Delcath Systems, Inc. (DCTH) Q1 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Delcath Systems First Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to David Hoffman. Please go ahead.

Thank you, and welcome to Delcath Systems First Quarter 2026 Earnings Call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Chief Financial Officer; Kevin Muir, Chief Commercial Officer; Vojislav Vukovic, Chief Medical Officer; and Martha Rook, Chief Operating Officer. This statement is made pursuant to the safe harbor for forward-looking statements 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 27A of the Securities Act of 1933 and Section 21E 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 in a material manner 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 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 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. Our press release with our first quarter 2026 results is available on our website under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website. Now I would like to turn the call over to Gerard. Gerard, please proceed.

Thank you, David, and welcome, everyone. We've had a very successful first quarter marked by 4-centre activations and record new patient starts in the first quarter, both of which are core growth drivers for the business. In addition, we continue to advance numerous commercial and medical initiatives to ensure the long-term growth of HEPZATO with a strong focus on a third critical growth driver, building referral networks to quickly connect eligible patients with treating centers. To support center activations, increased utilization at existing centers and expanded referral patterns, we have nearly completed our U.S. commercial expansion into 9 regions. In addition, the expanded MSL team is fully trained and in the field, educating physicians about metastatic uveal melanoma with a focus on the CHOPIN results. As of today, we have 29 REMS-certified sites, and we are in active discussions with over 50 potential new centers. And 38 of these centers have had one or more members of a potential treatment team take the time to travel and be preceptive. While not all of these centers will be activated and the practice can take over a year in some cases, there is clearly broad-based interest in this therapy, which bodes well for the long-term growth of the business. As we note on every call, it is very difficult to predict pacing. And given where we are at this point in the year, we are modifying our year-end activated center build to 37 active centers with 40 active center treatment centers sometime in the first quarter of 2027. In patient center activation, we are focused on changing prescribing patterns by expanding the set of appropriate patients that treating teams consider for PHP through education, fostering peer-to-peer conversations and evidence generation. First quarter 2026 new patient starts per site have tracked at or slightly higher than the first quarter of 2025 at approximately 0.7 new patients per site per month. New patient starts contribute to revenue over subsequent quarters as patients receive a series of treatments. We expect the strong first quarter new patient starts to offset the reduced site activation pace. Based on conversations with some treating physicians, we know that the publication of the CHOPIN results in Lancet Oncology is already changing treatment patterns at certain centers. One piece of publicly available anecdotal evidence is the recent webinar hosted by the patient advocacy group at Kurinsight, during which Dr. Sid Padia, an interventional radiologist from UCLA, shared his experience treating metastatic uveal melanoma patients with HEPZATO. Some of the patients Dr. Padia is treating with PHP are also being treated with immunotherapy. And he noted on the webinar that his results with these patients are consistent with or perhaps superior in the positive results reported from the CHOPIN trial. As a reminder, CHOPIN response rates improved from approximately 40% with HEPZATO alone to about 76% when HEPZATO was combined with immunotherapy, including some cases of complete response. The combination arm demonstrated a survival benefit with a clear separation between survival curves of both 1 and 2 years. Dr. Padia characterized these study results as extremely encouraging and consistent with his clinical experience. Many metastatic uveal melanoma patients are managed outside REMS-certified centers. So earlier identification and streamlined referral processes are essential. One important approach to enhancing referral patterns is to use multiple data sources to identify physicians treating newly diagnosed metastatic patients and promptly connect these patients with a suitable HEPZATO treatment center. As these networks mature, we expect referrals to be an important driver of new patient starts across our footprint. I now would like to turn to our clinical development programs. In our ongoing metastatic colorectal cancer trial, we continue to activate new trial sites and now have a total of 13 centers who can actively screen CRC patients. We have implemented specialized training modules and streamlined onboarding processes to continue to accelerate site readiness and ensure protocol adherence. We are on track to activate nearly all of the currently targeted 26 trial sites by the end of this year and anticipate presenting interim results in late 2027. To date, we have enrolled 7 patients. While this pace has been slower than initially anticipated, we believe the program is picking up momentum. Our second program in metastatic breast cancer now has 4 clinical trial sites that are prepared to screen patients with additional sites opening soon. Since breast cancer physicians typically have less experience with liver-directed therapies compared to those treating metastatic colorectal cancer, we are conducting targeted education and outreach initiatives to increase awareness of HEPZATO's potential benefit to patients with metastatic breast cancer. We are targeting 15 trial sites and expect to activate them by late 2026. We will provide guidance related to the readouts from this trial later this year as operational progress supports more precise forecasting. We are seeing growing interest in HEPZATO beyond colorectal and breast cancer and are exploring clinical trial designs into additional indications, guided by physician input and advisory board feedback. Based on the results of the CHOPIN trial, there is strong enthusiasm from the medical community to investigate a CHOPIN-like combination regimen to treat liver involvement in patients with a variety of solid tumor types. I look forward to sharing updates on these plans later in the year. I will now ask Sandra to review our financial results.

