Earnings call transcript: Delcath Systems beats Q1 2025 forecasts, shares rise

Delcath Systems Inc. reported its first-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.03 against a forecast of $0.02. The company also exceeded revenue forecasts, posting $19.8 million compared to the projected $15.51 million. Following the announcement, shares of Delcath surged by 15.18%, reflecting investor optimism. According to InvestingPro data, the stock has delivered an impressive 110.52% return over the past year, with analysts setting price targets between $21 and $25, suggesting potential further upside.

Key Takeaways

• Delcath’s Q1 2025 EPS and revenue both surpassed forecasts.
• Stock price increased by over 15% post-announcement.
• The company reported a significant improvement in net income and gross margins.

Company Performance

Delcath Systems demonstrated robust performance in Q1 2025, driven by strong sales in the U.S. and Europe. The company reported a net income of $1.1 million, a significant turnaround from a $11.1 million loss in the previous year. Gross margins improved to 86%, up from 71% in 2024, indicating enhanced operational efficiency. InvestingPro analysis reveals the company maintains strong financial health with a "GOOD" overall score and exceptional liquidity, boasting a current ratio of 12.01. This is one of several insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of over 1,400 US stocks.

Financial Highlights

• Revenue: $19.8 million, up from $15.51 million forecasted.
• Earnings per share: $0.03, exceeding the $0.02 forecast.
• Gross Margins: 86%, up from 71% in 2024.
• Net Income: $1.1 million, compared to a $11.1 million loss in 2024.
• Adjusted EBITDA: $7.6 million, versus a $7.3 million loss in 2024.
• Cash Position: $59 million.

Earnings vs. Forecast

Delcath’s actual EPS of $0.03 was 50% higher than the forecast of $0.02, while revenue of $19.8 million exceeded expectations by nearly 28%. This earnings beat reflects the company’s successful operational strategies and market expansion efforts.

Market Reaction

Following the earnings release, Delcath’s stock price jumped by 15.18%, reaching a new high within its 52-week range. This positive market reaction underscores investor confidence in the company’s growth trajectory and financial health.

Outlook & Guidance

Delcath remains optimistic about future growth, aiming to activate 30 treatment centers by year-end. The company plans to increase its operational expenses, with SG&A expected to rise by 60% and R&D by 150%, while maintaining EBITDA positivity.

Executive Commentary

CEO Gerard Michel expressed confidence in achieving the company’s goals, stating, "We are well on track to achieve our previously stated goal of 30 active centers by year end." He also highlighted the potential impact of clinical trial data, noting, "A meaningful increase in PFS would be phenomenal... something like a four-month increase would be great."

Risks and Challenges

• Reimbursement challenges in Europe could limit market potential.
• Increased operational expenses may impact short-term profitability.
• Dependence on expanding treatment centers to sustain growth.
• Potential regulatory hurdles in clinical trials.

Q&A

During the earnings call, analysts inquired about patient treatment frequency and the European market’s cautious growth. CEO Michel addressed these concerns, emphasizing the company’s strategic focus on organic growth and clinical trial advancements.

Full transcript - Delcath Systems Inc (DCTH) Q1 2025:

Conference Operator: Good day and welcome to the Delco Systems First Quarter twenty twenty five Earnings Call. All participants are in listen only mode. There will be an opportunity to ask questions at the end of the formal presentation. Please note that this event is being recorded. I’d now like to turn the conference over to Mr.

David Hoffman, DelCast’s General Counsel. Please go ahead, sir.

David Hoffman, General Counsel, Delcast Systems: Thank you and once again welcome to Delcast Systems first quarter twenty twenty five earnings and business highlights call. With

RK, Analyst, H.C. Wainwright: me on

David Hoffman, General Counsel, Delcast Systems: the call are Gerard Michel, the Chief Executive Officer Sandra Pinnell, Chief Financial Officer Kevin Muir, General Manager Interventional Oncology Voya Vukovic, Chief Medical Officer and Martha Rook, Chief Operating Officer. I’d like to begin the call by reading the Safe Harbor statement. This statement is made pursuant to the Safe Harbor for forward looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call with the exception of historical facts may be considered forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward looking statements are reasonable, it makes no assurance that such expectations will prove to have been correct.

