Delcath Systems, Inc.

Good day and welcome to the Delcath Systems Reports third quarter fiscal year 2023 financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to David Hoffman, General Counsel. Please go ahead, sir.

Thank you. And once again, welcome to DelCast Systems 2023 Third Quarter Earnings and Business Update Call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pinnell, Senior Vice President of Finance, Kevin Muir, General Manager, Interventional Oncology, Boyle Vukovic, the Chief Medical Officer, and John Purpora, 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. 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 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 forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, Those contained and subsequently filed quarterly reports on Form 10Q, 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. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you, everyone, for joining today. Since the FDA approval of hep-saddle kit on August 14th for patients with metastatic uveal melanoma, we have been focused on outreach to potential treating sites and building our commercial team in preparation for commercial launch, which is now anticipated for January. While it has taken slightly longer than expected to work with our CMOs to finalize and produce QC-released, labeled, and packaged melt ones specific to Hepzato, we have been productively using the time between approval and launch to expand the number of treatment teams that have undergone didactic training and attended a preceptorship, both of which require before a new treating team can perform their first proctored case. Since Hepzato kits FDA approval, we have been encouraged by both the medical oncologists and interventional radiology communities' motivation and stated commitment to incorporate Hepzadokit into their practices treating patients with metastatic uveal melanoma. While we are fielding interest from more than 20 sites, we are primarily focused on a subset of these to ensure that we achieve our planned activation targets throughout the year. In conjunction with the local medical oncologists at each of our target sites, we have been working with the site's intervention radiologists to identify and train hep-sado kit treatment teams. In addition to training the treatment teams at each site, we are also working to get hep-sado kit approved through the various traditional hospital formulary and value analysis committees, and we have started that process in 13 hospitals. Currently, we have three EAP sites, Moffitt Cancer Center, Duke University, and the University of Tennessee, which are fully trained and can start treating commercial patients upon the availability of commercial product. In addition, we now have a further four sites, Mayo Clinic, Thomas Jefferson, Ohio State University, and Stanford University, that have completed the necessary steps to conduct their first commercial treatment under the guidance of a proctor once commercial product is available and formulary and value analysis committee approvals are obtained. Beyond those seven sites, another four sites, UCLA, Providence St. John's, Mass General, and Piedmont Hospital, currently have their preceptorship scheduled in November or December. In total, we expect at least 10 sites will have completed the required training to treat a commercial case by the end of January, contingent on scheduling a proctor chain for that first case and a successful completion of the various value analysis committee processes. Given the need for the first case to be proctored and the required committee approvals, I don't expect all of the 11 previously mentioned sites to be actively treating patients in the first quarter. However, based on interest and progress today, I am confident that we will achieve at least five active treatment sites sometime in the first quarter, 10 by the end of the second quarter, and 15 treating centers by the end of 2024. We expect treatments per site to start out at approximately one per month and end the year at approximately two per month. Simcepzadokid is a liver-directed interventional radiology procedure and not an effused drug. We are focused on medical centers, as currently mentioned, that currently offer liver-directed therapies for metastatic uveal melanoma patients and currently treat a meaningful number of patients with liver-directed therapy. Noteworthy centers include Thomas Jefferson University, led by uveal melanoma oncologist thought leader Marlena Orloff, and interventional radiologist David Eshelman, a leader in liver-directed therapy. Thomas Jefferson by far treats the largest number of metastatic uvea melanoma patients in the country. Other note-weather centers include UCLA, with the uvea melanoma thought leader, medical oncologist Bartosz Cimilowski, and interventional radiologist Sid Pavia. Mayo Clinic, with medical oncologist Roxanne Dronka and Yiyi Yan, interventional oncologist Charles Ritchie and Bo Toskis. Moffitt Cancer Center with the focused trial principal investigator, John Zager, and Stanford University with medical oncologist, Sunil Reddy, and interventional radiologist, Gloria Huang. Since approval, Kevin Muir, DelCast General Manager, Interventional Oncology, has been busy building the commercial organization. Kevin has made a point of bringing on team members that have deep experience in launching complex therapies that require multiple stakeholders in the hospital setting. For example, our new Director of Sales, Zach McLean, comes from Boston Scientific and has over 20 years' experience leading teams in bringing new liver-based interventional procedures to market. Under Zach's guidance, we have divided the U.S. into four regions, each of which will be served by a commercial team comprised of a liver-directed therapy representative and two oncology managers. The liver-directed therapy representative will manage the hospital approval process and ensure that the Hopsado kit procedure team is trained and supported while performing the procedures. The oncology managers will engage community-based medical oncologists outside of our treating centers with the goal of building referral networks to the oncologists within the treating centers. In addition, each team will be supported by a clinical specialist who will support the treatment teams in preparation for and during the treatment with the goal of ensuring patient safety and improving patient outcomes. To ease patient access, Kevin's team has been working with market access consultants to submit the required applications to obtain the C code, J code, and NTAP from CMS. Given the nature of HepsadoKit, we anticipate all codes and add-on payments to be granted. We are in the final stages of designing a patient access program called HepsadoKit Access, designed to assist patients and hospitals in numerous aspects of treatment planning, including prior authorization. We are working with a well-established hub service with significant experience in both ultra-orphan diseases and oncology to design and manage this program. We continue to support both internal and external efforts to add to a growing body of evidence that the PHP procedure, whether utilizing Melquin delivered by Stelcast ChemoSac or the HepCytoKit, is an important treatment option for patients with liver-dominant uveal melanoma. We recently announced the publication of results from a retrospective comparative study of chemosat and selective internal radiation, or CERT, published in the Journal of Cancers. The independent investigator study from the University Hospital Tübingen, Germany, compared two liver-directed therapies, multiple cycles of CERT versus two treatments of percutaneous hepatic perfusion with chemosat in patients with liver-dominant metastatic uveal melanoma. Median overall survival was 301 days for the 34 patients treated with SIRT and 516 days for the 28 patients treated with chemoset. In an adjusted COX regression model, there was a significant difference between SIRT and chemoset with a hazard ratio of 0.32, an associated 95% competence interval of 0.14 to 0.73, and a p-value of 0.006. The overall survival results clearly demonstrate the positive impact of treating liver metastases on patient outcomes with chemoSAT. As a reminder, there is an ongoing investigator-initiated randomized Phase II trial in Europe, the CHIPAN trial, evaluating the effect of adding immunotherapy to chemoSAT liver-directed therapy. The trial has enrolled 55 of the planned 76 patients, and the investigators expect the trial to be fully enrolled mid-2024. The primary objective of the trial is to determine the efficacy of combination treatment of immunotherapy with ipilimumab and nivolumab with chemostat treatment versus chemostat alone, defined by progression-free survival at one year. Secondary objectives include overall survival and overall response rate. An interim futility analysis conducted in September resulted in the independent data monitoring committee recommending the continuation of the study without modification. As mentioned earlier, we now expect to start commercial sales in January 2024, We have been utilizing the time between approval and launch to increase the number of trained training centers and initiating the formulary approval process in numerous institutions. The feedback and progress today gives us confidence that HepsadoKit will become the standard of liver-directed therapy care for metastatic uveal melanoma patients quickly after launch. I will now hand the call over to Sandra to share some details on her financial position. Sandra?

