Delcath Reports 2015 Second Quarter Financial Results

Revenues increase 86% underscoring progress in Europe with commercial adoption of CHEMOSAT® to treat liver cancers

05 Aug, 2015, 08:00 ET from Delcath Systems, Inc.

NEW YORK, Aug. 5, 2015 /PRNewswire/ -- Delcath Systems, Inc. (NASDAQ: DCTH), a specialty pharmaceutical and medical device company focused on oncology with an emphasis on the treatment of primary and metastatic liver cancers, announces financial results for the three and six months ended June 30, 2015. 

Highlights of the second quarter and recent weeks included:

  • Quarterly product revenue of $0.5 million, an increase of nearly 85.7% compared with the second quarter of 2014
  • Total operating expenses decreased by 35.1% to $4.0 million from $6.1 million in the second quarter of 2014
  • Enrollment opened for an intrahepatic cholangiocarcinoma (ICC) cohort of the Company's global Phase 2 trial of Melphalan/HDS in hepatocellular carcinoma
  • Positive data regarding the Delcath Hepatic CHEMOSAT® Delivery System highlighted at ASCO 2015
  • Exceeded 200 commercial treatments performed with CHEMOSAT since the product was launched in Europe
  • Multiple abstracts accepted for presentation at upcoming major medical conferences, including CIRSE, ESMO, and EADO   
  • Benefits of CHEMOSAT therapy to liver cancer patients affirmed by Key Opinion Leaders at European forum
  • Jennifer Simpson, Ph.D., MSN, CRNP named President and CEO
  • Granted U.S. Orphan Drug Designation for Melphalan/HDS for the treatment of  cholangiocarcinoma from the U.S. Food and Drug Administration (FDA)

"We made considerable progress toward achieving our key milestones for 2015 as evidenced by continued revenue growth, increasing procedure volumes and advancement of our clinical development program," said Dr. Simpson.  "We once again achieved record quarterly product revenue with year-over-year and sequential increases that have us already meeting our full-year 2014 sales on a local currency basis.  This growth underscores our commercial progress in key European markets and highlights continued market adoption of CHEMOSAT.

"The opening of enrollment of the ICC cohort of our Phase 2 HCC study was a meaningful milestone as we believe our Melphalan/HDS treatment may offer significant clinical benefit for ICC patients who face limited treatment options.  A positive efficacy signal may provide a regulatory path to a U.S. registration trial in this indication, and consolidated safety data from the HCC and ICC cohorts will offer valuable information for us to provide to the FDA. Our recent receipt of orphan drug designation from the FDA for melphalan for the treatment of cholangiocarcinoma, which includes ICC, highlights the medical need for viable treatments in this indication.

"We continue to advance our plans for a global pivotal Phase 3 clinical trial in ocular melanoma (OM) that has metastasized to the liver with overall survival as the primary endpoint.  We hope to initiate this trial by the end of 2015.

"The positive feedback from the three-day Key Opinion Leader Forum we convened with leading clinicians from across Europe who are using CHEMOSAT was very encouraging.  We look forward to these favorable findings being published in a white paper in a peer-reviewed journal.

"We are pleased with the meaningful progress made this quarter. With the additional resources secured through our recent public offering, we are well positioned to achieve several critical milestones during the second half of 2015," concluded Dr. Simpson. 

Second Quarter Financial Results

Total revenue for the second quarter of 2015 of $0.5 million increased 85.7% from $0.3 million for the second quarter of 2014.  Selling, general and administrative expenses during the second quarter of 2015 were $2.5 million, a decrease of $2.1 million or 45.6% from $4.6 million for the same period in 2014.

Total operating expenses for the second quarter of 2015 decreased by 35.1% to $4.0 million from $6.1 million for the same period in 2014. This decrease reflects a reduction in severance and compensation-related expenses following significant workforce restructurings throughout 2014 and into 2015, as well as a reduction in facility expenses following sub-leases of its 810 Seventh Ave location in 2014. 

The Company recorded a net loss for the second quarter of 2015 of $3.7 million, a decrease of $0.9 million or 19.6%, compared with a net loss of $4.6 million for the same period in 2014. This decrease is primarily due to a $2.1 million reduction in operating expenses, a $0.1 million improvement in gross profit and a $1.3 million change in the fair value of the warrant liability, a non-cash item.

First Half Financial Result

Total revenue for the first half of 2015 of $0.9 million increased 62.2% from $0.6 million for the first half of 2014.  Selling, general and administrative expenses during the first half of 2015 were $5.5 million, a decrease of $2.9 million or 34.1% from $8.4 million for the same period in 2014. 

Total operating expenses for the first half of 2015 decreased by 29.9% to $8.0 million from $11.4 million for the same period in 2014. This decrease reflects a reduction in severance and compensation-related expenses following significant workforce restructurings throughout 2014 and into 2015, as well as a reduction in facility expenses following sub-leases of its 810 Seventh Ave location in 2014.

The Company recorded a net loss for the first half of 2015 of $7.2 million, a decrease of $2.7 million or 27.2% compared with a net loss of $9.9 million for the same period in 2014. This decrease is primarily due to a $3.4 million reduction in operating expenses, a $0.2 million improvement in gross profit and a $0.9 million change in the fair value of the warrant liability, a non-cash item.

