Delcath Systems, Inc. ((DCTH)) has held its Q4 earnings call. Read on for the main highlights of the call.
Delcath Systems, Inc. recently held its earnings call, revealing a robust performance in the U.S. market with the successful launch of HEPZATO and substantial growth in Europe. Despite facing challenges related to pricing and high operational expenses, the company remains optimistic about its strategic focus on expanding treatment centers and advancing R&D initiatives, suggesting a positive outlook for the future.
Successful U.S. Launch of HEPZATO
Delcath Systems celebrated a successful launch of HEPZATO in the U.S., generating $32.3 million in revenue for 2024. Notably, $13.7 million of this was achieved in the fourth quarter alone from 14 active treatment centers, underscoring the strong market acceptance and demand for the product.
Positive Financial Performance
The company reported a positive financial milestone by achieving $4.6 million in adjusted EBITDA in Q4, marking a first for Delcath. The year concluded with $53.2 million in cash and investments, and importantly, the company has no debt, positioning it well for future growth.
European Growth
Delcath experienced remarkable growth in Europe, with a 137% increase in revenue over 2023. Germany saw a 75% rise, while other markets like the UK and Turkey doubled their revenue year-over-year, highlighting the company’s expanding international footprint.
Expansion of Treatment Centers
In Q4, Delcath activated three new U.S. treatment centers, bringing the total to 16. The company plans to expand to 30 centers by the end of 2025, demonstrating a commitment to broadening its reach and improving patient access to its treatments.
Strategic R&D Initiatives
The company is advancing its R&D efforts, having received FDA clearance for a Phase 2 trial in metastatic CRC. Plans are also underway for a Phase 2 trial in metastatic breast cancer, indicating a strategic push to expand HEPZATO’s indications and address larger patient populations.
Limited European Revenue Due to Pricing
Despite the growth, European revenue remains modest due to pricing and reimbursement challenges. However, Delcath is optimistic about strategic growth in these markets as it navigates these hurdles.
High Operating Expenses
Delcath’s operating expenses were significant, with R&D expenses at $13.9 million and SG&A expenses at $29.6 million for 2024. This reflects the company’s substantial investment in operations to support its growth trajectory.
Forward-Looking Guidance
Looking ahead, Delcath Systems aims to continue its growth trajectory with plans to increase the number of U.S. treatment centers to 30 by the end of 2025. The company also aims to maintain a positive adjusted EBITDA, having achieved $4.6 million in Q4. Key R&D initiatives include expanding HEPZATO’s indications, with a Phase 2 trial for metastatic CRC planned for the second half of 2025.
In conclusion, Delcath Systems, Inc. has demonstrated a strong performance with the successful launch of HEPZATO and significant growth in Europe. Despite challenges in pricing and operational expenses, the company’s strategic initiatives and expansion plans suggest a promising future. Investors and stakeholders can look forward to continued growth and innovation from Delcath in the coming years.