Delcath Issues Letter to Stockholders
September 01 2017 - 10:11AM
Delcath Systems, Inc. (Nasdaq:DCTH) (the "Company"), an
interventional oncology Company focused on the treatment of primary
and metastatic liver cancers, announces that Jennifer K. Simpson,
Ph.D., MSN, CRNP, President and Chief Executive Officer, has issued
a Letter to Stockholders providing a business update and
reiteration of the Board’s recommendation regarding the Company’s
proposed reverse stock split. The full text of the Letter, which
has also been posted to the Company's website, is as follows.
Dear Stockholders:
I write to reiterate our recommendation for
shareholders to approve the proposed reverse stock split as
outlined in our Schedule 14A filed on July 26, 2017. This is the
only item on the 14A, and we encourage all shareholders to read the
proposal in its entirety. It is our recommendation that
shareholders vote FOR the Proposal.
A vote FOR the Proposal will
result in the following:
- Extinguishment of the note with the majority Note Holder
- Adjust the floor price for the remaining note with the minority
noteholder to a minimum of $1.00 as required by NASDAQ
- Position the Company to solve the minimum bid requirement for
NASDAQ
- Allow the Company access to capital by decreasing the number of
Authorized shares outstanding
As stated in the Schedule 14A, the proposed
reverse stock is for a ratio range between 1 for 20 and 1 for 500,
at the discretion of the Board of Directors. The ratio range is
designed to provide the Board with maximum flexibility in order to
be able to adequately address two main issues that currently limit
the Company’s access to capital.
- Authorized Shares Limit. Delcath is currently at the threshold
of the Authorized Shares limit in our Certificate of Incorporation.
Without the ability to issue new authorized shares, we are unable
to access the restricted cash account associated with our
Convertible Notes, or undertake any type of equity financing.
- NASDAQ Compliance. Delcath is currently not in compliance with
NASDAQ minimum bid price requirements, and as disclosed recently is
not eligible for another six-month extension due to an issue
related to required shareholder equity accounting of its
Convertible Notes.
Should the Company not obtain approval for a
reverse stock split, it is likely that the Company will be delisted
from NASDAQ. We believe remaining on the NASDAQ provides
liquidity and other benefits to the Company and its investors.
To mitigate potential future dilution following
a reverse split, we recently concluded an agreement with the
majority holder of the Convertible Notes by which 90% of the
outstanding debt related to the Notes will be extinguished upon
shareholder approval of the reverse split proposal. Additionally,
the floor price of $.05 for the remaining 10% of our Convertible
Notes will be required to adjust by NASDAQ with the effected
reverse stock split ratio to a minimum of $1.00. We believe
this should serve to support the stock price following a split and
reduce future potential dilution related to the Convertible Note. A
vote in favor of the proposed reverse stock split will allow us to
regain compliance with the minimum bid price rule and trigger the
extinguishment of a substantial portion of the Convertible Notes,
the first step in addressing NASDAQ shareholder equity compliance.
If the proposed split is not approved, the Convertible Notes will
not be extinguished because the Notes will likely be the primary or
only source of funding once the Company is listed on an alternate
market.
The proposed reverse split of our common shares
will reduce the shares outstanding and provide us with the
flexibility to raise equity capital to invest in our Clinical
Development Program our commercial efforts in Europe, where we
believe long-term shareholder value ultimately resides.
For these reasons, we believe the proposed
reverse stock split is in the best long-term interest of
shareholders, and on behalf of Delcath’s management team and Board
of Directors, I am seeking your support by voting
FOR the reverse stock split so we can continue to
build Delcath into a leading interventional oncology company.
Sincerely,
Jennifer K. Simpson, Ph.D., MSN, CRNPPresident
and Chief Executive Officer
Voting Instructions. All stockholders as of
the July 13, 2017 record date can submit consents, even
if they have subsequently sold their shares, and the Company
encourages stockholders to do so before September 6,
2017 at 11:59 p.m. Eastern Time. Stockholders are
reminded that their vote is extremely important and are urged to
complete, sign, date and mail the consent card at their earliest
convenience. Any stockholder who would like to vote by telephone
may call 877-777-8133 or online by
visiting www.proxyvote.com.
YOUR PARTICIPATION IS IMPORTANT - PLEASE VOTE
TODAY!
About Delcath Systems
Delcath Systems, Inc. is an interventional
oncology Company focused on the treatment of primary and metastatic
liver cancers. Our investigational product – 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 and associated side effects. We have commenced a global
Phase 3 FOCUS clinical trial for Patients with Hepatic Dominant
Ocular Melanoma (OM), and plans to initiate a Registration trial
for intrahepatic cholangiocarcinoma (ICC) by the end of 2017
contingent on effecting the reverse stock split as outlined in the
Company’s consent proposal. Melphalan/HDS has not been approved by
the U.S. Food & Drug Administration (FDA) for sale in
the U.S. In Europe, our system has been commercially
available since 2012 under the trade name Delcath Hepatic CHEMOSAT®
Delivery System for Melphalan (CHEMOSAT), where it has been used at
major medical centers to treat a wide range of cancers of the
liver.
Forward Looking Statements
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 OM and ICC clinical trial
programs, timely enrollment and treatment of patients in the
global Phase 3 OM clinical trial, IRB or ethics committee clearance
of the Phase 3 OM and ICC Registration trial 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, 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:
Scott Gordon
President - CoreIR
Email: investorrelations@delcath.com