Good morning, ladies and gentlemen, and welcome to the Delcath’s First Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Hoffman, Delcath’s General Counsel. Sir, the floor is yours.

Thank you. And once again welcome to Delcath Systems First Quarter 2022 Earnings Call. With me on the call are Gerard Michel, Chief Executive Officer; Dr. Johnny John, Senior Vice President of Medical Affairs and Clinical Development; Kevin Muir, Vice President of Commercial Operations; John Purpura, Chief Operating Officer, and Anthony Dias, Vice President of Finance. I'd like to begin the call by reading the Safe Harbor statement. This statement is made pursuant to the Safe Harbor for forward-looking statement 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 27(a) of the Securities Act of 1933 and Section 21(e) 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 materially from those expressed or implied in forward-looking statements due to various risks and uncertainties. For a discussion of such risks 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 subsequently 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 earnings 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. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you everyone for joining today. Delcath has had a very productive first quarter of 2022 and year-to-date for both HEPZATO, the company's product development candidate in the United States and CHEMOSAT the company's marketed product in Europe. In the US, [Technical Difficulty] forward towards the re-submission of a new drug application for HEPZATO, we have completed the pre-NDA meeting with FDA and based on that interaction we see no barriers to a resubmission of HEPZATO’s NDA, which we now plan to file in the third quarter. In addition, an update on the Phase III FOCUS trial results were accepted for a poster presentation at the American Society of Clinical Oncology or ASCO’s Annual Meeting in June. Regarding CHEMOSAT, single center safety and efficacy data from the University Hospital Southampton in England was published in the Journal of melanoma research and data from patients treated at the Hanover Medical School were presented at the European Conference on Interventional Oncology or ECIO. In addition, we achieved medical device regulation certification under our CE mark and most notably we resumed direct responsibility for sales, marketing and distribution activities of CHEMOSAT in all of Europe. Starting with HEPZATO in the US. After the first quarter ended we completed a pre-NDA meeting regarding HEPZATO’s NDA resubmission without any meaningful new issues arising and gaining additional clarity of FDAs expectations regarding certain analyses. While we wait for the final official meeting minutes from FDA, we do not believe that any additional preclinical or clinical studies will be required in order to file the NDA, whether the FDA will convene an advisory committee is an open question. As a company, we are planning for one and would look forward to the opportunity to highlight HEPZATO’s efficacy and safety. We expect to file HEPZATO’s Class II resubmission…

Thank you, Gerard. Product revenues for the three months ended March 31, 2022 was approximately $207,000 compared to $261,000 from the prior year quarter from sales of CHEMOSAT in Europe as we resumed direct sales during March 2022. Other income for the quarter was $171,000 compared to $127,000 in the prior year quarter. Research and development expenses for the quarter increased to $4.2 million compared to $3.7 million in the prior year quarter, primarily due to higher professional service costs related to our pre-NDA meeting with the FDA and preparation for our NDA submission in the third quarter of 2022. Selling, general and administrative expenses for the quarter were approximately $3.6 million compared to $3.3 million in the prior year quarter. The increase was due to pre-launch costs relating to the commercialization of HEPZATO. Other expenses increased from $660,000 from [$27,000] (ph) due to the increase in interest expense, amortization related to our debt financing. On March 31, 2022, the company had cash, cash equivalents and restricted cash totaling $20.5 million as compared to cash, cash equivalents and restricted cash totaling $27 million on December 31, 2021. During the three months ended March 31, 2022 and March 31, 2021, we used $6.4 million and $4.6 million, respectively, our cash in operating activities. That concludes my financial remarks. I'd like to ask the operator to open the phone lines for Q&A. Can you please check for questions.

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Thank you. Your first question is coming from Marie Thibault from BTIG. Marie, over to you.

Good morning. Thank you for taking the questions. I wanted to start here with what you learned from the pre-NDA meeting, with the FDA, as well as any more detail you can give us on that one, that vendor who had those unforeseen delays. Any detail you could give along what those delays are and how they led to the slight change in the timeline.

Sure, Marie. So as you well know, pre-NDA meeting usually there is not a lot of upside and there is potential for some downside out of those. In this particular case there was some modest upside in that -- in discussions with the FDA, they did tell us that they would prefer us to use, actually. Our treated population is the primary efficacy analysis, it’s not the IPT. And as you may recall, the efficacy parameters were a bit higher in the treated as would be expected. In terms of any downside, there really wasn't that, we got some clarification from the FDA in terms of how they wanted to look at some of the data. As an example, was there a question as to whether or not they want us to prove our safety data for purposes of an integrated summary of safety, and they agreed that the data and the devices were distinct enough from the prior pivotal trial that we no need to do that. So that was excellent, they told us that they kind of at the same mindset as we did in that, this is a step change in terms of the safety of the product and it made no sense to pull the two. So I think that was a very strong positive signal. But overall, I mean it was a very positive meeting, there are always some certifications on how they want to see some of the data, but nothing dramatic one way or another. So we were very, very happy with how the meeting went. And we've got to see the official meeting minutes. We don't expect there'll be anything in there that would surprise us, but we still have to get those in hand. Now in terms of the delay in…

Okay, very good. And then, I guess I'll ask on the EAP expecting to have sites accepting patients by end of month, three more coming online pretty soon. What's needed to get those centers across the finish line here and what will they be doing in the early days of that EAP. Thanks again.

