On August 13, 2020 Delcath Systems, Inc. (NASDAQ: DCTH), an interventional oncology company focused on the treatment of rare primary and metastatic cancers of the liver, announces financial results for the quarter ended June 30, 2020, and will host an earnings call on August 13, 2020 at 4:30 p.m.

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Recent Corporate Highlights:

Completed a $22 million public offering, led by healthcare-focused investors, to allow completion of the Company’s Phase 3 registration trial of Melphalan/HDS in liver-dominant metastatic ocular melanoma (mOM) and refiling of a New Drug Application (NDA) with FDA.

Uplisted to the NASDAQ Capital Market.

Announced management and board transitions.

Initiated pre-commercialization work for Melphalan/HDS in mOM.

Initial physician and payer surveys have highlighted the high-unmet medical need in mOM as well as the expectation of ultra-orphan oncology pricing dynamic for Melphalan/HDS.
Expected Milestones:

Late 2020/early 2021 – COVID-19 has affected clinical trials globally, including our Phase 3 FOCUS registration trial for Melphalan/HDS in liver-dominant ocular melanoma. Importantly, however, throughout these months, the trial protocol remained intact and ongoing trial patients continued to receive treatments. While access to clinical sites for data entry and monitoring was severely restricted during the quarter, the majority of the study’s European and US sites began to ease these restrictions subsequent to quarter end. In addition, we implemented a number of steps to increase data monitoring efforts in light of the impact of the pandemic. Based on the current trajectory of site access, management is focused on delivering top-line results by year-end 2020/early 2021.

Mid-2021– New Drug Application (NDA) submission of Melphalan/HDS in liver-dominant mOM. During the quarter management took steps to ensure progress on key elements of our NDA submission. Those included, among other things, required non-clinical studies and Chemistry, Manufacturing and Controls (CMC) work to ensure that any potential COVID-19 clinical data delays would not affect our timelines to NDA submission.

Initiation of additional clinical studies for Melphalan/HDS in liver-dominant orphan cancers of high unmet-medical need. During the quarter, in-line with the overall restructuring efforts, management initiated a comprehensive review of the multitude of potential pipeline opportunities available for the Company to pursue, as potential label-expansion, beyond mOM. The analysis comprises available clinical evidence, based on the European commercial experience, where Melphalan/HDS is approved as a device-only configuration under the brand name CHEMOSAT, as well as the potential US commercial opportunity. Based on the conclusions of this analysis Delcath expects to initiate at least one additional clinical development program of Melphalan/HDS in coming quarters.
John Purpura, interim CEO of Delcath commented, "Q2 was a transformational quarter for Delcath. The recent $22 million public offering along with our NASDAQ uplisting have been the culmination of a strategic restructuring achieved over the last year. With $51.5 million raised in the 12-month period ended June 30, 2020, led by fundamental healthcare focused investors, Delcath has been restructured, recapitalized and refocused. Our current cash resources, along with expected cash milestones from our European commercialization partner, medac GmBH, provide us with a sufficient runway through multiple value inflection points. These include completion of our Phase 3 FOCUS trial in metastatic ocular melanoma and the refiling of a New Drug Application (NDA) with FDA by mid-2021."

Mr. Purpura added, "Working towards the possibility of having Melphalan/HDS available as a treatment for mOM patients, who have limited therapeutic options, is Delcath’s top priority. With Melphalan/HDS set for potential FDA approval in the second half of 2021, as the only labelled mOM-specific therapy in the US, Delcath has begun pre-commercialization activities which it intends to accelerate in coming quarters. Initial work has highlighted oncologists’ perceptions of the high-unmet medical need of mOM patients, the potential front-line positioning of Melphalan/HDS in this setting and the expectation of attractive ultra-orphan pricing dynamics for our therapy."

Mr. Purpura concluded, "Interventional Oncology has become, in recent years, an integrated, fast-growing segment of cancer care. We believe that Melphalan/HDS is uniquely positioned as a potentially well differentiated, high-value, interventional oncology treatment paradigm targeting orphan and ultra-orphan indications of high unmet medical need. Beyond mOM, Delcath is currently looking to initiate additional studies in one or more liver-dominant metastatic indications for which Melphalan/HDS could be applicable. We expect the next 12 months to be transformational for Delcath and are looking forward to providing updates on our progress throughout."

Second Quarter 2020 Financial Results:

Income Statement Highlights. Product revenue for the three months ended June 30, 2020 was approximately $262 thousand, compared to $221 thousand for the prior year period from our sales of CHEMOSAT procedures in Europe. Selling, general and administrative expenses were approximately $2.3 million compared to $2.7 million in the prior year quarter. Research and development expenses for the second quarter were $2.2 million compared to $1.7 million in the prior year quarter. Total operating expenses for the second quarter were $4.5 million compared with $4.4 million in the prior year quarter.

We recorded a net loss for the three months ended June 30, 2020, of $4.3 million, compared to a net loss of $6.0 million for the same period in 2019.

Balance Sheet Highlights. At June 30, 2020, we had cash, cash equivalents and restricted cash totaling $16.2 million, as compared to cash, cash equivalents and restricted cash totaling $10.2 million at December 31, 2019 and $1.4 million at June 30, 2019. During the three months ended June 30, 2020 and June 30, 2019, we used $7.9 million and $3.2 million, respectively, of cash in our operating activities. In Q2 we made a number of one-time cash payments not indicative of the usual cash usage trend totaling approximately $3.3 million, including compensation payable subsequent to resignations of executives and a director, and past-due payables.

We believe our cash resources and anticipated milestone payments, are adequate to fund our operating activities into mid-year 2021.

Conference Call Information

To participate in this event, dial approximately 5 to 10 minutes before the beginning of the call. Please ask for the Delcath Second Quarter Conference Call when reaching an operator.