Delcath Systems, Inc. (Nasdaq:
DCTH), an
interventional oncology company focused on the treatment of rare
primary and metastatic cancers of the liver, today reported
business highlights and financial results for the second quarter
ended June 30, 2021.
Recent Business Highlights
During and since the second quarter the company:
- Had positive
efficacy results presented from its FOCUS Phase III trial of
HEPZATO™ KIT (melphalan hydrochloride for injection/hepatic
delivery system) in patients with liver dominant metastatic ocular
melanoma (mOM) at the American Society of Clinical Oncology (ASCO)
Annual Meeting. The oral presentation by the study’s Lead
Investigator, Dr. Jonathan Zager, Chief Academic Officer, Chair,
USF Department of Oncologic Sciences, Moffitt Cancer Center,
included data based on 79 of 91 treated HEPZATO patients showing an
overall response rate of 29.2% with a 95% confidence interval lower
bound of 20%. Given the magnitude by which the lower bound exceeded
the 8.3% prespecified threshold for success, the primary endpoint
of the trial has been met regardless of the outcome of patients who
have not yet been evaluated. Patient level response data were also
presented for this same patient set, indicating that 44% of
evaluable patients in the HEPZATO arm had a 30% or greater
reduction in target tumor lesions at one or more time points versus
17% for patients enrolled in the Best Alternative Care arm.
- Announced that the
United Kingdom’s National Institute for Health and Care Excellence,
has updated its guidance for the Delcath CHEMOSAT® Hepatic
Delivery System for Melphalan (CHEMOSAT) in the treatment of
patients with metastases in the liver from Ocular Melanoma. Under
this designation, private insurance may be more likely to fund
treatment with CHEMOSAT, some regional funding may be more
accessible, and a process is now available to seek national
reimbursement.
- Entered into a
debt facility with Avenue Venture Opportunities Fund, L.P.
providing up to $20 million with an initial $15 million funded at
close
- Was added to the
Russell Microcap® Index. Membership in the Russell Microcap® Index,
which remains in place for one year, means automatic inclusion in
the appropriate growth and value style indexes. FTSE Russell
determines membership for its Russell indexes primarily by
objective, market-capitalization rankings and style
attributes.
“During the quarter we announced new patient level data at ASCO
that further strengthens the case that HEPZATO would offer a
compelling clinical benefit to patients were it approved by the
FDA,” said Gerard Michel, CEO of Delcath. “With additional capital
from the just closed transaction with Avenue Venture Opportunities
Fund, Delcath has the required resources to accomplish its
strategic priorities – the filing of the HEPZATO NDA in early 2022,
preparing for the subsequent US launch when approved, and expanding
the development of HEPZATO into additional areas of high unmet
need.”
First Quarter 2021 Financial Results:
Income Statement Highlights.
Product revenue for the three months ended June 30, 2021 was
approximately $536 thousand, compared to $379 thousand for the
prior year period from our sales of CHEMOSAT procedures in Europe.
Selling, general and administrative expenses were approximately
$3.3 million compared to $2.3 million in the prior year quarter.
Research and development expenses for the quarter were $3.5 million
compared to $2.2 million in the prior year quarter. Total operating
expenses for the quarter were $6.8 million compared with $4.5
million in the prior year quarter. Expenses for the quarter
included approximately $1.6 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 June
30, 2021, of $6.4 million, compared to a net income of $4.3 million
for the same period in 2020
Balance Sheet Highlights.
On June 30, 2021, we had cash, cash equivalents and restricted
cash totaling $19.4 million, as compared to cash, cash equivalents
and restricted cash totaling $16.2 million at June 30, 2020. During
the three months ended June 30, 2021 and June 30, 2020, we used
$11.7 million and $13.1 million, respectively, of cash in our
operating activities.
On August 6th, we closed a $20 million venture debt financing
transaction with Avenue Venture Opportunities Fund ("Avenue Venture
Fund"). The initial tranche of the Loan is $15 million, including
$4 million which has been funded into a restricted account and will
be released upon achievement of certain milestones. The Company may
request an additional $5 million of gross proceeds between October
1, 2022 and December 31, 2022, which will be funded at Avenue
Venture Fund’s discretion.
Also, on August 6th, 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 will be
contained in the company's Current Report on Form 8-K to be filed
with the Securities and Exchange Commission.
Conference Call Information
To participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call.