Actual results may differ in a material manner from those expressed or implied in forward looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward looking statements, please see risk factors detailed in the company’s annual report on Form 10 ks, those contained in subsequently filed quarterly reports on Form 10 Q, as well as reports that the company files from time to time with the Securities and Exchange Commission. Any forward looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward looking statements to reflect subsequent knowledge, events or circumstances. Our press release with our first quarter twenty twenty five results is available on our website under the investor section and includes additional details about our financial results.

Our website also has our latest SEC filings, which we encourage you to review. A recording of today’s call will be available on our website. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Gerard Michel, Chief Executive Officer, Delcast Systems: Thank you for joining us today to review our first quarter’s financial results and business updates. I’m proud of our continued progress this quarter in terms of both revenue growth and incremental center openings. Both Hebsado and ChemoSATs have had an impressive first quarter of twenty twenty five, generating a combined revenue of $19,800,000 Hebsado sales in The U. S. Contributed $18,000,000 while ChemoSATs sales in Europe added 1,800,000.

Thanks to the exceptional efforts of our commercial team, we ended the quarter with 17 treating sites and have since opened an additional two centers, bringing our total to 19 active centers in The U. S. In the first quarter, we continued to solidify the company’s finances with positive cash from operations of $2,200,000 net income of $1,100,000 and positive adjusted EBITDA of $7,600,000 Additionally, we ended the quarter with no debt and approximately $59,000,000 in cash and investments. With this strong financial footing, we will continue to leverage cash from operations to support Hebsato’s research and development initiatives beyond metastatic uveal melanoma patients. Given our belief that hepcidos and the underlying hepatic delivery system platform has the potential to benefit a much broader set of patients suffering from cancer in the liver.

Turning back to center activations, in the first quarter we activated the University of Kansas Health System, Cleveland Clinic, and Providence St. John’s. So far in the second quarter we activated Northwest Northwestern Memorial Hospital and the University of Miami. In addition to the 19 active treating centers, there are currently 10 centers now accepting referrals and pending activation. With our pace of opening between three to five centers per quarter, I am confident that we are well on track to achieve our previously stated goal of 30 active centers by year end.

In the first quarter, we averaged approximately two treatments per month per center, and based on the expected pace of new center activations and mix of existing centers, we expect the average monthly treatment per site to be just under two for the remainder of the year. As we increase our footprint across The United States, we are expanding from four to six territories, with each territory having a liver directed therapy manager, an oncology manager, and a clinical specialist. This transition transition to six territories is nearly complete, and we are successfully attracting top commercial talent across The United States to support our expansion. We continue to improve access for patients with metastatic uveal melanoma through our newly implemented hepcidokit access three sixty platform. This comprehensive program connects patients with authorized hepcidokit treatment centers and supports eligible patients in reducing their out of pocket costs.

Hepcido KidAccess three sixty also includes copay assistance for those with commercial insurance, and also helps patients explore additional financial support available. The European market continues to experience and grow experience growth, increasing 29% over the prior quarter to $1,800,000 as we have previously stated, given the reimbursement pricing challenges in Europe, this market will not be a significant contributor to revenue, at least in the short to medium term. However, given chemo set holds a comprehensive pan solid tumor device label and several of our European sites post over a decade of experience with chemo set, the region has and will continue to be a critical source of clinical data. Turning to company sponsored trials, our clinical team is diligently working to establish sites for our liver dominant metastatic colorectal and metastatic breast cancer trials, which represent a promising new indication for hepciddo. Our phase two trial in metastatic colorectal patients received FDA clearance in December of twenty twenty four.

As a reminder, the phase two trial will evaluate the safety and efficacy of hepciddo in combination with standard of care versus standard of care alone in patients receiving third line treatment. Standard of care will be Trifluridine, Pipferil’s Hill and Bevacizumab. Our Phase II trial metastatic breast cancer received FDA clearance in April of this year. The phase two trial will evaluate the safety and efficacy of hepciddo and combination of standard of care versus standard of care alone in second or third line patients with liver dominant HER2 negative metastatic breast cancer. State of care options will be Iribulin, Vinorelavine, or Capcitabine.

