Delcath Systems, Inc.

Good morning, ladies and gentlemen, and welcome to the DeKalb First Quarter 2021 Earnings Event. At this time, all participants have been placed on a listen-only mode, and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, James Carbonara of Hayden Investor Relations. Sir, the floor is yours.

Thank you. And once again, welcome to Delcat Systems' First Quarter 2021 Earnings Call. With me on the call are Gerard Michel, Chief Executive Officer, John Perpora, Chief Operating Officer, Dr. Johnny John, VP Medical Affairs, Christine Padula, Interim Principal Accounting Officer, and Kevin Moore, Vice President, Commercial Operations. 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 fact, 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 the 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 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 roll are made only as of the date of this call. We do not undertake any obligation to update or supplement any core looking statements to reflect subsequent knowledge, events, or circumstances. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you, everyone, for joining today. Our last quarterly call was just over a month ago, given the typical compressed timeframe between filing the annual 10-K and the first quarter 10-Q. The focus of that recent call was the release of the preliminary results from the FOCUS trial. Given the importance of those data, and frankly the misinterpretation by some investors regarding the results, I believe a recap of the data is warranted on this call. Most importantly, the preliminary FOCUS trial results are unambiguously positive. The primary endpoint, overall response rate, as determined by an independent review committee, exceeded the pre-specified threshold for success by a very wide margin. We powered the study to demonstrate superiority over checkpoint inhibitors used to treat metastatic ocular melanoma. To demonstrate superiority, the lower bound of the overall response rate of the ITT population needed to exceed 8.3%. We reported an overall response rate of 29.2%, the lower bound of which was just over 20%, greatly exceeding the pre-specified 8.3% threshold for success. While the data is based on 87% of treated patients, it is mathematically impossible to have the lower bound of our efficacy calculation fall below the pre-specified success criterion of 8.3% regardless of the response outcome of the remaining patients. We can unequivocally state we have met the pre-specified overall response rate endpoint based on these data and that this cannot change regardless of results for the few remaining patients. Additionally, Pre-specified comparative analyses against the best alternative care arm, including overall response rate, disease control rate, and progression-free survival, all demonstrated clinically meaningful and statistically significant improvements. This was not expected given the small N in the best alternative care arm. In the per-protocol population, the overall response rate was 32.9% in the Hepsado arm versus 13.8% for the best alternative care arm. Medium progression-free survival was nine months for the Hepsado arm versus 3.1 months for the Best Alternative Care arm. And the disease control rate was 70.9% for the Hepsado arm versus 37.9% for the Best Alternative Care arm. Since most of the patients in the Best Alternative Care arm were treated with TACE, this trial provides a strong signal that Hepsado may have advantages over both the checkpoint inhibitors used in the trial and TACE in the treatment of metastatic oculomelanoma patients. TACE and checkpoint inhibitors represent the bulk of current treatments utilized for metastatic ocular melanoma, these data may result in HF-SATO becoming the standard of care for metastatic ocular melanoma patients. While these comparative results against best alternative care are preliminary, we are confident these preliminary data will not significantly change upon evaluation of the full data set. More importantly, the safety profile was consistent with the safety profile of chemosat treatment described in previous European single-center of multicenter publications with no new safety signals observed in this patient population and no treatment related deaths. A critical objective of the FOCUS trial was to maintain or improve the efficacy seen in the earlier pivotal trial conducted with a different version of our medical device procedure while dramatically improving the safety profile. We have clearly demonstrated that goal. We are excited that the focus trial results will be presented as an oral presentation at the American Society of Endocrinology Annual Meeting, which will be held virtually June 4th to 8th. We will hold a Q&A webinar on Monday, June 7th at 8.30 a.m. Eastern Time to answer any questions which the broader investment community may have regarding the results. We are currently projecting final data by the end of the summer. Whether or not we release that at a medical meeting, such as the European Society of Medical Oncology, or ESMO, in September or sooner has not yet been determined. It is important to keep in mind that this is the second large multicenter trial to demonstrate efficacy for our PHP system, and that the complete response letter, or CRL, that we received from the FDA in September 2013 was largely due to safety-related issues. While at the time of the CRL, the company had developed an improved version of the PHP system procedure, The FDA required that we clinically demonstrate that this modified system procedure did indeed improve the safety results associated with the prior device and procedure. Based on these results, again, we have clearly improved both efficacy and safety. We have started compiling the various modules of the NDA despite final database lock being months away. We are still targeting the first quarter of 2022, but with the caveat that all this depends on access to the clinical sites. The primary gating item to our submission is still data monitoring, which requires site access, and some sites are still restricting access due to COVID mandates, especially in Europe. As sites open, we, like most other sponsors, are trying to get additional days on site to catch up on lost monitoring days. Timelines may shift, but we will endeavor to do all we can to avoid that. If timelines do shift, we will still be creating incremental value by increasing the number of expanded access