Thank you, Gerard. We ended Q3 with $40.5 million in cash. Cash used in operations was approximately $9.2 million in the third quarter and $23.1 million for the first nine months of the year. The increase in cash is due to the funding received as part of the tranche warrant exercise. Specifically, the tranche warrants were exercised for $35 million for the equivalent of $7.5 million in common stocks. $35 million should be sufficient to fund the company until another 4.1 million shares of common stock equivalents are issued at a strike price of $6 as part of the tranche fee warrants without having to issue additional equity capital. The tranche fee warrants would result in $25 million of gross proceeds upon the company achieving $10 million in quarterly revenue. Current shares outstanding is $22.1 million and 40.5 million on a fully diluted basis. Revenue from our sales of ChemoSaf was 0.4 million for the three months ended September 30th, 2023, compared to 0.9 million for the three months ended September 30th, 2022. For the three months ended September 30th this year, R&D expenses were 4.7 million compared to 4.1 million for the three months ended September 30th, 2022. The increase is due to activities related to the FDA inspection and other requests in advance of their approval of HECSA. For the three months ended September 30, 2023, compared to the same period in 2022, selling general and administrative expenses have increased from $4.8 million to $6.2 million due to activities to prepare for commercial launch. That concludes our earnings and business updates. and I'd ask the operator to open a line for Q&A. Can you please check for questions?

