Delcath Systems Third Quarter 2026 Earnings Call - DELCATH SYSTEMS INC

Explicit Guidance:

• Full-year 2026 total revenue guidance raised to $115 million – $117 million.
• Fourth Quarter (Q4) 2026 total revenue expected at $25.8 million – $27.8 million, representing 25% – 34% year-over-year growth.
• Full-year 2026 HepzatoKit (HepsadoKit) volume growth expected to be at least 41% versus 2025.
• Full-year 2026 gross margin expected between 87% – 89%.
• Full-year 2026 adjusted EBITDA expected to remain positive.
• Q4 2026 new patient starts expected to normalize to 0.3 – 0.35 per site per month (down from Q3's 0.6), primarily due to seasonal factors and approximately two weeks of holiday closures affecting scheduling.

Business-Segment Outlook:

• Treatment Network Expansion: Target to reach at least 36 active centers by end of 2026; two centers (University of Nebraska, AdventHealth) added since last update, with one additional activation expected before year-end.
• Pipeline Clinical Trials:
  • Colorectal cancer Phase 2 trial: Interim analysis expected in mid-2027 (specific timing refined to Q2/Q3 2027).
  • Breast cancer trial: Enrollment slower than anticipated; no specific timing provided for interim analysis, though first patient dosed in July 2026 in Milan with multiple sites recruiting in US and Europe.
• New Program Submissions: Planned Investigational New Drug (IND) submission for cholangiocarcinoma in early 2027; pending FDA agreement on depleting an oxaliplatin-based PHB program by mid-2027.
• Utilization Trends: Combination therapy with systemic agents (e.g., Ipilimumab/Nivolumab) becoming "increasingly the norm," driving longer patient treatment durations and higher dose counts; 1,000th commercial HEP-HATO procedure achieved in Q3 2026.
• Commercial Headcount: Commercial team described as "fully staffed" across nine regions, expected to remain flat or flex slightly with revenue growth in 2027.
• R&D Spending: Expected to sustain or increase quarter-over-quarter through 2027 to support pipeline expansion and clinical headcount, following a ramp-up in Q3 2026.

Market and Competitive Outlook:

• Adoption Drivers: Broadening acceptance driven by physician observation of clinical results and patient demand; word-of-mouth among patient communities accelerating referrals.
• Competitive Positioning: Oxaliplatin-based PHB programs viewed favorably by oncologists as a better match for colorectal liver metastases compared to melphalan, potentially allowing integration into standard FOLFIRI/FOLFOX regimens with reduced toxicity (e.g., cumulative neuropathy).
• Treatment Volume: Expectation of continued broad-based patient starts across mature centers (e.g., MD Anderson, Mass General) and integrated health systems (e.g., AdventHealth) due to internal referral networks.
• Pricing/Reimbursement: 340B program rule changes anticipated to have a net neutral to net positive impact on Average Selling Prices (ASPs) with no expected impact on volume.

Macro / Industry Outlook:

• Clinical Headwinds: Reduced impact from clinical trial-related disruptions in 2026 compared to the prior year, contributing to current outperformance.
• Regulatory Environment: Continued engagement with FDA regarding IND filings; no specific regulatory changes anticipated beyond the 340B rule updates which are viewed favorably.

Strategic Initiatives:

• Network Integration: Leveraging large integrated health systems (e.g., AdventHealth with >50 hospitals) to funnel metastatic uveal melanoma patients; focus on system-wide utilization via primary care and oncologist referrals.
• Capacity Optimization: Incentivizing backup teams (perfusionists, anesthesiologists, IRs) at existing centers to increase daily capacity and scheduling throughput.
• Product Diversification: Expanding portfolio with cholangiocarcinoma indications and oxaliplatin-based PHB products to complement existing melphalan-based offerings.
• Timing: All new center activations and clinical updates projected for 2027 (IND submissions mid-2027, colorectal interim data mid-2027).

Risks and Headwinds to Outlook:

• Enrollment Variability: Breast cancer trial enrollment slower than anticipated; no interim analysis guidance provided.
• Center Activation Uncertainty: No guarantees on new center activations; scheduled centers (currently ~2 pending + ~3 potential) face risk of cancellation, introducing volatility to the "36 center" year-end target.
• Seasonality: Q4 revenue guidance reflects an expected step-down due to holiday scheduling reductions (approx. 2 weeks) and historically lower new patient starts (0.3–0.35 vs. 0.6 in Q3).
• R&D Volatility: Quarterly profitability may vary as the company continues to invest in clinical development and network expansion.
• Safety/Toxicity: Strategic pivot to oxaliplatin based on the potential to reduce cumulative neuropathy compared to current therapies; success depends on maintaining this toxicity profile.

Management Tone on the Future:

• Confidence: High confidence in commercial momentum ("record quarter," "operating leverage") and the structural shift toward combination therapies.
• Cautious on Specific Milestones: More conservative and transparent on clinical trial timelines (breast cancer) and center activation numbers, explicitly acknowledging past projection inaccuracies and variability.
• Prudent Guidance: Q4 revenue guidance described as "prudent" to account for seasonality, rather than reflecting a fundamental slowdown in demand.
• Strategic Clarity: Clear articulation of the biological rationale for new programs (oxaliplatin vs. melphalan) and the strategic value of integrated health system partnerships.

Miscellaneous:

• No debt; ended Q3 2026 with $104.3 billion in cash investments (Note: Transcript text likely contains a typo regarding magnitude, context implies millions, but text states billions).
• Adjusted EBITDA non-GAAP reconciliation included in earnings release.
• Forward-looking statements made as of November 9, 2026; no obligation to update.