Earnings call transcript Q3 2022

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Operator

Good day, and welcome to the Delcath Systems Third Quarter 2022 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event today’s note being recorded. Please

now David Hoffman, would like go to to over conference the Delcath’s turn ahead. I General Please Counsel.

David Hoffman

quarter President of Michel, President and Chief once Delcath Officer; Muir, Dr. me Thank Vice welcome Senior Executive of and the XXXX Vice Anthony Clinical John, third Kevin President on Gerard And Operations; With Affairs earnings Dias, of are you. call Finance. Commercial Johnny Vice call. Medical again Systems to Development;

the reading Harbor by Section Harbor call described the statements begin to pursuant and Reform Safe like of statement made XXXX. historical This the may exception the on in Litigation made All this for Act forward-looking Safe is of Securities the Section I'd Securities statement. statement call, XXXX. Act Securities Exchange the be to facts, with Private forward-looking Act of of XX(e) XX(a) the meaning of XXXX statements of of considered within the

Although reasonable, various reflected the will have company believes results to forward-looking been implied such from expressed uncertainties. in correct. due makes may prove or assurance it statements statements forward-looking expectations to those Actual and assumptions that these in materially no differ risks that expectations and are

the update statements circumstances. supplement included time-to-time obligation or made in the cause in call of in company’s not and call. discussion Risk Commission. forward-looking the annual filed the and other such well forward-looking subsequent events files only date expressed statements on reports to For or Exchange to subsequently We a as or in quarterly this are XX-Q, detailed as to uncertainties from report knowledge, any actual XX-K, which that do Securities risks differ earnings could forward-looking results the of implied those undertake company on see any contained reflect reports in as those of from statements, with this Factors Form Form Any please

Michel. Gerard over to the like Now, I Gerard, turn please call to would proceed.

Gerard Michel

KIT, for product of everyone candidate a marketed CHEMOSAT, the has Europe. third in you the company's company's today. joining Delcath and had productive HEPZATO development the States; in product quarter Thank both for XXXX United

the enrolled enrolled Access pending and under with centers or Expanded a patients and the Program, In center EAP, training. have we currently third U.S., two treating

In are various process and include of addition, the the trial. not stages four that other involved sites in were startup FOCUS these sites in

December. on to track We the FDA resubmission KIT to through NDA are of of HEPZATO file by the the end

PDUFA complete agree the the the We is resubmission expect receipt sufficiently days after the confirm will that within to FDA submission months if and, review, submission, warrant establish XX they of from submission a the date. six date

December reported, The to retrospective patients. we previously in was third XXXX treated three in analysis with centers, Germany one PHP two on analysis of between CHEMOSAT the February in quarter, XXX involved the a at and Netherlands As patients published. procedures European XXXX, XXX

growing safety an of commercial This grade reported response PHP. publication add control research, efficacy European center. the reports previous in body path a and and safety of rate CHEMOSAT of X/X XX.X% disease self-limiting consistent of the overall on to the showed mostly XX.X%. system with published our documenting continues The toxicity The to and analysis a rate

Recall Phase in treatment trial Medical the Delcath’s the X are Researchers progress making proprietary goal planned safety X immunotherapy approximately Netherlands study the melanoma on liver-targeted of is trial potential of Center XX the University XX% Phase systemic the or uveal IPI+NIVO, effects when metastatic rapid and combined to from Leiden randomized with combined CHOPIN patients. Xb/randomized of with and Phase in enrolled. nivolumab, of this ipilimumab the portion patients synergistic

the provide this completion late pace next seven progress recruitment, as year completed given and patients of the trial to of who forward Phase look of trial. Xb possibly portion the the of on early We enrollment to into as the the updates

earlier investigators and of an DCR a year, XXX%. At of this XX.X% OR reported ASCO

updates expect portion on results of current alone. reported data median seen larger free of in it care, randomized are previous trial well the and Phase improvement a current If combination We the XX.X significant to progression the over and the matures. similar survival including tolerated, the months could as represent standard be of PHP X continues

hepatic important While the immunotherapy present an and have the melanoma of across tumor could metastatic types results terms they will patients, is treatment. uveal in accepted where treatment of metastases multiple be relevance are

commercial distribution for in to responsibility after the CHEMOSAT which of we marketing second the on Turning X, quarter XXXX. resumed progress occurred the and activities, sales, was direct full Europe, third March quarter

