Delcath Systems, Inc.

Good day and welcome to the DELCAP Systems Reports fourth quarter and fiscal year 2023 financial results conference call. 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 your telephone keypad. 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, DELCAP General Counsel. Please go ahead.

Thank you. And once again, welcome to DELCAP Systems 2023 Fourth Quarter Results 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, Boyo Vukovic, the Chief Medical Officer, and Martha Rook, who recently joined as our 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 the 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 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. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you, everyone, for joining today. On today's call, I will focus primarily on our commercial progress in the U.S. since our last update call in November. We continue to be encouraged by both the medical oncologists and interventional radiology communities' interest in engaging with our medical and commercial teams, their motivation and stated commitment to incorporate HepsadoKit into their practices treating patients with metastatic uveal melanoma. The company is currently working with over 20 leading cancer centers across the U.S. which have indicated interest in HepsadoKit. I will shortly share more details regarding our team's achievements over the last four months as a result of which we are increasing our site activation guidance from 15 active sites by the end of 2024 to 20 active sites by the end of the year. The approximate pacing of site activation will be 10 active sites by the end of the second quarter, 15 by the end of the third quarter, and 20 treating sites by year end. Importantly, we believe that our current financial resources, subsequent to our most recent $7 million financing, are adequate to achieve these goals. It is important to note that this financing was supported entirely by DELCAS senior executives, board members, and existing institutional investors. In January 2024, we announced the first commercial patient treated at Moffitt Cancer Center. By the end of the first quarter, we expect to have four active sites. These include Moffitt Cancer Center, Stanford University Cancer Center, and Thomas Jefferson University, which are fully trained and are currently treating commercial patients. In addition to those three, the University of Wisconsin is scheduled to treat its first commercial patient by the end of this week. In the first quarter, given the marked start for most of those sites and the temporary use of product sampling for some of the initial proctored cases, first quarter revenue will predominantly be generated by treatments at Moffitt, with the balance of the three sites activated in the first quarter starting to consistently generate revenue in the second quarter. While some sites will be more active than others, on average, we expect treatments per site to steadily increase from an average of approximately one per month early in the second quarter, ramping to a run rate of approximately 1.5 treatments per month by mid-year, and then reaching a run rate of two treatments per month late in the fourth quarter. These past four months have been a critical period for the company, as we prepared for and subsequently launched HepsadoKit in the U.S. During the pre-launch and early launch period, the commercial and medical affairs teams needed to accomplish three critical objectives. These included obtaining a product-specific reimbursement code and pass-through status from CMS, effectively communicating the potential benefits that Hubsado can provide to patients suffering from metastatic uveal melanoma to a broader set of medical oncologists and interventional radiologists, and developing an efficient process to educate, train, and activate commercial sites. I believe that our progress to date demonstrates that we have achieved all three of these launch-related goals. Starting with product-specific reimbursement, On January 30th, CMS established a permanent and product-specific J-code, J9248, for Hepzada, which will become effective on April 1st, 2024. Supplementing the J-code is transitional pass-through payment status, which was granted on March 21st and will also be effective on April 1. While we are aware that hospitals have successfully been reimbursed for the treatment using a miscellaneous C-code, The establishment of a permanent J-code for Hepsado will greatly simplify the reimbursement process and lower the perceived risk of a hospital not receiving adequate reimbursement. The importance and impact of having the unique J-code cannot be overstated. In conjunction with medical oncologists at each of our target sites, we have been working with the site's interventional radiologists to identify and train Hepsado kit treatment teams. To date, we have had over 90 perfusionists, anesthesiologists, and interventional radiologists attend one or more preceptorships representing approximately 20 institutions in the U.S., with some institutions sending multiple healthcare providers for the same specialty. This volume of training activity is clear evidence of the success of our outreach and the resulting broad physician interest in the U.S. to incorporate Hepzato as a standard of care for patients suffering from metastatic uvea melanoma. In addition to training the treatment teams at each site, we are also working to continue to obtain Hepsado kit hospital formulary and value analysis committee approvals at additional hospitals, and we have found MD champions at each site to help shepherd Hepsado through these processes. Since the product-specific J-Cub will greatly simplify these reviews after it becomes effective on April 1, we expect to see a significant increase in the pace of facilities conducting their first commercial treatment and fully completing the required REMS training. In fact, in just the first two weeks of April, three additional sites have scheduled treatments. These include Ohio State University Wexner Medical Center, University of Tennessee Memphis, and UCLA Health. A further two sites, Mayo Clinic Jacksonville and Duke University, have completed the necessary steps to conduct their first commercial treatment under the guidance of a proctor once hospital formulary and