Delcath Systems, Inc.

Good morning, ladies and gentlemen, and welcome to the DELCA Systems First Quarter 2026 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to David Hoffman. Please go ahead.

Thank you, and welcome to DelCast Systems' first quarter 2026 earnings call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pinnell, Chief Financial Officer, Kevin Muir, Chief Commercial Officer, Voyo Vukovic, Chief Medical Officer, and Martha Rook, Chief Operating Officer. 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 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. Our press release of our first quarter 2026 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. Gerard, please proceed.

Thank you, David, and welcome, everyone. We've had a very successful first quarter marked by four center activations and record new patient starts in the first quarter, both of which are core growth drivers for the businesses. In addition, we continue to advance numerous commercial and medical initiatives to ensure the long-term growth of Hepsado, with a strong focus on a third critical growth driver, building referral networks to quickly connect eligible patients with treating centers. To support center activations, increased utilization at existing centers, and expanded referral patterns, we have nearly completed our U.S. commercial expansion into nine regions. In addition, the expanded MSL team is fully trained and in the field, educating physicians about metastatic uveal melanoma with a focus on the Chopin results. As of today, we have 29 REN-certified sites, and we are in active discussions with over 50 potential new centers. And 38 of these centers have had one or more members of a potential treatment team take the time to travel and be preceptive. While not all of these centers will become activated, And the process can take over a year in some cases. There is clearly broad-based interest in this therapy, which bodes well for the long-term growth of the business. As we note on every call, it is very difficult to predict pacing. And given where we are at this point in the year, we are modifying our year-end activated center goal to 37 active centers, with 40 active treatment centers sometime in the first quarter of 2027. In addition to center activation, we are focused on changing prescribing patterns by expanding the set of appropriate patients that treating teams consider for PHP through education, fostering peer-to-peer conversations, and evidence generation. First quarter 2026 new patients starts per site have tracked at or slightly higher than the first quarter of 2025 at approximately 0.7 new patients per site per month. New patient starts contribute to revenue over subsequent quarters as patients receive a series of treatments. We expect the strong first quarter new patient starts to offset the reduced site activation pace. Based on conversations with some treating physicians, we know that the publication of the SHPAN results in Lancet Oncology is already changing treatment patterns at certain centers. One piece of publicly available anecdotal evidence is the recent webinar hosted by the patient advocacy group, A Cure Insight, during which Dr. Sid Patia, an interventional radiologist from UCLA, shared his experience treating metastatic uveal melanoma patients with Epsado. Some of the patients Dr. Patia is treating with PHP are also being treated with immunotherapy. and he noted on the webinar that his results with these patients are consistent with or perhaps superior than the positive results reported from the Chopin trial. As a reminder, Chopin response rates improved from approximately 40% with Hubsado alone to about 76% when Hubsado was combined with immunotherapy, including some cases of complete response. The combination armed the demographic survival benefit with a clear separation between survival curves at both one and two years. Dr. Padia characterized these study results as extremely encouraging and consistent with his clinical experience. Many metastatic uvea melanoma patients are managed outside REN-certified centers, so earlier identification and streamlined referral processes are essential. One important approach to enhancing referral patterns is to use multiple data sources to identify physicians treating newly diagnosed metastatic patients, and promptly connect these patients to the suitable Hepsado treatment center. As these networks mature, we expect referrals to be an important driver of new patient starts across our footprint. I now would like to turn to our clinical development programs. In our ongoing metastatic colorectal cancer trial, we continue to activate new trial sites and now have a total of 13 centers who can actively screen CRC patients. We have implemented specialized training modules and streamlined onboarding processes to continue to accelerate site readiness and ensure protocol adherence. We are on track to activate nearly all of the currently targeted 26 trial sites by the end of this year and anticipate presenting interim results in late 2027. To date, we have enrolled seven patients. While this pace has been slower than initially anticipated, we believe the program is picking up momentum. Our second program, in metastatic breast cancer, now has four clinical trial sites that are prepared to screen patients, with additional sites opening soon. Since breast cancer physicians typically have less experience with liver-directed therapies compared to those treating metastatic colorectal cancer, we are conducting targeted education and outreach initiatives to increase awareness of hepatocytosis potential benefits in patients with metastatic breast cancer. We are targeting 15 trial sites and expect to activate them by late 2026. We will provide guidance related to the readouts from this trial later this year as operational progress supports more precise forecasting. We are seeing growing interest in Hepsado beyond colorectal and breast cancer and are exploring clinical trial design into additional indications, data by physician input and advisory board feedback. Based on the results of the Chopin trial, there is strong enthusiasm from the medical community to investigate a Chopin-like combination regimen to treat liver involvement in patients with a variety of cell or tumor types. I look forward to sharing updates on these plans later in the year. I will now ask Sandra to review our financial results.