Thank you, Gerard. Total revenue in the first quarter of 2026 was $25 million compared with $19.8 million in the first quarter of 2025. This included $23.3 million of HEPZATO KIT revenue and $1.7 million of CHEMOSAT revenue. Gross margin for the quarter was 85% compared to 86% in the first quarter of 2025. Research and development expenses in the first quarter was $9.8 million compared to $5 million in the prior quarter, driven primarily by continued investment in our clinical organization and the ongoing Phase II trial. Selling, general and administrative expense in the first quarter was $13.1 million compared to $11.3 million in the prior year quarter. This reflects our investment into the continued commercial expansion and increased marketing activities. Net loss for the first quarter was $1.1 million compared to net income of $1.1 million in the prior year first quarter. On a non-GAAP basis, adjusted EBITDA for the quarter was $3.4 million compared to $7.6 million for the first quarter of 2025. We ended the quarter with $89.3 million in cash and investments and no debt. Cash provided by operations was $0.9 million in the quarter. We also purchased approximately 300,000 common shares for about $3 million in the first quarter under the company's approved $25 million share buyback program. To date, we have purchased $9 million worth of common shares. Turning to 2026 guidance. We are confident we will achieve total revenue of at least $100 million, which reflects 20% growth in HEPZATO kit volume over 2025. Our guidance takes into account expected seasonal trends in the third and fourth quarters, much like in 2025 when new patient starts rates declined partially due to scheduling challenges. Forecast for 2026 gross margins remain between 85% to 87%, and we now expect to report positive adjusted EBITDA for the remainder of the year. I want to thank you all for participating today. This does conclude our prepared remarks, and I'd ask the operator to open the phone lines for Q&A.

[Operator Instructions] Your first question comes from Marie Thibault with BTIG.

I wanted to ask my first here on the volume you're seeing per site. Certainly encouraging to hear that that's more than offsetting kind of the slightly slower pace of activations. So I just want to understand what was driving that. It sounds like perhaps CHOPIN is having a bit of an effect. I know in the past, competing or other trials might have been a distraction. So if you can just tell us a little bit more about some of the dynamics behind driving that higher volume.

Yes. I think it's primarily CHOPIN as well as new sites come on board. Not all of them, but as some of the new sites come on board, when they see the results, they start increasing their volume. So I think it's both things, what they see in practice and the CHOPIN results as well. Clinical trial headwinds are probably reduced a bit from probably similar time last year. But I think the majority of the effect, as best as I can sort out, is CHOPIN and then doctors just seeing the scans and seeing the tumor shrinkage.

Great to hear. Simple enough. And then I'll ask a follow-up, I think, for Sandra. When we think about the spending trajectory this year, I recall that it is expected to be higher in 2026 than it was in 2025. Can you just give us any more detail, if you have it at this point, on visibility for cadence of that spending, how you see some of the investments in R&D and commercial expansion unfolding throughout this year?

Absolutely. So I know in the previous call, we did mention R&D for full year 2026 would be about a 90% increase over 2025. But based on a little bit of acceleration in the enrollment in both trials, we're likely going to see a full year increase closer to the 70% to 75% over 2025. R&D, we will likely see a decent increase in Q2, about 20% over Q1, and start to level off, but about 10% over the remainder of the year and into the fourth quarter. SG&A, probably about a 60% increase in 2026 over 2025 due to the sales force expansion and just increases in selling costs as we grow. Q2 for SG&A, probably a 10% to 15% increase over Q1 due to those marketing initiatives and then increase just modestly each quarter thereafter.

