Delcath Systems Q2 2025 Earnings Report

Delcath Systems EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.02
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

Delcath Systems Revenue Results

• Actual Revenue: $24.16 million
• Expected Revenue: $22.84 million
• Beat/Miss: Beat by +$1.32 million
• YoY Revenue Growth: N/A

Delcath Systems Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 8:30AM ET

Delcath Systems (NASDAQ:DCTH), an interventional oncology company, focuses on the treatment of primary and metastatic liver cancers in the United States and Europe. The company's lead product candidate is HEPZATO KIT, a melphalan for injection/hepatic delivery system to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects. Its clinical development program for HEPZATO is the FOCUS clinical trial for patients with metastatic hepatic dominant Uveal Melanoma to investigate objective response rate in metastatic uveal melanoma. It also provides HEPZATO as a stand-alone medical device under the CHEMOSAT Hepatic Delivery System trade name for Melphalan or CHEMOSAT for medical centers to treat a range of liver cancers in Europe. Delcath Systems, Inc. was incorporated in 1988 and is headquartered in New York, New York.

Delcath Systems Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Company reported Q2 revenue of $24.2 million, over 20% year-over-year growth, with $2.7 million net income, $9.8 million adjusted EBITDA, $7.3 million net cash from operations, no debt, and $81 million in cash and investments.
• Neutral Sentiment: The network grew to 20 treating sites with 10 more accepting referrals, aiming for 25–28 operational centers by year-end and 40 by end of next year, though pace is slower than originally projected.
• Negative Sentiment: Full-year product revenue guidance was lowered to $93 million–$96 million due to slower US site activations despite consistent treatment rates per center.
• Negative Sentiment: Entry into the NDRA/340B program means ~50% of kits are sold at a ~23% statutory discount, expected to cut third-quarter revenue per kit by 10%–15%, partially offset by higher volume.
• Positive Sentiment: First patient has been dosed in two Phase II trials for metastatic colorectal and breast cancer, with interim data expected as early as 2027 and primary endpoint results by mid-2028/29, targeting larger liver-dominant markets.

Presentation

[Operator]

morning, ladies and gentlemen, and welcome to the Double Cat Systems Second Quarter twenty twenty five Earnings Call. All participants will be in listen only mode. A question and answer session will follow the formal presentation. Please note that this event is being recorded. I will now hand you over to Delcat General Counsel, Mr. David Hoffman. Please go ahead.

[David Hoffman, General Counsel, Corporate Secretary & Chief Compliance Officer at Delcath Systems]

Thank you, and welcome to Delcat Systems' second quarter twenty twenty five Earnings Call. With me on the call are Gerard Michel, Chief Executive Officer Sandra Pinnell, Chief Financial Officer Kevin Muir, General Manager, Interventional Oncology Voyo 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.

[David Hoffman, General Counsel, Corporate Secretary & Chief Compliance Officer at Delcath Systems]

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 in other 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.

[David Hoffman, General Counsel, Corporate Secretary & Chief Compliance Officer at Delcath Systems]

A press release with our second quarter twenty twenty five results is available on our website under the Investors 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, CEO & Director at Delcath Systems]

Thank you for joining us today to review our second quarter's financial results and business updates. We continue to make steady progress in building our U. S. Business. This quarter marks the fifth consecutive quarter of site and hepcido volume growth.

[Gerard Michel, CEO & Director at Delcath Systems]

Quarterly revenue reached $24,200,000 an increase of over 20% compared to the 2025, reflecting continued strong adoption. U. S. Sales of hepcidol were $22,500,000 while Kenosat sales in Europe were $1,700,000 In the second quarter, we generated $7,300,000 in positive cash from operations, net income of $2,700,000 and adjusted EBITDA of $9,800,000 Additionally, we ended the quarter with no debt and approximately $81,000,000 in cash and investments. We finished the second quarter with 20 treating sites, and during the quarter we activated Northwestern Memorial Hospital, University of Miami Hospital, and University of Virginia Medical Center.

[Gerard Michel, CEO & Director at Delcath Systems]

Additionally, 10 centers are currently accepting referrals while progressing through the required training and approval process. Crucially, we are scaling intentionally, targeting world class cancer centers, which can attract patients in both our first ultra orphan market, as well as partner with us as we look to expand the use of hepciddo into our pipeline indications where there are larger patient populations with high unmet need. Based on the current pace, 25 to 28 operational centers are expected by the end of the fourth quarter. Although this is fewer than previously projected, active centers continue to treat patients at a consistent rate. The episodic pace of site openings reflects the complexities of working with large institutions for a novel product, which treats an ultra orphan population.