Thank you, Gerard. Total revenue in the first quarter of 2026 was $25 million compared with $19.8 million in the first quarter of 2025. This included $23.3 million of his auto kit revenue and $1.7 million of chemo stat revenue. Gross margins for the quarter was 85% compared to 86% in the first quarter of 2025. Research and development expenses in the first quarter was $9.8 million compared to $5 million in the prior quarter, driven primarily by continued investment in our clinical organization in the ongoing phase two trial. Selling general and administrative expense in the first quarter was $13.1 million compared to $11.3 million in the prior year quarter. This reflects our investment into the continued commercial expansion and increased marketing activities. Net loss for the first quarter was $1.1 million compared to net income of $1.1 million in the prior year first quarter. On a non-GAAP basis, adjusted EBITDA for the quarter was $3.4 million compared to $7.6 million for the first quarter of 2025. We ended the quarter with $89.3 million in cash investments and no debt. Cash provided by operations was $0.9 million in the quarter. We also purchased approximately 300,000 common shares for about $3 million in the first quarter under the company's approved $25 million share buyback program. To date, we have purchased $9 million worth of common shares. Turning to 2026 guidance, we are confident we will achieve total revenue of at least $100 million, which reflects 20% growth in Hepatokin volume over 2025. Our guidance takes into account expected seasonal trends in the third and fourth quarters, much like in 2025 when new patient starts rates decline partially due to scheduling challenges. Forecasts for 2026 gross margins remain between 85% to 87%, and we now expect to report positive adversity the past other remainder of the year. I want to thank you all for participating today. This does conclude our prepared remarks, and I'd ask the operator to open the phone lines for Q&A.

Thank you.

In a moment, we will open the call to questions. The company requests Let all callers limit your time to two questions from each analyst. One question and one follow-up. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation sound will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we call for the questions. Your first question comes from Marie Duval with BTIG. Please go ahead.

Good morning, Gerard and Sandra. Thank you for taking the questions. I wanted to ask my first tier on the volume you're seeing per site. Certainly encouraging to hear that that's more than offsetting kind of the slightly slower pace of activations. So I just want to understand what was driving that. It sounds like perhaps Chopin's having a bit of an effect. I know in the past... competing or other trials might have been a distraction. So if you can just tell us a little bit more about some of the dynamics behind, you know, driving that higher volume.

Yeah, I think it's primarily Chopin as well as new sites come on board. Not all of them, but as some of the new sites come on board, you know, when they see the results, they start increasing their volumes. So I think it's both things, what they see in practice and the Chopin results as well. Clinical trial headwinds are probably reduced a bit from probably a similar time last year. But I think the majority of the effort is as best as I can sort it out. The majority of the effect as best as I can sort it out is Chopin and then docs just seeing the scans and seeing the tumor shrinkage.

Okay. Great to hear. Simple enough. And then I'll ask a follow-up, I think, for Sandra. When we think about the spending trajectory this year, I recall that it is expected to be higher in 2026 than it was in 2025. Can you just give us any more detail, if you have it at this point, on visibility for cadence of that spending, how you see some of the investments in R&D and commercial expansion unfolding throughout this year? And thanks both for taking the questions.

Absolutely. So I know in the previous call, we did mention R&D for full year 2026 would be about a 90% increase over 2025. But based on the enrollment in both trials, we're likely going to see a full year increase closer to the 70 or 75% over 2025. You know, R&D, we'll likely see a decent increase in Q2, about 20% over Q1. And first level off, but about 10%. over the remainder of the year and into the fourth quarter. So SG&A, probably about a 50% increase in 2026 over 2025 due to the Salesforce expansion and just increasing in selling costs as we grow. Q2 for SG&A, probably a 10% to 15% increase over Q1 due to those marketing initiatives, and then increase just modestly each quarter thereafter.

Very helpful. Thank you.