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, and then 2. Our first question comes from Bill Maghan with Canaccord Genuity. Please go ahead.

Hi, good afternoon and thank you. So I have two questions. So you talk about getting sites up and running and the last hurdles to go through being product availability and sites value analysis committee approvals. On the sites value analysis committee approvals, how active is DELCAT in that process or is that is that generally an internal hospital process and how much, you know, how certain is the outcome of those processes? In other words, is it sort of a check the box operation or is there any uncertainty in that approval? Second question is, how do you see this, how do you see Hepzido being used post-ChemTrack? Are those patients simply too far along to be an addressable market.

Thanks. All right, yes. Let me start with the first question, Bill. Good to hear from you. And I think, Kevin, you could probably add some color to this, but I think I wouldn't go as far as to say check the box, but I would also say, and Kevin can add some color to this, that we have a lot of sites. There's no place that we're moving forward in aggressively where we aren't confident of support. But, David? Kevin can give some color there. And we certainly support the sites to some extent, but I think the days that the company going in and presenting are long gone. But you do have to support them to some extent. But Kevin, can you add some color?

Yeah, sure. Thank you. It's far from check the box. It's a formal process within each facility. And they're basically looking for, if we code this procedure, Will we get paid? Will we get reimbursed? And so we are asked to provide a limited amount of information, and then the hospital makes its decision on itself. We feel confident with our hub services Gerard mentioned earlier in the call, and they're assisting with the coding the kind of the coding forecast for the facilities, and then it's up to them to see if that's beneficial to them. And the feedback that we've had to this point in time has been very good, so we're confident that out of the 11 sites that Gerard mentioned, we'll have five of them that will perform procedures by the end of January.

And Kevin, I think it's fair to say that we haven't, there have been a number of these meetings already, and it's usually not just one meeting. But a number of these meetings have started. We've yet to have any, geez, this isn't going to happen type reactions. Is that correct?

It's entirely correct. We've been overwhelmed by the response that we've had and the two-way communications that we've had with each hospital to this point in time. As Jordan mentioned, we've had several of these calls and presentations that we've made to the hospitals, and we anticipate most if not all of these coming back with the value analysis committee in our favor.

Now, Bill, in terms of your second question, are patients who are post-cadentifus, will they be too far gone, too far progressed? And I think the answer is some may be, some may not be. I think if we take a step back, the first question really is, should you use liver directed first? There are certainly some patients oncologists out there who believe that in many cases, many cases, liver directed first makes sense. There are others that want to go to systemic first. So it's not going to be everyone automatically going to TABV first. I think one of the points we're going to make to oncologists is that you can tell after two treatments from us whether or not you're getting a benefit. With tibetanthus, They recommend treating through progression because of pseudoprogression with immuno-oncology agents. So you run the risk of going too long with TEVI before you really know whether it's working or not. So it may make sense to start with us from that rationale. The third thing I'll say is we have seen patients post-TEVI. So we've seen patients that are applicable for TEVI coming with us first, and we've seen patients post-TEVI. So clearly it's going to be a mix, but we think we have a sound argument because the liver is usually the life-limiting organ site of metastases, and you can get a quicker read on whether you're getting efficacy when you go with us first. We think we have a good argument to go with us first, but if not, I think we'll still get a fair number of those type of patients that unfortunately eventually progress.

