becoming subordinate to the Avenue Venture Fund debt.
Additional details concerning the Avenue Venture Fund facility and modification of the existing convertible notes are contained in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 11, 2021.
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