Each trial will enroll approximately 90 patients across over 20 sites in The United States and Europe. Both trials have a primary endpoint of hepatic progression free survival. We anticipate both studies starting by the end of twenty twenty five with enrollment for the metastatic colorectal trial to begin a third or early fourth quarter and enrollment for metastatic breast cancer to follow shortly thereafter. For metastatic colorectal, we anticipate the primary endpoint to read out by the end of twenty twenty seven or early twenty twenty eight with overall survival data expected to follow in 2028. For our metastatic breast cancer trial, we project hepatic progression free survival data to be read out in late twenty twenty eight or early twenty twenty nine with overall survival data likely following in 2029.

Our market research estimates that an annual addressable market of approximately seven thousand patients with liver dominant metastatic colorectal cancer advancing to third line treatment in The US, alongside a comparable population of approximately seven thousand patients with liver dominant metastatic breast cancer eligible for second or third line therapy. Each of these markets is approximately seven times larger than the metastatic uveal melanoma population, which affects approximately one thousand patients annually in The U. S. These substantial patient populations face significant unmet needs as neither systemic therapies nor permanent liver directed therapies adequately address liver metastases, underscoring the urgent demand for innovative treatment options. Our strong start to 2025 was marked by consistent revenue growth and the expansion of active treatment centers adopting hepciddo.

In the first quarter, we achieved both positive net income and operating cash flow, driven by robust clinical demand and accelerating adoption among oncologists and interventional radiologists. Our ongoing engagement with these specialists underscores the critical role of whole liver treatment and addressing liver dominant disease, informing our strategy to pursue additional indications. These efforts position us to potentially transform care for a broader population of metastatic patients, including those with liver dominant colorectal and breast cancer. I’ll now hand the call over to Sandra, who will provide a detailed overview of our financial performance.

Sandra Pinnell, Chief Financial Officer, Delcast Systems: Thank you, Gerard. Revenue from our sales of Pepzato was $18,000,000 and ChemoSAT was $1,800,000 for the first quarter of twenty twenty five, compared to just $2,000,000 per Epsado and $1,100,000 for ChemoSAT during the same period in 2024. We recognized gross margins of 86% in the first quarter compared to 71% for the same period in the prior year. Research and development expenses for the quarter were $5,000,000 compared to $3,700,000 for the same period in the prior year. Selling, general and administrative expenses for the first quarter were $11,300,000 compared to $8,800,000 for the same period in the prior year.

Our first quarter twenty twenty five net income was $1,100,000 compared to $11,100,000 net loss in the first quarter of the previous year. Non GAAP positive adjusted EBITDA for the first quarter was $7,600,000 compared to an adjusted EBITDA loss of $7,300,000 for the same period in 2024. As Gerard mentioned, we ended the quarter with approximately $59,000,000 in cash and investments, positive operating cash flow of $2,200,000 compared to a 1,000,000 operating cash burn in the previous quarter. As of today, we have no outstanding debt obligations and no outstanding warrants. The exercise of Series F warrants resulted in $16,200,000 of funding in 2025.

The warrants were previously issued in May of twenty twenty as a component of a private placement, had an exercise price of $10 per share, and expired recently on May 5. Thank you all for participating today. That concludes our prepared remarks, and I’d ask the operator to open the phone lines for Q and A. Thank you.

Conference Operator: Thank you. We will now be conducting the question and answer session. You may press star and then 2 if you decide to leave the question queue. For participants making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Chase Knickerbocker of Craig Hallum Capital Group.

Please go ahead.

Chase Knickerbocker, Analyst, Craig Hallum Capital Group: Good morning. Congrats on strong results here. Continued progress and thank you for taking the questions. Just first on center ads. Gerard, you had previously said that you expect the majority of ads to be in the second half of the year.

I would say that this is kind of stronger progress than we had expected. You’ve got visibility on a further 10. Can we add another two to three centers in Q2 here? I mean, do you kind of still stand by those comments that the majority of the adds will be in the second half? Just kind of an update there.

Gerard Michel, Chief Executive Officer, Delcast Systems: I think it’ll be a little more even throughout the year than I anticipated. As you know, I’ve had a less than perfect track record in predicting center activations. For some reason, The hospitals don’t always listen to our timing, but it is a solid queue. I know a few of those 10 will all of a sudden hit a barrier. I don’t know what it will be that will slow them down.