Got it. Thank you very much. The next question comes from Scott Henry with Roth Capital.

Please go ahead.

Thank you, and good afternoon. I just had a couple questions. You know, first, as far as I'm just thinking about the launch metrics you sort of laid out, Gerard, when we think about one per month moving to two per month, do you think about that as an average, or do you think of that as a high-volume approach? or just trying to get a sense? Because I know, you know, obviously some people will do more, some will do less. How are you trying to put that one to two in reference?

Yeah, I think here's what we have. Before we really get out there and get moving, I'm kind of averaging it maybe down. Who knows? I do know I'm confident there'll be some sites that are doing, you know, one a week. And I think there are others as they get started and we're building the referral networks, they might be doing one every two months. You know, eventually my hope is that sites do at least one a week, you know, out some time over the horizon, and that's what we need to do to, you know, get to peak share. But it's definitely an average, and it's really thinking there's one or two sites doing most of those, and the new ones that have recently come on board, they're building their referral networks.

Okay, great. And when we think about... cycles per patient, how would you think about the average cycle, number of cycles a patient would have, and how much time between cycles should we expect in utilization?

What we saw in the focus trial, I think as you know, was 4.1, so we're kind of, for our own modeling purposes, assuming 4. In the focus trial, we allowed patients to go up to eight weeks between cycles. Six was the recommended. I think what we're seeing, you know, what we've seen in other settings to Europe is that some docs, more compassionate use settings earlier in the U.S., some docs choose to do two quickly together, let's say six, eight weeks apart, and then do watchful waiting. Others follow the protocol perfectly. So I think... My guess is we're going to have a subset that do, you know, two, eight weeks apart and then wait. Others are going to go straight through. One thing I am certain of is patients that we, you know, lost in the trial that withdrew because their blood counts had not risen to the level where it was appropriate to retreat them. We won't lose those likely in a commercial setting because the docs will just wait a few extra weeks. So on average, I think it'll be, go ahead.

So when we think about cycles per quarter as we model out expectations for the launch, obviously everyone doesn't come in the first day of the quarter. It sounds like we should think about it as one to two cycles per quarter, depending when the patient... One to two, yeah.

One, on average, kind of starting out early in the first quarter, one treatment a month per site, ending two. And then when I say treatment, I mean a cycle or a treatment. It could be And we're not really counting patients right now because, you know, we were just scratching the surface at these levels in terms of the TAM. You know, at some point we'll have to start talking about number of patients on therapy, but right now we're just focused on treatments or cycles.

Okay. And, Gerard, you know, maybe for the typical hospital, maybe if you could just walk through how that hospital, you know, gets paid with this product, you know, what is the procedure and, you know, how we should think about that.

Yeah, so for the typical hospital, you know, there will be three components of payments, all right? And we're going to talk about an outpatient because the majority of these patients will be outpatients. They're going to put in a set of CPT codes for a facility fee. They're going to put in a set of CPT codes for the procedure for the doctor's time. Now, most of these doctors are on salaries, so it's not a direct incentive to them, but they do care. The third reimbursement component will be putting in for reimbursement for the drug itself. That will initially be with a C code, and then eventually we will get a J code. But that's a pass-through payment, so the hospital would get paid whatever we charge them, plus 6%. Let me just pause there and see if there's any more detail or any particular part of that process that you'd like to hear about.

No, I think that's... So these three codes that all come into place, are all of them necessary to start the process, or is there a sequence that hospitals will want as they utilize this?

Yeah, so let me... Kevin, why don't you explain the availability of, you know, how the CPT codes work in terms of being a portfolio of codes they're going to use, and then, you know, when the, what they'll do initially, and then when the C code comes in more than a J code.

