Delcath (DCTH) Q3 2026 Earnings Call Transcript

DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Gerard Michel
• Chief Financial Officer - Sandra Pennell
• Chief Commercial Officer - Kevin Muir
• Chief Medical Officer - Vojo Vukovic
• Chief Operating Officer - Martha Rook
• General Counsel - David Hoffman

TAKEAWAYS

• Total Revenue -- $35.1 million, representing 71% growth compared with the third quarter of 2025.
• HEPZATO KIT Revenue -- $32.7 million, an increase from $19.3 million in the prior year quarter driven by higher treatment volume.
• CHEMOSAT Revenue -- $2.4 million, compared with $1.3 million in the third quarter of 2025.
• Gross Margin -- 89%, reflecting an improvement from 87% in the prior year quarter due to operational efficiencies.
• Net Income -- $7 million, compared with $0.8 million in the third quarter of 2025.
• Non-GAAP Adjusted EBITDA -- $11.5 million, an increase from $5.3 million in the third quarter of 2025 demonstrating commercial operating leverage.
• Cash and Investments -- $104.3 million as of Sept. 30, 2026, with no debt on the balance sheet.
• Operating Cash Flow -- $8.2 million, an increase from $4.8 million in the prior year quarter.
• Full Year Revenue Guidance -- $115 million to $117 million, raised from previous levels to reflect year-to-date performance.
• HEPZATO Volume Guidance -- at least 41% growth for the full year 2026 compared with 2025.
• Q4 Revenue Outlook -- $25.8 million to $27.8 million, representing year-over-year growth of approximately 25% to 34%.
• Active Treatment Centers -- 33 sites in the U.S., with the recent additions of the University of Nebraska and AdventHealth.
• New Patient Starts -- 0.6 per site per month, which management identified as a primary driver of quarterly results.
• Research and Development Expense -- $11 million, compared with $8 million in the prior year quarter due to increased clinical headcount and trial activity.
• Selling, General, and Administrative Expense -- $13.1 million, reflecting continued investment in commercial expansion and a fully staffed team in nine regions.
• HEPZATO Commercial Milestones -- 1,000 commercial treatments completed in the U.S. as of the third quarter.
• Colorectal Trial -- interim analysis expected in the middle of 2027 based on current enrollment rates.
• Breast Cancer Trial -- first patient dosed on July 9, 2026, at the European Institute of Oncology in Milan.
• Cholangiocarcinoma Pipeline -- IND submission targeted for early 2027 supported by clinical experience with CHEMOSAT in Europe.
• Oxaliplatin-based PHP -- preclinical development completion expected by mid-2027 to support a subsequent IND submission.
• Active Site Guidance -- at least 36 centers expected by the end of 2026, with two additional sites already having patients scheduled.

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RISKS

• Michel stated, "enrollment in the breast cancer trial has been slower than initially anticipated," which has prevented the company from providing guidance on the timing of an interim analysis.
• Michel noted the company expects to "lose close to two weeks due to the holidays" in the fourth quarter, which is reflected in the sequential revenue step-down in the 2026 guidance.
• Michel stated, "The danger there is they get canceled and that happens occasionally," regarding the potential for scheduled patient treatments at new sites to be delayed.

SUMMARY

Delcath Systems, Inc. (NASDAQ:DCTH) reported a 71% increase in total revenue for the third quarter and achieved positive operating cash flow, leading to an upward revision of its full year 2026 financial guidance. Management attributed the performance to strong new patient starts at active U.S. treatment centers and the broadening adoption of combination therapy strategies. The company is currently expanding its clinical pipeline with planned regulatory submissions in 2027 for new indications while focusing on increasing utilization across its growing network of specialized oncology centers.

• Management noted that the adoption of background systemic therapy alongside PHP has become the norm at many treatment centers, which helps patients stay on therapy longer.
• The company incentivized its sales force to help centers establish backup teams for perfusionists and anesthesiologists to increase total treatment capacity.
• Muir noted that larger centers, such as MD Anderson and Mass General, have significantly increased their treatment volume by expanding their internal clinical teams.
• Management indicated that changes to 340B rules are expected to be a net neutral to a net positive for average selling price without impacting overall volume.
• The addition of AdventHealth provides a platform for referral volume from one of the nation's largest integrated health systems with over 50 hospitals.
• Physicians are pursuing oxaliplatin-based PHP due to high familiarity with the agent as a standard backbone for colorectal and other gastrointestinal cancer treatments.
• The company expects to reach at least 36 active treatment centers by the end of 2026, supported by a recruitment pipeline of approximately six additional sites.