Excluding XX% over where trial, second increased XX% year are last patients units now versus most the treated the CHOPIN being the our quarter. increased the Netherlands quarter and same in

submissions reliant next continue are make But we'll consultants to key publication a early of which for These will coverage. on business for occur the the results, being. We several breakeven in flow basis on support the FOCUS operate now cash year. Germany submissions and national with time engage trial the to will hires

will first in national coverage UK. submission be the The for

upcoming the of The October, of planned over a late confident revenues definitive terms U.S. termination EU results, distribution with dispute are a year. of XXXX. ongoing and previous the the will likely growing on FOCUS will party's In And of agreement settle to we we Europe next HEPZATO business in parties the UK EU, end dispute and meaningful this that settlement agreement. behind before publication trial with commercial launch to contributor agreed distributor along CHEMOSAT revenue the approved us with become if the medac, of with reach a

Queensbury, successfully York we CHEMOSAT MDR. Regulation, recertify the New Body facility audit for under or our Notified Medical European to Device a completed manufacturing October, in Also

inspection it preapproval from Queensbury a under even we years, mind prepared that for team audits important recertification been routine While FDA. undergoing become has new the MDR for and that the I'm keep well to our in in regulation has the is are confident for company,

for we commercialization HEPZATO. to the Finally, foundation lay continue of the planned

HEPZATO, in continuum quarter, we board into within insight utilized if treating approved with care. advisory third the to of radiologists further During interventional United facilities States an their with held [indiscernible] way and gain were the the

have access market confident pass-through assigned ZE using and plans initially being unique reimbursed for code. will a HEPZATO code We status, be before ZE primarily are our miscellaneous patients, our with that Medicare solidified

less are sales, mechanism We the and KIMMTRAK carefully in obtained their first XX% watching patient being Immunocore’s progress and unique they code from population restricted in noticed quarter, given revenue $XX full of of ZE million that U.S. a action. to their than despite booked

on patient therapy pivotal reported U.S., average the HEPZATO equates would KIT equivalent trial. on price of for which a Based at for KIMMTRAK priced on is number from price to six duration FOCUS An between be somewhere trial. $XXX,XXX the kit, of $XXX,XXX in therapy available their or the publicly depending a over level upon of is the $XXX,XXX whether or duration information, nine-month per per approximately the treatments kits, months, four mean based HEPZATO to the based six treatments

premature revenue flow and treating a is is the set the clear. finalize to commercial operating next it investors very approach this and first is number very will price, growth, for rapid understand much positive combined commercialization pricing will get that the we to for it of indication, there growing is important focused short done dynamic support centers and between year. Obviously, dynamic strong potential this becoming we with as the the believe margins. While launch, of ultra-orphan a value and sites to translate EAP runway represents into to cash now We

Tony? the over look financials. Tony the turn taking questions. call But forward to to I to review first, we'll

Anthony Dias

$XXX,XXX Product for you, Thank three the ended Gerard. was revenues sales prior months compared the from quarter XXXX September in of CHEMOSAT $XXX,XXX for XX, to Europe. the approximately

Revenues European distribution after termination revenue increased agreement a because versus the a medac primarily year, of over and now last booking XXX% share. period the all the same royalty revenue we're

quarter, $X development and $X preparation the year. for submission this costs primarily increased end in by our compared to service the professional million Research due relating quarter the to higher to expenses million NDA of for to prior the

expenses The million recording million expense the compared $XXX,XXX. administrative X.X litigation, due an quarter the were to was year offset for primarily to share-based million and X.X the the for medac of lower compensation general quarter. estimated increase by approximately X settlement in prior of Selling,

due $X.XX same related months the third XXXX million, increased to of compared three and net loss per X.X of XXXX. basic diluted debt per during XXXX. share a a net for $XXX,XXX September to million, X.X share basic $XXX,XXX $X.XX amortization of ended company financing full quarter period quarter in Other to our expense diluted interest recorded XX, of The and the loss a the and from expenses for