Yeah, so, thanks Gerard. So, CPT codes are nothing more than codes that describe what the physicians are doing during the procedure. So, when they go through the step, there will be, or when they go through the procedure, uh they will record what they do the cpt codes will match what they do they're presented to cms and the payment comes back those are there's going to be two payments one for the hospital one for the physicians we've gone through a number of coding exercises to to ensure both ourselves and uh and our hospital partners that uh this will be there are codes in place And if they code them correctly or they do the procedure, then the hospital will be reimbursed fully for what they are doing. Physicians, the same thing. Their codes will pay them adequately for their time. So those are the two main concerns when you really come down to it. This is a lot of what's done from the earlier question on the value analysis committee. Make sure the CPT codes are there for the hospital and the physician. And then the final part of that is the product. And we should anticipate hearing very soon back from CMS on our C code, or it's actually called a TPT, transitional pass-through application, which results in a C code. We anticipate hearing on that shortly. Those usually go into effect on January 1st, but sometimes they drag into January. So that should, as Gerard mentioned, be a pass-through payment for the hospital, and they get a 6% administration fee on top of that. So, again, from the customers that are from the hospital that we've talked to at this point in time, there seems to be more than adequate reimbursement for them to move forward.

Okay, great. That's helpful. Gerard, that should do it for me. Thank you.

All right. Thanks so much, Scott. The next question comes from Murie. Thibault with BTIG. Please go ahead.

Hey, good afternoon. This is Sam Iver on for Marie. Thanks for taking the questions and congrats on the progress getting through some of those treatment sites. Maybe I can use my first question here on the work with the CMOs. I think I caught your comments earlier on the call that it's taking a bit longer than expected. Just wanted to get any additional color on maybe some of the bottlenecks or work that's going on behind the scenes there. Thanks.

Sure. So, you know, we've known for quite a while that we'd like to work more directly, you know, with a CMO for Melflin. You know, what we've given that series of acquisitions based on who we initially signed up with Melflin, I won't go through all the details. We ended up in a situation where Mylan holds the ANDA and they use a CMO near Pharma in Italy, and their farmer uses a set of CMOs or contract labelers to make the various labels and such. We have tried prior to approval and post-approval to take some of that work on ourselves, saying ship us naked vials, we'll label it, we'll make the labels and ship them out to Italy, anything we can to accelerate this. And unfortunately, since we're a very small player, for this generic product and these nested manufacturers, we really are having difficulty, you know, moving, you know, getting them to move off of what they say is basically here's your contracted lead times. Now, there really was no way in our position to, you know, write a large check or even guess what the final label would be to get way ahead of this. This is an unusual situation, again, where we're using a generic product and we're getting into carve-outs, you know, a small run for us. and that's really what the bottom line is. You know, could it have been a little smoother? Perhaps, but, you know, at the end of the day, we've got to work with what I'm calling these NFCMOs. This won't be a problem longer term. We've already got an order in for a second full batch, you know, which will be delivered probably shortly after the first batch. And so that will be, you know, well-supplied going forward. We wouldn't have these bottlenecks anymore. But, again, it's kind of a situation where, We're never really in a position to fund our own ANDA for this type of thing. So we just kind of have to live with this situation. And as we go forward, you know, we're going to focus a lot on making sure the supply chain is robust as possible. And we don't have any, you know, we're never at a stock-out situation or a slow-down situation.

Okay. Yeah, that all makes sense. I appreciate the added color there. Maybe I could use my follow-up here on some of the VAC approval process questions. How long do these usually take? I mean, we hear for other products, they could take six to 12 months. You know, I assume that it's probably a bit quicker here. Recognize it's not just a check the box kind of item, but just wondering your thoughts on how long those back approvals you expect to take.

Yeah, I think what's unique about this is, well, this is not another antibiotic, you know, for a hospital acquired, you know, infection or another stent. This is a product where there is nothing else like it for this patient set. And, you know, our interventional radiologists and medical oncologists are very happy to champion this and push this forward outside the regular scheduled meetings. Now, what I'm doing here is I'm repeating what Kevin has told me, but Kevin, is there anything I left out in terms of the product in terms of color?

