Financial Data and Key Metrics Changes - Delcath reported total revenue of $7.8 million for Q2 2024, with $6.6 million from U.S. sales of HEPZATO and $1.2 million from European sales of CHEMOSAT, marking a significant increase compared to previous periods [5][19] - Gross margins were reported at 80% for the second quarter [19] - Cash and investments at the end of Q2 were $19.9 million, with cash used in operations approximately $4.5 million [19][20] Business Line Data and Key Metrics Changes - HEPZATO treatments averaged just under two treatments per month per center in Q2, with expectations of 1.5 to 2 treatments per center for the remainder of the year [10][11] - CHEMOSAT sales in Europe increased over 100% year-over-year, primarily driven by growth in Germany [12] - The company ended Q2 with seven active treatment centers, increasing to eight by the call date, with expectations to reach 12 by the end of Q3 and 20 by the end of 2024 [9][10] Market Data and Key Metrics Changes - In the Netherlands, approximately 40% of metastatic uveal melanoma patients are treated with CHEMOSAT, mainly as part of the ongoing CHOPIN trial [12] - The company is in the process of submitting for reimbursement in the U.K., with a review expected next year [12][13] Company Strategy and Development Direction - The company aims to activate additional treatment centers while managing investments carefully in the European market to maintain a breakeven basis [13] - Delcath is focusing on expanding the use of HEPZATO and CHEMOSAT in various treatment settings, including potential new clinical studies in colorectal and breast cancer [18] - The company plans to engage medical oncologists to integrate HEPZATO into treatment algorithms and explore combination therapies with immunotherapy [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $10 million in quarterly U.S. revenue by Q4 2024, which is expected to trigger additional cash proceeds from warrant exercises [11][20] - The management noted that while the activation of treatment centers has been slower than anticipated, there are no systemic issues, and they expect all centers currently in process to activate by 2025 [6][9] Other Important Information - The company received New Technology Add-on Payment (NTAP) status for HEPZATO, effective October 1, 2024, which will help cover costs for a small percentage of Medicare patients requiring inpatient stays [11] - The CHOPIN trial is progressing, with 70 out of 76 patients enrolled, and results are expected to be presented in mid-2025 [17] Q&A Session Summary Question: What is the mean number of treatments for HEPZATO expected to progress over the next 12 to 24 months? - Management indicated that most patients are progressing to two, three, or more treatments, with expectations to match or exceed trial averages over time [22] Question: Can you comment on the average treatment per center metric excluding high-volume centers? - Management noted that while high-volume centers like Moffitt and Thomas Jefferson raise averages, most centers are expected to eventually perform at least two treatments per month [29] Question: What is the sustainability of gross margins and operating expenses? - Management stated that they are disciplined with operating expenses and do not anticipate needing a large sales force, which helps maintain margins [31] Question: How does the NTAP benefit adoption and procedure numbers? - Management believes NTAP will help hospitals with infrequent inpatient cases but does not expect it to significantly impact overall uptake [38] Question: What is the marketing strategy focus? - The current focus is on site activation, with plans to shift towards increasing patient awareness and access as more sites become operational [46] Question: What is the anticipated revenue run rate to achieve breakeven? - Management indicated that achieving around 60 to 80 kits per quarter would be necessary for breakeven or cash flow positive status, with hopes to reach this by Q1 2025 [43]
Delcath(DCTH) - 2024 Q2 - Earnings Call Transcript