INDUSTRY GLOSSARY

• HEPZATO KIT: A combination drug and device product approved in the U.S. for the treatment of liver-dominant metastatic uveal melanoma.
• CHEMOSAT: The device-only configuration of the hepatic delivery system marketed in Europe for various liver cancers.
• PHP: Percutaneous hepatic perfusion, a procedure that delivers high-dose chemotherapy directly to the liver while limiting systemic exposure.
• mUM: Metastatic uveal melanoma, a rare form of cancer that frequently metastasizes to the liver.
• CHOPIN: A Phase II clinical trial evaluating the combination of HEPZATO with systemic immunotherapy.
• IND: Investigational New Drug application, a request for authorization from the FDA to start human clinical trials.
• Melphalan: The chemotherapeutic agent used in the HEPZATO KIT.
• Oxaliplatin: A chemotherapy medication being developed as an alternative agent for use with the company's hepatic delivery system.
• ASP: Average selling price, a metric used to track the net revenue generated per unit sold.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen. Welcome to the Delcath Systems Third Quarter 2026 Earnings Conference Call. [Operator Instructions] The call is being recorded on November 9, 2026. I would now like to turn the conference over to Mr. David Hoffman, Delcath General Counsel.

David Hoffman: Thank you, and welcome to Delcath Systems' third 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; Vojo 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. The 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, please see the risk factors detailed in the company's annual report on Form 10-K, quarterly reports on Form 10-Q, and 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. We will also discuss adjusted EBITDA, a non-GAAP financial measure. This measure should not be considered a substitute for GAAP results. A reconciliation to net income is included in our earnings release. The third quarter 2026 earnings release is available in the investor section of our website, along with additional details on our financial results and our latest SEC filings. We encourage you to review those materials. A recording of today's call will also be available on our website. Now I'll turn the call over to Gerard Michel. Gerard, please proceed.

Gerard Michel: Thank you, David, and good morning. Delcath's record third quarter of $35.1 million in revenue, up 71% in the third quarter in 2025, reflects the growing adoption of HEPZATO KIT and the hard work of both the Delcath and physician treatment teams. Just as importantly, we are delivering positive operating cash flow, which gives us the flexibility to support investment in both the treatment networks and ongoing research that will expand the platform. The growth and profitability was driven by strong new patient starts for the quarter at approximately 0.6 new patient starts per site per month. We now have 33 active treatment centers in the U.S. Since our last update, we have added the University of Nebraska and AdventHealth.

Two additional new centers have patients scheduled this month, and we expect at least one more activation before year-end, which would bring us to at least 36 centers by year-end. The addition of AdventHealth is especially meaningful given its scale as one of the nation's largest integrated health systems, with more than 50 hospitals, over 2,000 care sites, and roughly 4 million unique patients served each year, providing a robust platform for referral volume and system-wide utilization of HEPZATO. Our focus remains on both expanding the network and increasing utilization at existing centers through referral relationships, community physician education, and better coordination across the patient pathway. Combination treatment with systemic therapy is increasingly becoming the norm.

Most physicians view the two approaches as complementary rather than mutually exclusive. CHOPIN has provided an important foundation for this treatment strategy. And independent real-world experience continues to inform patient selection and sequencing strategies. In the third quarter, the 1,000th commercial HEPZATO treatment in the United States took place, which reflects the broadening acceptance of the therapy across a growing number of centers. In addition, University Hospital Southampton delivered their 500th CHEMOSAT procedure led by Dr. Sachin Modi. Now, once the center gains experience and sees results, the therapy tends to become firmly incorporated as an important component of standard of care.