Date: August 10, 2021Time: 8:30 AM Eastern TimeToll Free:
877-545-0523; Entry Code: 148562International: 973-528-0016; Entry
Code: 148562
The call will also be available over the Internet and accessible
at:
https://www.webcaster4.com/Webcast/Page/2475/42376
About Delcath Systems, Inc.
Delcath Systems, Inc. is an interventional oncology company
focused on the treatment of primary and metastatic liver cancers.
The company’s proprietary percutaneous hepatic perfusion (PHP)
system is designed to administer high-dose chemotherapy to the
liver while controlling systemic exposure and associated side
effects. In the United States, the PHP system is being developed
under the tradename HEPZATO KIT (melphalan hydrochloride for
injection/hepatic delivery system), or HEPZATO, and is considered a
combination drug and device product regulated by the United States
Food and Drug Administration (FDA).
In Europe, the PHP system is regulated as a Class IIb medical
device and is approved for sale under the trade name CHEMOSAT
Hepatic Delivery System for Melphalan, or CHEMOSAT, where it has
been used at major medical centers to treat a wide range of cancers
of the liver. CHEMOSAT is being marketed under an exclusive
licensing agreement with medac GmbH, a privately held
multi-national pharmaceutical company headquartered in Germany that
specializes in the treatment and diagnosis of oncological,
urological and autoimmune diseases.
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 news release contains forward-looking
statements, which are subject to certain risks and uncertainties
that can cause actual results to differ materially from those
described. Factors that may cause such differences include, but are
not limited to, uncertainties relating to: the timing and results
of the Company’s clinical trials, including without limitation
the mOM and ICC clinical trial programs, as well as the
receipt of additional data and the performance of additional
analyses with respect to the mOM clinical trial, our determination
whether to continue the ICC clinical trial program or to focus on
other alternative indications, and timely monitoring and treatment
of patients in the global Phase 3 mOM clinical trial and the impact
of the COVID-19 pandemic on the completion of our clinical trials;
the impact of the presentations at major medical conferences and
future clinical results consistent with the data presented;
approval of Individual Funding Requests for reimbursement of the
CHEMOSAT procedure; the impact, if any, of ZE reimbursement on
potential CHEMOSAT product use and sales in Germany; clinical
adoption, use and resulting sales, if any, for the CHEMOSAT system
to deliver and filter melphalan in Europe including the key markets
of Germany and the UK; the Company’s ability to successfully
commercialize the HEPZATO KIT/CHEMOSAT system and the potential of
the HEPZATO KIT/CHEMOSAT system as a treatment for patients with
primary and metastatic disease in the liver; our ability to obtain
reimbursement for the CHEMOSAT system in various markets; approval
of the current or future HEPZATO KIT/CHEMOSAT system for delivery
and filtration of melphalan or other chemotherapeutic agents for
various indications in the U.S. and/or in foreign markets; actions
by the FDA or foreign regulatory agencies; the Company’s ability to
successfully enter into strategic partnership and distribution
arrangements in foreign markets and the timing and revenue, if any,
of the same; uncertainties relating to the timing and results of
research and development projects; and uncertainties regarding the
Company’s ability to obtain financial and other resources for any
research, development, clinical trials and commercialization
activities. These factors, and others, are discussed from time to
time in our filings with the Securities and Exchange Commission.
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.