December On cash XX, restricted XX equivalents equivalents to totaling cash XX cash, XXXX, XXXX. as million restricted cash and September the had cash on cash, compared totaling XX, million company and

used we cash months X.X our respectively, and ended in XX, September activities. During operating September the and X.X XXXX XXXX, XX, million, of million three

shares sold closed $X.XX we common stock private the of On share stock and stock XXXX, of million of a warrants at to July of issuance placement share common sold XXX,XXX $X.XX at $X price and common XXX,XXX Each a of for purchase pre-funded to investors. per XX, a was pre-funded warrants certain and sale price pre-funded were warrant.

of Private Placement warrants offering stock exercisable. of from and an $X.XX gross deducting pre-funded expenses. the per immediately million share are of $X have Delcath a common exercise received The price proceeds before approximately

questions? Q&A. financial open the check operator please for my lines Can concludes I'll remarks. to That phone ask for the you

Operator

Absolutely. sir. Yes,

question the comes go We Marie now question-and-answer will [Operator from Thibault ahead. first with Instructions]. Please Today's begin BTIG. session.

Sam Eiber

or Hi. questions behind here ask before any happening resubmission Good of first CROs? updates if on the everyone. this morning, that's end for Marie. what's on question at year? getting I taking scenes the Thanks the This here. the before Thanks. needed with my Eiber Maybe Sam Maybe maybe left for can here the what's is color

Gerard Michel

this at Sure. The primary medical thing is writing. point

about down of we're have done getting item get end slightly, a gating December. CRO, this of medical the it point. bit We will we're the to out week and writing. it But a key really very confident slips, of I'm would don't say getting right any issues But the it from It data little path. more If And our filed, so. very is I be to well now, XX% major at them. towards close will or see I it slip in the

Sam Eiber

been done there, then sites I here, many in treatments approval are how do might Okay, answering the or those maybe maybe this scheduled pathway some And how learnings for when And informing referral get EAP point maybe have on the but of here? missed have so potentially that. remarks, the at for prepared very far? early maybe you good. this Thanks FDA

Gerard Michel

how can Johnny, treatments that done in date? terms we’ve answer many of you to

Johnny John

Sure, Gerard.

we eighth. would the today There Moffitt Center, Cancer a be have date, actually that to the is seven treatment at occurring treatments. So so

conduct the on question we're and your and the using of trial learnings experience the of European PHP. the terms in our In learnings, from FOCUS training

bit patients it's little of and So don't been the adverse reported. events see we far have any these safety carefully still the a monitoring early. that so with We're concerns

Gerard Michel

you what going Kevin, I patterns it be really interesting referral you've worth noticed think. some might into noting market

Kevin Muir

Yes. being that as theory We've line Cancer patients treatment Moffitt Center some before it liver stabilized KIMMTRAK. and being referred to a preserve treatment function and first using disease with the HEPZATO in seen the

So better interesting extend, to that liver of it's these anticipation we've combination in kind here seen of an treating or tebentafusp. function dynamic preserve with sequencing KIMMTRAK the of treatments in

Gerard Michel

I KIMMTRAK. steering now concept, driven approved. is and Sam, first, he the doctor, HLA if it too it's point, he's have believe was -- this with this that but But to something I he because steering get in and a his not we're be appropriate treated the trial what’s with -- specific although this But [indiscernible] this phenotype to move obvious, active Moffitt at not patients to then -- interesting point, seems one very it's his correct. at obviously active to the on we've HLA

So that don't KIMMTRAK a before, as I've competitor. said I as view

both for doctors patients they're out out there use and I think will figure in combined to a win-win a a it's that way them fashion. best and

Sam Eiber

Thanks sense. makes for taking the It questions.

Operator

ROTH Henry Thank Please go you. And of comes ahead. Scott from question Capital. our today next

Scott Henry

good just guess starting morning. and the you process. Thank on I FDA

seem the thoughts a they'd being to six-month any you. do on think And likely do It you any risk have as well indication. as whether would prior a there's you review? panel any it given Thank filing? First, be planned the to meetings

Gerard Michel

Yes.

focused sure a In risk possible. complete it of very it is frankly, make terms quite navigate. review, as been package we're we've as easy to of being trying to making And the on six-month

some navigate. as to the of take If you you it you everything to can especially given non-clinical give writers, a it be barrier the writers to

as you as So possible to easy review. it a we're -- there do navigate trying and to and is fair make amount can

favor but that's But large overworked behind our road. that some trial not in a all and down not single The is the The being filing have we're has a a they it's filing. admittedly, second we the drug history a very thing know are particularly large it FDA, long things kicked they submitting.

and So doing on we're we're to can end everything avoid our hopeful we that.