Yeah, the thing we're facing with the EAP that I think a lot of other probably companies are facing is really frankly, the nursing shortage is impacting the ability to supply clinical coordinators in the hospital for clinical trials. EAPs are not always the easiest thing to entice people to hospitals or investigators to join, they are considered not the sexiest thing we put it that way in terms of trials. I am thrilled that pretty sure we have -- we have two that either have been trained or one of those pieces training to be done, so they can start enrolling patients, three others have committed, there are quite a few, more than five others have talked to us and they're kind of circling the basket, we just need to see we can get five more over the finish line. But it really is having them be able to allocate the resources, find the resources to do it and I think this is an industry-wide problem. I'm pushing the team very hard to get the 10. I'm not moving that goal right now internally. I think we can get there, but it really has mostly to do with the sites having adequate resources to put on trials right now.

Okay. That's well understood. Thanks a lot, Gerard.

Thank you. Your next question is coming from Scott Henry of Roth Capital. Scott, please ask your question.

Thank you and good morning. Just a couple of questions. I guess, first, with regards to the survival data, has that data fully matured or is that still going to be coming in through this process?

That data will mature over the next year. So, maturity in terms of duration of response and overall survival, that will continue to recur over the next year. There'll be an update at ASCO and probably one or two more updates until the final maturity occurs. In our protocol, we said we would follow those patients for two years post the last treatment and that last treatment was May at last year, but OS is not the primary exploratory endpoint of the trial. There is no need to wait for that data to mature to submit at the NDA.

Okay, great. Thank you for that color. And then on the income statement, couple of questions. R&D, should we expect that to start to decline or should it may be stay up at this level for another quarter or two? And then I guess, very small numbers, but the COGS going down, is that a function of the new sales model in Europe? Just trying to get my arms around that.

Yeah, in terms of R&D, I think we'll have another quarter probably at the high level as we continue to pay the typical army of consultants that gets involved when you're pulling an NDA together. And then that should drop for a period before we are ramping up with the new indications. But there'll be a part of a couple of months in terms of that higher level. In terms of the COGS, I will turn to Tony to see if he can answer that question. They are indeed small numbers.

Yeah, it is a small number this quarter as we only started going direct in March. So -- but the COGS is reflective of some of the direct sales, as a result of some of the direct sales we did in the month of March.

Yeah. And there is was also a modest drop in the units sold. I think our past partner probably sold in a little bit into some sites, which led to this modest drop in the units sold. So that probably had an impact as well.

Okay, great. And, Gerard, perhaps a bigger picture question. Do you kind of slow things down a little bit on future indications given the current market environment and biotechnology? Or how do you would just kind of your compass give given the backdrop we have currently? I’m just curious if you do it all and your thoughts on that? And also another balance sheet question, that restricted cash, is that usable or what are the restrictions there? Thank you.

Sure. In terms of how do we adjust the dial given the current market situation, there isn't a lot left to do interim -- there is a lot of spending at the moment on those new indications. It's primarily advisory boards and we have already slowed that down, we started doing that probably three months ago and sort of really pushing hard. But what we're trying to do is the low cost names in the interim, which is advisory boards to get interest with investigators, make sure we have the protocol fine-tuned. We have definitely slowed down the expansion of hiring that we otherwise would have done to support some of that. So that's a key component in terms of trying to manage the balance sheet. In terms of restricted cash, there is a target amount of money to raise that would release it. And that would be raising another $16 million and equity financing would release the restricted cash. We can always, of course, have conversations conversation Avenue if the need arose to do that sooner, they are a very constructive partner. So those are the two avenues we would have to release that cash.

Okay, great. Thank you for taking the questions.

Thank you.

Okay. Your next question is coming from Swayampakula Ramakanth of HC Wainwright. Over to you.

Thank you. Good morning, Gerard. Quite a few of my questions have been asked, but just thinking of CHEMOSAT and Europe. Now that you're taken over the responsibility of commercializing in Europe, how is that working and anything we can get color on in terms of the progress so far and what needs to be get done, so that it goes smoothly from here onwards?

Sure. So for the last several years we've been -- haven't had a lot of visibility into kind of the commercial dynamics in the markets in Europe when we handed it over. So right now we are reintroducing ourselves to a lot of the clinicians, some of which we kept tabs on because we were doing clinical development in Europe. But right now, it's really is, for example, in Germany, trying to better understand the lay of the land, but the near-term priorities in those markets -- the markets we currently exist in is the following, in the UK we try to increase referral patterns to the existing sites. I think we have enough sites in the country, so we're trying to increase referral patterns, whether or not it's from Ireland, which has an agreement with the NHS or whether it's within the UK itself. Finding those patients were being surveyed and then refer them to the treating center. The second thing, in the UK is to get a submission together for national coverage. Our goal is to get that in this year, but it's a good year and a half process between EU and then getting budgeted in the NHS budget. So there is also regional funding. So we've hired a consultant to help try to get regional funding in parallel, again we couldn't do this before we have the rights back. So we're looking for regional funding which we think might give us some additional revenue beyond the patients we’re paying out of pocket right now. In Germany, we will likely want to open another site somewhere in Germany, but also importantly it is again once again trying to get referrals of two hospitals and working more closely with the hospitals from a budgetary perspective, because those hospitals…

[Operator Instructions] Okay. There appear to be no more questions. I will now hand back over to Gerald for any closing remarks.

Okay. I want to thank you all again for your interest and support. We look forward to giving the future updates as the year progresses. Have a great day everyone.

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.