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. The full text
of the Letter, which has also been posted to the Company's website,
is as follows.
Dear Shareholders:
The development of oncology therapeutics is a
long and sometimes difficult path, but one of great reward
when promising new therapies are brought to patients in
need. I am writing you to affirm Delcath’s
unwavering commitment to advancing our innovative percutaneous
hepatic perfusion (PHP®) therapy and to highlight the important
role this therapy can play in treating patients with cancers of the
liver. Oftentimes these patients face limited treatment
options. Toward that end, I’d like to update you on our
progress and plans for the future, as well as to review some of the
challenges we faced last year.
Our clinical development programs now provide us
with two viable paths to U.S. market approvals. We believe that
it is through these trials that shareholder value will
ultimately be realized. As such, our focus in 2017
remains on advancing the programs for our innovative Melphalan
Hydrochloride for Injection for use with the Delcath Hepatic
Delivery System (Melphalan/HDS), as well as on our
commercialization efforts for CHEMOSAT® in Europe. The year began
with a number of significant developments toward these twin goals,
and we are positioned for further advancement of these
programs throughout the balance of the year.
Our priority for the year is expanding the
number of clinical sites and enrolling patients into our global
FOCUS Phase 3 clinical trial in hepatic dominant ocular melanoma
(the FOCUS Trial). We initiated the FOCUS Trial in January 2016
under a Special Protocol Assessment (SPA) agreement with
the U.S. Food and Drug Administration (FDA), which
indicates that the design of this trial adequately addresses
objectives that, if met, will support regulatory requirements for
approval of Melphalan/HDS in this indication. Throughout 2016 we
established a network of participating clinical trial sites that
now includes 20 prestigious cancer research centers across the U.S.
and Europe that are open for patient enrollment. We are continuing
to expand this network and expect to have up to 40 clinical
centers participating globally in this pivotal study by
the end of the summer of 2017.
I’d also like to highlight that the clinical
potential of Melphalan/HDS in the treatment of ocular melanoma
liver metastases was repeatedly supported by compelling clinical
data presented and published throughout the past year. Most
recently, a single-center retrospective review was published in the
American Journal of Clinical Oncology in which the authors found
that investigational PHP with Melphalan/HDS offered promising
results with a doubling of overall survival (OS)
and significantly longer progression-free survival (PFS) and
hepatic PFS than other targeted therapies. In addition, an oral
presentation at the Regional Cancer Therapies 12th International
Symposium reported data from a retrospective, multicenter study
demonstrating that 45.7% of patients with ocular melanoma that
metastasized to the liver who underwent PHP using investigational
Melphalan/HDS experienced a complete or a partial response. That
same study further showed that among those who responded to
treatment, OS was projected to be more than three
years. The projected 657-day median OS and 1,207-day
median OS in patients with a partial or a complete response is very
impressive, and we believe speaks to the potential of our system to
provide a meaningful and durable response in a disease that has an
average survival of only six to eight months.
We continue to be encouraged that results such
as these have been presented or published on several occasions over
the last two years, as they provide us with considerable confidence
in the potential of the FOCUS Trial to support FDA approval in the
U.S. We believe the FOCUS trial represents our fastest path to U.S
market approval, and that PHP with Melphalan has the potential to
treat up to 2,000 patients with ocular melanoma liver metastases in
the U.S. and Europe annually.
Another major clinical goal for 2017 is to
advance PHP with Melphalan/HDS for the treatment of intrahepatic
cholangiocarcinoma (ICC). Toward this end, we announced a new
SPA with the FDA for the design of a pivotal trial in that
indication. As with the FOCUS Trial, this SPA agreement indicates
that this trial design adequately addresses objectives that, if
met, will support regulatory requirements for approval of
Melphalan/HDS in the treatment of ICC.
