On August 20, 2019 Delcath Systems, Inc. ("Delcath," the "Company", "we", "our" or "us" (OTCQB: DCTH) reported that it has closed on its previously announced private placement with gross proceeds of $9.5 million at a combined price of $1,000 per Unit (Press release, Delcath Systems, AUG 20, 2019, View Source [SID1234538880]). Each Unit consists of one preferred share initially convertible into 16,667 shares of common stock at an initial conversion price of $0.06 per share and a common stock purchase warrant. Each whole warrant entitles the holder to purchase one share of common stock at an initial exercise price of $0.06 for a period of five years from the date of the Company’s anticipated reverse stock split. The Company has now raised a total of $29.5 million since July 2019.
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The offering is being led by fundamental healthcare investors, including Rosalind Advisors and Altium Capital.
Commenting on the announcement, Jennifer K. Simpson, Ph.D., MSN, CRNP President and CEO of Delcath stated, "With this transaction completed, we have a cash runway beyond top line data, a clean capitalization table and the foundation for a possible path to NASDAQ listing. Looking forward, we are positioned for success through multiple value inflection points including full enrollment, top line data and NDA filing – targeted for Q4 2019, 1H 2020 and Q4 2020, respectively, in our registration trial for the treatment of metastatic Ocular Melanoma (mOM). mOM is a devastating disease of high unmet-need for which there is no approved standard-of-care in the United States and for which the Company has orphan drug designation."
Dr. Simpson added, "the management team has laid the foundation for a leading interventional oncology platform company and now has the resources, capital structure and operational resources to move forward its long-term priorities and growth plans, to maximize shareholder value."
The recapitalization enables Delcath to pursue its business plan to:
Develop therapies for cancers of the liver with high unmet medical need and no established standards of care, addressing a multi-billion-dollar opportunity in the United States and Europe;
Expand development of our platform to other indications, chemotherapies and organs; and;
Support our commercial partner medac in Europe (where CHEMOSTAT is approved) to maximize the opportunities set out in our December 2018 commercialization agreement.
The company recently announced the addition of John R. Sylvester to its Board of Directors. Mr. Sylvester is currently Chief Commercial Officer at BTG PLC, an international specialist healthcare company that develops and commercializes products targeting critical care, cancer and other disorders. The quality of BTG’s interventional medicine business played an integral part in its sale to Boston Scientific for $4.2 billion. The Company intends to leverage John’s expertise and experience in the commercialization of new medical technologies as Delcath prepares to enter US and ex-US markets.
Dr. Simpson concluded by stating, "I would like to thank the investors who took the time to assess this incredible opportunity and as a result have recognized the substantial value of Delcath’s assets, technology and clinical programs. Management and the Board are excited to work with our team of clinicians and key opinion leaders to make Melphalan/HDS available as a treatment option to improve patients’ lives and outcomes."
Roth Capital Partners acted as the sole placement agent for the offering. After the placement agent fees and estimated offering expenses payable by the Company, the Company has received net proceeds of approximately $8.6 million. The offering closed on Aug 19, 2019.
The securities offered in the private placement have not been registered under the Securities Act of 1933, as amended or applicable under state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company has agreed to file a resale registration statement on Form S-1 with the Securities and Exchange Commission by August 21, 2019 for purposes of registering the resale of the shares of common stock issuable upon conversion of the preferred shares and upon exercise of the warrants issued in the private placement.
This notice does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.