Contact:
Delcath Investor Relations
Email: investorrelations@delcath.com
Hayden IR
James
Carbonara(646)-755-7412james@haydenir.com
DELCATH SYSTEMS,
INC.Condensed Consolidated Balance
Sheets(Unaudited)(in thousands, except
share and per share data)
|
|
June 30, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
19,274 |
|
|
$ |
28,575 |
|
Restricted cash |
|
|
151 |
|
|
|
181 |
|
Accounts receivable, net |
|
|
75 |
|
|
|
57 |
|
Inventories |
|
|
1,221 |
|
|
|
855 |
|
Prepaid expenses and other current assets |
|
|
2,185 |
|
|
|
2,670 |
|
Total current assets |
|
|
22,906 |
|
|
|
32,338 |
|
Property, plant and equipment, net |
|
|
1,361 |
|
|
|
1,351 |
|
Right-of-use assets |
|
|
650 |
|
|
|
946 |
|
Total assets |
|
$ |
24,917 |
|
|
$ |
34,635 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,224 |
|
|
$ |
1,774 |
|
Accrued expenses |
|
|
3,621 |
|
|
|
5,241 |
|
Deferred revenue, current |
|
|
509 |
|
|
|
525 |
|
Lease liabilities, current |
|
|
387 |
|
|
|
495 |
|
Convertible notes payable, current |
|
|
— |
|
|
|
2,000 |
|
Total current liabilities |
|
|
5,741 |
|
|
|
10,035 |
|
Deferred revenue, non-current |
|
|
1,754 |
|
|
|
2,072 |
|
Lease liabilities, non-current |
|
|
263 |
|
|
|
450 |
|
Convertible notes payable, non-current |
|
|
2,000 |
|
|
|
— |
|
Total liabilities |
|
|
9,758 |
|
|
|
12,557 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 11) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value; 10,000,000 shares authorized;
11,707 and 20,631 shares issued and outstanding at June 30, 2021,
and December 31, 2020, respectively |
|
|
— |
|
|
|
— |
|
Common stock, $.01 par value; 40,000,000 shares authorized;
7,349,777 and 5,996,101 shares issued and outstanding at June 30,
2021, and December 31, 2020, respectively |
|
|
74 |
|
|
|
60 |
|
Additional paid-in capital |
|
|
423,660 |
|
|
|
417,449 |
|
Accumulated deficit |
|
|
(408,504 |
) |
|
|
(395,327 |
) |
Accumulated other comprehensive loss |
|
|
(71 |
) |
|
|
(104 |
) |
Total stockholders' equity |
|
|
15,159 |
|
|
|
22,078 |
|
Total liabilities and stockholders' equity |
|
$ |
24,917 |
|
|
$ |
34,635 |
|
|
|
|
|
|
|
|
|
|
DELCATH SYSTEMS,
INC.Condensed Consolidated Statements of
Operations and Comprehensive
Loss(Unaudited)
(in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Product revenue |
$ |
398 |
|
|
$ |
262 |
|
|
$ |
659 |
|
|
$ |
437 |
|
Other revenue |
|
138 |
|
|
|
117 |
|
|
|
265 |
|
|
|
235 |
|
Cost of goods sold |
|
(202 |
) |
|
|
(168 |
) |
|
|
(314 |
) |
|
|
(246 |
) |
Gross profit |
|
334 |
|
|
|
211 |
|
|
|
610 |
|
|
|
426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
3,497 |
|
|
|
2,223 |
|
|
|
7,204 |
|
|
|
5,197 |
|
Selling, general and administrative expenses |
|
3,288 |
|
|
|
2,257 |
|
|
|
6,584 |
|
|
|
4,573 |
|
Total operating expenses |
|
6,785 |
|
|
|
4,480 |
|
|
|
13,788 |
|
|
|
9,770 |
|
Operating loss |
|
(6,451 |
) |
|
|
(4,269 |
) |
|
|
(13,178 |
) |
|
|
(9,344 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of the
warrant liability, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,832 |
) |
Interest expense, net |
|
(40 |
) |
|
|
(52 |
) |
|
|
(81 |
) |
|
|
(88 |
) |
Other income |
|
61 |
|
|
|
46 |
|
|
|
82 |
|
|
|
128 |
|
Net loss |
|
(6,430 |
) |
|
|
(4,275 |
) |
|
|
(13,177 |
) |
|
|
(12,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend for triggering of warrant down round feature |
|
— |
|
|
|
(55 |
) |
|
|
— |
|
|
|
(55 |
) |
Net loss attributable to common stockholders |
$ |
(6,430 |
) |
|
$ |
(4,330 |
) |
|
$ |
(13,177 |
) |
|
$ |
(12,191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,430 |
) |
|
$ |
(4,275 |
) |
|
$ |
(13,177 |
) |
|
$ |
(12,136 |
) |
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(61 |
) |
|
|
(1 |
) |
|
|
33 |
|
|
|
65 |
|
Total other comprehensive loss |
$ |
(6,491 |
) |
|
$ |
(4,276 |
) |
|
$ |
(13,144 |
) |
|
$ |
(12,071 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per common share |
$ |
(0.96 |
) |
|
$ |
(1.90 |
) |
|
$ |
(2.00 |
) |
|
$ |
(10.40 |
) |
Diluted loss per common share |
$ |
(0.96 |
) |
|
$ |
(1.90 |
) |
|
$ |
(2.00 |
) |
|
$ |
(10.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic shares outstanding |
|
6,681,369 |
|
|
|
2,273,187 |
|
|
|
6,589,655 |
|
|
|
1,171,994 |
|
Weighted average number of diluted shares outstanding |
|
6,681,369 |
|
|
|
2,273,187 |
|
|
|
6,589,655 |
|
|
|
1,171,994 |
|
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