The next question comes from John Newman with Canaccord.

Congrats on the continued progress. I just wondered if you could talk a little bit about the factors involved regarding the change to the site addition guidance. Obviously, it looks like that's going to be offset by increased patient volume, which is great. But just curious if you could discuss a little bit the different factors that went into that change there.

Really, the visibility we have in terms of -- there's always about half a dozen or more sites roughly that look like they could go any week. And so the pipeline is full. I want to make sure that's clear. If I don't have patients that I know are scheduled for treatment or multiple patients going through screening, then I'm a little reluctant to say, hey, I'm going to get a couple of sites in the next month or two. The average pace has been a little over — since we've launched has been, I think, about 1.1, 1.2 per month. But if I don't see sites ready to treat a patient or having one scheduled, then I say, all right, I'm going to have another dry month or two, and I pull that out. So, under that framework, I'm saying, yes, it's more likely we'll be 37. Could it be 38 or 39? Yes. But I think 37 is probably a more likely number. And it's as simple as that. We just don't see anything in the next month or so, so I kind of reduce it.

And then one quick follow-up. On the CHOPIN data, which I think are really fantastic and should be really beneficial, I'm curious if you're seeing most of the new sites that you're in discussion with kind of citing that as a factor for their enthusiasm, or if it's sort of balanced between new and old sites. I'm just curious if perhaps you're seeing kind of the new sites pick up on this in terms of wanting to get on board with the product? Or is it kind of balanced across older existing sites and the new sites?

All right. So if you're asking the level of enthusiasm from CHOPIN, I think it's both new and existing. There are some existing sites that have been doing a CHOPIN -like protocol from day one when they became active. And there are others that have moved over to that given the data. I would argue that probably most new sites are planning to do a CHOPIN -like protocol, a combination of immunotherapy and PHP. But Kevin, why don't you chime in? You're a little closer to it than I am in terms of would you say almost all the new sites are going with the CHOPIN? Or is it more 50-50?

I would say that the majority of them will be going with the CHOPIN -like protocol. We hear a lot about just combination treatments in general, but CHOPIN specifically. Now it is kind of important to note the new sites we have been engaged with for months. As you just pointed out, the site opening process takes a considerable amount of time. So when we talk with these sites as they are bringing us on, there are many conversations between peer-to-peer groups as well as our medical and clinical team as well. So everyone is well versed in the CHOPIN -type protocol. And so I would anticipate the majority of them that are coming on in the future will embrace that.

The next question comes from Sudan Loganathan with Stephens.

My first question is regarding the ESMO breast cancer data that you also provided. I noticed that the adverse event profile showed some Grade 3/4 adverse events in about 8% of patients. Additionally, the median overall survival is around 6 months for untreated liver metastatic breast cancer patients, or maybe around the 4- to 5-month range. So just kind of curious on how you're viewing this first set of data for this indication and how this kind of dictates how you go forward?

Yes. These were all very heavily pretreated patients. And I think probably one of the most important parts of the data is -- although the adverse event profile you mentioned may seem high to oncologists, these events are easily managed and all are resolvable. I think there's not much that can be done for these types of patients that were treated. So I think we're quite happy with the data and glad it's there to help improve recruitment, site activation and recruitment in the clinical trial. I'll ask Vojislav, is there any other commentary you want to add regarding those results?

Yes, sure. So thanks for the question. In addition to the comments that Gerard made, I'd like to point out that the patients who were treated with HEPZATO in this data review received a median of four prior systemic treatments. That means they have been receiving multiple chemotherapies and many, if not most, of the patients have residual toxicities. So these are not the patients that we have treated before in the FOCUS or Phase III trial, which are typically very little pretreatment or no pretreatment at all. So the safety profile depends also on the line of treatment in which you administer PHP. And regarding your comment about the survival, these are patients with breast cancer and they develop liver metastases. Typically, that's the final stage of the disease where patients have just a few months of life left. So seeing 6 months is actually, in that context, not so bad. And doctors expressed a great deal of satisfaction when we talk to them about being able to manage this very difficult stage of the disease.

