NEW YORK, March 12, 2014 /PRNewswire/ -- Delcath
Systems, Inc. (NASDAQ: DCTH) today reported financial results and
operational developments for the fiscal fourth quarter and full
year ended December 31, 2013.
Developments for the quarter and recent weeks subsequent to quarter
end are as follows:
- The Company's cash and cash equivalents increased in the fourth
quarter 2013 and the first quarter of 2014; cash position as of
February 28, 2014 was $32.7 million; fourth quarter 2013 cash
utilization was $6.2 million
- 2014 average quarterly cash utilization expected to be between
$5 and $6 million
- In December 2013 Delcath received
comments from FDA on its proposed HCC trial protocol to investigate
Melphalan HDS for first-line treatment of patients with
unresectable advanced hepatocellular carcinoma (HCC) or primary
liver cancer; a supplemental Investigational New Drug (IND)
application incorporating FDA comments was submitted to FDA in
February 2014; FDA review of the IND
is pending
- The Company received the approval from shareholders authorizing
its Board of Directors, at its discretion, to effect a reverse
stock split of the common stock at a specific ratio within a range
from 1-for-8 to 1-for-16, inclusive, on or prior to December 31, 2014
"During our fourth quarter we continued to make steady progress
on our main priorities of CHEMOSAT clinical adoption
in Europe and our clinical development program for HCC,"
commented Jennifer K. Simpson,
Interim Co-President and Co-CEO. "We are optimistic that
clinical adoption is progressing in Germany and the U.K., key target markets that
we believe offer the best near-term revenue opportunities.
Experience with CHEMOSAT therapy continues to build, with 89
procedures performed on 61 patients since we first introduced
CHEMOSAT in Europe. Concurrently,
we had dialogue with the FDA on our supplemental IND submission and
with the clinical institutions that will be conducting our HCC
studies. As a result of our February IND submission, and assuming
scientific review and institutional review board approvals, we now
anticipate clinical institutions to become activated in the second
quarter of 2014."
Financial Results
For the fourth quarter ended December 31,
2013, total revenue was $0.3
million compared with total revenue of $0.2 million in the fourth quarter 2012.
Operating expenses decreased by approximately 52% to $5.8 million from $12.0
million for the same period in 2012. The decrease is
primarily due to a significant reduction in expenses related to the
Company's NDA submission to the FDA, as well as the Company's
overall cost management efforts. Operating loss was $5.5 million, which included non-cash stock-based
compensation income of $0.3 million,
as compared with an operating loss of $11.8
million, including $0.9
million in non-cash stock-based compensation expense, in the
year ago period.
For the full year ended December 31,
2013, total revenue was approximately $0.8 million of which $0.3
million was related to the recognition of previously
deferred revenue. Total operating expenses decreased by
approximately 38% to $33.3 million
from $54.2 million for the same
period in 2012. Operating loss for the year was $33.0 million, which included $0.3 million in non-cash stock-based compensation
expense, as compared with an operating loss of $53.9 million, including $3.8 million in non-cash stock-based compensation
expense, in the year ago period.
In 2013, Delcath raised approximately $43.2 million before related expenses, including
approximately $26.7 million through
the Company's At-the-Market equity offering program, $9.0 million through its Committed Equity
Financing Facility program, and approximately $7.5 million through a registered direct
offering.
Cash and cash equivalents as of December
31, 2013 were $31.2 million,
compared with $23.7 million at
December 31, 2012. During the year,
cash used in operating activities was $34.1
million, a 32% reduction compared to $50.0 million in the comparable period in 2012.
The decrease in cash utilization was in part due to a reduction in
NDA submission-related costs, and improved organizational and
operational efficiencies.
During the first quarter through February
28, 2014, the Company raised approximately $4.5 million before related expenses through our
At-the-Market offering program. As of February 28, 2014, the Company's cash and cash
equivalents were $32.7 million,
including $0.4 million in accounts
receivables collection.
"During the second half of 2013, we made significant progress in
streamlining our business operations and improving our operational
efficiencies, while focusing on our key priorities. As a result, we
successfully reduced our operating costs and cash burn to more
sustainable levels, and we believe we have sufficient resources to
execute our plan into the first half of 2015," said Graham G. Miao, Interim Co-President and
Co-CEO.