Thank you. The next question comes from John Noonan with Canaccord. Please go ahead.

Questions. Congrats on the continued progress. I just wondered if you could talk a little bit about the factors involved regarding the change to the site addition guidance. Obviously, it looks like that's going to be offset by increased patient volume, which is great. But just curious if you could discuss a little bit the different factors that went into that change there.

Thanks. Really, the visibility we have in terms of, you know, there's always about a half, at this point, about half a dozen or more sites, roughly, that look like they could go any week. And so the pipeline's full. I want to make sure that that's clear. If I don't have patients that I know are scheduled for treatments or, you know, multiple patients going through screening, then I can, you know, I'm a little reluctant to say, hey, I'm going to get a couple of sites for the next month or two. The average pace has been a little over, since we've launched, has been I think about 1.1, 1.2 per month. But if I don't see sites... you know, ready to treat a patient or having one scheduled, then I say, all right, I'm going to have another dry month or two. And I pull that out. So, you know, under that framework, I'm saying, yes, more likely it will be 37. Could it be 38 or 39? Yeah. But I think 37 is probably, you know, a more likely number. And it's as simple as that. But I don't see anything in the next month or so, so I kind of reduce it.

Okay, great. And then one quick follow-up on the show plan data, which I think are really fantastic and should be really beneficial. I'm curious if you're seeing most of the new sites that you're in discussion with kind of citing that as a factor for their enthusiasm or if it's sort of balanced between new and old sites. I'm just curious if perhaps you're seeing kind of the new sites pick up on this in terms of wanting to get on board with the product, or is it kind of balanced across older existing sites and the new sites?

All right, so if you're asking, you know, the level of enthusiasm from Chopin, I think it's both new and existing. There are some existing sites that have been doing a Chopin-like protocol from day one when they became active. and there are others that have moved over to that, given the data. I would say, I would argue that probably most new sites are planning to do a Chopin-like protocol, a combination of immunotherapy and PHP. But, Kevin, why don't you chime in? You know, you're a little closer to it than I am in terms of if you say almost all the new sites are going with the Chopin, or is it more 50-50?

I would say that the majority of them will be going with the Chopin-like protocol. We hear a lot about just combination treatments in general, but Chopin specifically. Now, it is kind of important to note the new sites we've been engaged with for months. As you just pointed out, the site opening process takes a considerable amount of time. When we talk with these sites as they're bringing us on, there are many conversations between, you know, peer-to-peer groups as well as our medical and clinical team as well. So everyone is well-versed in the Chopin-type protocol, and so I would anticipate the majority of them that are coming on in the future will embrace that. Thanks.

Thank you.

Thank you. The next question comes from Sedan Loganathan with Stevens. Please go ahead.

Hi, good morning, Gerard and Sandra. My first question is regarding the ESMO breast cancer data that you also provided. I noticed that the adverse event profile shows some grade three, four adverse events in about 80% of patients. Additionally, the median overall survival was around six months when untreated. never met that type of cancer patients or maybe around the four to five month range. So just kind of curious on how you're viewing this first set of data for this mutation and how this kind of dictates how you go forward.

Yeah, these were all very heavily pretreated patients. And I think probably one of the most important parts of the data is Although the average event profile you mentioned may seem high to the untutor, to oncologists, these events are easily managed and all are resolvable. I think there's not much that can be done for these types of patients that were treated. So I think we're quite happy with the data and glad it's there to help improve recruitment site activation improvement in the clinical trial. I'll ask Boyo, is there any other commentary you want to add regarding those results?

Yes, sure. So, thanks for the question. In addition to the comments that Gerard made, I'd like to point out that the patients who were treated with HbSALT in this data review, received a median of four prior systemic treatments. That means they have been receiving multiple chemotherapies, and many, if not most, of the patients have residual toxicities. So these are not the patients that we have treated before in the FOCUS or SHPEN trial, which are typically very little pretreatments or no pretreatments at all. So the safety profile depends also on the line of treatment in which you administer PHP. And regarding your comment about the survival, these are patients with breast cancer, and they develop with a metastasis. Typically, that's the final stage of the disease where patients have just a few months of life left. So seeing six months is actually, you know, in that context, not so bad. And as the doctors have expressed a great deal of satisfaction when we talked to them about being able to manage this very difficult stage of the disease.

