Delcath Systems, Inc.

Good morning, ladies and gentlemen, and welcome to the Double Cap Systems second quarter 2025 earnings call. All participants will be in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press the Start key and then 0 on your telephone keypad. Please note that this event is being recorded. I will now hand you over to DELCAC General Counsel, Mr. David Hoffman. Please go ahead.

Thank you, and welcome to DELCAC Systems' second quarter 2025 earnings call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pinnell, Chief Financial Officer, Kevin Muir, General Manager, Interventional Oncology, Vojo 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 in a material manner 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 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 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. A press release with our second quarter 2025 results is available on our website under the Investors 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 for joining us today to review our second quarter's financial results and business updates. We continue to make steady progress in building our U.S. business. This quarter marks the fifth consecutive quarter of site and Hepsado volume growth. Quarterly revenue reached $24.2 million, an increase of over 20% compared to the first quarter of 2025, reflecting continued strong adoption. U.S. sales of Hepzada were $22.5 million, while ChemoSat sales in Europe were $1.7 million. In the second quarter, we generated $7.3 million in positive cash from operations, net income of $2.7 million, and adjusted EBITDA of $9.8 million. Additionally, we ended the quarter with no debt and approximately $81 million in cash and investments. We finished the second quarter with 20 treating sites, and during the quarter, we activated Northwestern Memorial Hospital, University of Miami Hospital, and University of Virginia Medical Center. Additionally, 10 centers are currently accepting referrals while progressing through the required training and approval process. Crucially, we are scaling intentionally. targeting world-class cancer centers, which can attract patients in both our first ultra-orphan market, as well as partner with us as we look to expand the use of Hepsado into our pipeline indications, where there are larger patient populations with high unmet need. Based on the current pace, 25 to 28 operational centers are expected by the end of the fourth quarter. Although this is fewer than previously projected, active centers continue to treat patients at a consistent rate. The episodic pace of site openings reflects the complexities of working with large institutions for an Alva product, which creates an ultra orphan population. I am confident that we will continue to open sites and we have set a goal of 40 sites by the end of next year. To support the expanding number of both target sites and actively treating sites, As we outlined on the last few calls, we recently expanded our U.S. sales force from four to six regions, each staff with a liver-directed therapy manager, oncology manager, and a clinical specialist. During the second quarter, average treatments were approximately two per month per center, with expectations for similar averages for the remainder of the year. Due to recent slower U.S. site activations, full-year revenue guidance has been adjusted to $93 to $96 million. Forecast for 2025 gross margins remain between 83% and 85%, with continued positive non-GAAP-adjusted EBITDA and positive cash flow for the rest of the year. The total HEP-SATA treatment volume in 2025 is projected to increase by over 175% versus 2024. We have proceeded with plans to enter into the National Drug Rebate Agreement, or NDRA, with the U.S. Department of Health and Human Services. The NDRNA enables Medicaid and Medicare coverage for outpatient drugs, while requiring manufacturers to provide rebates to state Medicaid programs according to statutory formulas. Entering into the NDRA requires participation in the 340 drug pricing program, which enables eligible hospitals to purchase Hep Cytokine at reduced prices. Participating in these programs should increase market access and aligns with Medicaid and Medicare coverage requirements. Since July 1, 2025, Habsado kit has been sold at 340B prices to eligible facilities, with approximately 50% of kits distributed being sold at the discounted price. For Habsado kit, both rebate and discounts are 23.1% of the published WAC price. Earlier projections suggested a larger proportion of centers qualifying as disproportionate share hospitals or dish hospitals. But the actual list varies quarterly, and some customers with multiple facilities are purchasing via non-DISH facilities. Volume distribution under the 340B program is expected to remain at roughly 50% for the next few quarters. In the third quarter, the estimated net effect will be a 10% to 15% reduction from the second quarter average revenue per HPSAO kit. Of course, this will be largely or partially offset by ongoing growth in volume. Looking beyond uveal melanoma, we are investing in further research and development for Hepsado, as we believe Hepsado and its underlying hepatic delivery system platform holds significant potential to benefit a wide range of patients with liver cancer. As discussed on previous calls, preparations are underway to conduct company-sponsored trials in liver-dominant metastatic colorectal cancer and liver-dominant metastatic breast cancer, both of which allow us to approach large markets with clear unmet need. Both Phase II trials for these indications have received FDA clearance, and the colorectal trial has received CTA authorization in Europe and the UK. As a reminder, both Phase II trials will evaluate the safety and efficacy of Hubsado in combination with the standard of care versus standard of care alone in patients receiving third-line treatment for metastatic CRC and second- or third-line treatment for patients with liver-dominant HER2-negative metastatic breast cancer. Each trial will enroll approximately 90 patients across 20 to 30 sites in the United States and Europe. Both trials have a primary endpoint of hepatic progression-free survival. We anticipate patient dosing for the metastatic colorectal trial to begin within weeks with the first patient having been randomized just yesterday and enrollment for metastatic breast cancer to follow in the first quarter of 2026. For metastatic colorectal, we expect the release of interim data as early as the second quarter of 2027, with anticipated release of primary endpoint results in mid-28, with overall survival of data expected to follow in 2029. For our metastatic breast cancer trial, we anticipate interim data release as early as the fourth quarter of 2027, with anticipated release of primary endpoint results in mid-2029, with overall survival of data expected to follow in 2030. We continue to have advisory board meetings with oncology subspecialties to prioritize our next set of indications to pursue. There is strong interest in intrahepatic colonic carcinoma and cutaneous metastatic melanoma, among others. Another potential area of development includes combination or sequence with immunotherapy agents, such as immune checkpoint inhibitors. Preclinical studies suggest a strong rationale for combining Hepsada with immune checkpoint inhibitors to improve efficacy for patients with liver metastases. Upcoming re-dives from the randomized phase two Chopin trial are expected to inform the feasibilities of these combination approaches. We look forward to the presentation of these results at the ESMO conference in October 2025. I'm really thrilled with how the team is executing on the clinical front, and we are well positioned to approach some exciting new opportunities and a host of cancer indications where we can leverage our footprint of sites to reach more patients and have some real impact in patient outcomes. With that, I will now hand the call over to Sandra for a detailed financial review.