Delcath Reports 2013 Third Quarter Results

                  Delcath Reports 2013 Third Quarter Results

- Conference Call and Webcast Today at 4:30 p.m. ET -

PR Newswire

NEW YORK, Nov. 6, 2013

NEW YORK, Nov. 6, 2013 /PRNewswire/ --Delcath Systems, Inc. (NASDAQ: DCTH)
today reported financial results and operational developments for the fiscal
third quarter and nine months ended September 30, 2013. Developments for the
quarter and recent weeks subsequent to quarter end are as follows:

  oFinalizing plans to initiate a global Phase 2 efficacy and safety study to
    investigate its Melphalan Hepatic Delivery System (Melphalan HDS) for
    first-line treatment of patients with unresectable hepatocellular
    carcinoma (HCC); the U.S. Food & Drug Administration (FDA) granted the
    Company orphan drug designation for melphalan in the treatment of patients
    with HCC
  oThe Company raised approximately $7.5 million in gross proceeds in an
    offering of shares of its common stock and warrants to purchase common
    stock; cash and cash equivalents as of September 30, 2013 were $27.7
    million; combined with October financing activities, pro forma cash and
    cash equivalents were approximately $35 million
  oThe Company completed a reorganization of its operations, reducing
    headcount by a further 33% and lowering its cash utilization by more than
    50% compared to the same quarter in the prior year; the Company expects to
    reduce operating costs in 2014 by approximately $10 million compared to
    2013, while focusing resources on its clinical development program
  oThe Company's Board of Directors appointed Jennifer K. Simpson and Graham
    G. Miao as Interim Co-Presidents and Co-CEOs following the separation of
    Eamonn P. Hobbs from the Company; a Transition Committee was formed to
    assist the Board and senior management in implementing a leadership
    transition plan and its evaluation of potential strategic alternatives for
    the Company
  oDelcath received a complete response letter (CRL) from the U.S. Food &
    Drug Administration (FDA) regarding the non-approval of the Company's
    New Drug Application (NDA) for Delcath's Melblez^TMKit (Melblez
    (melphalan) for Injection for use with the Delcath Hepatic Delivery
    System) for the treatment of patients with unresectable ocular melanoma
    metastatic to the liver; the Company is evaluating the requirements
    contained in the letter, and will review potential regulatory paths
    forward with the FDA for the indication of ocular melanoma liver
    metastasis

"The actions we took this quarter were designed to optimize utilization of
available resources on continued CHEMOSAT clinical adoption in Europe and our
clinical development program for HCC," commented Jennifer Simpson, Interim
Co-President and Co-CEO. "We are currently pursuing a focused market access
approach in Europe by seeking interim reimbursement mechanisms for CHEMOSAT
procedures in Germany and the United Kingdom, where adoption of CHEMOSAT has
been strongest. In addition, we continue to evaluate various interim
reimbursement pathways in other target countries in the EU. We believe these
mechanisms will help build the foundation for commercialization and help
support long-term revenue growth."

"In looking at the HCC market, we believe our greatest potential opportunity
is in the first line setting," continued Dr. Simpson. "As a result, we have
modified our proposed clinical trial accordingly, and will be seeking comments
from the FDA. Subject to agreement by the FDA, we now anticipate enrolling our
first patient in our HCC Phase 2 trial in the first quarter of 2014."

Financial Results

For the third quarter ended September 30, 2013, total revenue was $72,000
compared with total revenue of $39,000 in the in third quarter 2012.
Operating expenses decreased by approximately 44% to $6.8 million from $12.2
million for the same period in 2012. The decrease is primarily due to a
significant reduction in expenses related to the Company's NDA submission to
the FDA, as well as the Company's overall cost management efforts. Operating
loss was $6.7 million, which included non-cash stock-based compensation income
of $0.2 million, as compared with an operating loss of $12.2 million,
including $1.1 million in non-cash stock-based compensation expense, in the
year ago period.

"During the quarter, the proactive decisions we made have enabled our
organization to be more efficient and lowered our cash utilization by 53%
compared to the prior year period. We expect that these actions will reduce
annual operating costs by approximately $10 million while preserving our
ability to invest in our clinical strategy," commented Graham Miao, Interim
Co-President and Co- CEO. "With our current cash balance, buoyed with the just
completed capital raise, we have strengthened our balance sheet, which we
believe will allow us to execute our strategy into 2015."