[Gerard Michel, CEO & Director at Delcath Systems]

I am confident that we will continue to open sites and we have set a goal of 40 sites by the end of next year. To support the expanding number of both target sites and actively treating sites, as we outlined on the last few calls, we recently expanded our U. S. Sales force from four to six regions, each staffed with a liver directed therapy manager, oncology manager, and clinical specialist. During the second quarter, average treatments were approximately two per month per center, with expectations for similar averages for the remainder of the year.

[Gerard Michel, CEO & Director at Delcath Systems]

Due to recent slower US site activations, full year revenue guidance has been adjusted to 93,000,000 to $96,000,000 Forecast for 2025 gross margins remain between 8385%, with continued positive non GAAP adjusted EBITDA and positive cash flow for the rest of the year. The total hepcidotreatment volume in 2025 is projected to increase by over 175% versus 2024. We have proceeded with plans to enter into the National Drug Rebate Agreement, or NDRA, with the U. S. Department of Health and Human Services.

[Gerard Michel, CEO & Director at Delcath Systems]

The NDRA enables Medicaid and Medicare coverage for outpatient drugs while requiring manufacturers to provide rebates to state Medicaid programs according to statutory formulas. Entering into the NDRA requires participation in the 340B drug pricing program, which enables eligible hospitals to purchase hepcidokid at reduced prices. Participating in these programs should increase market access and aligns with Medicaid and Medicare coverage requirements. Since 07/01/2025, hepcidokit has been sold at 340B prices to eligible facilities, with approximately 50% of kits distributed being sold at the discounted price. For Epsato kit, both rebate and discounts are 23.1% of the published WAC price.

[Gerard Michel, CEO & Director at Delcath Systems]

Earlier projections suggested a larger proportion of centers qualifying as disproportionate share hospitals or dish hospitals, But the actual list varies quarterly, and some customers with multiple facilities are purchasing via non DSH facilities. Volume distribution under the 340B program is expected to remain at roughly 50% for the next few quarters. In the third quarter, the estimated net effect will be a 10% to 15% reduction from the second quarter average revenue per hepatochid. Of course, this will be largely or partially offset by ongoing growth in volume. Looking beyond uveal melanoma, we are investing in further research and development for Hepsato, as we believe Hepsato and its underlying hepatic delivery system platform holds significant potential to benefit a wide range of patients with liver cancer.

[Gerard Michel, CEO & Director at Delcath Systems]

As discussed on previous calls, preparations are underway to conduct company sponsored trials in liver dominant metastatic colorectal cancer and liver dominant metastatic breast cancer, both of which allow us to approach large markets with clear unmet need. Both Phase II trials for these indications have received FDA clearance, and the colorectal trial has received CTA authorization in Europe and The UK. As a reminder, both Phase II trials will evaluate the safety and efficacy of hepciddo in combination with the standard of care versus standard of care alone in patients receiving third line treatment for metastatic CRC and second or third line treatment for patients with liver dominant HER2 negative metastatic breast cancer. Each trial will enroll approximately 90 patients across 20 to 30 sites in The United States and Europe. Both trials have a primary endpoint of hepatic progression free survival.

[Gerard Michel, CEO & Director at Delcath Systems]

We anticipate patient dosing for the metastatic colorectal trial to begin within weeks, with the first patient having been randomized just yesterday and enrollment for metastatic breast cancer to follow in the 2026. For metastatic colorectal, we expect the release of interim data as early as 2027 with an anticipated release of primary endpoint results in mid-twenty eight with overall survival of data expected to follow in 2029. For our metastatic breast cancer trial, we anticipate interim data release as early as the 2027 with an anticipated release of primary endpoint results in mid-twenty twenty nine, with overall survival data expected to follow in 02/1930. We continue to have advisory board meetings with oncology subspecialties to prioritize our next set of indications to pursue. There is strong interest in intrahepatic cholangiocarcinoma and cutaneous metastatic melanoma, among others.