I appreciate the details. And then additionally, I just wanted to ask, even as we go into the second half of this year, could we still anticipate a few other data readouts or just other updates on either breast cancer or colorectal cancer indications going forward?

Yes. There's not going to be any data readouts. I mean we'll keep you apprised of how the trials are proceeding in terms of open sites and patients. But there won't be any data readouts from us. As you know, the product has been on the market as a stand-alone device in Europe for over a decade. And often data comes out that we don't know investigators or clinicians have submitted for a poster presentation or publication. So could something else come out? Yes, but not from the company.

The next question comes from Chase Knickerbocker with Craig-Hallum.

This is Jake on for Chase. Just first, regarding the goal of 40 sites by the first quarter of 2027, for the incremental 11 sites, how much are you relying on the three new sales territories? And what are you seeing from the funnel there?

Yes. The territories are not new geographies, okay? So we are just slicing the existing territories from 4 to 6 to 9 into smaller territories, so there's more concentrated effort. So there's no particular territory. I think the reason to increase -- there's no particular region where we're going to get more business. As sites are opened, it takes effort to manage open sites. So, to maintain the same level of effort in terms of activating the sites and the same pace of activating the sites, we have to put more bodies in the field. Now these are very experienced reps, bodies. But we have to put more experienced people out there to manage the existing accounts and to maintain the same level of site activation effort.

Okay. And then on guidance, just on a run rate basis, you're already at the $100 million floor just with this quarter. What are your assumptions for the remaining 3 quarters for revenue?

Yes. Well the assumptions, as I mentioned before, are that we will see the same seasonal impact we saw in the third and fourth quarter of last year. Now we could be wrong there. In hindsight, it could very well be that we're being overly conservative. But we have a very small end in terms of understanding to what extent seasonality will impact things. There are certain aspects of the seasonality that we think we can address and are trying to address. The specific one that we are trying to handle is if at an important center, there is only one full treatment team, let's say there's only one IR or there's only one anesthesiologist who's trained. If they go on vacation, by definition, the capacity has dropped at that center. So, we have implemented a special incentive to the sales force. If you get a second treatment team trained up and going, there will be something in it for the rep. That is yielding some additional backup treatment teams. And I'm hopeful that, that will offset some of the seasonality we saw. There's also seasonality, I think, by patients deciding in certain times of the year, they would rather not be treated. They'll postpone treatment or postpone getting started. That is difficult for us to impact. But for those aspects we can impact, specifically maintaining capacity in terms of training teams, we're doing what we can. But again, getting back to the core of your question, what assumptions are we utilizing given we're already at a run rate to hit guidance, we're assuming we see the same level of seasonality as last year. And again, that might be overly conservative. But I think it's best to guide that way and also to be clear about our assumptions underlying the guidance.

The next question comes from John Newman.

I had a question about the recent data that you were just discussing earlier on the breast cancer work that was done in Europe. It was interesting, I noticed that the median number of cycles was 1. And I'm wondering if you think that's representative of what we'll see going forward when you test this treatment in perhaps a different set of breast cancer patients and also whether that median cycle may have just been limited by either patient survival or just physicians that maybe hadn't had a lot of experience with the treatment.

Yes. I will note that the clinical protocol calls for 2 treatments. So I would think that would be the median when the trial reads out. In terms of why they only received one, I have some theories, but let me ask Vojislav to comment.

Yes. As Gerard mentioned, this was not a prospective trial. This is basically reflecting data from real-world clinical practice. And the practicing physicians were probably making decisions which they thought in the absence of any guiding data are the best for the patients. So just to remind you, these are heavily pretreated patients with a median of 4 prior treatments, quite exhausted with lots of residual toxicities. And I think physicians were probably being cautious and trying to manage the disease, perhaps not to achieve the best possible efficacy, but rather to control the disease and prolong patients' lives, which will be typical the treatment goal after first or second line. So I think that the median number of cycles simply reflects the different treatment objective compared to if you treat patients at an earlier stage in the patient journey.