On the clinical development side, the Phase II colorectal trial continues to enroll at a pace that supports an interim analysis in the middle of next year. As we've discussed in prior calls, enrollment in the breast cancer trial has been slower than initially anticipated. We are not yet in a position to provide guidance on the timing of an interim analysis. However, the first patient was dosed in July at the European Institute of Oncology in Milan, and we now have multiple sites recruiting patients in Europe and the U.S., and we continue to work with sites to support enrollment.

We are also expanding our pipeline with a planned IND submission for cholangiocarcinoma in early 2027 and, pending FDA agreement, completion of an ongoing preclinical development of an oxaliplatin-based PHP program by mid-2027 to support a subsequent IND. Both clinical programs have substantial strategic significance. The cholangiocarcinoma trial has broad support in the medical community based on both clinical development experience with CHEMOSAT in Europe and the very high unmet need. Delcath is exploring the oxaliplatin-based PHP product because physicians are already highly familiar with the product and comfortable with oxaliplatin as a standard backbone agent in colorectal and other GI cancer treatments.

By delivering high-dose oxaliplatin regionally through the hepatic delivery system and reducing systemic exposure, we may be able to incorporate it in the standard FOLFOX regimen in patients with liver-dominant cancers without meaningfully increasing toxicity, particularly cumulative neuropathy. From a biology standpoint, many oncologists view oxaliplatin as a better match to colorectal liver metastases and therefore may be more comfortable using oxaliplatin-based PHP treatment in a first or second-line setting versus a melphalan-based product. We will provide updates on these two programs as they reach regulatory and operational milestones in 2027. With that, I'll turn the call over to Sandra.

Sandra Pennell: Thank you, Gerard. For the third quarter of 2026, total revenue was $35.1 million compared with $20.6 million in the third quarter of 2025. HEPZATO KIT revenue was $32.7 million compared to $19.3 million in the prior year third quarter. This represents a HEPZATO volume increase of 19% from the prior quarter and 72% year-over-year. CHEMOSAT revenue was $2.4 million compared with $1.3 million in the prior year third quarter. Gross margin was 89% for the quarter compared with 87% in the third quarter of 2025. Research and development expense was $11 million compared with $8 million in the prior year quarter. The increase primarily reflects additional clinical headcount and increased clinical trial activity.

Selling, general, and administrative expense was $13.1 million compared with $10.3 million in the prior year quarter. This increase reflects our continued investment in commercial expansion. Net income was $7 million compared with $0.8 million in the third quarter of 2025. On a non-GAAP basis, adjusted EBITDA was $11.5 million compared with $5.3 million in the prior year quarter. These results demonstrate the operating leverage in our commercial model. At the same time, quarterly profitability may vary as we continue to invest in treatment network expansion and clinical development. We ended the quarter with $104.3 million in cash and investments and no debt.

Cash generated from operations was $8.2 million for the quarter compared with $4.8 million in the prior year quarter. Turning to our 2026 outlook, we are raising our full year total revenue guidance to a range of $115 million to $117 million. We expect at least a 41% HEPZATO KIT volume growth over 2025. Our guidance reflects $25.8 million to $27.8 million total revenue in the fourth quarter of 2026, a year-on-year growth of approximately 25% to 34%. We also expect full-year gross margin of 87% to 89% and positive adjusted EBITDA. Thank you for joining us today. I'll now turn the call back to the operator to open the lines for questions.

Operator, we are opening the line for questions.

Operator: Ladies and gentlemen, we will now conduct a question and answer session. [Operator Instructions] The first question comes from Marie Thibault with [ US Bank ]. Please go ahead.

Marie Thibault: Congrats on a really impressive quarter. I wanted to ask a little bit about what you think drove the outperformance this quarter. It was certainly several million more than I think folks were expecting, and it looks like your outlook is calling for a return to sort of a more normalized level in Q4. I'm not sure if that's some conservatism, but maybe you could get into a little more detail about what you saw at centers in the quarter and what your expectations are going forward from here.

Gerard Michel: Yeah, I think probably two primary drivers for -- well, three, I think, for the strong results. One is I think CHOPIN and combination therapy or sequencing therapy is becoming increasingly the norm. So we're no longer getting behind systemic treatments. I am not -- I don't believe we have a lot of first-line usage, but when the patients make it to our centers, if they're already on ipi-nivo, for an example, or tebe, they'll add this on pretty quickly. Or if they're treatment naive, they'll start with sequencing. Not all centers are doing that, but I would say it's probably more the norm now than the exception for background systemic therapy with PHP.