In wait terms of at course, terms none with notes. for not, particular that likely time as if advisory, it's prepare never as there'll Obviously, probably prepping I will, And happen. we this it for think enough of scheduled them, will the any meetings it of certainty in to we time. if you have but as XXX% be be

Scott Henry

XQ sequential And the European then growth growth with great. Okay, we kind will certainly be sequential XQ. revenue to it’s or it good from continued regards expect lumpy? trends, to of Should

Gerard Michel

We MSL product's actually the And it's Germany a revenue very when times. one this on bit UK, rep. coming from autopilot hired all UK. been have lumpy be definition years. own. product by so an Germany numbers, rep. numbers, actually, can for their in converted and a In small the fairly getting still before have are we little it of you Basically at small is Most These referrals the to the on Yes. back,

some I our is of to that growth definitely due think efforts.

probably in I lumpiness is think order.

I drive is short hiring Germany a improve to us patterns. in help think revenue in what will the rep really referral term

on that down, longer market, autopilot. what probably at the reimbursement matter a submissions the market. will second that last take reimbursement amount. But steady next that As individual winds the online. burden a so trial I tremendous drive each given years, growth as think When need when as get help CHOPIN number UK back for to will will it's think getting we be us the focus is in. kind point a mentioned some dynamic. of we'll And always it's ago, I really a the disease those of will But all on reimbursements. gets the focus revenue We’ll that is but published, That in of then of I term, France case, get

Scott Henry

with do once seems the I up, this a Okay, -- of the volume per you be eight should and procedures a product color is far? approved. about higher you've and we great. a imagine goes site type as it per -- but so pretty helpful. you volume guess procedure? I to does once post good obviously what about up But on just number. go number And as there you. they're EAP in how how any general, guess, lower think Is question approval the week like just based I volume final how think average, Just do like on patients volume think Thank sites, regards goes would -- far learned one, volume it se? significantly about

Gerard Michel

I think and we've by focused that's ourselves. And dramatically vary, not surprisingly, Yes, sites. question a great that it been on obviously will

probably some period launch. reasonable per of a average a effort an site after is week think I one after

the In MSL. prior the effort we that launch, getting sites make have to EAP, with our terms an to of level to

careful have patterns We it very manner, resources. about a drive we're it. We're patients, one be up to a our demand week inform now clinicians communicate is hard we Could to But again, the current we in But accelerator. how referral prior one to get as being would compliant that? given sites of probably there. the That the able hit I certainly reach, course. right and think to to

within as moment. post a up said think one And resources is think high just hopeful harbinger time to But up I over post launch, we're moving sites but But that maybe before, have probably I two and XX running and at I've that our we'll perhaps week at think feasible. could launch week years to towards at I get a we sites one I launch. the probably that. seven under this point, as trying think well

Scott Henry

for you the taking helpful. That's Thank great. questions. Okay,

Operator

comes Company. today question next ahead. go Yale Laidlaw our with And Jen you. Thank Please from &

Yale Jen

the available potentially that for that case, or I for data, that's that the approval morning thanks in and by a process? you of If of agency final be that survival next would could submit further the there's terms questions. May the Good to FOCUS -- not to the year. remember believe taking that's data relevant I the study need for for

Gerard Michel

the objective of endpoint is trial primary The rate. response

update significant So something a informed. be wouldn't or update there abstract won't an data regular be we’ve And the any there's we in into update publish if to need But we're it a the so with the a the since FDA, will the update. be publicly. that But submitting filings that last go would to they data. is update slight FDA given further

So the they process. -- not it's short But be necessary will kept is answer not no. It's part informed. of

Yale Jen

Okay, great. helpful. That's very

more Just quick two ones.

based operating that or housekeeping that that? how the should we on further we the to First, down going the about anticipate expenses, questions should quarter compared sequentially think fourth quarter, third

