Delcath Systems, Inc.

Greetings and welcome to the DelCast System third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Mr. David Hoffman, DelCast General Counsel. Thank you. You may begin.

Thank you. And once again, welcome to DelCast Systems' third quarter 2024 Earnings and Business Highlights 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, 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. 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 risk 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 contain and subsequently file 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. Our press release with our third quarter 2024 results is available on our website under the investor 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.

Thank you, everyone, for joining us. This past quarter's results continue the strong growth we have seen since the launch of HepsadoKit this past January. I'm very encouraged by our progress with those center activations, and treatment rate. In the third quarter, we reported $11.2 million in total revenue, including $10 million in U.S. revenue from Hepsado and $1.2 million in European revenue from Chemostat. As we have previously reported, the $10 million in quarterly Hepsado revenue was a critical milestone, triggering an approximately $25 million financing for warrant exercises. The key drivers of our revenue ramp in the U.S. are center activation and the average number of treatments per center. In terms of center activation, we finished the quarter with 11 active centers, with an additional center becoming active in October, and as of today, we have 12 active centers. In the third quarter, we activated Massachusetts General Hospital, Ohio State, Honor Health, and University of California, San Diego. In early October, we activated Duke, and we have another center scheduled to treat their first patient in the next two weeks. There are further five centers which recently fully completed preceptorships and have started screening for their first patient. We should exit the year with at least 15 treating centers and sometime in the first quarter have 20 treating centers. Our 2025 goal is 30 centers by the end of the year. Importantly, and to reiterate from prior calls, we haven't seen any center in the activation process halt the process. I'm very proud of our progress with center activations, and I appreciate our investors' patience and understanding regarding the complexity of the process and the inherent variability in the time required to activate a center. Now I'd like to delve into a second important metric, average treatments per center. Our average treatment rate per month post-activation averaged just under two treatments per month in the third quarter. Given the pattern of many of the new centers having low volumes for the first few months, We expect this average treatment rate to stay flat for the foreseeable future as we continue to add new centers. The one exception may be this coming quarter, the first holiday season since the launch of Hep Cytokine. Based on conversations with centers, we expect that due to hospital schedules and patient preferences, there will be effectively one and a half to two weeks fewer treatment days in the fourth quarter, leading to a lower treatment average over the entire quarter. We shouldn't lose treatments. but the timeframe between treatments will likely be extended for a subset of the patients. I'd like now to turn to our chemo set sales in Europe. While revenue was roughly flat versus the prior quarter, it did increase over 100% over the same time period last year. Going forward, we expect modest but consistent year-on-year growth. As previously mentioned, given the relatively low price point in Europe, we have chosen to manage the EU market on a roughly break-even basis. Recall that we believe that the near to midterm value of our efforts in Europe is to identify and utilize sites for clinical trials and as a continuing source of publications, both in metastatic uveal melanoma and other tumor types, both of which will support EU and U.S. adoption. ChemoSAT has a broader pan-solid tumor device label, and some of our European centers have over a decade's worth of experience with ChemoSAT. We are early in the process of identifying and opening commercial and trial centers in France, Italy, and Spain, expanding beyond our current major treating centers in the UK, Germany, and the Netherlands. We believe it is important to have multiple treating sites in all major European markets. In addition to the significant commercial activity, we continue to support both internal and external efforts to add to a growing body of evidence that the percutaneous hepatic perfusion procedure enabled by our hepatic delivery system, whether utilizing melphalan delivered by Delcov Kemosat or the HepSato kit, It is an important treatment option for patients with liver-dominant uvea melanoma, as well as potentially other liver-dominant cancers. As detailed in today's release, in the third quarter, there were numerous presentations and publications based on both the FOCUS study and a number of retrospective studies from a variety of independent investigators. A subgroup analysis from the FOCUS trial presented at ESMO 2024 demonstrated similar outcomes in overall survival, overall response rate, and progression-free survival between patients with and without extrahepatic lesions or based on prior therapy. In addition, tumor responses were observed throughout the entire treatment period, supporting the strategy to continue treatment until best response is achieved. These are very important factors in both choice of therapy and duration of treatment. A 30-patient study was published in the Annals of Surgical Oncology by researchers at Moffitt Cancer Center in Tampa, Florida. This study reported that Hepsado used in first or second line therapy for metastatic uveal melanoma provided better disease control in the liver and improved progression-free survival compared to both immunotherapy and other liver-directed therapies. A 167-patient study published in the journal Therapeutic Advances in Medical Oncology by investigators from the University of Tübingen, Germany, reported that first-line liver-directing therapies, including chemosats, significantly improved the melanoma-specific survival in patients with liver metastases from uveal melanoma compared to first-line systemic therapies. We believe that this is an important finding because in cancers where the liver is the life-limiting organ, specifically metastatic uveal melanoma, liver-directed therapy may be a more appropriate option than systemic therapy. Finally, a 33-patient study was published in the Esmo Journal of Gastrointestinal Oncology by researchers from the University Hospital of Leipzig. The study, which included previously treated patients with unresectable intrahepatic metastases from seven different cancer types, reported a hepatic disease control rate of 91%, with six patients, over 18%, achieving complete response in the liver. Median hepatic progression pre-survival was 52 weeks across all patients. This is another strong signal that our hepatic delivery system platform, whether ChemoSAT or HepSATO, may have a role in treating other cancers. We continue to engage medical oncologists in the US and EU to discuss integration of Hepzato into treatment algorithms in combinations or sequencing with available treatment options in metastatic uveal melanoma. In the third quarter, a new investigator-initiated trial, the SCANDIUM-3 trial, started screening patients in Sweden. This 40-patient trial is comparing randomized treatment with two cycles of chemosat six weeks apart followed by treatments with ipilimumab and nivolumab, with the control arm being ipilimumab and nivolumab alone, which is one of the global standards for care for metastatic uveal melanoma. This trial is distinct from the Chopin trial being run in Leiden University in the Netherlands, which starts with ipilimumab and nivolumab and sequences in two chemostat treatments. At this time, the Chopin trial is fully enrolled with 76 patients, and we are anticipating analysis of the primary endpoint, progression-free survival at one year to occur in mid-2025. We expect presentation of the results in the second half of 2025. During the past quarter, DELCAS has engaged in discussions with a number of internationally recognized medical oncologists at leading cancer centers with the objective of identifying the next hep-sado clinical development targets. Liver-dominant metastatic colorectal cancer and metastatic breast cancer were identified and endorsed by experts as potential new indications for HEP-SATO. DELCAP is planning to initiate two phase two randomized clinical trials to compare safety and efficacy of HEP-SATO plus standard of care versus standard of care alone in these two indications. The metastatic colorectal clinical trial is designed to enroll approximately 90 patients and will be conducted at more than 20 study sites in the US and Europe. The protocol is complete and the lead investigator for the colorectal clinical trial cancer clinical trial has been identified. Patient enrollment and treatment is expected to begin the second half of 2025. The phase two trial in patients with liver-dominant metastatic breast cancer will start somewhat later, likely in the fourth quarter of 2025. From a financial perspective, the company is in a strong position. Our third quarter operating cash frame was only $3.6 million, and given our revenue ramp, we are on the cusp of being cash flow redeemed. We have more than adequate resources to fund further expansion of both our commercial and our clinical development activities. The future of the company is extraordinarily promising, given our expected revenue growth, strong balance sheet, and the ability to further develop our hepatic delivery system platform across additional diseases. I will now hand the call over to Sandra to share further details on our financial position.