So I’m balanced looking at it. Think 30 is about the right number to expect by the end of the year. Hope to do better, but I’m not going to bank on that.

Chase Knickerbocker, Analyst, Craig Hallum Capital Group: But so more even in the first half, and so call it potential for two or three more of those centers in Q2 to come on?

Gerard Michel, Chief Executive Officer, Delcast Systems: Yes, I think so. And I think it’s going to be more of along the lines of roughly four a quarter. But again, very difficult we’re talking about small ends and complex processes. But yes.

Chase Knickerbocker, Analyst, Craig Hallum Capital Group: Got it. And has there been anything that’s changed about the process? Any learnings that have kind of smoothed it out? And then you’ve got a little over two treatments per center per month in Q1. You’d said a little under two kind of for the rest of the year.

Can you just give us an update on kind of who these centers are for the last 10? Do you expect them to be pretty is there some pretty good potential adopters in there? And any reason why we’re going to see that a little bit of a decrease sequentially from that Q1 treatments per center per month number?

Gerard Michel, Chief Executive Officer, Delcast Systems: Yes, there are some that we would hope would be really high volume. If you look at the script data who treats metastatic uveal melanoma, Miami should be theoretically a big center, Cleveland Clinic, etc. But what we found is even in these centers with a lot of patients, it takes a while before they kind of start doing a lot. They’ll do a few patients, wait and see, and that wait and see can take, you know, when I say wait and see doesn’t mean they stop, but they’re not going do a lot. And that could be like a six month lag before they really hit their stride.

So that’s why I keep the number a little under two for the balance of the year. And it’s been pretty consistent since we launched, just under two. Yeah, this first quarter, you’re doing some quick math, was about two, maybe a little over, but I think as we get the new, to increase the pace of new centers, I think just under two is probably the right number. Now you would ask, are there any learnings? I think we’re getting better at anticipating where there are hiccups, and being much more aggressive to get the multiple, multiple stakeholders in the hospital or the center around the table and talk to them beforehand to try to preempt some of the barriers.

So on the margin, yeah, I think we’ve gotten better at it as we’ve learned. But still, there’s just a lot of uncontrollable variables that we have to deal with as they come up.

Chase Knickerbocker, Analyst, Craig Hallum Capital Group: Got it. And just last for me. Sandra, as we think about kind of basically asking kind of cadence of OpEx here, how we expect kind of R and D to ramp as these studies ramp up? And connected with that, how are you thinking about EBITDA kind of through the year as those expenses ramp for the trials?

Sandra Pinnell, Chief Financial Officer, Delcast Systems: Yes. So total OpEx, yes, we expect it to increase, obviously, over 2024, as you’ve already seen in Q1. ’20 ’20 ’5 SG and A will increase probably 60% over 2024, and that includes our noncash stock compensation. Stock comp is comprised about 35% of that. Now R and D is expected to increase at a higher rate over 2024, around 150%, again, with stock comp comprising about 20% of that balance.

In terms of EBITDA, yeah, we had EBITDA margins of 30% in Q1. There is no current target to maintain that EBITDA margin now in the near term and executing site opening and clinical trial initiatives, we should remain EBITDA positive this year.

Analyst, Stephens Inc.: Thank you.

Conference Operator: Our next question comes from Sveampakula Ramakanthar of H. C. Wainwright. Please go ahead.

RK, Analyst, H.C. Wainwright: Thank you. This is RK from HC Wainwright. Excellent quarter. You know, it’s all good on all fronts. In general, you know, in terms of patients undergoing procedures, are you seeing any repeat procedures done on patients, you know, over the period that it has been commercial so far?

And also in terms of the centers coming on board, just trying to understand the cadence in the sense, are some of these centers kind of in that competitive situation where they feel that within a certain geographic jurisdiction that they need to grab patients as soon as they can. Some of them are in that process. And that’s why you’re seeing this higher than expected increase in terms of coming on board.

Gerard Michel, Chief Executive Officer, Delcast Systems: Sure, in terms of your question about frequency of treatment in the clinical trial, it averaged 4.1. And it’s, as we look backwards, patients who came on board a year ago, six months ago, etcetera, it seems like we’re going to be pretty much have exactly what happened in the trial or close to it. So I think, you know, for those modeling, four is a good number, 4.1 is a good number, you know, it might bounce down to 3.9 at some point or up to 4.2 or three, but it’s definitely in that range. And, you know, that is a big driver for overall revenue is how many treatments do these patients get. In terms of pace of opening, this is about what we expected.