The next question comes from Yale Jen with Needham & Company.

You refer in the press release that you have 36% volume growth year-over-year of the same quarter. I just wonder whether if you compare to the fourth quarter of last year, what that readout might be? And then I have a follow-up.

Sandra, do you have the quarter-on-quarter growth off the top of your head? Sandra, you might be on mute.

You're correct. I was on mute. I want to say we're mid-20% volume growth from Q1 2026 over Q4 2025.

Okay. Great. That's very helpful. Maybe just a follow-up here that we know that the referral, obviously, is the long-term sort of expansion sources. And so we know that you guys already started the process. And just curious what will be the measurement or other sort of follow-up to track how the referral track is being done and improvements if needed, so on and so forth. So any color on that front?

Yes. It's interesting that you asked that question because it's something I've grappled with Kevin. Just what we want to do is incentivize our oncology managers to get the referrals going. It is somewhat difficult to know when the patient shows up at the center because obviously, we have the compliance. You can't exactly quiz the doctor on where did this patient come from that sort of thing. So, it's difficult to know, hey, did our referral process lead to this specific patient. We definitely know of cases, many, many cases where the work of the oncology manager resulted in a patient ending up at one of our treating centers. So, it is working. In terms of measuring it on a specific metric, we're grappling with that an accurate metric. We're grappling with that ourselves. How do we follow that. We have some ideas. But right now, I can't point to a specific way we're going to measure that. And it's unlikely that we're going to be able to tell you ever get to the point where we can say, hey, X percent of our patients or the rate of referral is Y per site. I don't think we'll ever get there. Because again, it's HIPAA compliant, you can't quiz the docs, but we're focused very, very much on it.

The next question comes from Charles Wallace with H.C. Wainwright.

This is Charles on for RK from H.C. Wainwright. So, the first question I have is, I was curious for the CHOPIN publication in the ESMO clinical practice guidelines, are you seeing these 2 publications translate into increased physician adoption in Europe? I know it's a little early, but should we expect kind of that to grow in 2026 from these?

Yes. I think the European growth is significantly hampered by reimbursement issues. I think many centers in Europe are doing a combination type regime. But to be frank, a lot of European oncologists are less aggressive than they are in the U.S. But I can't really comment as to whether or not I think is it going to grow to increase revenue in Europe over the long-term, certainly. For this particular year, I think we just have to assume that we're going to see probably modest single-digit growth in Europe. What will change that is getting reimbursement in the U.K., which we've been working on for quite a while as well as establishing commercial businesses in Spain, France and Italy, and we're working hard on that as well. In terms of the overall impact on the business, given the price point in Europe, I wouldn't just call it a rounding error, certainly, but it's a plus or minus 10% thing on EBITDA for the business. It's not a huge driver. But we're focused on Europe, as I've mentioned before, primarily at least for the short to medium-term as areas where we can generate data. The drug is approved, the device is approved to deliver melittin to the liver. It is not tied to a specific tumor type. Now most of the usage is in uveal melanoma because that's where most of the data is. But it's a great place to generate run IITs and generate data in other tumor types. So right now, Europe's importance is generation of data. We manage it on a breakeven basis. At some point, we may relaunch the product as a combination drug device as a HEPZATO and try to reset the price point, but that's many, many years down the road.

I guess one more follow-up for me. So, on the pipeline for mCRC, I think you mentioned that there's 13 sites, but it's been slower-than-expected enrollment with -- I think you said 7 patients. So, I was just curious when you expect enrollment to pick up and ultimately complete for this study?

Sure. Vojislav, you mind taking that?

Sure. You're correct. We have opened 13 sites, and we have enrolled thus far 7 patients. Based on the momentum that we've observed over the last several months, we feel confident that the momentum, both in terms of site openings and patient screening and enrollment is picking up. So, we believe that enrollment will proceed in this year and next year and that we'll be able to share interim results publicly by the end of next year, '27.

Thank you. We have reached the end of the question-and-answer session. And this concludes today's conference, and you may now disconnect your lines. Thank you all for your participation.