DELCATH SYSTEMS, INC. Q3 FY2024 earnings call

• Center Activation: Ended Q3 with 11 active centers, and as of now, there are 12 active centers. Activated several centers in Q3 and early October, with 5 centers having completed preceptorships. Goal is to exit 2024 with at least 15 centers, have 20 treating centers by the first quarter of 2025, and 30 centers by the end of 2025.
• Treatment Rates: Average treatments per center post-activation was just under 2 per month in Q3. Q4 is expected to have fewer treatment days due to the holiday season, but no treatments will be lost, just extended time between some treatments.
• CHEMOSAT Performance: European revenue was ~$1.2 million, flat vs prior quarter but up over 100% year-over-year. Plan to expand commercial and trial centers in France, Italy, and Spain.
• Clinical Evidence: Numerous presentations and publications from the FOCUS study and other retrospective studies supported the efficacy of the hepatic delivery system.
• New Trials: SCANDIUM 3 trial started in Sweden; planning phase II randomized controlled trials for colorectal and breast cancer, with the colorectal trial starting mid-2025 and breast cancer later in 2025.
• Financial Position: Q3 operating cash burn was $3.6 million, on the cusp of cash flow break-even, had $14 million in cash, no outstanding debt, and received $25 million from warrant exercises.

In the third quarter of 2024, Delcath Systems reported total revenue of $11.2 million. The HEPZATO KIT contributed $10 million in US revenue, which was a critical milestone. CHEMOSAT generated $1.2 million in European revenue. HEPZATO's $10 million quarterly revenue accounted for approximately 89.29% of the total revenue, while CHEMOSAT's $1.2 million made up about 10.71% of the total revenue.

• Center Activation: Expect to exit 2024 with at least 15 treating centers, have 20 treating centers by the first quarter of 2025, and 30 centers by the end of 2025.
• Trials: Phase II RCTs for colorectal cancer will start mid-2025, and breast cancer trials will start later in 2025.
• CHEMOSAT: Modest year-on-year growth is expected in Europe.

• Execution Risks: Complexity in the center activation process with inherent variability in the time required.
• Seasonality Risks: Potential impact on treatment days and preceptorships during the holiday season.
• Regulatory Risks: Uncertainties regarding regulatory adjustments or label expansions for indication expansions.

Q: Clarification on Q4 seasonality and whether it's a recurring pattern A: Gerard mentions one and a half to two weeks fewer treatment days in Q4, stating seasonality is expected but no treatments will be lost, just extended time between some treatments Q: Increase in R&D spend for new trials A: Sandra says Q4 R&D will be relatively flat from Q3, with full year R&D ranging approximately from $35 million to $40 million including new indications Q: Seasonality impact on preceptorships A: Gerard says preceptorships will slow down but there is a good pipeline of sites ready Q: Warrant funds and cash forecast A: Sandra states that the $25 million from warrant exercises is not included in the current cash forecast, and current cash on hand should fund operations Q: Treatment intervals and real-world experience A: Kevin and Gerard mention treatments are mostly 6-8 weeks, medical community positive with anecdotal better response rates Q: CHOPIN trial data and indication expansion A: Gerard says no need for indication expansion as data opens door for basket trials Q: CHOPIN trial timing and CRC/breast trials A: Vojo says CHOPIN data will be read out mid-2025, CRC trial starts mid-2025, breast cancer trial starts later in 2025 Q: Referrals and awareness A: Gerard says Kevin's team is approaching medical oncologists, with referrals increasing but more work needed Q: Center activation time and CHOPIN data impact A: Gerard says center activation takes 6-9 months, CHOPIN data could make HEPZATO standard of care, increasing ramp and peak revenue Q: R&D for new trials A: Sandra reiterates Q4 R&D flat, full year R&D ~$35M-$40M