It may be at the center over or so, but it’s about what we expected in terms of pace. Our center is feeling competitive pressure to get this. It’s human nature. I’m sure there’s a bit of, you know, hey, XYZ center has it, so I need it as well. I think the biggest driver, the larger driver, though, is there aren’t that many patients in this area.

Nobody’s really except perhaps Thomas Jefferson. Nobody is, you know, no one has a foundation of their practice based on uveal melanoma except outside of some docs at Thomas Jefferson. So they talk to each other and share information, and it is very collaborative across centers, have noted in this particular disease state with docs, and they are just hearing about good results. And I think that is the biggest driver. An IR or an oncologist speaks to another one at a conference, and they say what they seeing with hepcido, that’s the biggest driver for centers wanting to bring the product on board.

RK, Analyst, H.C. Wainwright: Thanks for that, Gerard. One last question for me on the European front, if I heard it correctly, the revenues were up 26%, but you’re saying it’s not a major contributor yet. I get that. But at the same time, you know, every quarter we are watching that and it’s kind of inching, you know, higher and higher. So what is working there?

And do you think you would want to put additional resources or you just want to wait for it to grow organically to a certain point before you start adding more resources? I know you’re also looking for other countries to get reimbursement through, and if there’s any comments on that front.

Gerard Michel, Chief Executive Officer, Delcast Systems: Yeah, So aside Germany, there is no other reimbursement in Europe. And we hope to get reimbursement in The UK. We’ve put our submission in. And hopefully, we get approval sometime this year and fund next year. The issue we have is twofold.

One is, when they look at the price of this, they include the cause of procedure. The second thing is when they come up with pricing, they do look at the trial and they say, this is a single arm trial. We factor all that in. We don’t think we are going to get much more than maybe a seventh of The U. S.

Price, which is roughly what we’re doing now. So, you know, whatever the TAM is in The US, you kinda have to divide that. Let’s say Europe’s roughly equivalent. You know, you have to divide that by seven. So there’s just less to go after at this price point.

It’s just not feasible to get the price point we have in The US and Europe. I would invest more if there was reimbursement. When we do get reimbursement, we will invest more in certain markets. But right now, I am willing to do IITs and that sort of thing anywhere in Europe because it generates clinical data. I’m managing it roughly on a breakeven basis.

So we probably added three people in the last two years in Europe, which isn’t a lot, but, you know, we’re incrementally adding people when we think it’ll do some good. But, yeah, my focus in the short to medium term is let’s get a lot of clinical data out of Europe. At some point, an indication will come along at high enough volume with the right type of data to get better pricing and higher volume and reimbursement. That’s probably not going be with uveal melanoma. Maybe it’ll be with colorectal breast or one of the other indications we’ll pursue.

RK, Analyst, H.C. Wainwright: Yeah, so if I can, if I may, really one last question on the R and D front, because you just talked about additional indications. So you, on the opening remarks, we did talk about the CRC and breast cancer, But at the same time, I know since chemo has been in Europe for a long time, are you seeing any additional indications that the centers are wanting to do, especially with a liver metastasis in it? And if so, is that indication at a point where we can start thinking about or is it just too early?

Gerard Michel, Chief Executive Officer, Delcast Systems: Yeah, no, centers in Europe have done breast cancer. They’ve done quite a bit of ICC. We’ve had centers say that like to do cutaneous melanoma, but these are like n equals two, three, six, not enough to generate real world data. The most data that is out there on the product is uveal melanoma, and while docs like to, I want to call it experiment, try this for some patients, what would really drive is us either funding an IIT when a doc raises their hand and asks about it and getting that published or sponsored trial. But we are trying to get these docs to publish case studies or small series when they have the data, and hopefully we will get some more papers out of Europe based on these small and retrospective analyses.

But I don’t think from a revenue perspective, I don’t think there’s anything to bake into a model that’s meaningful.

RK, Analyst, H.C. Wainwright: Thank you. Thank you very much, Gerard, and good luck.