For the nine months ended September 30, 2013, total revenue was approximately
$452,000, of which $300,000 was related to the recognition of previously
deferred revenue. Total operating expenses for the nine months ended September
30, 2013 decreased by approximately 35% to $27.6 million from $42.2 million
for the same period in 2012. Operating loss for the nine months ended
September 30, 2013 was $27.5 million, which included $0.6 million in non-cash
stock-based compensation expense, as compared with an operating loss of $42.0
million, including $2.9 million in non-cash stock-based compensation expense,
in the year ago period.

Delcath raised approximately $23.2 million before related expenses through the
Company's At-the-Market (ATM) equity offering program during the nine months
ended September 30, 2013, including approximately $2.3 million in the third
quarter. As of October 31, 2013, there was approximately $47 million available
under the ATM program. In addition, the Company raised $9.0 million before
related expenses through its Committed Equity Financing Facility (CEFF)
program during the nine months ended September 30, 2013. At September 30,
2013, there was approximately $24 million available under the CEFF program.

Cash and cash equivalents as of September 30, 2013 were $27.7 million,
compared with $23.7 million at December 31, 2012. Combined with October
financing activities, pro forma cash and cash equivalents were approximately
$35 million. During the nine months ended September 30, 2013, cash used in
operating activities was $28.9 million, a 29% reduction compared to $40.7
million in the comparable nine month period in 2012. The decrease in cash
utilization was in part due to a reduction in NDA submission-related costs,
and improved organizational and operational efficiencies.

With the recently announced reorganization, management believes the Company is
on track to meet previously established guidance of $6-7 million cash burn in
the fourth quarter of 2013 and a quarterly average cash burn projection of
$5-6 million in 2014. The Company will continue to examine additional cost
effectiveness strategies, while focusing resources on clinical adoption and
corporate development programs.

Conference Call and Webcast

The Company will host a conference call today, November 6, 2013 at 4:30 p.m.
ET. The dial-in numbers for the conference call are 800-706-7745 (U.S.
participants) and 617-614-3472 (international participants); both numbers
require passcode 38516673. To access the live webcast, go to the Events &
Presentations page on the Investor Relations section of the Company's website
at http://www.delcath.com/investors/events

A taped replay of the call will be available beginning approximately two hours
after the call's conclusion and will be available for seven days. Dial-in
numbers for the replay are 888-286-8010 and 617-801-6888 for U.S. and
International callers, respectively. The replay passcode for both U.S. and
International callers is 31858222. An archived webcast will also be available
at http://www.delcath.com/investors/events

About Delcath Systems

Delcath Systems, Inc. is a specialty pharmaceutical and medical device company
focused on oncology. Our proprietary drug/device combination product, the
Delcath Hepatic Delivery System, is designed to administer high dose
chemotherapy and other therapeutic agents to the liver, while controlling the
systemic exposure of those agents. The Company's initial focus is on the
treatment of primary and metastatic liver cancers. Outside of the United
States, our proprietary product to deliver and filter melphalan hydrochloride
is marketed under the trade name Delcath Hepatic CHEMOSAT® Delivery System for
melphalan hydrochloride. The Company obtained authorization to affix a CE Mark
for the Generation Two CHEMOSAT Delivery System for Melphalan in April 2012.
The right to affix the CE mark allows the Company to market and sell the
CHEMOSAT Delivery System for Melphalan in Europe. The Delcath Hepatic Delivery
System for Melphalan has not been approved for sale in the United States by
the United States Food and Drug Administration. The Company has initiated
plans to investigate Melphalan Hydrochloride for Injection for use with the
Delcath Hepatic Delivery System for primary liver cancer.

