Delcath Systems, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Delcath Systems, Inc. Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to James Carbonaro. Thank you. Please go ahead, sir.

Thank you. And once again, welcome to Delcat Systems' second quarter 2020 earnings call. With me on the call are John Pappura, Interim Chief Executive Officer, Christine Padula, Principal Accounting Officer, Dr. Johnny John, VP of Medical Affairs, and Dr. Gil Aharon, Director. 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. False 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 assurances that such expectations will prove to have been correct. Actual results may differ materially 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-K, 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 earnings 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. Now I would like to turn the call over to John Perfora. John, please proceed.

Thank you, James, and thanks, everyone, for joining us today. We will arrange our comments by providing a strategic overview, highlights of our second quarter performance, an operational update, and our financial results before having our Q&A. So first up, a strategic overview. This second quarter has been truly transformational for Delcath and the culmination of a 12-month process of restructuring, recapitalization, and refocusing the company. This included, among other things, management as well as board transitions. Delcath is now fully restructured with a clean balance sheet and cap table, fully recapitalized with $51.5 million raised over the past 12 months due led by Fundamental Healthcare Focus Funds to allow us to complete our Phase III registration focus trial of our therapeutic treatment platform, Melphalan HDS, in liver-dominant metastatic oculomelanoma, for which we have an orphan drug designation, and refile our new drug application with FDA by mid-2021. I can truly say that working towards the possibility of making Melflan HDS available as the only labeled metastatic oculomelanoma-specific product for U.S. patients who currently have limited therapeutic options is our organization's top focus and priority. During the second quarter, we completed a $22 million capital raise in conjunction with an uplisting to NASDAQ. Our current cash resources, In addition to expected cash milestones in the coming quarters from our European commercialization partner, MEDAC, provide us with a runway through multiple value inflection points expected by mid-year 2021. With Melflin HDS set to potentially be FDA approved by the second half of 2021 as the only metastatic oculomelanoma-specific therapy in the U.S., Delcat has begun pre-commercialization activities, which it intends to accelerate in coming quarters. These include initial market sizing, physician, hospital, and payer surveys. While Melphalan HDS is a platform technology with the potential broad applicability across multiple liver-dominant metastatic cancers, let alone other potential organs, We look at metastatic oculomelanoma, which in over 90% of cases is liver dominant, as our initial commercial indication on which to build upon. Our initial medical oncologist surveys have highlighted their views of the high unmet medical need for this patient population, the lack of effective therapies, The desire for novel, effective therapeutic approaches and, if it were to be approved, the potential frontline positioning of Melflin HDS in this patient population. Our initial hospital and payer surveys confirmed the expectation of attractive ultra-orphan oncology pricing dynamics for our therapy, in line with the relatively low incidence of this patient population and the high unmet medical need. Belcat estimates that there are currently about 1,500 annual new cases of liver-dominant metastatic oculomelanoma in the U.S. Assuming parity pricing with other ultra-orphan oncology therapies, we believe that the U.S. metastatic oculomelanoma market opportunity is indeed in the hundreds of millions of dollars and represents a compelling commercial opportunity for a relatively small organization to capitalize upon. As mentioned before, Melklin HDS is a platform interventional oncology technology with broad potential applicability in multiple liver dominant as well as other organ metastases. Interventional oncology in recent years has rapidly become an integrated specialty component of comprehensive oncology care. It is fully accepted and Demanded by Knowledgeable Oncologists, where it has become an integral part of the treatment referral pattern. From a business standpoint, we have seen the interventional oncology market expand rapidly in recent years with a consolidation of strategic assets among a number of key players. We believe that Meltland HDS represents an exciting new technology in the interventional oncology armamentarium, which is mechanistically unique. are clinically differentiated and of high value commercially. While we believe that metastatic oculomelanoma is a commercially sizable market on which substantial