Analyst, Stephens Inc.: Thank you.

Conference Operator: Our next question comes from Marita Boldt of BTIG. Please go ahead.

Marita Boldt, Analyst, BTIG: Hi, good morning. Thanks for taking the questions, Gerard and Sandra, and congrats on a very impressive to the year. Wanted to ask here very quickly, I heard mention of the patient access program. I want to understand if there’s been any hurdles in terms of payments or anything that you’re seeing on the patient access front that’s led to the creation of this program or if this was always sort of intended and planned as we typically might see with some of these more rare diseases. So any detail on that and any impacts you might see or expect from it on adoption pace would be great.

Gerard Michel, Chief Executive Officer, Delcast Systems: Now in terms of, I mean, we put this in place primarily for co pays, co pay assistance, and the rare patient that had no coverage whatsoever. In terms of the hospitals getting reimbursed, aside from the hiccups that were driven by submitting claims incorrectly, we have seen nothing that gives us any pause about either commercial or Medicare coverage. So, I think this is sort of the sort of thing that it’s helpful for patients that can lower their copay. If they don’t have any coverage at all, we can point them towards various charities that do assist with the patients with rare diseases. And I think, as you said, Marie, it is kind of standard practice to have this type of service up and running.

You know, if we had been a company with, you know, more resources moving into the launch, we probably would have had it in day one. But we had to wait a bit so we could, you know, gather the resources necessary to launch it.

Marita Boldt, Analyst, BTIG: Okay, glad to see it and glad to confirm that billing is going well. And then we’re expecting Chopin data I think later this year. Any chance we could start to sort of understand what the for what will be impressive to clinicians is? I don’t know if you can start to help us set up some expectations for that data at this point, Gerard.

Gerard Michel, Chief Executive Officer, Delcast Systems: Yeah. The endpoint is PFS. So I think a meaningful increase in PFS is what we’re looking for. What might that be? I think it’s in the eye of the beholder.

I think anything any increase of given how severe this disease is for patients, I think, for example, a four month increase would be phenomenal, you know, because that probably translates into four months or more life. So something in that range I think would be great, But, you know, we’ll have to see. But that’s my kind of personal bar, about four months increase in success would be great.

Marita Boldt, Analyst, BTIG: Okay, great. Congrats again on the nice quarter.

Gerard Michel, Chief Executive Officer, Delcast Systems: Thank you.

Conference Operator: The next question comes from Sudan Laganathan of Stephens Inc. Please go ahead.

Analyst, Stephens Inc.: Hi, Gerard and Sandra. Congrats on the great quarter and thank you for taking my questions. My first one is going to be kind of on the territories that you mentioned. The six territories you mentioned cover the lower 48 states and get you to that eventual peak site activation to potentially 40 sites like you’ve mentioned before. Does your current boots on the ground get you to the over 30 sites?

Or will there need to be some kind of increase to that SG and A effort to support site activation growth over 30 states?

Gerard Michel, Chief Executive Officer, Delcast Systems: I think we can get to 40 with the six territories. With that said, if it looks like you know, the number of boots on the ground, as some say, is limiting the growth, we’ll do more. Luckily, this is not a huge expense. You know, if you go from if you went from six territories to eight, that would be an incremental six people. So it doesn’t move the needle very much one way or another.

So time will tell. But right now, on paper, our models say, hey, we should be able to get by with these six territories.

Analyst, Stephens Inc.: Okay, great. And then my second one, with the FDA clearance now in hand for the Phase two trials for HER2 negative breast cancer and CRC, what are the remaining tasks prior to initiating the first patient on trial? And what’s kind of the bars now from initiating a patient maybe this quarter itself versus waiting into the third or fourth quarter of this year?

Gerard Michel, Chief Executive Officer, Delcast Systems: Sure, I’ve got Voyo virtually So our CMO, I’m going ask Voyo to chime in there.

Voyo Vukovic, Chief Medical Officer, Delcast Systems: Sure, happy to address the question. So once the FDA clears the protocol, here in The US we engage with clinical trial sites, major centers to review and approve the protocol, train the site if necessary, and also do the contact link to make sure that the cost of the trial and procedures is covered. So because we typically go to large academic centers which are quite complex to navigate, this process can take anywhere between six and twelve months for the typical treatment centers. So that’s why there’s a gap between the FDA clearing the protocol and us actually enrolling patients. In Europe, it’s a similar situation.