[Gerard Michel, CEO & Director at Delcath Systems]

Another potential area of development includes combination or sequence with immunotherapy agents such as immune checkpoint inhibitors. Preclinical studies suggest a strong rationale for combining hepcidin with immune checkpoint inhibitors to improve efficacy for patients with liver metastases. Upcoming readouts from the randomized Phase II CHOPEN trial are expected to inform the feasibilities of these combination approaches. We look forward to the presentation of these results at the ESMO conference in October 2025. I'm really thrilled with how the team is executing on the clinical front, and we are well positioned to approach some exciting new opportunities in a host of cancer indications where we can leverage our footprint of sites to reach more patients and have some real impact to patient outcomes.

[Gerard Michel, CEO & Director at Delcath Systems]

With that, I will now hand the call over to Sandra for a detailed financial review.

[Sandra Pennell, CFO at Delcath Systems]

Thank you, Gerard. Revenue from our sales of HIPSTADA was 22,500,000.0 and ChemoCet was $1,700,000 for the 2025, compared to just $6,600,000 for hepcidin and $1,200,000 for ChemoCet during the same period in 2024. The second quarter shows growth of over 20% over the 2025 in both revenue and volume of kits sold. We recognized gross margins of 86% in the second quarter compared to just 80% for the same period in the prior year. Research and development expenses for the quarter were $6,900,000 compared to $3,400,000 for the same period in the prior year.

[Sandra Pennell, CFO at Delcath Systems]

Selling, general, and administrative expenses for the second quarter were $11,400,000 compared to $6,800,000 for the same period in the previous year. Our second quarter twenty twenty five net income was $2,700,000 compared to a $13,700,000 net loss in the second quarter of the previous year. Non GAAP positive adjusted EBITDA for the second quarter was $9,800,000 compared to an adjusted EBITDA loss of $800,000 for the 2024. We ended the quarter with approximately $81,000,000 in cash and investments and quarterly positive operating cash flow of $7,300,000 compared to $2,200,000 operating cash flow in the previous quarter. As of today, we have no outstanding debt obligations and no outstanding warrants.

[Sandra Pennell, CFO at Delcath Systems]

As a reminder, the exercise of Series F warrants resulted in $16,200,000 of funding in 2025. The warrants were issued in May 2020 as a component of a private placement at an exercise price of $10 per share and expired on May 5. We expect to remain cash flow positive throughout 2025. Thank you all for participating today. That concludes our prepared remarks, and I'd ask the operator to open the phone lines for questions and answers. Thank you.

[Operator]

Thank you. We will now be conducting the question and answer session. If you'd like to ask a question, please press star and then one on your telephone keypad. A confirmation turn will indicate that your line is in the question queue. You may press star and then two to leave the question queue. Our first question comes from Marie Talbold of BTIG.

[Marie Thibault, MD & Medical Technology and Digital Health Analyst at BTIG]

Good morning. Thanks for taking the questions and congrats on yet another good quarter. Wanted to start here with a question about the NDRA program and what you are seeing. I know it's only been one month since that was activated, but what you are seeing so far in terms of awareness from centers, any tailwinds to volumes that you're starting to see with this increased access and how this might be playing into the revised guidance you gave us, if there's any details on the cadence you'd like to see for the next two quarters, that would be helpful for us as well.

[Gerard Michel, CEO & Director at Delcath Systems]

Sure. Marie, good to hear from you. Probably a little premature to say whether or not there'll be any tailwinds. Prior to us participating in the NDRA, we often, I think always got questions from sites as to whether or not sites with that were dish hospitals as to whether or not we participated. And they were generally a little disappointed when we said no.

[Gerard Michel, CEO & Director at Delcath Systems]

Now they're happy that we are. But in terms of any breaks being removed, think that will play out over a number of quarters before we can sort that out. In terms of getting to 25 to 28 centers by the end of the year, the pace of that, which I think you were asking too, I think we can do about one to 1.5 per month for the balance of the year to get to that number.

[Marie Thibault, MD & Medical Technology and Digital Health Analyst at BTIG]

Okay, that's really helpful. And then I wanted to check, I think I recall that your sales team, you were going through an expansion. Just want a progress update on how that expansion has been going, how you found productivity, how that is helping with perhaps utilization at the centers?

[Gerard Michel, CEO & Director at Delcath Systems]

It is completed. As you probably remember, it's six regions now. We have three professionals or customer facing people on the commercial side in each of those regions. One is his job or her job is to be at every treatment, a clinical support specialist. Another job is to open the sites and kind of manage the sites, liver directed therapy manager.