value analysis committee approval is obtained. In total, there are nine sites currently accepting patient referrals, four of which have or will conduct a commercial case before the end of the first quarter, three of which have a patient scheduled the first two weeks of April, and another two sites which are pending hospital formulary and value committee analysis. Beyond these nine sites, approximately another 10 to 11 sites currently have preceptorship scheduled or are partway through the preceptorship training. As a reminder, to activate a site, we need to train the center, which includes didactic training, three healthcare professionals traveling to attend the preceptorship, and subsequently three experienced healthcare professionals traveling to the new site to proctor the first case. And of course, reviews by hospitals, formulary and value analysis committees. The entire process from initially scheduling a preceptorship to activation can take approximately three months. Given the significant level of commitment required from these healthcare providers to become fully trained and certified under the REMS program, we believe all the healthcare providers and the approximately 20 cancer centers involved to date all intend to incorporate Hepsado kit as a core part of their treatment regime for metastatic UVM melanoma patients. These achievements would not have been possible without a world-class commercial team with support from our medical affairs and operations groups. Kevin Muir, DELCAV's General Manager, Interventional Oncology, has been focused on building the right commercial organization to launch Hepsado for well over a year. Kevin has made a point of bringing on team members that have experience in launching complex therapies that require multiple stakeholders in the hospital setting. As a reminder, we have divided the U.S. into four regions, each of which will be initially served by a commercial team of three, comprised of a liver-directed therapy manager who will manage the hospital approval process and ensure that the Hepzodokit procedure team is trained and supported. an oncology manager who is building referral networks to the oncologists within the treating centers, and 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. At the moment, we have about 70% of this team in place and expect to finish recruiting by July. Over time, we may increase the field force by a modest amount, for example, increasing the number of oncology managers to two per region. In addition to the significant commercial activity, we continue to support both internal and external efforts to add to the growing body of evidence that PHC procedure, whether utilizing melphalan delivered by Delcasse ChemoSat or the HepSido kit, is an important treatment option for patients with liver-dominant uveal melanoma. As a reminder, there is an ongoing investigator-initiated randomized phase two trial in Europe, the Chopin trial, evaluated in the effect of adding immunotherapy to chemo site liver directed therapy. The trial has enrolled approximately 60 of the planned 76 patients, and the investigators expect the trial to be fully enrolled by the end of this year. The primary objective of the trial is to compare the progression-free survival of one year of patients treated with a combination of immunotherapy and with ipilimumab and nivolumab with chemosat to patients treated with chemosat alone. As SHOPAN is an investigator-initiated trial, we do not control the timing of data release. However, our understanding is that the study results, including the primary endpoint, will be presented at a major oncology conference in the second quarter of 2025. In the fourth quarter, we announced the publication of results from two independent investigator-led studies, the first of which was a retrospective comparative study of chemosat and selective internal radiation, or CERT, published in the Journal of Cancers, and the second, which focused on the impact of chemosat on the quality of life of patients with metastatic uveal melanoma, and was published in the journal Melanoma Research. The comparative study of chemosat and CERT was conducted by independent investigators from the University Hospital Tübingen, Germany, and compared multiple cycles of CERT versus two treatments of PHP with chemosat, In this paper, ChemoSat demonstrated clear advantages over SIRT, including a clinically meaningful and statistically significant improvement in OS. The second publication, entitled Quality of Life After Melphal and Hepatic Perfusion for Uveal Melanoma, was conducted by independent investigators from University Hospital Southampton, UK, and reported the impact of PHP with ChemoSat on the quality of life of patients with metastatic uveal melanoma. The authors concluded that utilizing Delcath's Temosat to administer high-dose milk from the liver is well-tolerated by patients and does not negatively affect their quality of life. While Hapsado is used to treat metastatic uveal melanoma, it represents a validated and sizable market opportunity for us to capitalize on. We believe that Hapsado has the potential to treat other cancers in the liver, such as metastatic colorectal cancer, metastatic neuroendocrine tumors, metastatic breast cancer, and intrahepatic cholangiocarcinoma. and we plan to begin a study of HepsadoKit to treat one of these physicians within a year, while still focused on our revenue growth and increasing cash flows from operations. We believe that those and similar disease states are areas of unmet medical need that represent significant future growth opportunities for our platform. In summary, the company has passed a major inflection point in terms of relative risk and potential return, given FDA's approval of the HepsadoKit last year the issuance by CMS of a product-specific J-code, the demonstrated interest from over 20 major institutions, and our proven ability to train and activate sites. While the treatment of metastatic uveal melanoma patients will support significant growth for the foreseeable future, we are planning to pursue additional indications given the tremendous unmet need for patients suffering from cancers of liver. Clearly, the future of DELCAF has never been brighter. I will now hand the call over to Sandra to share some details on our financial position. Sandra?