We file typically in Europe protocols for regulatory clearance after the FDA has lessened and that’s what we’ve done for these two trials, and in parallel we engage with sites and repeat during the same process. Activation of sites in Europe can also take anywhere between three and twelve months depending on what type of site and which country it is, So there’s always an operational lag between clearance of the protocol and staff of patient enrollment. I hope that addresses your question.

Analyst, Stephens Inc.: Yeah, thank you for the clarity there, Richard. I really appreciate it. And one more last one if I can squeeze one in. I think I believe you may have noted before that achieving that around $13,000,000 in revenues should kind of yield like a breakeven EPS. And then over that could yield a positive EPS with current OpEx levels, which you’ve now proven in the first quarter.

So congrats on that great milestone. Now that is proven about your business and with the cash positions you currently have, is there any interest in employing that cash to in license a companion diagnostic device or therapeutic that go hand in hand with IPSTADA kit and be accretive to the business maybe in a shorter timeframe than running clinical trials for label expansion and going that route. Just curious what your level of consideration is for that kind of a strategy.

Gerard Michel, Chief Executive Officer, Delcast Systems: We always keep an open mind And a number of things have come across our desks to look at, none of which seem like it makes sense. I think usually in licensing, it’s usually along the lines of what else could the sales force sell in this type of business. I think taking our eye off this very profitable product to sell something that is high volume, low margin, that takes a lot more sites to sell into doesn’t make a lot of sense. Now, if something comes along that is more a profile in terms of focused highly technical sale, that might make some sense. But nothing’s come across to date.

In terms of a companion diagnostic or something, if we do move into an adjuvant setting, which is probably something we do talk about, but it’s not actionable yet. If there was something that, for example, predicted one will get liver mets, we might be interested in funding something like that. I don’t there’s no such thing out there right now that’s just a pickup that’s commercialized. That would be more of an R and D investment. But we look at complementary things like that.

If there might be a synergistic systemic, something that for some reason fits with our liver targeted, we would look at that if there’s a good clinical and medical rationale. But I don’t think there’s a lot out there in the near term that fits well within the business. We’re certainly not going to in license something just to have a larger top line.

Analyst, Stephens Inc.: Gotcha. Thanks, George. I really appreciate all the color there. Again, congrats on the great start to the year.

Conference Operator: Our next question comes from Bill Morgan of Clear Street. Please go ahead.

Bill Morgan, Analyst, Clear Street: Hi. Thanks for taking the question. Congrats on the quarter. So looking at revenue in Q1, just kind of want to look at it from any angle to see kind of how stable this base is going forward with it being such a strong number. So was there any month to month variability that might suggest any quarter to quarter variability going forward?

And were there any headwinds from beginning of the year insurance resets? Thanks.

Gerard Michel, Chief Executive Officer, Delcast Systems: In terms of the latter part, we expected to perhaps see something with the copays resetting. And we didn’t expect, we wondered. That’s probably a better better way to put it. But with the disease such as this, it seems relatively, I won’t say, to it, but it it is less of an effect. In terms of kind of month to month variability, we’re still talking about relatively small ends.

So by definition, you’re gonna have some level of variability. It’s tough to tease out a pattern. Since patients are treated every six to eight weeks, and we’re probably closer to eight, we do see kind of see an up and down effect month to month, depending on January has a lot and February has a bit fewer, then March is likely to have a lot and April a bit fewer just due to the returning patterns. But it’s not that meaningful. And, again, the the the ends are relatively small, so there’s noise in there as well.

Thank you.

Conference Operator: Our next question comes from Haile Jen of Leiblaw and Company. Please go ahead.

David Hoffman, General Counsel, Delcast Systems0: Good morning, Gerard, and congrats on a great quarter. I have a few short questions here. First, in terms of the CRC trials, how many sites you are anticipating to activate for the study?

Gerard Michel, Chief Executive Officer, Delcast Systems: Avoya?

Voyo Vukovic, Chief Medical Officer, Delcast Systems: Sure. We anticipate more than 20 sites across The US and Europe to participate in the colorectal trial.