[Gerard Michel, CEO & Director at Delcath Systems]

And the last is an oncology manager, and they're more like a typical pharmaceutical oncology rep. They're all in place. Obviously there's always a little bit of growth pains as you realign territories, hire new people. But I think about as well as one could be expected, and I think that they've all hit their stride at this point.

[Marie Thibault, MD & Medical Technology and Digital Health Analyst at BTIG]

Very good to hear. Thanks for taking the questions.

[Operator]

The next question comes from John Newman of Canaccord Genuity. Please go ahead.

[John Newman, MD - Biotechnology at Canaccord Genuity Inc]

Hi, team. Thanks for taking my question and also congrats on a good quarter. Gerard, I just had a question on the NDRA program as well. We get a lot of questions from investors here. Just curious over the long term, if you could talk about perhaps the potential for volume to expand and sort of why 340B is actually attractive to these hospitals.

[John Newman, MD - Biotechnology at Canaccord Genuity Inc]

I think people are kind of looking at the very short term, but I'm just curious if you could comment on sort of the long term potential opportunity here.

[Gerard Michel, CEO & Director at Delcath Systems]

Sure. And I'm not surprised investors are hungry for more detail because most companies when they launch are either in this or out of this. And you rapidly understand kind of what the average value per unit is factoring in the various discounts. For us, we kind of stepped into it midstream because of some changes in, let's just say, guidelines from CMS and enforcement discretion, etcetera. So we kind of were forced into it all of a sudden.

[Gerard Michel, CEO & Director at Delcath Systems]

I think net effect, what that means is two things. One is based on how things are running right now, and we're not that far into it a month and change, we think about half of our sites will take half of our volume will take advantage of this statutory discount. The net effect of that is probably a 10% to 15% reduction between the second quarter and the third quarter in terms of value per kit sold. Offsetting that is the more difficult thing to quantify, and that is, hey, to whatever extent were certain hospitals saying, look, we are just not going to make enough to cover our costs in certain types of patients. And either that would maybe limit their excitement to joining to working with us, or more likely, and although one would hope this doesn't happen, I think there's occasionally some screening out of patients who might be under insured.

[Gerard Michel, CEO & Director at Delcath Systems]

When hospitals look at this on a portfolio basis with this 340B NDRA program, for a portion of their business, those that participate, they're now making a much larger margin. And on a portfolio basis, the product becomes a bit more attractive to them. Will I ever be able to say how much more business did we get because of it? No. Am I fairly certain that there will be increased volume to some extent that we could run parallel universe experiments?

[Gerard Michel, CEO & Director at Delcath Systems]

Yes, but I'm reluctant to try to quantify that. I think it'll be meaningful, but it will take a bit of time to probably materialize. And that's a very long winded answer, Jenna. I hope that's helpful.

[John Newman, MD - Biotechnology at Canaccord Genuity Inc]

No, it is. This is a complicated topic that we're not used to hearing much about, but we appreciate all the detail here. Thank you.

[Operator]

The next question comes from Chase Knickerbocker of Craig Hallum. Please go ahead.

[Jake Soucheray, Associate Analyst at Craig-Hallum Capital Group LLC]

Good morning, everyone. This is Jake on for Chase. Thanks for taking the questions. Just regarding the NDRA, are you seeing any increased urgency to get centers up and running or hearing anything from centers since joining the program?

[Gerard Michel, CEO & Director at Delcath Systems]

No. And I think the reason for that is, although that might to the extent that any existing center that's accepting referrals or is trying to get to the point where they accept referrals, the extent that was revenue integrity folks and there's different names in every hospital for it, but let's use that term to the extent that they were a little reluctant or wondering how thin would the margins be or can they cover their costs, It's a much easier conversation to have for those that have DSH eligible facilities. But they are one of, and I probably not exaggerate when I say up to a dozen different gating items to get this thing approved in hospitals. I don't think anyone's pulling us forward because they're saying, hey, we're going to make a lot of money. And I'm thankful for that because at the end of the day with a cancer treatment, you don't want that to be a driver on either end of the equation.

[Gerard Michel, CEO & Director at Delcath Systems]

But no, I wouldn't say I see increased urgency in terms of, geez, look at this, this is much more much better. At the end of the day, what drives us forward are physicians interested in doing the right thing by their patients and hearing from other docs that they're seeing extraordinary results in some patients. And then they just need to get through a lot of bureaucratic gating items.