Thank you, I appreciate the details. And then additionally, I just wanted to ask, even as we go into the second half of this year, could we still anticipate a few other data readouts or just other updates on either breast cancer or colorectal cancer indications going forward?

Thanks. Yeah, there's not going to be any data readouts. We'll keep you apprised of how the trials are proceeding in terms of open sites and patients. But there won't be any, from us, any data readouts. As you know, the product's been on the market as a standalone device in Europe for over a decade. And often data comes out that we don't know that investigators or clinicians have submitted it as a poster presentation or a publication. So could something else come out? Yes, but not from the company.

Thank you. The next question comes from Chase Knickerbocker with Craig Hillam. Please go ahead.

Morning, everyone. This is Jake on for Chase. First, regarding the goal of 40 sites by the first quarter of 2027, for the incremental 11 sites, how much are you relying on the three new sales territories and what are you seeing from the funnel there?

Yeah, the territories are not new geographies, okay? So we're just slicing the existing, you know, territories, four, six to nine, into smaller territories so there's more concentrated effort. So there's no particular territory. I think the reason to increase, there's no particular region where we're going to get more BISCs. As sites are opened, it takes effort to manage open sites. So to maintain the same level of effort in terms of activating these sites and the same pace of activating these sites, you have to put more bodies in the field. Now, these are very experienced reps. I don't want to call them bodies. We have to put more experienced people out there to manage the existing accounts and to maintain the same level of site activation efforts.

Okay, thanks for that. And then on guidance, just on a run rate basis, you're already at the $100 million floor with this quarter. What are your assumptions for the remaining three quarters for revenue?

Yeah, well, the assumptions, as I mentioned before, are that we will see the same seasonal impact we saw in the third and fourth quarter of last year. Now, we could be wrong there. In hindsight, It could very well be that we're being overly conservative, but we have a very small N in terms of understanding to what extent seasonality will impact things. There are certain aspects of the seasonality that we think we can address and are trying to address. The specific one that we are trying to handle is if we have a treatment team, if at an important center there is only one full treatment team, let's say there's only one IR or there's only one anesthesiologist who's trained. If they go on vacation, by definition, the capacity has dropped at that center. So, you know, we have implemented a special incentive to the sales force. If you get a second treatment team trained up and going, there will be something in it for the rep. That is yielding some additional backup treatment teams, and I'm hopeful that will offset some of the seasonality we saw. There's also seasonality, I think, like patients deciding certain times of year they would rather not be treated. They'll postpone treatment or postpone getting started. That is difficult for us to impact. But for those aspects we can impact, specifically maintaining capacity in terms of trained teams, we're doing what we can. But, again, getting back to the core of your question, what assumptions – Are we utilizing, given we're already at a run rate, to hit guidance? You know, we're assuming we see the same level of seasonality as last year. And, again, that might be overly conservative. But I think it's best to guide that way and also be clear about our assumptions underlying the guidance.

Appreciate that, Keller. Thank you.

Thank you.

Thank you. The next question comes from John Noonan. Please go ahead.

Hi. Thanks for taking my follow-up. I had a question about the recent data that you were just discussing earlier on the breast cancer work that was done in Europe. It was interesting. I noticed that the median number of cycles was one. And I'm wondering if you think that's representative of what we'll see going forward when you test this treatment in perhaps a different set of breast cancer patients and also whether that median one cycle may have just been limited by either patient survival or just physicians that maybe hadn't had a lot of experience with the treatment. Thanks.

Yeah, I will note that the clinical protocol calls for two treatments, so I would think that would be the median when the trial reads out. In terms of why they only received one, I have some theories, but let me ask Roy to comment.

Yeah, as Gerard mentioned, This was not a prospective trial. This is basically reflecting data from real-world clinical practice. And the practicing physicians were probably making decisions which they thought, in the absence of any guiding data, are the best for the patients. And just to remind you, these were heavily participated patients with a median of four prior treatments, quite exhausted with lots of residual toxicities. And I think physicians were probably being cautious and trying to manage the disease, perhaps not to achieve the best possible efficacy, but rather to control the disease and prolong patients' lives, which would be typical of the treatment goal, you know, after first or second line. So I think that the median number of cycles simply reflects the different treatment objectives compared to if you treat patients at an earlier stage in the patient journey.

Great. Thank you.

Thank you. The next question comes from Yale Gem with Lido and Company. Please go ahead.