sites, which should accelerate market uptake upon launch. Now that the focus of all enrollment is complete, we anticipate formally initiating the expanded access program for metastatic octomelanoma patients to receive hep-sado treatments. While we strongly believe we have an approvable therapy in metastatic octomelanoma, an orphan indication with high M at need, we are confident there is utility in the treatment for indications well beyond metastatic octomelanoma. Interhepatic cholangiocarcinoma, or ICC, and metastatic colorectal cancers are worthy of note since we already have strong evidence that PHP should have some level of efficacy in these conditions. In ICC, where there are a few good treatment options, we have strong signals of efficacy from commercial usage in Europe in approximately 50 patients. While we have paused the trial in ICC due to slow enrollment, We believe that we should continue to pursue this indication given the unmet need and existing data that indicates PHB may provide a meaningful clinical improvement over current options. We are now scheduling advisory boards with oncologists both to design protocols which will enable appropriate recruitment rates as well as increase awareness among investigators which should enable expanded site recruitment. In terms of a clinical signal and colorectal cancer, we can leverage existing publications reporting results from a surgical procedure referred to as isolated hepatic perfusion or IHP. Over the past two decades or more, IHP has been utilized to treat numerous cancers with the largest septum colorectal and the most common chemotherapeutic agent being melphalan. IHP is an open abdomen surgery in which the circulation of the liver is isolated by placing multiple cannulas in a variety of major arteries and veins. in order to route the blood from these vessels into an extracorporeal circuit in which the chemotherapeutic agent is delivered at high doses. Given it is a very invasive and demanding surgical procedure, it is performed in relatively few centers, and it is not repeatable. Over the past two decades, eight publications have documented results in well over 400 metastatic colorectal patients with response rates ranging 41% to 71%. Given the strong results, this technique would likely be widely used if it was not for the significant morbidity and mortality associated with the surgery. Hepzada was essentially a percutaneous, and thus far less invasive, repeatable replacement for surgical isolated hepatic perfusion, and we believe the published results from these eight studies documenting results from 400 patients have direct bearing on the likelihood that Pepsado or PHP could offer a meaningful option for colorectal patients suffering from hepatic metastases. ICC in colorectal patients with liver-dominant disease alone would expand the initial metastatic oculomeloma target additional market more than tenfold, and there are multiple other tumor types which might warrant investigation. We are midway through a consulting engagement to assess the appropriate setting and related protocols to study ICC colorectal, as well as other possible indications. We look forward to reporting on that later in the year. As we prepare for our FDA submission, we continue to design our commercial launch strategy. We are assessing the size of our commercial organization, the efficacy of competitive treatments, and our strategy for coding, pricing, and reimbursement. In addition to the DELCCAP commercial team, we are enlisting the assistance of a well-known consulting firm and KOL advisory boards in ocular melanoma to help fine-tune our commercial launch strategy with a focus on market access. Because of the rarity and prognosis of metastatic ocular melanoma, most patients seek care at one of approximately 20 medical centers across the US that specialize in the treatment of ocular melanoma. This modest number of centers will allow us to meet the needs of the ocular melanoma community with a small but specialized commercial team. Currently, most metastatic ocular melanoma treatment regimes begin with a costly combination of immunotherapy agents. Ocular melanoma has not responded well to these treatments. If Hepsado is approved, it will represent a well-documented, clinically significant advance in the treatment of metastatic ocular melanoma. Given that, the pricing of Hepsado should be comparable to compute current immunotherapy treatment options. While Hepsado will be used in both the inpatient and outpatient settings, and our market access plans are being designed accordingly. Our outreach has indicated a consensus among physicians experienced with Hepsado that this will predominantly be an outpatient procedure. Most importantly, the US investigators involved in the trial are anxious to get access to Hepsado, which bodes well for rapid uptake upon launch. Another important commercial development has been the change in guidance for the United Kingdom's National Institute for Health and Care Excellence better known as NICE, for chemoset in the treatment of patients with metastatic ocular melanoma. Previously, the NICE guidance recommended chemoset can only be used in the context of formal research studies. Due to that guidance, both private insurance and regional funding were generally not available for treatment with chemoset, nor was it possible to apply for national coverage. Under the revised NICE guidance, chemoset has been categorized under a special arrangement designation. Under this designation, Private insurance may be more likely to fund treatment with Chemosat, some regional funding may be more accessible, and a process is now available to seek national reimbursement. The past six months have marked the start of a critical transformation for DELCAP. During that time, we have attracted new investors, strengthened the management team, and most importantly, released preliminary results from the FOCUS trial, which, as of this compilation, strongly indicates that Hepzato's benefit-risk ratio is a significant improvement versus an earlier generation of Delcat's proprietary percutaneous hepatic perfusion system. We look forward to continued progress in the balance of the year as we prepare bills to file on NDA in early 2022 and expand the development of Hepzato into additional areas of high unmet need. I look forward to taking questions, but first we'll turn the call over to Christine to review the first quarter financial results.