Delcath Announces 2016 Financial Results
March 29 2017 - 8:00AM
Delcath Systems, Inc. (NASDAQ:DCTH), an interventional oncology
Company focused on the treatment of primary and metastatic liver
cancers, announces financial results for the 12 months ended
December 31, 2016.
Highlights for the fourth quarter of 2016 and
recent weeks include:
- Fourth quarter 2016 revenue increased 54.0% to $0.7 million and
full year 2016 revenue increased 18% to $2.0 million;
- Fully established national reimbursement coverage in Germany
under ZE system;
- Significantly expanded the number of clinical sites for the
Company’s global Phase 3 clinical trial for patients with hepatic
dominant ocular melanoma (the FOCUS Trial);
- Announced a Special Protocol Assessment (SPA) agreement with
the U.S. Food and Drug Administration (FDA) for the
design of a pivotal trial of Melphalan/HDS to treat patients with
intrahepatic cholangiocarcinoma (ICC);
- The American Journal of Clinical Oncology published a
single-center retrospective review finding that the Company’s
investigational percutaneous hepatic perfusion (PHP) with
Melphalan/HDS offered promising results with a doubling of overall
survival and significantly longer progression-free survival (PFS)
and hepatic progression-free survival (HPFS) compared with other
targeted therapies; and
- Favorable data from two institutions were presented at the
Regional Cancer Therapies Symposium and showed strong tumor
response and overall survival with the Company’s investigational
PHP therapy in patients with ocular melanoma that metastasized to
the liver.
“Fiscal year 2016 was devoted to the advancement
of our global FOCUS Trial in ocular melanoma liver metastases as
well as other important clinical initiatives for our Melphalan/HDS
as a treatment for primary and metastatic liver cancers, while at
the same time we continued to facilitate the commercial
availability of CHEMOSAT in Europe,” said Jennifer K. Simpson,
Ph.D., MSN, CRNP, President and Chief Executive Office of
Delcath.
“Our FOCUS Trial was initiated in January 2016
under an SPA with the FDA to evaluate Melphalan/HDS as a treatment
for ocular melanoma that has metastasized to the liver.
During the year we activated more than 20 leading U.S. and European
cancer centers as participating clinical sites in this study. We
plan to have approximately 40 sites activated by the end of summer
2017.
“In addition, we recently announced a new SPA
with the FDA for the initiation of a pivotal trial for the use of
Melphalan/HDS in patients with ICC. This new trial will enroll
approximately 295 ICC patients at approximately 40 clinical sites
in the U.S. and Europe, with the primary endpoint of overall
survival and secondary and exploratory endpoints including safety,
progression-free survival, overall response rate and
quality-of-life measures. We’ve designed this trial to be
cost effective and intend to pursue it in a financially prudent
manner. Given the sequential nature of the trial design, our
investment in this study will be modest in 2017 as the
Melphalan/HDS segment of the study will not occur until late in the
year.
“In Europe, we continued to grow revenue and
focus our efforts on obtaining favorable reimbursement in key
markets. We believe our ZE national reimbursement in Germany, along
with the continued presentation and publication of data supporting
the use of CHEMOSAT by leading clinical experts validates our
access efforts in other markets across Europe.
“During the year we also secured committed
financing through a securities purchase agreement with an
institutional investor to issue $35 million of senior convertible
notes and common stock purchase warrants. Assuming all
conditions are satisfied, we expect the quarterly releases of
capital throughout 2017 will fund our clinical development plan
through the end of the year, while also supporting our commercial
activities in Europe.
“The commercial and clinical progress made
throughout 2016 has been steady and we look forward to expanding
access to our potentially life-saving PHP therapy for patients
around the world afflicted with primary and metastatic liver
cancer,” concluded Dr. Simpson.
2016 Financial Results
Total revenue for 2016 of $2.0 million increased
18% from $1.7 million for 2015. Selling, general and administrative
expenses for 2016 decreased to $9.4 million from $10.0 million in
2015. For 2016, research and development expenses increased
to $8.4 million from $6.5 million in 2015. Total operating
expenses for 2016 were $17.9 million compared with $16.5 million
for 2015.
The Company reported a net loss for 2016 of
$18.0 million or $10.59 per share based on 1.7 million weighted
average common shares outstanding, compared with a net loss for
2015 of $14.7 million or $14.56 per share based on 1.0 million
weighted average common shares outstanding. The increase is
primarily due to a $14.3 million increase in interest expense
primarily related to the amortization of debt discounts, a non-cash
item, and a $1.4 million increase in operating expenses primarily
related to increased investment in clinical trial initiatives. This
was offset by a $12.2 million change in the fair value of the
warrant liability, a non-cash item, and a $0.2 million improvement
in gross profit due to higher sales.
Balance Sheet Highlights
As of December 31, 2016, Delcath had cash and
cash equivalents of $4.4 million, compared with $12.6 million as of
December 31, 2015. During 2016 the Company used $14.2 million
of cash to fund operating activities. Delcath believes it has
sufficient capital and access to committed capital to fund its
operating activities through the first quarter of 2018.
