Was Delcath Systems, Inc. (OTCMKTS:DCTH) Another Pump and Dump Case?

Delcath Systems, Inc. (OTCMKTS:DCTH) is a mystery the market is yet to solve. The stock jumped and fell all the way back within a month. Although analysts are quick to assume it was a pump and dump by market movers, the movement has brought some spotlight on the company.Here is the stock’s price movement in the past month: DCTH One-Month ChartBrief ProfileDelcath Systems, Inc. was founded in 1988 and is headquartered in New York. It 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 systemIt is an interventional oncology company focused on the treatment of primary and metastatic liver cancers. Its investigational product – Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) – is designed to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects. The firm has commenced a global Phase 3 FOCUS clinical trial for Patients with Hepatic Dominant Ocular Melanoma (OM) and plans to initiate a registration trial for intrahepatic cholangiocarcinoma (ICC). Melphalan/HDS has not been approved by the U.S. Food & Drug Administration (FDA) for sale in the U.S. In Europe, its system has been commercially available since 2012 under the trade name Delcath Hepatic CHEMOSAT Delivery System for Melphalan (CHEMOSAT), where it has been used at major medical centers to treat a wide range of cancers of the liver.Recent DevelopmentsRecently, the firm announced that the independent Data Safety Monitoring Board (DSMB) of its Phase 3 FOCUS clinical trial for Patients with Hepatic Dominant Ocular Melanoma had completed its pre-specified review of safety data for treated patients in the trial. The DSMB has recommended that the study continues without modification.The FOCUS Trial is evaluating the efficacy, safety, and pharmacokinetics of Melphalan/HDS versus best alternative standard of care in 240 patients with metastatic ocular melanoma (OM). The primary objective of the study is a comparison of overall survival between the Melphalan/HDS treatment arm and best alternative care arm comprised of selected therapies; secondary objectives include overall progression-free survival and objective response rate, each as determined by the Investigator, while exploratory objectives include progression-free survival, objective response rate, hepatic progression-free survival and hepatic objective response rate all as determined by Blinded Independent Central Review, and quality of life measures. The FOCUS Trial is being conducted under a Special Protocol Assessment (SPA) agreement with the U.S. Food and Drug Administration (FDA) to support marketing approval in the U.S.In November 2017, the firm appointed Simon Pedder, Ph.D., a scientist and pharmaceutical executive with more than 30 years of experience in drug development, to join the Delcath Board of Directors.Dr. Pedder currently serves as Chief Business and Strategy Officer at Athenex, Inc., a global biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies for the treatment of cancer. During his long career in drug development, Dr. Pedder has held several leadership positions including President and CEO of Cellectar Biosciences, President and CEO of Chelsea Therapeutics, Executive Officer and Vice President of Oncology Pharma Business at Hoffmann-LaRoche, Life Cycle Leader and Global Project Leader of Pegasys/IFN and Head of the Hepatitis Franchise at Hoffmann-LaRoche.Dr. Pedder led the late-stage development and commercial launch of multiple proprietary pharmaceutical products, including Pegasys, Copegus, and Northera, which will benefit Delcath as it moves through its phase III clinical trials and NDA submission for the Ocular Melanoma and Intrahepatic Cholangiocarcinoma indications. The Board of Delcath has determined that Dr. Pedder is a crucial addition due to his expertise in late-stage drug development.Dr. Pedder received his Ph.D. in Pharmacology from the College of Medicine at the University of Saskatchewan in Canada, where he was a faculty member in the Department of Pharmacology at the College of Medicine. Dr. Simon earned a Master of Science in Toxicology from Concordia University in Montreal, Canada, a Bachelor of Science in Environmental Studies from the University of Waterloo in Canada and completed the Roche-sponsored Pharmaceutical Executive Management Program at Columbia Business School in New York.Company FinancialsAn analysis of the firm’s statement of comprehensive income reveals that revenues grew by 14% year on year, rising from $1.75 million to $1.99 million in 2016. However, net loss increased by 22% mainly as a result of increased research and development costs while other expenses a remained within the same rangeThe firm is very highly leveraged and has a significant portion of its liabilities due within the next period. However, its liquidity of 0.96 means the company would be capable of paying off the debts due within the year but would require additional cash either from profits or investors for extra expenses.ConclusionDCTH is small cap stock with a lot of potential, but it is necessary to observe the company carefully for a while before making any investment decisions.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.