No, but to add a little color to the question, you're right. I mean, you know, throughout my entire career, I've budgeted nine months for one of these value analysis committees. And again, it's kind of been what has been so encouraging about this is that we have, you know, it's ultra rare disease. It's, you know, lack of a standard of care for some of these patients. And we're We're also at the right hospitals and so they recognize the need for the product that we're bringing and we're kind of moved outside of that nine months and we're probably closer to three months and even in some scenarios maybe shorter than that. So it's been very encouraging from the response that we've received from these committees.

Okay, really helpful. Maybe just a clarification question, how many of the Proctor sites do you have in the U.S. that could essentially do the proctored cases or that you expect to have?

Kevin?

Yeah, looking at my list right now, we have the three EAP sites that are ready to go. The rest of the focus trial sites have abbreviated training requirements. So that would be another one, two, three, four. So we'll have seven.

Kevin, in terms of Proctor teams ready to go, it's Moffitt, right? Oh, Proctor team.

Yeah.

Yeah. I'm sorry. I misunderstood the question.

Yeah, it's Moffitt.

And that's one of the reasons it's going to be a bit slow. But we'll have another team, two or three teams up and going within a few months. And we have a number of teams in Europe. you are more than happy to fly over and proctor. So we're probably going to end up relying on some European teams as well.

Got it. Okay. Thanks for taking the questions.

Yeah. The next question comes from Yale Jen with Laidlaw & Company. Please go ahead.

Good afternoon, and thanks for taking the questions, and congrats on all the progress. Thank you, Bill. A couple of quick – good evening. Just a couple quick ones. First one is that in terms of your inventory preparation for the launch, by beginning of the end of this year or beginning of next year, what do you think your inventory level might be and how would that be, you know, how adequate would supply the anticipated, potential anticipated use over the subsequent quarters?

Okay, I got the first question, the inventory level answer, and that is we're trying to maintain at least a year's worth of inventory. I think once, and so that'll be a rolling demand forecast looking forward, I think once we get past the $10 million revenue milestone that'll bring more cash to the balance sheet, we'll be just short of being breakeven then on an EBITDA basis. I think we'll probably increase safety stock beyond a year on certain components just to be careful because it's not always easy to switch out components if suppliers change. So that's the answer to your first question. What was the second, Neil?

When you start to launch the product, you have adequate or how do you see that preparation at that time?

So do we have adequate? I think we will probably, based on orders coming in this year, And once the melt one shows up, every component, we will have at least a year's worth of stock.

Okay, great. That's helpful. And my second question here is that given you indicated there's roughly 10 sites ultimately will be in the queue for the, I guess, first half of next year. What is your estimate or the total potential patient size or procedure number of all those 10 combined?

So are you asking what I think the volume will be for the full year?

For the full year from those 10, I guess, hospitals and such.

Yeah, let me stick with what I've said before, and then if there's, I mean, and that is, and I think you can probably do the math, and that is with a little bit of, of, of, of range, which is I'm trying to ensure here is, you know, five by the end of the quarter, we'll definitely have five sites up and running. And I think ending the quarter, they'll be doing at least one month, middle of the year, at least 10 sites up and running, um, end of the year, at least 15 sites up and running, and they should end the year doing at least two a month, you know, exiting the year. you can get to a fairly wide range, plus or minus 30% in terms of volume, depending on when you assume they get there within the quarter. In terms of how many patients that represents, whatever number you have, divide it by four.

Okay, sounds good. And maybe the last question here is that is there any patient you anticipated or to be in the procedures when you launch the product? In other words, they become patients, presumably, you know, people call them low-income fruits. Any number and colors on that?

Yeah, so if we are having the conversations with sites or have had the conversation with sites, it varies by site, that We plan, we'd like to transition EAP patients over to commercial patients once commercial supply is available. With the exception, of course, if a patient doesn't have coverage, we wouldn't stop treating them. The way we set up the protocol is it's not an automatic. We can't force that, and there are some important reasons why we chose not to set it up so that we could force it. But I don't know whether or not it'll be a third or half, but there'll be some some meaningful percentage of the patients that we'll treat in the first quarter will be patients who switch over from EAP.