[Jake Soucheray, Associate Analyst at Craig-Hallum Capital Group LLC]

Thank you. That was helpful. If we could just turn to R and D for a second. Now that trials are starting to spin up, can you give us some thoughts on how we should be thinking about R and D? How does that ramp and when the trials are going to fully get going in terms of spend and what we should be modeling for?

[Gerard Michel, CEO & Director at Delcath Systems]

Sure. Sandra, can you help out with that?

[Sandra Pennell, CFO at Delcath Systems]

Absolutely. So yes, R and D increased already in Q2 over Q1 by about 37%. And again, this is fully loaded with the stock comp in there. We can expect probably another 40% in Q3 increase as we start to really ramp up in CRC and NBC, and probably another 25% to 30% increase in Q4 over Q3. Overall, from 2024, this will result in a full year, probably about 140% increase.

[Sandra Pennell, CFO at Delcath Systems]

Again, that does include a significant increase in stock comp from prior year, probably makes up about 20 plus percent of the balance in R and D in 2025.

[Jake Soucheray, Associate Analyst at Craig-Hallum Capital Group LLC]

Great. Thank you.

[Operator]

The next question comes from Sudan Laganathan of Stephens. Please go ahead.

[Sudan Loganathan, Managing Director at Stephens Inc]

Hi, good morning, Gerard, Sandra and the Delcat team. Congrats on another strong quarter and thank you for taking my questions. First, I wanted to ask on the SHOPAN readout from ESMO. At what capacity can you market or educate physicians with the outcomes of the SHOPAN trial expected at ESMO Congress twenty twenty five in October? Will this data be something your MSLs will be able to talk to or sales reps will be able to talk to when meeting with prospective or existing active sites?

[Gerard Michel, CEO & Director at Delcath Systems]

It's a great question that we've discussed internally. At a minimum, the MSLs will be able to talk about it. Whether the reps can talk about it, I think they can certainly share the publication. In terms of detailing and saying, this is the new treatment paradigm, you should sequence in this following manner, that's probably verboten. But I think in terms of sharing a publication, if the docs ask about it, that's perfectly fine.

[Gerard Michel, CEO & Director at Delcath Systems]

And also in terms of putting in touch with MSLs, that certainly will happen. It's kind of a slight gray area because it is unlabeled to use this just for two or six, however you want, the shou can protocol of initially two. But we'll probably try to stay somewhat on the conservative side and have most of the detailed conversations occur with the MSLs.

[Sudan Loganathan, Managing Director at Stephens Inc]

Got it. Great. And secondly, if I could ask, I think if I heard correctly, you made a slight adjustment to the number of active sites you're anticipating by end of fourth quarter to be 25 to 28 versus the prior guidance of 30 by end of the year. Since you're also mostly retaining your product sales guidance ranges, does the continued strength really coming from the number of treatments per site per month being at two or higher still for the exit to vaccine sites and even the ones that are potentially coming on between now and the end of the year?

[Gerard Michel, CEO & Director at Delcath Systems]

Yeah, so when we first issued guidance just a couple of months ago, I think it's important for me to kind of share. And I've talked a lot of you one on one about this, we did that, share why we decided to issue guidance. When we kind of quite frankly, quickly found out that we needed to participate in 340B and NDRA due to some rules or guideline changes, we realized that it would be very difficult for investors and analysts to kind of tease apart what the heck does that mean. Now we have another variable, the discount, but also how many sites are participating in the discount. We also knew our volume was ahead of what consensus was out there on the street.

[Gerard Michel, CEO & Director at Delcath Systems]

And we thought it would be probably really prudent, even though I didn't want to issue guidance until starting next year, because of the difficulty in predicting site activations. We thought it was best to kind of put some bounds out there to invest in community given this new kind of variable out there. With that said, if you're asking why it didn't come down more, which I think we tightened it a little bit and moved it down slightly, yes, we're doing okay. We are slightly over two treatments per center, which is great. Some of the centers that are coming on board we think will be higher volume centers as well, so that gives us a fair amount of confidence as well, and just a modest adjustment in the guidance.

[Sudan Loganathan, Managing Director at Stephens Inc]

Gotcha. That's great. And then the last point, I'm assuming most of or all of the adjustment from the product revenue guidance range is coming from Xelokit and not from ChemoSat. And just want to say if that's best assumption to make.