value can be built, we intend to work towards expanding the U.S. opportunity well beyond this initial indication. During the quarter, we received feedback from FDA in relation to potential protocol modifications to our ALIGN Phase III studies, and Interhepatic Cholangiocarcinoma, ICC, offering the company both guidance and suggestions on a path forward. At the same time, as part of the recent strategic restructuring and refocusing of the company, we have initiated a comprehensive review of all available clinical and commercial data to guide us on the optimal pipeline project to strategically pursue as we look to spend our precious R&D dollars in the coming quarters. Specifically, with over 1,000 commercial procedures performed in the EU in 13 different tumor types using our technology in recent years, where a product is approved by the brand name Kemosat under a CE mark, we have ample data to help guide us. Some of these potential programs, in addition to ICC, include metastatic neuroendocrine tumors, liver-dominant breast cancer, and metastatic colorectal cancer. As part of this initial evaluation, we have worked during the quarter to better define the U.S. patient incidence numbers for each of these potential settings. Further, we are in the process of engaging with our clinical advisors to review data generated in recent years in these settings with the goal of reaching the best risk-reward conclusions on our pipeline projects. We look forward to updating you in coming months on our strategic decisions as we look to initiate new trials. Now turning to our operational updates. Earlier this year, as with other global trials, our phase three registration focus study in liver dominant metastatic melanoma has been impacted by COVID-19. The pandemic did cause the closure of clinical sites to data monitoring as hospitals restricted access to non-essential staff members and visitors Importantly, however, throughout these months, trial protocol has remained intact. We have managed to keep ongoing trial patients who were being treated at the beginning of the pandemic on protocol. Faced with potential data timeline reporting uncertainty, we have taken steps to ensure progress on our new drug application key deliverables during this pandemic. Those included, among other things, required non-clinical studies, Chemistry Manufacturing Controls of CMC work to ensure that any potential delays will not affect our timelines to NDA submission by mid-2021. At the same time, we are pleased to report the majority of our clinical study sites are on a trajectory of reopening to data monitoring visits, starting in Europe and more recently in the US. In addition, we have implemented a number of steps to increase data monitoring efforts in light of the impact of the pandemic. Based on the current trajectory of sites reopening, our goal is to report our phase three top line data by the end of 2020 or early 2021 with a refiling of our NDA with FDA by mid-year 2021. Lastly, as mentioned before, MELFLA and HDS is approved in Europe under a CE mark with the brand name Chemosat. In late 2018, we signed a royalty-bearing partnership agreement with MEDAC, a leading private German pharmaceutical company, to become our commercialization partner in the EU. While over 1,000 commercial procedures have been done using chemosat in Europe, overall market penetration is still low, partly due to the lack of product reimbursement in the majority of countries. A prerequisite for enhanced reimbursement will depend on the focus study results, which our partner awaits. Further, as part of our recent restructuring, we have taken steps during the current quarter to review BDAC's performance proactively to ensure optimal execution and growth trajectory by country by country with an emphasis on tactical execution. We expect these interactions to continue more frequently with our goal of ensuring that the European opportunity expands significantly. in accordance with its real potential. To conclude, we believe Melflin HDS is a unique, differentiated, high-value interventional oncology asset representing an exciting opportunity for the treatment of metastatic cancers of high unmet medical needs. In the last 12 months, Melflin HDS has emerged as a late-stage interventional oncology company with a series of potential near-term transformative value inflection points We are focused on pursuing the initial approval of our platform technology, Meltzland HDS, in liver-dominant metastatic oculomelanoma, which we believe would represent a US commercial opportunity in the hundreds of millions of dollars. We are further strategically focused on follow-on indications for which our technology is applicable. Our goal is for this technology to become available as part of the armamentarium of integrated cancer care for patients who have limited treatment options. We are excited at the opportunities ahead and look forward to updating you on the progress in months to come. At this point, I'll now turn it over to Christine for a more in-depth view of our financials.