Okay, that's very helpful, and thanks a lot for the details, and again, congrats on the progress.

Thanks so much, Yale. The next question comes from Swayam Pakula, Ramakannath, with HC Wainwright. Please go ahead.

Thank you. This is RK from HCV. In terms of getting centers ready when you start launching the drug, the kit, in January, as you're preparing some of these hospitals, are you getting a feel for how long it's taking for some of these doctor teams or the surgery teams in terms of training so that they can start doing their surgeries and do you see that and also how do you think that training time is going to evolve as you launch and more of the physician teams start training?

Yeah, so in terms of how long, it really varies. We have one site that, you know, immediately jumped on it and got their preceptorship done within a month or so of having a discussion with maybe a month or two, having a discussion with them. We have other sites that, again, I've used the term multiple calls or one-on-ones, herding cats, where it's been very difficult to get, you know, an interventional radiologist, an anesthesiologist, and a perfusionist, you know, all attending a case at the same time, which requires an airplane flight, et cetera. So I think that's the reason why, one of the reasons why I'm saying, look, we'll probably have 11 sites, well, we're planning on having 11 sites preceptored, hopefully within about two months plus. But of those, I think five will end up getting proctored, because then we have to look at a team of experienced docs, and right now that's just Moffitt, because we have a requirement that they need to have done a certain number in the recent past, and Moffitt's the only one that checks off that box, as well as some European sites, you know, we expect there'll be some issues with experience sites, with getting an experience site to a preceptor site. So that will be the second, you know, gating item. Again, it's going to be, it's tough to predict. That's where we're saying out of the 11 that we think will have attended preceptor ships, maybe five will get on board. And we can't really decide which, we don't know exactly which five it'll be. Thereafter, you know, as more sites do more cases and more sites get beyond the, I think it's 10 cases they have to do before they can be a proctor. Once they get beyond the 10 cases, all of a sudden we'll have multiple experienced sites that can proctor. And I think towards the back end of next year, that's when it'll really accelerate. and it'll be a lot simpler to get sites up and running. So varied, hard to predict. It'll take much longer in the beginning of this year than it will towards the end, beginning of next year, than it will take towards the end of next year as more and more sites are available to be proctors. So hopefully that answers the question, RK, which is basically it depends.

Yeah, no, I've got that. And then... In terms of how do you see hospitals and even docs trying to get on treatment, treating with Hepsada kit versus KimTrack? And, you know, when you go in to have some of these conversations, you know, what sort of conversations do you end up having? Or do you think you will be able to you know, get any of the teams to move from ChemTrack to the kit.

Yeah, I think, well, Kevin, why don't you give an example from a commercial rep perspective? What will the conversation be?

Yeah, I don't think that we will replace ChemTrack with Hubsado kit. The conversations that we've had in the field right now have revolved around the potential to use these two therapies in sequence. What's the best sequence? How can they complement each other? Ultimately, these patients are probably going to go at least on two lines of treatment, if not three. So what is the order that is going to provide these patients with the best options and ultimately the longest overall survival. So that's where the conversations have been really focusing around, not so much on the either or between Peps Auto Kit or Kit Track.

Very good. That's good to hear. Thank you. Thank you.

I think it's also important to remember, and I think everyone on this call does remember this, but The chem track is indicated for about 40% to 45% of the overall population. So this is a subset of the patients that this conversation is pertinent to. But I think everybody knows that, but worth highlighting.

Thanks, Gerard. Thanks for taking the questions. All right.

This concludes our question and answer session. I would like to turn the conference over to Gerard, Michelle, for any closing remarks.

Okay, well, I want to thank everyone for taking the time this afternoon. I look forward to providing future updates regarding the launch and, subsequent to that, commercial uptake. Thank you, everyone, and have a good evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.