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: efficiencies and reduction in cash
utilization achieved through September 2013 staff reductions, the leadership
transition plan and its impact on the Company, the timing and results of
future clinical trials including without limitation the HCC trials, clinical
adoption, use and resulting sales, if any, for the CHEMOSAT system to deliver
and filter melphalan in Europe, our ability to successfully commercialize the
chemosaturation system and the potential of the chemosaturation 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,
the Company's ability to satisfy the requirements of the FDA's Complete
Response Letter and provide the same in a timely manner, approval of the
current or future chemosaturation system for delivery and filtration of
melphalan, doxorubicin or other chemotherapeutic agents for various
indications in the US and/or in foreign markets, actions by the FDA or other
foreign regulatory agencies, our 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,, and uncertainties regarding our
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:
Investor Contact:                Media Contact:
Michael Polyviou/Patty Eisenhaur John Carter
EVC Group                        EVC Group
212-850-6020/951-316-0577        212-850-6021



DELCATH SYSTEMS, INC.
Condensed Consolidated Balance Sheets
as of September 30, 2013 and December 31, 2012
(Unaudited)
(in thousands, except share data)
                                                       September    December
                                                       30,          31,
                                                       2013          2012
Assets:
Current assets
    Cash and cash equivalents                        $ 27,735      $ 23,726
    Accounts receivables                               111           144
    Inventories, net                                   963           1,105
    Prepaid expenses and other current assets          1,200         1,457
            Total current assets                       30,009        26,432
    Property, plant and equipment, net                 3,293         4,042
            Total assets                             $ 33,302      $ 30,474
Liabilities and Stockholders' Equity:
Current liabilities
    Accounts payable                                 $ 684         $ 939
    Accrued expenses                                   3,375         5,790
    Warrant liability                                  863           3,427
            Total current liabilities                  4,922         10,156
Long Term Liabilities
    Deferred revenue                                   7             309
    Accrued expenses                                   490           -
            Total long term liabilities                497           309
Commitments and contingencies                          -             -
Stockholders' equity
    Preferred stock, $.01 par value; 10,000,000
    shares authorized;no shares issued and            -             -
    outstanding at September 30, 2013 and December
    31, 2012
    Common stock, $.01 par value; 170,000,000 shares
    authorized; 103,318,021 and 76,849,033 shares                   
    issued and 103,289,921 and 76,820,933 shares
    outstanding at September 30, 2013 and December     1,033         768
    31, 2012, respectively
    Additional paid-in capital                         250,821       218,063
    Accumulated deficit                                (224,341)     (198,808)
    Treasury stock, at cost; 28,100 shares at          (51)          (51)
    September 30, 2013 and December 31, 2012
    Accumulated other comprehensive income             421           37
            Total stockholders' equity                 27,883        20,009
            Total liabilities and stockholders'      $ 33,302      $ 30,474
            equity





Delcath Systems, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
for the three and nine months ended September 30, 2013 and 2012
(Unaudited)
(in thousands, except share data)
                     Three months ended September  Nine Months Ended
                     30,                           September 30,
                     2013            2012          2013          2012
Product revenue      $  72           $ 39          $ 152         $ 146
Other revenues          -              -             300           -
Total revenue           72             39            452           146
Cost of goods sold      (23)           -             (386)         -
Gross profit            49             39            66            146
Operating expenses:
   Selling, general
   and               $  4,573        $ 6,960       $ 16,919      $ 21,604
   administrative^1
   Research and         2,178          5,254         10,639        20,589
   development^1
Total operating         6,751          12,214        27,558        42,193
expenses
Operating loss          (6,702)        (12,175)      (27,492)      (42,047)
Change in fair value
of warrant              (497)          446           2,345         1,025
liability, net
Interest income         2              9             18            16
Other expense and       (9)            (93)          (404)         (204)
interest expense
Net loss             $  (7,206)      $ (11,813)    $ (25,533)    $ (41,210)
Common share data:
   Basic and diluted $  (0.07)       $ (0.18)      $ (0.27)      $ (0.72)
   loss per share
Weighted average
number of basicand     100,068,998    67,219,224    94,023,834    56,844,697
diluted common
sharesoutstanding
Other comprehensive
income (loss):
   Foreign currency
   translation       $  15           $ 87          $ 384         $ 83
   adjustments
Comprehensive loss   $  (7,191)      $ (11,726)    $ (25,149)    $ (41,127)
   Note 1:
   Includes non-cash
   stock-based
   compensation as
   follows:
                     Three months ended           Nine Months Ended
                     September 30,                September 30,
                     2013            2012          2013          2012
   Selling, general
   and               $  (159)        $ 665         $ 370         $ 1,828
   administrative
   Research and         (67)           372           217           1,094
   development
   Total stock-based
   compensation      $  (225)        $ 1,073       $ 587         $ 2,922
   expense



SOURCE Delcath Systems, Inc.

Website: http://www.delcath.com
 
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