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
plan to initiate a Registration trial for intrahepatic
cholangiocarcinoma (ICC) in the Fall of 2017. 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.
-Tables to Follow-
|
Delcath Systems, Inc. |
Consolidated Statements of Operations and Comprehensive
Loss |
for the twelve months ended December 31, 2016 and
2015 |
(in thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
Product
revenue |
|
$ |
1,992 |
|
|
$ |
1,747 |
|
Cost of
goods sold |
|
|
(550 |
) |
|
|
(462 |
) |
Gross
profit |
|
|
1,442 |
|
|
|
1,285 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Selling,
general and administrative expenses |
|
|
9,434 |
|
|
|
10,009 |
|
Research
and development costs |
|
|
8,448 |
|
|
|
6,486 |
|
Total
operating expenses |
|
|
17,882 |
|
|
|
16,495 |
|
Operating
loss |
|
|
(16,440 |
) |
|
|
(15,210 |
) |
Derivative instrument income |
|
|
12,780 |
|
|
|
564 |
|
Interest
income |
|
|
17 |
|
|
|
9 |
|
Other
expense and interest expense |
|
|
(14,328 |
) |
|
|
(67 |
) |
Net
loss |
|
$ |
(17,971 |
) |
|
$ |
(14,704 |
) |
Other
comprehensive loss: |
|
|
|
|
Foreign
currency translation adjustments |
|
$ |
(33 |
) |
|
$ |
(28 |
) |
Comprehensive Loss |
|
$ |
(18,004 |
) |
|
$ |
(14,732 |
) |
|
|
|
|
|
Common share data: |
|
|
|
|
Basic and
diluted loss per share* |
|
$ |
(10.59 |
) |
|
$ |
(14.56 |
) |
|
|
|
|
|
Weighted
average number of basic and diluted shares outstanding* |
|
|
1,696,237 |
|
|
|
1,010,105 |
|
|
|
|
|
|
*reflects a
one-for-sixteen (1:16) reverse stock split effected on July 21,
2016 |
|
|
|
|
|
|
|
|
|
DELCATH SYSTEMS, INC. |
|
Consolidated Balance Sheets |
|
as of December 31, 2016 and December 31, 2015 |
|
(in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
4,409 |
|
|
$ |
12,607 |
|
|
Restricted cash |
|
|
27,287 |
|
|
|
— |
|
|
Accounts
receivables, net |
|
|
403 |
|
|
|
277 |
|
|
Inventories |
|
|
660 |
|
|
|
757 |
|
|
Prepaid
expenses and other current assets |
|
|
698 |
|
|
|
960 |
|
|
Deferred
financing costs |
|
|
699 |
|
|
|
— |
|
|
Total
current assets |
|
|
34,156 |
|
|
|
14,601 |
|
|
Property,
plant and equipment, net |
|
|
1,083 |
|
|
|
1,132 |
|
|
Total assets |
|
$ |
35,239 |
|
|
$ |
15,733 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
(Deficit) |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts
payable |
|
$ |
594 |
|
|
$ |
284 |
|
|
Accrued
expenses |
|
|
3,407 |
|
|
|
2,243 |
|
|
Convertible notes payable, net of debt discount |
|
|
13,343 |
|
|
|
— |
|
|
Warrant
liability |
|
|
18,751 |
|
|
|
3,785 |
|
|
Total
current liabilities |
|
|
36,095 |
|
|
|
6,312 |
|
|
Deferred
revenue |
|
|
30 |
|
|
|
— |
|
|
Other
non-current liabilities |
|
|
604 |
|
|
|
820 |
|
|
Total liabilities |
|
|
36,729 |
|
|
|
7,132 |
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
(Deficit) |
|
|
|
|
|
Preferred
stock, $.01 par value; 10,000,000 shares authorized; no shares
issued and outstanding at December 31, 2016 and December 31,
2015, respectively |
|
|
— |
|
|
|
— |
|
|
Common
stock, $.01 par value; 500,000,000 shares authorized; 4,131,527 and
1,396,348 shares issued and 4,112,417 and
1,360,239 shares outstanding at December 31, 2016 and
December 31, 2015, respectively* |
|
|
41 |
|
|
|
14 |
|
|
Additional paid-in capital |
|
|
277,749 |
|
|
|
269,863 |
|
|
Accumulated deficit |
|
|
(279,188 |
) |
|
|
(261,217 |
) |
|
Treasury
stock, at cost; 110 shares at December 31, 2016 and December 31,
2015, respectively* |
|
|
(51 |
) |
|
|
(51 |
) |
|
Accumulated other comprehensive loss |
|
|
(41 |
) |
|
|
(8 |
) |
|
Total stockholders' equity
(deficit) |
|
|
(1,490 |
) |
|
|
8,601 |
|
|
Total liabilities and stockholders' equity (deficit) |
|
$ |
35,239 |
|
|
$ |
15,733 |
|
|
|
|
|
|
|
|
*reflects a
one-for-sixteen (1:16) reverse stock split effected on July 21,
2016 |
|
|
|
|
|
|
|
|
|
|
|
Contact Information:
David Boral
Managing Director
CoreIR
Tel: 516 222 2560
Email: davidb@coreir.com