Delcath Systems Inc (OTCMKTS: DCTH) has started edging higher after starting the second quarter on the wrong footing. The stock has bounced back on huge turnover of traded shares, waiting to see if the upward momentum has what it takes to trigger a breakout.
Delcath Price Analysis
While the stock has started showing signs of bottoming out, it remains engulfed in a long-term bear trend, after harrowing crash in the second half of last year.
A plunge from highs of $45 a share, as early as last year, to lows of $0.21, continues to arouse concerns about the stock’s long-term prospects.
While the short-term momentum on price action is bullish, the stock faces stiff resistance at the $0.32 mark. It is at this critical technical level that the stock has come under pressure more than once on threatening to break out.
A rally-followed by a close above the critical resistance level should reaffirm suggestion that Delcath System has turned bullish, be it in the short term. Above the $0.32 mark, Delcath Systems would be well supported to make a run for the $0.70 mark, the next substantial resistance level.
For Delcath Systems to turn bullish as a long-term play, it needs to rise and stabilize above the $0.70 resistance level.
Conversely, below the $0.32 resistance level, Delcath Systems remains susceptible to further drops given that short sellers remain in firm control.
What Does Delcath Systems Do?
Delcath systems bills itself as an interventional oncology company focused on the development of treatments for primary and metastatic liver cancers. Its lead investigational product is Melphalan Hydrochloride used in combination with Delcath Hepatic Delivery System, CHEMOSAT, to administer high-dose chemotherapy to the liver.
Delcath market sentiments appear to have inched higher on the delivery of positive clinical trial results on the use of CHEMOSAT in a Single Center Prospective Study. The phase 2 study was conducted by Leiden University Medical center in the Netherlands.
The study tried to analyze the use of Delcath’s Hepatic CHEMOSAT Delivery System in the treatment of patients struggling with metastatic ocular melanoma. In the study, 35 patients were treated with CHEMOSAT and underwent a total of 72 PHP treatments and tumor response.
Study results presented to the European Conference on Interventional Oncology indicate that one patient had a complete response as 22 had a partial response, leading to an overall response rate of 74%.
“Safety analysis showed a total of 14 serious adverse events were recorded. The hematologic toxicities were in the majority of the cases self-limiting and manageable. PHP Therapy with the Generation Two version of CHEMOSAT is an effective and safe treatment for patients with hepatic metastases from ocular melanoma,” Delcath Systems in a statement.
Brazil CHEMOSAT Approval
The positive clinical trial results come on the heels of Delcath Systems securing a Health Authority approval for its hepatic delivery system in Brazil. The country’s top health regulator has granted CHEMOSAT a Class 3 medical device permit.
With the approval, Delcath Systems can engage in marketing and commercialization of CHEMOSAT in Brazil. The approval also paves the way for the company to pursue similar approval in other Latin America markets. Approval in Brazil follows a similar milestone in Europe.
Delcath Systems has already opened discussions with potential partners in Brazil as it seeks to launch a large-scale commercialization drive. The company is eyeing revenue generation through such partnerships before the end of the year.
“According to the World Health Organization, liver and bile duct cancers account for over 10,000 deaths in Brazil annually. With a population of approximately 200 million, we believe there is a significant unmet medical need in Brazil for CHEMOSAT in both primary and metastatic liver cancers,” stated Jennifer K. Simpson, Ph.D., MSN, CRNP President and CEO of Delcath.
Delcath System is still languishing at all-time lows amidst the milestones achieved on the development of the hepatic delivery system CHEMOSAT. The underperformance could be short-lived as the company embarks on a commercialization drive of its flagship system, after securing landmark regulatory approvals in key markets.
Prospects of the company transitioning into a revenue-generating entity should continue to shore up market sentiments. That said it would not come as a surprise, especially after bottoming out on huge volume.
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Disclosure: We have no position in DCTH and have not been compensated for this article.
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