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Delcath Systems, Inc. (OTCMKTS:DCTH) Remains A Mystery For Investors

Delcath Systems, Inc. (OTCMKTS:DCTH) Remains A Mystery For Investors
Written by
Jim Bloom
Published on
February 14, 2018
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After what was suspected to be a pump and dump Delcath Systems, Inc. (OTCMKTS:DCTH) stock, there has been little by way of news concerning the firm. However, its jump from $0.03 to $0.04 has raised some curiosity for current and potential investors. In this piece, we provide with details on the company and the possible expectations for the firm going forward.Here is the stock’s movement over the last month: DCTH Daily ChartCompany ProfileDelcath Systems, Inc. was established in 1988, with its head office situated in New York. The firm is a pharmaceutical and medical device company which focuses on oncology and liver cancer therapy. It develops and commercializes Melphalan Hydrochloride for Injection which is a proprietary product for use with the Delcath Hepatic Delivery System; the product was designed to deliver high dosages of chemotherapy to the liver even while managing system exposure and other related side effects. In Europe, its system has been made available for sale ever since 2012 using the trade name Delcath Hepatic CHEMOSAT Delivery System for Melphalan or just CHEMOSTAT, where it has been used at major medical centers to treat a wide range of cancers of the liver.For more details, check out our previous post here.In February 2018, the firm reported that it had fulfilled all its obligations under the privately placed senior secured convertible notes which it issued to two institutional investors in June 2016. In December 2017, Delcath went into exchange agreements with two corporate investors as a result of which the investors were given shares of its common stock (or the rights to receive common stock to the extent such issuance of Shares would otherwise result in the beneficial ownership by any such investor of more than 4.9% or 9.9% of Delcath’s issued and outstanding stock) in exchange for fulfillment in full of the notes, , as applicable, in an aggregate of 123 million shares of its common stock. By the end of January 2018, all of the rights had been exercised, and neither investor has more than 4.9% of the issued and outstanding shares of Delcath’s common stock.Earlier in January, Delcath had announced that it had concluded a modification agreement with the U.S. Food and Drug Administration for its Phase 3 clinical trial of Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) to treat patients who were suffering from hepatic dominant ocular melanoma. The modification agreement reviewed the FOCUS trial’s eligibility criteria to allow a larger degree of extra-hepatic ailment by eradicating the location, number and size constraint of extra-hepatic lesions, in unification with a treatment plan for the extra-hepatic metastases.Chief Executive Officer, Dr. Jennifer K. Simpson explained that the firm had requested for the modification of the protocol to improve access for patients to the clinical trial for patients who had been appropriately nominated and managed. This had been done, considering that striking the appropriate balance between eligibility criteria and patient access in an ultra-orphan indication like ocular melanoma, could be quite difficult. He added that management was quite pleased that the Food and Drug Administration agreed to the modification and they hoped that once it had been approved by the institutional review boards of the participating clinical trial sites, that the modification would aid the acceleration of enrollment in the registration trial.Delcath Systems developed PHP Therapy with Melphalan/HDS as a targeted, whole organ treatment suited for the liver. The system is already available commercially and is being used as a device in Europe, where it is known and commercialized as CHEMOSAT. However, the system is yet to gain approval from the U.S. Food and Drug Administration and is currently undertaking Phase 3 clinical testing in the U.S. as an investigational product.Financial PerformanceAccording to its statement of comprehensive income, the firm was able to grow sales revenue by 14% from the last period, rising from $0.17 million to $0.2 million in 2016.This continued the trend of rising revenue for at least the last three years. However, cost of sales grew by a larger 19% and another increase in operating expenses as well. All of this contributed to a net loss increased by a much higher 22% all stemming from the increase of selling, general and administrative expenses along with other costs.The firm is not very highly leveraged as its liabilities are estimated to be worth just as much as its assets. Its high liquidity of 0.94 buoyed by the amount of cash available means the firm is capable of handling its regular operations smoothly over the year.ConclusionDCTH still holds a lot of mystery for potential and current investors; it may take time for the market to determine just how valuable it is worth.We will be updating our subscribers as soon as we know more. For the latest updates on DCTH, sign up below!Disclosure: We have no position in DCTH and have not been compensated for this article.

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