David Hoffman, General Counsel, Delcast Systems0: Okay, great. And the second one is that I don’t remember whether you haven’t mentioned how many hepcidyl units been sold in the quarter. I guess we can calculate that, but would you be able to just provide a number as well?

Gerard Michel, Chief Executive Officer, Delcast Systems: We had a price increase mid first quarter, so it probably isn’t quite as clear as that. But I think if you just divide by about, let’s say, one eighty five thousand, you’ll get the number or close to within two units or so.

David Hoffman, General Counsel, Delcast Systems0: Okay. So could you elaborate the level of price increase?

Gerard Michel, Chief Executive Officer, Delcast Systems: Sandra, will you share the price increase, the timing?

Sandra Pinnell, Chief Financial Officer, Delcast Systems: Yes. We started the year on January 1 with a price of 182.5. And on February 1, we went up to $187.05.

David Hoffman, General Counsel, Delcast Systems0: Great. That’s very helpful. And thanks. The next question is that in terms of have you guys start to track to see how many patients the breakout page that’s actually referred initially referred by oncologists versus those patients already in the interventional oncology, So so to track in terms of the the the performance of the sales team toward the colleges.

Gerard Michel, Chief Executive Officer, Delcast Systems: So are you are you asking

David Hoffman, General Counsel, Delcast Systems0: Out of the patient, many

Gerard Michel, Chief Executive Officer, Delcast Systems: of those patients were already at that center versus referred into that center?

David Hoffman, General Counsel, Delcast Systems0: Yes.

Analyst, Stephens Inc.: Yes.

Gerard Michel, Chief Executive Officer, Delcast Systems: Kevin, can you give an estimate on that?

David Hoffman, General Counsel, Delcast Systems1: Yeah, that’s a great question. And something we attempt to track as some of our key indicators for the health of these centers that we’re in. And I would say that right now it’s probably around thirty to forty percent of the patients are organic to the sites that we have opened with the remainder being referred from the outside.

David Hoffman, General Counsel, Delcast Systems0: Okay, great. Actually go ahead, sorry.

Gerard Michel, Chief Executive Officer, Delcast Systems: Yeah, I’m gonna say, what’s kind of there’s two contravening forces there. You know, we we try to get better at generating referrals into the centers. On the flip side, as more centers open, there’s less need for referrals. So but that’s a health limit. The reason we structured these territories with three different types of professionals, the liver therapy manager, the clinical support or specialist who’s in there and then the oncology manager.

That third person, their job is to get those referrals to those centers. And so they’re clearly doing a decent job. Now, some of these patients are self referrals, but definitely, we’re doing the introductions for many, many of these patients, oncologists to oncologists to keep feeding the pipeline into these centers.

David Hoffman, General Counsel, Delcast Systems0: Okay, great. Maybe the last the last question here is that I’m just doing a quick scan in terms of the top line, particularly the in The United States. And I just realized that you’ve got roughly a 4,000,000 quarter over quarter revenue increase up to this quarter. So, it’s almost five quarters when we started. Mean, was there any meaning you can extract from this or simply that just what happened?

And I think

Gerard Michel, Chief Executive Officer, Delcast Systems: I think it’s, you know, it’s driven by center activation. And it hasn’t been the same number of centers every quarter, but it’s, you know, that’s roughly what’s causing that increase. You know, we had, let’s call it, you know, three to five centers a quarter or three to that you’re gonna you’re gonna end up at the pace at which centers do treatment to kind of lead to that fixed increase every quarter. So it’s not an exponential growth like you might get with a drug, but we’ll keep this is kind of more of a typical device ramp as you enter more centers, you get the growth.

David Hoffman, General Counsel, Delcast Systems0: And actually, let me squeeze the last one here, which you may or may not answer, which is that can we extrapolate at least for toward the end of this year?

Gerard Michel, Chief Executive Officer, Delcast Systems: I’ll pass on that one, Yale.

David Hoffman, General Counsel, Delcast Systems0: Okay. Great. Thanks a lot. And congrats really congrats on the performance.

Voyo Vukovic, Chief Medical Officer, Delcast Systems: Thank you.

Conference Operator: Ladies and gentlemen, that brings us to the end of today’s event. Thank you for attending, and you may now disconnect your lines.

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