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Here's Where The Latest Delcath Systems, Inc. (NASDAQ:DCTH) News Fits Into The Picture

Here's Where The Latest Delcath Systems, Inc. (NASDAQ:DCTH) News Fits Into The Picture
Written by
Chris Sandburg
Published on
September 20, 2017
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Delcath Systems, Inc. (NASDAQ:DCTH) just announced that it has presented data from a single institution study at the Cardiology and Interventional Radiology of Europe (CIRSE) annual meeting, held in Copenhagen, Denmark on September 16-20, 2017.The company gained 24% in market capitalization during the session on Tuesday and is up a little over 40% on Monday intraday lows. This is a company that has had a real roller coaster ride over the last few weeks and one for which sentiment is decidedly uncertain right now. DCTH Daily ChartWe covered the stock back on September 14 and suggested that, against a backdrop of some real market weakness and subsequent to a decline of more than 68% from June highs, there may well be some value in a speculative punt at the then current levels. We never want to try and catch a falling knife, but when a company has been beaten down on the potential for a reverse split as much as Delcath was during August and early September, and when this pressure is compounded by a voluntary delisting, there's not much else that can push a company like this down more.After all, regardless of capital structure management issues, this is a biotechnology company with an asset already on shelves in a major global market (Europe) and the same asset in a phase 3, pivotal investigation set up to underpin a registration application in the US.But that's not what people are talking about right now as regards to Delcath. Markets are more interested in what the company plans to do about its debt and capital structure issues – something that's far from an unreasonable focus, of course, but something that seems to be drawing a disproportionate amount of attention away from pipeline and, in turn, might be something of an opportunity to sneak into a speculative exposure without anyone noticing.So what did the latest data tell us?In all honesty, not that much. It's rooted in a second generation of the delivery system that the company is trialing in the US right now and, reportedly, this second-generation has been able to demonstrate an overall efficiency of 86%, with efficiency highest at the time of highest concentration of melphalan in the blood and declining as melphalan blood concentration declined.To translate this, the active compound seems to be being delivered effectively and maintains efficiency in line with the pharmacokinetics you would expect from this sort of drug, with this sort delivery method.Bottom line, according to the researchers that conducted the study, is that the second generation system appears to have higher melphalan filter efficiency, more consistent performance, and appears safe but needs further validation.In other words, it looks like it might be better but we need to confirm it before resting solidly on that conclusion.So this is news, sure, and a second generation technology that builds on the efficacy of the first does add value to the company from the point of view of any buyer that might be looking to pick up Delcath's asset portfolio at bargain bin prices (that's what shareholders are really hoping for right now, but we're not going to dwell on that here), but we're looking at something else as a real value driver over the coming 12 to 18 months – this trial. it's a phase 3 study that kicked off back in 2015 and is set to conclude early to mid 2019, investigating the above-discussed melphalan in a target indication of ocular melanoma.If this trial succeeds, there is nothing stopping Delcath picking up a green light for commercialization in the US on the product that's already approved in Europe and – once it does – the company can finally start generating the cash flow that's going to alleviate some of the above-mentioned capital structure concerns.Again, that's if it doesn’t get bought out first.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on DCTH, sign up below!Image courtesy of Justin Ladia via FlickrDisclosure: We have no position in DCTH and have not been compensated for this article.

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