[Gerard Michel, CEO & Director at Delcath Systems]

All right. You asked, is most of the growth coming from hepcid and not chemo set?

[Sudan Loganathan, Managing Director at Stephens Inc]

The change in the range for the product revenue guidance range, is that primarily due to changes in hepatokit expectations or chemoSATs?

[Gerard Michel, CEO & Director at Delcath Systems]

A slight change in chemoSATs expectations and a change I think both. Now ChemoSAD is tough because the end in terms of treating centers that really contribute to revenue is fairly small. I think three or four centers probably account for 70% of the business. So a bunch of docs being out because they're sick, which actually happened at one of the sites in Germany can really swing it around. But I'd say two thirds of the change is probably from Hipsatto and a third, give or take, from ChemoSAT.

[Sudan Loganathan, Managing Director at Stephens Inc]

Great. Thanks. And again, congrats on the great quarter.

[Operator]

The next question comes from Bill Morgan of Clear Street. Please go ahead.

[Bill Maughan, MD, Equity Research - Biotechnology at Clear Street]

Hey. Good morning and thanks. So just looking at it's kind of a multipart question on treatment rates at sites. So you're currently at around two per month per center and and you've indicated that should be similar through year end. Do you see that changing meaningfully in the currently activated centers beyond this year, either up or down?

[Bill Maughan, MD, Equity Research - Biotechnology at Clear Street]

And then as you grow to a target of 40 by the end of next year, given those are probably not the first 20 most attractive sites to add, do you expect them to have a lower treatments per month per center? Thank you.

[Gerard Michel, CEO & Director at Delcath Systems]

Yeah, I think to the last point, less attractive because it's the next 20. I'm not sure about that. They may be have less of a book of business of uveal melanoma patients, but part of what we're going to do is build referral networks to those centers. One of the dynamics that we are aware of and are working on plans to deal with is some centers, some of the heavy volume centers run out of capacity. So we kind of have two things to do there.

[Gerard Michel, CEO & Director at Delcath Systems]

One is keep that in mind as we're building referral networks, and centers that we know don't have enough slots to treat. We'll try to adjust that referral pattern to other centers that are under capacity. A second dynamic is to try to see if we can actually get centers increase either room time or train a second team. In some centers it's room time, in some centers it's just the team that's available. I know one center was treating at a rate that required some of the team members to come in on their days off.

[Gerard Michel, CEO & Director at Delcath Systems]

I think it's a testament to what they think of the therapy that they're willing to do that, but that's probably not sustainable. So we're trying to see what we can do about getting more people trained up. But that's kind of the dynamic in the growth. Some centers reach a cap and either we need to refer I won't say refer around them, but refer to other centers to the extent we can do that, or try to help them build a case that they can expand capacity. If we are successful in that, then I do believe we'll start seeing increasing growth beyond two in terms of on an average basis.

[Bill Maughan, MD, Equity Research - Biotechnology at Clear Street]

Thank you.

[Operator]

The next question comes from Il Jain of Laidlaw and Co. Please go ahead.

[Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company]

Good morning and thanks for taking the questions. Congrats on the top line this quarter. Just a few quick ones. The first one is that in terms of the ESMO presentation, to your best knowledge, what kind of data will be presented? And so this is the first one.

[Gerard Michel, CEO & Director at Delcath Systems]

Okay, so you're talking about the Chopin study at ESMO? Okay, all right. Do you mind responding to that?

[Vojislav Vukovic, Chief Medical Officer at Delcath Systems]

Sure. Thanks for the question. The CHOPEN trial, just to remind you, is comparing the two treatments. One arm is PHP alone, that's a chemostat, and the other is the sequential use of chemostat with ipinivo. The primary endpoint of the study is one year progression free survival, and our understanding is that the analysis is underway, and it is the intention of the investigators to present the primary endpoint results along with safety and secondary efficacy results at the ESMO conference.

[Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company]

Okay, great. That's very helpful. And one other question here is that in terms of you going to reduce the center to be activated from 30 to 25, maybe 25 to 28, is there a specific reasons for doing that? And would you like to know a little bit of colors on that as well?

[Gerard Michel, CEO & Director at Delcath Systems]

Sure, I'll say there's definitely not one specific reason. I wish there was, it would be easier to deal with perhaps, but it really has to do with the complexity activating these very large most of them large academic centers. But Kevin, do you mind just adding a little bit of color as to what's going on and just the sense from the field force?

