Delcath Reports 2015 Third Quarter Financial Results

Revenues Doubled and Operating Expenses Decreased 23% versus Prior Year

Nov 10, 2015, 08:30 ET from Delcath Systems, Inc.

NEW YORK, Nov. 10, 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 nine months ended September 30, 2015. 

Financial and other highlights for the third quarter of 2015 and recent weeks included:

  • 84% increase in total revenue compared with the third quarter of 2014
  • 23% decrease in total operating expenses compared with the third quarter of 2014
  • Establishment of national reimbursement coverage for CHEMOSAT® procedures in Germany
  • Treatment of first patient in the intrahepatic cholangiocarcinoma (ICC) cohort of the Global Phase 2 HCC/ICC trial program
  • Acceptance for publication of prior Melanoma Phase 3 trial results in the Annals of Surgical Oncology
  • Presentation of data supporting Delcath's Hepatic CHEMOSAT® Delivery System at the CIRSE, ECCO and EADO annual meetings
  • Appointment of Jennifer Simpson, Ph.D., MSN, CRNP, President and CEO of Delcath to the Company's Board of Directors

"Our performance in the third quarter and recent weeks was strong, with significant achievements in all of our commercial and clinical priorities," said Dr. Simpson. "Highlighting the period was the establishment of ZE reimbursement for CHEMOSAT procedures in Germany beginning in 2016, which represents our first national reimbursement mechanism and an important step towards increasing commercialization of CHEMOSAT in Europe. We also continued to drive commercial adoption of CHEMOSAT in other European markets, as evidenced by a nearly 84% increase in third quarter revenue compared with last year.  In fact, our year-to-date revenue has already exceeded full-year 2014 revenue. This performance was achieved while maintaining disciplined expense management, which allowed us to beat our operating expense guidance of $4-5 million per quarter." 

"During the period we also continued to advance our clinical development program, with the first treatment performed in the ICC cohort of our Global Phase 2 HCC/ICC trial program in October and data supporting CHEMOSAT presented at three major medical conferences. Adding to this growing body of evidence will be data from our prior U.S. Phase 3 clinical trial, which will published in the Annals of Surgical Oncology in the coming weeks. Publication of these results will be an important tool that will enhance our efforts to expand reimbursement in certain European countries, and will also help increase awareness of the value of this therapy in Europe."

"We held a productive meeting with the U.S. Food and Drug Administration regarding our plans for a global pivotal Phase 3 clinical trial in patients with ocular melanoma (OM) that has metastasized to the liver, with overall survival as the primary endpoint.  The dialogue was constructive and the FDA is working with Delcath to advance the initiation of this important trial."

"Our team is executing our plan and entirely focused on delivering value for shareholders. We look forward to continuing this momentum through to the end of 2015 and beyond," concluded Dr. Simpson. 

Third Quarter Financial Results

Total revenue for the third quarter of 2015 of $0.4 million increased 83.9% from $0.2 million for the third quarter of 2014.  Selling, general and administrative expenses during the third quarter were $2.3 million, a decrease of $2.2 million or 48.9% from $4.5 million for the same period in 2014.

Total operating expenses for the third quarter of 2015 decreased by 23.1% to $4.0 million from $5.2 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.

The Company recorded a net loss for the third quarter of 2015 of $2.4 million, or $0.12 per share, a decrease of $2.2 million or 47.8%, compared with a net loss of $4.6 million, or $0.48 per share, for the same period in 2014. This decrease is primarily due to a $1.2 million reduction in operating expenses, a $0.1 million improvement in gross profit and a $0.8 million change in the fair value of the warrant liability, a non-cash item.

Nine Month Financial Results

Total revenue for the first nine months of 2015 of $1.3 million increased 62.5% from $0.8 million for the first nine months of 2014.  Selling, general and administrative expenses during the first nine months of 2015 were $7.8 million, a decrease of $5.2 million or 40.0% from $13.0 million for the same period in 2014. 

Total operating expenses for the first nine months of 2015 decreased by 27.7% to $12.0 million from $16.6 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.

The Company recorded a net loss for the first nine months of 2015 of $9.6 million, or $0.67 per share, a decrease of $4.8 million or 33.3% compared with a net loss of $14.4 million, or $1.54 per share, for the same period in 2014. This decrease is primarily due to a $4.7 million reduction in operating expenses, a $0.4 million improvement in gross profit and a $0.2 million change in the fair value of the warrant liability, a non-cash item.

Balance Sheet Highlights

Cash and cash equivalents as of September 30, 2015 were $16.7 million, compared with $20.5 million as of December 31, 2014. During the first nine months of 2015, net cash used in operating activities was $12.2 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. the Melphalan/HDS system 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 the Melphalan/HDS system for the treatment of primary liver cancer (HCC) and intrahepatic cholangiocarcinoma (ICC), and expect to initiate a global Phase 3 trial in ocular melanoma (OM) 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 impact, if any, of publication of the Phase 3 trial manuscript to support the Company's efforts,  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 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, 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 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: Investor Contact: Anne Marie Fields LHA 212-838-3777 afields@lhai.com

-Tables to Follow-

 

DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)

Three months ended September 30,

Nine months ended September 30,

2015

2014

2015

2014

Revenue

$           399

$         217

$        1,308

$         778

Cost of goods sold

90

50

$           360

209

Gross profit

309

167

948

569

Operating expenses:

Selling, general and administrative

2,276

4,538

7,818

12,956

Research and development

1,683

683

4,112

3,632

Total operating expenses

3,959

5,221

11,930

16,588

Operating loss

(3,650)

(5,054)

(10,982)

(16,019)

Change in fair value of the warrant liability, net

1,253

519

1,414

1,612

Other expense and interest expense

(25)

(23)

(43)

(29)

Net loss

$      (2,422)

$    (4,558)

$      (9,611)

$  (14,436)

Other comprehensive loss: 

Foreign currency translation adjustments

$             (4)

$           (6)

$           (12)

$         (27)

Comprehensive loss

$      (2,426)

$    (4,564)

$      (9,623)

$  (14,463)

Common share data:

Basic and diluted loss per common share

$        (0.12)

$      (0.48)

$        (0.67)

$      (1.54)

Weighted average number of basic and diluted common shares outstanding

19,729,374

9,447,887

14,301,105

9,391,793

 

 

DELCATH SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 September 30, 

December 31,

2015

2014

(Unaudited)

Assets:

Current assets

Cash and cash equivalents 

$             16,666

$         20,469

Accounts receivables, net

432

174

Inventories

402

349

Prepaid expenses and other current assets

665

974

Total current assets

18,165

21,966

Property, plant and equipment, net

1,402

1,798

Total assets

$             19,567

$         23,764

Liabilities and Stockholders' Equity:

Current liabilities

Accounts payable

$                  221

$              748

Accrued expenses

2,022

3,603

Warrant liability

2,935

225

Total current liabilities

5,178

4,576

Other non-current liabilities

874

1,043

Total liabilities

6,052

5,619

Commitments and Contingencies

Stockholders' equity

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

Common stock, $.01 par value; 170,000,000 shares authorized; 22,341,707 and 9,740,397 shares issued and 21,763,864 and 9,708,841 shares outstanding at September 30, 2015 and December 31, 2014, respectively 

223

97

Additional paid-in capital

269,460

264,592

Accumulated deficit

(256,125)

(246,513)

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

(51)

(51)

Accumulated other comprehensive income

8

20

Total stockholders' equity

13,515

18,145

Total liabilities and stockholders' equity 

$             19,567

$         23,764

 

SOURCE Delcath Systems, Inc.



RELATED LINKS

http://www.delcath.com