The ICC pivotal trial is a
randomized, controlled study comparing the efficacy, safety and
pharmacokinetics of Melphalan/HDS treatment administered
sequentially following Cisplatin/Gemcitabine (the current
standard-of-care) compared with Cisplatin/Gemcitabine alone in
approximately 295 ICC patients at approximately 40 clinical sites
in the U.S. and Europe. The primary endpoint is OS and
secondary and exploratory endpoints include safety, PFS, overall
response rate (ORR) and quality-of-life measures.
This is an important program because the current
standard of care, surgical resection, is not possible for an
estimated 80% to 90% of the approximately 14,000 patients in the
U.S. and Europe diagnosed with ICC each year. The promising
outcomes and observations for PHP with Melphalan/HDS in the
treatment of ICC identified by European investigators at our global
Key Opinion Leader Forum last year were discussed at length with
the FDA, and provide us with considerable confidence in the
potential of our therapy as a treatment for this rare and
difficult-to-treat tumor type. We expect the European
investigators to submit a manuscript of their data to a
peer-reviewed journal for publication later this year.
We intend to initiate the ICC study this fall.
The trial is designed to be cost-effective, utilizing many trial
sites already participating in our FOCUS Trial, and will be pursued
in a financially prudent manner. Given the sequential nature of the
trial design, our investment will be modest in 2017 as the
Melphalan/HDS segment of the study will not begin until late in the
year.
Commercially, we continue to make steady
progress with CHEMOSAT in Europe. Although they remain
modest, product sales increased 18% in 2016, to
$2.0 million, and were driven by the establishment of ZE
diagnostic-related group (DRG) reimbursement for CHEMOSAT
procedures in Germany. Throughout 2016 we worked with local and
regional hospitals in Germany to support their negotiations for
reimbursement levels, and we are pleased with the
rates that have been established. With coverage under the ZE system
now in place, we expect product sales growth from this market in
2017.
Elsewhere in Europe our commercial efforts are
focused on building the clinical and pharmacoeconomic data to
support reimbursement applications in other key markets. We
expect that the positive negotiations for coverage in Germany will
support our efforts for payment levels in other markets such as the
U.K. and the Netherlands. Securing reimbursement coverage in
additional European markets remains critical to future revenue
growth for CHEMOSAT.
Though more robust revenue growth in Europe
remains contingent on wider reimbursement, our market access
efforts in Europe have yielded significant achievements thus far.
Of note, SPIRE Southampton Hospital in the U.K. recently surpassed
100 treatments with CHEMOSAT since beginning procedures in December
2013. This includes a record eight treatments on a single patient.
Since introducing CHEMOSAT in 2012, we have built a significant
network of expertise in Europe that has led to the steady flow of
abstracts, presentations and publications. These efforts have also
established deep relationships with major cancer research centers
in Europe that are participating in our pivotal clinical
trials.
To fund the ongoing development of our clinical
and commercial programs, last year we secured $35 million
in committed financing through a securities purchase
agreement with two institutional investors, which consisted of
senior convertible notes and common stock purchase warrants. This
committed financing was the best option available to the Company at
that time, and it has provided the resources necessary to advance
our clinical development programs toward market approvals where
shareholder value ultimately resides. We are regularly evaluating
additional alternatives for capital and are committed to acting in
the best, long-term interest of our shareholders in all that we
do.
Recently, we entered into separate
warrant repurchase agreements under which each
investor agreed to a Controlled Account Release, in an aggregate
amount of $7,876,312, in exchange for cancellation of the Warrants
issued under the original agreement. This transaction
simplifies our capital structure, and we continue
to expect that the cash remaining in the Controlled Accounts after
the warrant repurchase will be sufficient to fund our operating
activities through the end of 2017.
On behalf of Delcath’s management team and Board
of Directors, I thank you for your support as we continue to build
Delcath into a leading interventional oncology
company bringing life-saving therapy to patients
suffering with cancers of the liver who have few treatment
options.
We look forward to reporting on our continued
clinical and commercial progress.
Sincerely,
Jennifer K. Simpson, Ph.D., MSN,
CRNPPresident and Chief Executive Officer
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.
Contact Information:
David Boral
Managing Director
CoreIR
Tel: 516 222 2560
Email: davidb@coreir.com