[Kevin Muir, General Manager - Interventional Oncology at Delcath Systems]

Sure, I will. As Gerard mentioned in his comments, we're scaling intentionally and our focus is activating the right site. That brings its own layer of complexity in the process. And this hepato kit procedure sits outside traditional care pathways and conventional team structures. So their flexibility is crucial for us to open the sites.

[Kevin Muir, General Manager - Interventional Oncology at Delcath Systems]

And one example is perfusion. Perfusion is often the final hurdle before launch. It involves credentialing, scheduling integration, and alignment with surgical workflows. It's also one of our most crucial onboarding steps. Securing perfusion services is essential to procedural success, but it's not universally available.

[Kevin Muir, General Manager - Interventional Oncology at Delcath Systems]

So what we're having to do is go in to a number of these sites and contract with external providers of perfusion services. So we've had a recent wave of success in signing some of these contracts. So what we're seeing is kind of an alignment across the board with these hospitals, and I would expect that even though we dropped the guidance on the total number, I think we'll see a lot of the sites that we have been trying to get in that have significant patient volume opening in the near future.

[Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company]

And maybe just a follow-up on this way, in terms of, as you mentioned, securing the perfusion services, do you anticipate overall this will, going to improve going forward, so make it less a hurdle, for example, in next year? And thanks.

[Kevin Muir, General Manager - Interventional Oncology at Delcath Systems]

Yeah, I think it will help. I do, I will say, as Gerard mentioned, each one of these sites is kind of a unique beast. And there's not one specific thing that holds up an account opening, but definitely providing and securing perfusion services has been identified, and it's one of the things that we are tackling earlier in the site activation process now than we have been in the past.

[Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company]

Okay, great. Thanks a lot. Go ahead. I'm sorry.

[Gerard Michel, CEO & Director at Delcath Systems]

I'm just going add a little color on that. It's very unusual for a large academic center to say, sure, we're happy to work with you to contract with some other third party so we can have your product. In most cases, they tell you to just go pound sand. So this is a testament to the fact that the docs want the product. And they're championing it for us and going through this issue.

[Gerard Michel, CEO & Director at Delcath Systems]

So this really is and I know investors and analysts have probably heard of me, tired of hearing me say this. This is a very, very unique beast. It doesn't fit into so many different pathways, team structures, etcetera. And the fact that we are getting it into these sites should tell you that there's something here. There's something real.

[Gerard Michel, CEO & Director at Delcath Systems]

It's been difficult to predict the pace, but we are getting in. It just fits and starts in terms of just the various contracts and bureaucracies, etcetera, that we need to go through.

[Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company]

Okay. Great. I appreciate the detailed explanation, and, again, congrats on the quarter.

[Gerard Michel, CEO & Director at Delcath Systems]

Thanks.

[Operator]

Thank you. The next question comes from Swayampakula of H. C. Wainwright. Please go ahead.

[Swayampakula Ramakanth, Managing Director & Senior Equity Analyst at H.C. Wainwright & Co.]

Thank you. This is RK from HC Wainwright. Good morning, Gerard and Sandra. Most of my questions have been asked. I just have one question.

[Swayampakula Ramakanth, Managing Director & Senior Equity Analyst at H.C. Wainwright & Co.]

After working with different centers in terms of getting them trained and taking patients and go through the procedure, do you have a system at this point where you think you can get through this onboarding and training process a little bit sooner than previously? And the second part of the question is, you know, now that you are on the 340B program, do you think some of the current centers could easily go beyond the average two treatments per month to say closer to three by the end of this year?

[Gerard Michel, CEO & Director at Delcath Systems]

Sure. Okay, let me start with the second question. I don't think that would be like a 50% increase in volume. I don't think we're going to see that do the NDRA 340B program. I do think that it will lead to, on a portfolio basis, if hospitals realize, hey, are covering our costs, and then some.

[Gerard Michel, CEO & Director at Delcath Systems]

It's a prudent thing to do for the institution not to put the brakes on occasionally. I think that'll go away. It'll be very hard for us to ever quantify that. So I'm reluctant to do that. But I'll say it certainly isn't going to hurt.

[Gerard Michel, CEO & Director at Delcath Systems]

Whether or not it's well over the revenue we lose per kit, hard to say. It may very well be. But I think what's good about it is it removes a conversation that perhaps was occurring in some of the centers, and that we're not privy to these conversations, and puts the bulk of the decision as to whether to use the product or not basically on how good will it be for the patient. And that's a win. In terms of, hey, have we pulled together, is there a process now, a template that we can go to the next set and get this done faster?