Good morning, and thanks for taking the questions. You refer in the press release that you have 36% volume growth year over year of the same quarters. Uh, I just wonder whether, if you compare to the fourth quarter of last year, uh, what that readout might be, and then I have a follow-up.

So do you have the quarter on quarter growth off the top of your head?

Volume growth?

Sandra, you might be on mute.

Apologies, you're correct. I was on mute. I want to say we're mid-20% volume growth from Q1 2026 over Q4 2025.

Okay, great. That's very helpful. Maybe just a follow-up here. We know that the referral, obviously, is the long-term sort of expansion sources. So we know that you guys already started the process, and just curious, what would be the measurement or other sort of follow-up to track how the referral practice being done and, you know, improvements if needed, so on and so forth? So any colors on that front? And thanks.

Yeah, it's interesting that you asked that question because it's something I've grappled with with Kevin. But just what we want to do is incentivize our oncology managers to, you know, get the referrals going. It is somewhat difficult to know when a patient shows up at a center because obviously we have to be at the compliance. You can't exactly quiz the doctor on where did this patient come from, that sort of thing. Okay. And so it's difficult to know, hey, did our referral process lead to this specific patient? We definitely know of cases, many, many cases, where the work of the oncology manager resulted in a patient ending up at one of our treating centers. So it is working. In terms of measuring a specific metric, you know, we're grappling with an accurate metric. We're grappling with that ourselves. how do we follow that? We have some ideas, but right now I can't point to a specific way we're going to measure that. And it's unlikely that we're going to be able to tell you, you know, every different point where we can say, hey, if X percent of our patients or the rate of referral is Y per site, I don't think we'll ever get there. Because, again, it's HIPAA compliant. You know, you can't quiz the docs. But we're focused very, very much on it.

Okay, great. That's very helpful, and thanks, and congrats.

Thank you. The next question comes from Charles Wallace with HCW. Please go ahead.

Hi, this is Charles. I'm for RK from HCW. Thanks for taking my questions. So the first question I have is I was curious for the Chopin publication in the ESMO clinical practice guidelines. Are you seeing these two publications translate into increased physician adoption in Europe? I know it's a little early, but should we expect ChemoSat to grow in 2026 from these?

Yeah, I think the European growth is significantly hampered by reimbursement issues. I think many centers in Europe, you know, are doing, you know, a combination type regime. Um, but to be frank, a lot of European centers are, a lot of European oncologists are less aggressive than they are in the US. Um, But I can't really comment as to whether or not I think it's – is it going to grow to increase revenue in Europe over the long term? Certainly. For this particular year, you know, I think we just have to assume that we're going to see probably modest single-digit growth in Europe. What will change that is getting reimbursed in the U.K., which we've been working on for quite a while. as well as establishing commercial businesses in Spain, France, and Italy, and we're working hard on that as well. In terms of the overall impact on the business, given the price point in Europe, I wouldn't call it a rounding error, certainly, but it's a plus or minus 10% thing on EBITDA for the business. It's not a huge driver, but we're focused on Europe, as I mentioned before. primarily, at least for the short to median term, as areas where we can generate data. The device is approved to deliver melphalan to the liver. It is not tied to a specific tumor type. Now, most of the usage is in uveal melanoma because that's where most of the data is. But it's a great place to generate, run IITs and generate data in other tumor types. So right now, Europe's importance is generation of data. We manage it on a break-even basis. At some point, we may relaunch the product as a combination drug device, as a Hepsado, and try to reset the price point, but that's many, many years down the road.

Yeah, thank you for all the color. I guess one more follow-up from me. So on the pipeline for NCRC, I think you mentioned that there's 13 sites, but it's been slower than expected enrollment with, I think you said, seven patients. So I was just curious when you expect enrollment to pick up and ultimately complete for this study. Thank you.

Sure. Am I taking that?

Sure. You're correct. We have open 30 sites, and we have enrolled thus far seven patients. Based on the momentum that we've observed over the last several months, we feel confident that the momentum both in terms of site openings and patient screening and enrollment is picking up. So, we believe that enrollment will proceed in this year and next year, and that we'll be able to share interim results publicly by the end of next year, 27. Great.

Thank you for taking my questions.

Thank you. We have reached the end of the question and answer session. And this concludes today's conference. And you may now disconnect your lines. Thank you all for your participation.