Delcath triggers $25 million financing with Q3 revenue

QUEENSBURY, N.Y. - Delcath Systems, Inc. (NASDAQ:DCTH), a company specializing in interventional oncology treatments, has announced a significant financial milestone with its preliminary third-quarter revenue reaching $11.2 million. This figure includes $10 million from U.S. sales of its HEPZATO KIT, a treatment for liver cancers. The revenue achievement has activated the exercise of Tranche B warrants from a private investment event on March 29, 2023, potentially bringing in an additional $25 million in financing.

The Tranche B warrants allow holders to purchase shares at $6.00 each, and they have 21 days from the announcement to take action. Gerard Michel, CEO of Delcath, expressed that the revenue milestone underscores the strong demand for HEPZATO KIT and the unmet medical need it serves for patients with uveal melanoma that has spread to the liver.

The company plans to use the new funds to further the commercial launch of HEPZATO KIT and invest in upcoming clinical trials aimed at expanding the treatment's indications, set to begin in 2025. Delcath's proprietary products, including HEPZATO KIT and CHEMOSAT, offer high-dose chemotherapy to the liver while minimizing systemic exposure and side effects.

HEPZATO KIT, regulated by the FDA as a combination drug and device product in the United States, is designed for adult patients with metastatic uveal melanoma with specific conditions. In Europe, the device component, CHEMOSAT, is approved for a broader range of liver cancers.

Delcath cautions that the financial figures are preliminary and subject to change upon completion of standard quarter-end procedures. The company will provide a comprehensive financial and business update during its investor call on November 8, 2024.

This news is based on a press release statement, and the final financial outcomes could differ from the current estimates. Delcath's forward-looking statements involve risks and uncertainties that could cause actual results to diverge from those discussed. The company's future plans for HEPZATO KIT include securing supplies, managing the product's supply chain, and obtaining necessary FDA approvals and reimbursement agreements.

In other recent news, Delcath Systems has made significant strides in liver cancer treatment. The company's HEPZATO KIT and CHEMOSAT Hepatic Delivery System have shown promising results in recent studies. Independent research from Moffitt Cancer Center and University Hospital of Leipzig, Germany, has demonstrated improved outcomes in disease control and progression-free survival for patients with metastatic uveal melanoma and primary or secondary liver tumors.

Delcath Systems' Q2 2024 revenue has seen a substantial increase, totaling $7.8 million, largely driven by the success of HEPZATO and CHEMOSAT. The company also received New Technology Add-on Payment status for HEPZATO from CMS, expected to further enhance U.S. revenue.

Investors should note the company's robust financial position, with $19.9 million in cash and investments. Delcath Systems plans to increase active treatment sites from seven to 20 by the end of 2024, and aims to be cash flow positive by Q1 2025. These are recent developments that investors should monitor closely.

InvestingPro Insights

Delcath Systems' recent financial milestone aligns with several key insights from InvestingPro. The company's preliminary third-quarter revenue of $11.2 million reflects a remarkable growth trajectory, with InvestingPro data showing a revenue growth of 350.44% over the last twelve months. This surge is even more pronounced in the quarterly figures, with a staggering 1468.89% growth in Q2 2024.

An InvestingPro Tip highlights that analysts anticipate sales growth in the current year, which is consistent with the company's recent performance and the strong demand for HEPZATO KIT mentioned in the article. The activation of Tranche B warrants, potentially bringing in an additional $25 million, is particularly significant given another InvestingPro Tip indicating that Delcath operates with a moderate level of debt.

Despite the positive revenue news, it's worth noting that according to InvestingPro Tips, analysts do not anticipate the company will be profitable this year. This aligns with the company's focus on commercial launch and future clinical trials, as outlined in the article.

The market's response to Delcath's progress is evident in the stock's performance. InvestingPro data shows a significant 148.3% price return over the last year, with a particularly strong 112.51% return over the past six months. This positive momentum reflects investor optimism about the company's growth potential and the market opportunity for HEPZATO KIT.

For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Delcath Systems, providing a deeper understanding of the company's financial health and market position.

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