On February 24, 2014, shareholders
approved an amendment to the Company's Amended and Restated
Certificate of Incorporation authorizing the Board of Directors to
affect a reverse stock split of the Company's common stock at a
specific ratio within a range from 1-for-8 to 1-for-16, inclusive,
on or prior to December 31, 2014. If
deemed necessary by the Board, a reverse stock split may enable the
Company to regain compliance with NASDAQ's $1.00 minimum bid price requirement by
June 9, 2014, and maintain its
listing on the NASDAQ Capital Market.
Conference Call and Webcast
The Company will host a conference call today, March 12, 2014 at 4:30
p.m. ET to discuss its financial results for the fourth
quarter and full year of 2013 ended December
31, 2013, and provide an update on recent corporate
progress. The dial-in numbers for the conference call are
800-706-7749 (U.S. participants) and 617-614-3474 (international
participants); both numbers require passcode 27241849. To access
the live webcast, go to the Events & Presentations page on the
Investor Relations section of the Company's website at
http://www.delcath.com/investors/events/.
A taped replay of the call will be available beginning
approximately two hours after the call's conclusion and will be
available for seven days. Dial-in numbers for the replay are
888-286-8010 and 617-801-6888 for U.S. and International callers,
respectively. The replay passcode for both U.S. and International
callers is 49674508. An archived webcast will also be
available at http://www.delcath.com/investors/events/.
About Delcath Systems
Delcath Systems, Inc. is a specialty pharmaceutical and medical
device company focused on oncology. Our proprietary drug/device
combination product, the Delcath Hepatic Delivery System, is
designed to administer high dose chemotherapy and other therapeutic
agents to the liver, while controlling the systemic exposure of
those agents. The Company's initial focus is on the treatment of
primary and metastatic liver cancers. Outside of the United States, our proprietary product to
deliver and filter melphalan hydrochloride is marketed under the
trade name Delcath Hepatic CHEMOSAT® Delivery System for Melphalan
Hydrochloride. The Company obtained authorization to affix a CE
Mark for the Generation Two CHEMOSAT Delivery System for Melphalan
in April 2012. The right to affix the
CE mark allows the Company to market and sell the CHEMOSAT Delivery
System for Melphalan in Europe.
The Delcath Hepatic Delivery System for Melphalan has not been
approved for sale in the United
States by the United States Food and Drug Administration.
The Company has initiated plans to investigate Melphalan
Hydrochloride for Injection for use with the Delcath Hepatic
Delivery System for primary liver cancer.
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 Company's
ability to achieve the estimated average quarterly cash utilization
for 2014, the impact of the potential reverse stock split and the
Company's ability to regain compliance with the NASDAQ Marketplace
Rules and maintain its listing on the NASDAQ Capital market, FDA
clearance of the Company's IND supplement including the
protocol for the Phase II HCC clinical trial and IRB
clearance of the same from participating site and the timing of
site activation and subject enrollment in the HCC Phase II trial,
the timing and results of future clinical trials including
without limitation the HCC clinical trial program, the ability of
hospitals in Germany to
successfully negotiate and receive reimbursement for the CHEMOSAT
procedure in their region under Value 4 status and the amount of
reimbursement, if any, to be provided under Value 4 status in 2014,
approval of Individual Funding Requests for reimbursement of the
CHEMOSAT procedure, the impact 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, doxorubicin or other chemotherapeutic
agents for various indications in the US 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, 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:
|
Media Contact:
|
Michael Polyviou/Patty Eisenhaur
|
John Carter
|
EVC Group
|
EVC Group
|
212-850-6020/951-316-0577
|
212-850-6021
|
DELCATH SYSTEMS,
INC.