Balance Sheet Highlights

Cash and cash equivalents as of June 30, 2015 were $14.1 million, compared with $20.5 million as of December 31, 2014. During the first six months of 2015, net cash used in operating activities was $9.0 million.

About Delcath Systems

Delcath Systems, Inc. is a specialty pharmaceutical and medical device company focused on oncology with a principal focus on the treatment of primary and metastatic liver cancers. Our proprietary Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) is designed to administer high-dose chemotherapy to the liver while controlling systemic exposure. In April 2012 we obtained authorization to affix a CE Mark to our second-generation system, which is currently marketed in Europe as a device under the trade name Delcath Hepatic CHEMOSAT® Delivery System for Melphalan (CHEMOSAT). In the U.S. Melphalan/HDS is considered a combination drug and device product, and is regulated as a drug by the U.S. Food and Drug Administration (FDA). Melphalan/HDS has not been approved for sale in the U.S. We have commenced a global Phase 2 clinical trial in Europe and the U.S. to investigate Melphalan/HDS for the treatment of primary liver cancer (hepatocellular carcinoma or HCC), and have expanded the study to include a cohort of patients with intrahepatic cholangiocarcinoma (ICC).  We are also advancing plans to conduct a global Phase 3 trial in ocular melanoma that has metastasized to the liver.

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 HCC, ICC  and OM  clinical trial programs,  timely enrollment and treatment of patients in the global Phase 2 HCC and ICC clinical trial, FDA and European Health Authority approval of the global Phase 3 OM clinical trial protocol, IRB or ethics committee clearance of the Phase 2 HCC/ICC  and/or Phase 3 OM  protocols from  participating sites and the timing of site activation and subject enrollment in each trial, acceptance of the Phase 3 manuscript at a leading peer reviewed medical journal and the impact of publication to support the Company's business, future clinical results consistent with the data presented, approval of Individual Funding Requests for reimbursement of the CHEMOSAT procedure, the impact, if any  of Value 4 status 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 Melphalan HDS/CHEMOSAT system and the potential of the Melphalan/HDS/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, the Company's ability to satisfy the requirements of the FDA's Complete Response Letter and provide the same in a timely manner, approval of the current or future Melphalan/HDS/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 other 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, our ability to maintain NASDAQ listing, 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 Information: Anne Marie Fields LHA 212-838-3777 afields@lhai.com

-Tables to Follow-

 

DELCATH SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 June 30, 

December 31,

2015

2014

(Unaudited)

Assets:

Current assets

Cash and cash equivalents 

$      14,053

$         20,469

Accounts receivables, net

460

174

Inventories

281

349

Prepaid expenses and other current assets

1,097

974

Total current assets

15,891

21,966

Property, plant and equipment, net

1,498

1,798

Total assets

$      17,389

$         23,764

Liabilities and Stockholders' Equity:

Current liabilities

Accounts payable

$           528

$              748

Accrued expenses

2,060

3,603

Warrant liability

761

225

Total current liabilities

3,349

4,576

Other non-current liabilities

929

1,043

Total liabilities

4,278

5,619

Commitments and Contingencies

Stockholders' equity

Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares    issued and outstanding at June 30, 2015 and December 31, 2014,    respectively

 Common stock, $.01 par value; 170,000,000 shares authorized; 12,991,707and    9,740,397 shares issued and 12,385,016 and 9,708,841 shares outstanding    at June 30, 2015 and December 31, 2014, respectively 

130

97

Additional paid-in capital

266,721

264,592

Accumulated deficit

(253,702)

(246,513)

Treasury stock, at cost; 1,757 shares at June 30, 2015 and December 31,    2014, respectively

(51)

(51)

Accumulated other comprehensive income

13

20

Total stockholders' equity

13,111

18,145

Total liabilities and stockholders' equity 

$      17,389

$         23,764

 

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,

2015

2014

2015

2014

Revenue

$           466

$         251

$           910

$         561

Cost of goods sold

137

66

$           270

160

Gross profit

329

185

640

401

Operating expenses:

Selling, general and administrative

2,502

4,597

5,542

8,416

Research and development

1,450

1,492

2,430

2,949

Total operating expenses

3,952

6,089

7,972

11,365

Operating loss

(3,623)

(5,904)

(7,332)

(10,964)

Change in fair value of the warrant liability, net

(48)

1,297

161

1,092

Other income (expense) and interest income (expense)

(28)

7

(18)

(6)

Net loss

$      (3,699)

$    (4,600)

$      (7,189)

$    (9,878)

Other comprehensive income (loss): 

Foreign currency translation adjustments

$               7

$         (20)

$             (7)

$         (22)

Comprehensive loss

$      (3,692)

$    (4,620)

$      (7,196)

$    (9,900)

Common share data:

Basic loss per common share

$        (0.30)

$      (0.49)

$        (0.62)

$      (1.06)

Diluted loss per common share

$        (0.30)

$      (0.52)

$        (0.62)

$      (1.08)

Weighted average number of basic common shares outstanding

12,241,154

9,426,169

11,552,572

9,363,123

Weighted average number of diluted common shares outstanding

12,241,154

9,480,933

11,552,572

9,462,717

 

SOURCE Delcath Systems, Inc.



RELATED LINKS

http://www.delcath.com