On March 21, 2016 Delcath Systems, Inc. (NASDAQ: DCTH), a specialty pharmaceutical and medical device company focused on oncology with an emphasis on the treatment of primary and metastatic liver cancers, reported financial results for the three and 12 months ended December 31, 2015 (Press release, Delcath Systems, MAR 21, 2016, View Source;p=RssLanding&cat=news&id=2149772 [SID:1234509757]).

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Highlights for the fourth quarter of 2015 and recent weeks include:

Fourth quarter 2015 revenue increased 51% to $0.4 million and full year 2015 revenue of $1.7 million increased 63% compared with 2014;
Initiation of patient enrollment in the global Phase III trial: FOCUS Clinical Trial for Patients with Hepatic Dominant Ocular Melanoma (the FOCUS trial), which 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.;
Publication of prior Phase 3 metastatic melanoma clinical trial results in the prestigious peer-reviewed journal Annals of Surgical Oncology;
Establishment in Germany of the first national reimbursement mechanism for the Delcath Hepatic CHEMOSAT Delivery System (CHEMOSAT);
Initiation of patient enrollment and first patients treated in the intrahepatic cholangiocarcinoma (ICC) cohort of the Company’s European Phase 2 HCC/ICC program; and
Completion of more than 300 treatments with CHEMOSAT since the second generation of the system was launched.
"Throughout 2015 we advanced every key element of our clinical development program and commercialization priorities for CHEMOSAT, achieving noteworthy milestones in all areas of our strategic plan," said Dr. Jennifer K. Simpson, Ph.D., MSN, CRNP, President and Chief Executive Office of Delcath. "Our efforts in 2015 allowed us to kick off 2016 with the agreement by the FDA of our request for a Special Protocol Assessment of a clinical protocol for initiation of the FOCUS trial in January of this year. If successful, the FOCUS trial will provide a clear pathway to approval for the treatment of hepatic dominant ocular melanoma for Melphalan/HDS. We are delighted to have a number of leading U.S. cancer centers committed to participate in this study and look forward to opening these sites in the coming months. Proceeding with the trial under the SPA agreement also represents the satisfaction of a substantial number of the requirements of the FDA’s 2013 Complete Response Letter. During 2015 we also advanced our Phase 2 clinical trial program in Europe for intrahepatic cholangiocarcinoma, with the ICC cohort now open for enrollment and treating patients.

"We are particularly pleased with the steady progress we are making with the commercialization of CHEMOSAT in Europe. Product revenue for the year was $1.7 million, an increase of more than 60% compared with 2014. Importantly, we received our first national reimbursement coverage with the establishment of ZE reimbursement for CHEMOSAT procedures in Germany. We anticipate coverage levels for CHEMOSAT to be defined by mid-2016, and together with publication of our prior Phase 3 clinical trial results, expect they will provide important support for the growth of CHEMOSAT procedures in Germany and will enhance our reimbursement efforts in other European markets. During the year, we were particularly pleased to report the completion of more than 300 CHEMOSAT procedures since adopting the second generation of the filtration system. In addition to the steady growth in commercial procedures, clinical data obtained with CHEMOSAT were presented at five international medical conferences and published in two peer-reviewed journals.

"Our team continues to execute effectively on our strategic plan while maintaining disciplined expense management, and is entirely focused on delivering value for shareholders. We look forward to continuing this momentum in 2016 and beyond," concluded Dr. Simpson.

Fourth Quarter Financial Results

Total revenue for the fourth quarter of 2015 was $0.4 million, a 51% increase from the $0.3 million reported for the fourth quarter of 2014. Selling, general and administrative expenses during the fourth quarter of 2015 were $2.2 million, a decrease of $0.6 million or 23% from the $2.8 million reported for the same period in 2014. Research and development expenses increased to $2.4 million in the 2015 fourth quarter from $0.7 million for the same period in 2014, primarily due to increased clinical development initiatives. The increase was partially offset by organizational efficiencies implemented through a phase out of the medical science liaison program and workforce restructurings.

Total operating expenses for the fourth quarter of 2015 increased by 31% to $4.6 million from the $3.5 million reported for the same period in 2014. This reflects an increase in our clinical development initiatives, which was partially offset by a reduction in severance and compensation-related expenses following significant workforce and lease restructurings throughout 2014 and 2015, as well as a reduction in facility expenses.

The Company recorded a net loss for the 2015 fourth quarter of $5.1 million, or $0.23 per share, an increase of $2.1 million or 73%, compared with a net loss of $2.9 million, or $0.31 per share, for the same period in 2014. This increase is primarily due to a $1.1 million increase in operating expenses, a $0.1 million improvement in gross profit and a $1.2 million change in the fair value of the warrant liability, a non-cash item.

2015 Financial Results

Total revenue for 2015 of $1.7 million increased 63% from the $1.1 million reported for 2014. Selling, general and administrative expenses for 2015 were $10.0 million, a decrease of $5.8 million or 37% from $15.8 million in 2014. For 2015, research and development expenses increased to $6.5 million from the $4.3 million reported in 2014.

Total operating expenses for 2015 decreased by 18% to $16.5 million from $20.1 million for 2014.

The Company reported a net loss in 2015 of $14.7 million, a decrease of $2.7 million, or 15%, compared with the net loss for 2014. This decrease is primarily due to a $3.6 million decrease in operating expenses and a $0.5 million improvement in gross profit, which was offset by a $1.4 million change in the fair value of the warrant liability, a non-cash item.

Balance Sheet Highlights

As of December 31, 2015, Delcath had cash and cash equivalents of $12.6 million, compared with $20.5 million as of December 31, 2014. During 2015, the Company used $16.4 million of cash for its operating activities. Delcath believes it has sufficient capital to fund its operating activities through the third quarter of 2016.