[Gerard Michel, CEO & Director at Delcath Systems]

There certainly are some learnings, and I think Kevin just identified one, perfusion. We found not in all the centers, but in a meaningful percentage, I don't know off the top of my head, let's say a third or so, perfusion became gating at the end. So Kevin's team is getting ahead of that now. Another thing that Kevin is going to start implementing is in some centers where it's more IR driven, and the oncologist is saying sure, but isn't necessarily making the phone calls and walking the halls to try to get through some of these gating items. They're just kind of like, sure, I'll do it.

[Gerard Michel, CEO & Director at Delcath Systems]

I'll be part of it. Kevin's introducing, what I'll call oncology proctors. He's gonna make a point of trying to get oncologists at other sites that have seen very strong responses in their patients, try to get them to kind of proctor the oncologist is what you can expect to see. Frankly for the subset of sites where the oncologist isn't leading it, IR is, so we can get both MDs to lead the charge. So yeah, we're trying to tweak the process.

[Gerard Michel, CEO & Director at Delcath Systems]

But again, I'm reluctant to put a, so yeah, we're gonna be 20% faster. Because obviously we had a slight slowdown all of a sudden and I didn't expect that. But again, it's because each of these institutions is very different.

[Swayampakula Ramakanth, Managing Director & Senior Equity Analyst at H.C. Wainwright & Co.]

Okay, and then the last question from me is now that you have a clinical program starting in Europe for the additional indication. Do you see that helping out on the chemostat sales at all by any means? Not only for the rest of the year, but in 2026, Or these are two independent things that it really should not or may not benefit the sales of ChemoSATs?

[Gerard Michel, CEO & Director at Delcath Systems]

Longer term it will benefit. Europe was primarily driven by a small number of sites in Germany and one or two sites in The UK where they essentially on their own organically, the product was approved as a device, used it, became believers, championed it within their own institutions. We had very little, very few clinical sites and participation in Italy, Spain, France, and most of those were IRs. So to get a new cancer therapy utilized, you really need the oncologists on board. IRs are helpful, but to a large extent, and I hope they're not listening or hope they don't get angry with me, but they're subcontractors to the oncologists.

[Gerard Michel, CEO & Director at Delcath Systems]

Opening clinical sites for colorectal cancer, breast cancer, that will allow us to open sites in countries where we either have no sites, Italy, France, Spain, or currently have sites but we can expand it. Once we have those sites up and running in terms of for the clinical trial purpose, and that's a huge, huge hurdle. It takes a lot of activation energy, some reason to open a site from the site's perspective. Once we have a site open, it will be much, much easier to start talking to docs, mostly dermal oncologists, what they're called in Europe. It will be much easier to have conversations with them and say, hey, at your center you have this team that's doing this procedure.

[Gerard Michel, CEO & Director at Delcath Systems]

Why don't you steer some patients to that because the team's already trained? So yes, the short answer to your question is yes, it will help chemo set sales, but it will take a period of quarters to years to really make a material difference.

[Swayampakula Ramakanth, Managing Director & Senior Equity Analyst at H.C. Wainwright & Co.]

Thank you. Thank you, Gerald, for taking my questions.

[Operator]

Thank you. Ladies and gentlemen, with no further questions in the queue, this concludes the question and answer session. Thank you for attending, and you may now disconnect your lines.

Participants

Executives

• David Hoffman, General Counsel, Corporate Secretary & Chief Compliance Officer
• Gerard Michel, CEO & Director
• Sandra Pennell, CFO
• Vojislav Vukovic, Chief Medical Officer
• Kevin Muir, General Manager - Interventional Oncology

Analysts

• Marie Thibault, MD & Medical Technology and Digital Health Analyst at BTIG
• John Newman, MD - Biotechnology at Canaccord Genuity Inc
• Jake Soucheray, Associate Analyst at Craig-Hallum Capital Group LLC
• Sudan Loganathan, Managing Director at Stephens Inc
• Bill Maughan, MD, Equity Research - Biotechnology at Clear Street
• Yale Jen, Senior Managing Director & Senior Biotech Analyst at Laidlaw & Company
• Swayampakula Ramakanth, Managing Director & Senior Equity Analyst at H.C. Wainwright & Co.