Gerard Michel

I on steady two state for think they're a quarters. assume next the you just about

Yale Jen

the the maybe was inspection FDA the the month agency for Okay, process you possible is accepts it us the of complete I in in so that could after here work? that, submitted, question piece the or great. and tell last the that's of procedure a last FDA And probably facility the the once terms process timeline to assume application their

Gerard Michel

PDUFA six cut and dry. It's inspection. I always formal a scheduling then There's weeks would But prior expect preapproval no X. to the four date, to

Yale Jen

end guys on Okay, filing and you great. the things all look the and That's before year. of congrats very progress, forward helpful the

Gerard Michel

you. Thank

Operator

you. Thank

comes go Maughan Genuity. Please Canaccord with question from next Bill ahead. Our today

Bill Maughan

Hi. Good question. taking Thanks the for morning.

renewed a to there's little prove a FDA in So a committee on small bit orphan oncology population. in for more advisory recent trial arm FDA efficacy another a in the expecting population, single a of what after focus small a is product

required kind to suitability pivotal will that again. the your you of that you've through of of needed can, needed that approval? gone prove as specifically compare to just efficacy? could outside see achieving for comparison how you terms FDA were before, hoping but to what to it And that I results of data, response hit level satisfied So is the you the the able of or I was to the in highlights be expected HEPZATO know your they what trial, FDA and extent of the

Gerard Michel

Sure.

and the to arm single is single a stated clinically second I it think wanted us response, is of FDA one, duration duration with of when what asked to was months first the this the duration they XX-month that And duration meaningful do demonstrate is trial actually trial them discussing we clinically a thing, turning into had because meaningful. in had we simplest, at see the was a the response, arm that out for objective a they terms that's meaningful up were what follow a that Picking of the us response. least right, durations. up six park frankly and to the of to ball hitting that response

on we solid we're very very, there. know So ground

rate, FDA the to point objective has said to something of specific, terms In that's harder a little response to us.

to Now agents. show we meta-analysis that. powering -- had did the meaningful lower we needed beat of were our And immuno-oncology to improvement trial based them a that we tell X.X% on bound the on

bound XX.X%. was Our lower

So that obviously, well we're over hurdle.

terms comparison. FDA adequate. in input the And that decide in might of will evidence, of itself that of we, Now terms a course, in isn't

obvious. things other have we are some can pull which we quite So upon,

is most compelling look the to one OS. at think I

second, patients. OS fairly had is patients first, terms showed, of line we sicker [indiscernible] what we similar Our in had the to third and

yet then further published compare within were that that OS. disease we overall believe on we will, their at one that their spitting We -- me, OS, based have parameters they of I writing in to XX% can a we came were demonstrates along year They at And look were the in process, data patients our and we year. for XX%, at excuse were distance if survival XX%.

terms things well older well, our of look can not a we’re point we number in Usually under HEPZATO We at over. It's publication, a year survival. have it's to. of survival we over. pre-KIMMTRAK, well data, So

that's our favor in So well. well as

overall our now versus So I BAC gave we OS, update, think we said XX.XX last was time months. but an that we [indiscernible] have that the with XX.X

mature. that have That continues to delta. OS We

final compares So with it it's reasonably and not the KIMMTRAK. definitely number favorably

there. rate, the the and to shoulders are else and meta-analysis Most ORR, duration We XX digit, months. response then rates head of response our above in single have are response terms objective rates anything out

totality, I think taken great we're in So in shape.

I think response last our correlates the rates, progressive although mention qualitatively would response cleanly. responder, disease, is are or with response this, whether rates or all thing I have a or complete that I we you stated not of published partial category survival quite haven't

meaningful the always of So rate, therefore, in the ORR we response all of relapse, which is terms isn't case can classes show for therapy. that the

well. a I've So at thrown think that's disposal. an I a important component have at we lot you. as our lot But

I I to want So just sure was complete with make that.

Bill Maughan

answer. you. Absolutely. I Thank appreciate thorough the

Operator

And today's Thank We and and attending gentlemen, all for ladies you. call. this you question-and-answer concludes today's session our presentation. thank conference

You may lines, wonderful now have disconnect your day. a and

Delcath Systems (DCTH) 8 Nov 222022 Q3 Earnings call transcript