|
Consolidated
Balance Sheets
|
as of December 31,
2013 and December 31, 2012
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
|
2013
|
|
|
2012
|
Assets:
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
31,249
|
|
$
|
23,726
|
|
Accounts receivables,
net
|
|
|
349
|
|
|
144
|
|
Inventories
|
|
|
719
|
|
|
1,105
|
|
Prepaid expenses and
other current assets
|
|
|
1,711
|
|
|
1,457
|
|
|
Total current
assets
|
|
|
34,028
|
|
|
26,432
|
|
Property, plant and
equipment, net
|
|
|
3,069
|
|
|
4,042
|
|
|
Total
assets
|
|
$
|
37,097
|
|
$
|
30,474
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
582
|
|
$
|
939
|
|
Accrued
expenses
|
|
|
3,740
|
|
|
5,790
|
|
Warrant
liability
|
|
|
2,310
|
|
|
3,427
|
|
|
Total current
liabilities
|
|
|
6,632
|
|
|
10,156
|
|
|
|
|
|
|
|
|
|
Long term
liabilities
|
|
|
|
|
|
|
|
Deferred
revenue
|
|
|
6
|
|
|
309
|
|
Accrued
expenses
|
|
|
360
|
|
|
-
|
|
|
Total long term
liabilities
|
|
|
366
|
|
|
309
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
Preferred stock, $.01
par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2013
and December 31, 2012
|
|
|
-
|
|
|
-
|
|
Common stock, $.01
par value; 170,000,000 shares authorized; 134,310,337 and 76,849,033 shares issued and
134,282,237 and 76,820,933 shares outstanding at December 31, 2013
and December 31, 2012, respectively
|
|
|
1,343
|
|
|
768
|
|
|
Additional paid-in
capital
|
|
|
257,843
|
|
|
218,063
|
|
Accumulated
deficit
|
|
|
(229,132)
|
|
|
(198,808)
|
|
Treasury stock, at
cost; 28,100 shares at December 31, 2013 and December 31, 2012
|
|
|
(51)
|
|
|
(51)
|
|
Accumulated other
comprehensive income
|
|
|
96
|
|
|
37
|
|
|
Total stockholders'
equity
|
|
|
30,099
|
|
|
20,009
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
37,097
|
|
$
|
30,474
|
Delcath Systems,
Inc.
|
Consolidated
Statements of Operations and Comprehensive Loss
|
for the three and
twelve months ended December 31, 2013 and 2012
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Product
revenue
|
|
$
|
338
|
|
$
|
200
|
|
$
|
490
|
|
$
|
346
|
Other
revenues
|
|
|
-
|
|
|
-
|
|
|
300
|
|
|
-
|
Total
revenue
|
|
|
338
|
|
|
200
|
|
|
790
|
|
|
346
|
Cost of goods
sold
|
|
|
(78)
|
|
|
(39)
|
|
|
(464)
|
|
|
(39)
|
Gross
profit
|
|
|
260
|
|
|
161
|
|
|
326
|
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative1
|
|
$
|
3,737
|
|
$
|
6,360
|
|
$
|
20,657
|
|
$
|
27,963
|
|
Research and
development1
|
|
|
2,049
|
|
|
5,626
|
|
|
12,688
|
|
|
26,215
|
Total operating
expenses
|
|
|
5,786
|
|
|
11,986
|
|
|
33,345
|
|
|
54,178
|
Operating
loss
|
|
|
(5,526)
|
|
|
(11,825)
|
|
|
(33,019)
|
|
|
(53,871)
|
Change in fair value
of warrant liability, net
|
|
|
410
|
|
|
1,134
|
|
|
2,756
|
|
|
2,159
|
Interest
income
|
|
|
2
|
|
|
4
|
|
|
20
|
|
|
19
|
Other expense and
interest expense
|
|
|
322
|
|
|
30
|
|
|
(81)
|
|
|
(175)
|
Net loss
|
|
$
|
(4,792)
|
|
$
|
(10,657)
|
|
$
|
(30,324)
|
|
$
|
(51,868)
|
Common share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
|
$
|
(0.04)
|
|
$
|
(0.14)
|
|
$
|
(0.30)
|
|
$
|
(0.85)
|
|
Diluted loss per
share
|
|
$
|
(0.04)
|
|
$
|
(0.14)
|
|
$
|
(0.31)
|
|
$
|
(0.85)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of basic common shares outstanding
|
|
|
120,849,824
|
|
|
74,440,509
|
|
|
100,809,824
|
|
|
61,275,527
|
Weighted average
number of diluted common shares outstanding
|
|
|
120,849,824
|
|
|
74,440,509
|
|
|
105,104,177
|
|
|
61,275,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
$
|
(325)
|
|
$
|
(46)
|
|
$
|
59
|
|
$
|
37
|
Comprehensive
loss
|
|
$
|
(5,117)
|
|
$
|
(10,703)
|
|
$
|
(30,265)
|
|
$
|
(51,831)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Includes non-cash
stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31,
|
|
Twelve
Months Ended December 31,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Selling, general and
administrative
|
|
$
|
9
|
|
$
|
569
|
|
$
|
379
|
|
$
|
2,398
|
|
Research and
development
|
|
|
(305)
|
|
|
334
|
|
|
(88)
|
|
|
1,427
|
|
Total stock-based
compensation expense
|
|
$
|
(296)
|
|
$
|
903
|
|
$
|
291
|
|
$
|
3,825
|
SOURCE Delcath Systems, Inc.