So that essentially kind of moves us up a bit. And I think the patients stay on therapy longer, I think, in combination therapy. So that should help the number of doses they get as well. I think the second thing is just docs are seeing results, and the word is getting out there to the patient community, and the patients are increasingly asking for the therapy. That helps quite a bit as well when they show up fairly well informed about it. And then lastly, I think this time last year, we were faced with significant headwinds from clinical trials. There's less of that going on now.

But I would add a fourth point, and that is that our teams did do a good job. We incentivized the sales force to try to get backup teams in place. Definitely was a component of scheduling last year. And quite a few centers, we managed to get backups both for the perfusionists, the anesthesiologists, as well as the IRs, which by definition increases the capacity at these centers. So there's four reasons for you.

Marie Thibault: Very good. Okay. Well, that's helpful. I'm glad to hear all of that is working together and driving results. And then maybe a question for Sandra, because I'd like to hear about pipeline, but I'm sure some of my colleagues on the line will also ask. I guess on the spending side, saw that the R&D headcount went up as you do more in the pipeline programs. So is it fair to assume that R&D spending is kind of at this new level, that we should kind of sustain that level and then SG&A sort of fluxes with revenue or how would you sort of think about that?

Sandra Pennell: Yes, I think that's correct. You know, as we mentioned, I think at the first couple of calls this year that spending was a little bit slower in the R&D side due to slower than anticipated ramp in the trials, but now in Q3 we've seen that come back a bit. So this is probably more of the norm to increase quarter-over-quarter as we go into 2027. And then from an SG&A perspective, yes, I think we have a fully staffed -- almost fully staffed commercial team based on the expansion to the nine regions.

So this is likely a little bit more flat of a growth going into the fourth quarter and then next year, but also will flex a bit with the increase in sales quarter-over-quarter.

Operator: The next question comes from John Newman with Canaccord. Please go ahead.

John Newman: Another really great quarter. Congrats on that. I just had a question about the progress in colorectal cancer. Gerard, I thought I heard you say we could get an update in the middle of next year, but I just wanted to double check that. I believe you may have previously mentioned year-end '27 and then just curious if you can give us any color on enrollment there.

Gerard Michel: I've noticed you guys do a good job paying attention to what I said last year -- last call and what changes. You're right, I was more towards the back end of next year and now I could say closer to mid this year. So I don't know, Q2, Q3 is probably when we'll provide an update on the interim results.

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

Chase Knickerbocker: Maybe just a double click on guidance. Q4 is an implied step down in your guide. That seemingly wouldn't be commensurate with that 0.6 new patient starts per site per month you mentioned. So I guess what's your level of visibility to that? And then can you just walk us through your assumptions to get to that implied Q4?

Gerard Michel: Yes, I think that the primary reason you're seeing that step down is, you know, we're assuming, and we did see this last year, we essentially lose close to two weeks due to the holidays. So, you know, if you take that out, that accounts for the majority of what you're characterizing as a step down. Could we be wrong? I'd love to be wrong, but I think it's prudent to assume that in terms of scheduling, we look at when patients were scheduled last year, look at the calendar this year, that we took out the days where we don't think we'll see any treatment. So that's the primary driver of what you characterize as a step down.

Chase Knickerbocker: So fair on the rest of the quarter to kind of expecting new patient starts that are fairly consistent with what we saw in Q3 and Q2, and then I just have a follow-up.

Gerard Michel: Yes, and we've seen it bounce all the way around, but no, we generally see fewer new patient starts in the fourth quarter. So we're doing it the best we can, but we're taking into account what we've seen in prior fourth quarters in terms of new patient starts, as well as what we've taken into account, what we've seen in terms of weeks or days where patients are actually scheduled for treatment.

Chase Knickerbocker: Understood. And then just maybe with the final rules getting posted last week, any thoughts that you have around the 340B changes and any potential impact to your business as we think about '27?

Gerard Michel: Yes, I think we've given a fair amount of thought, as you might expect. I think what we believe is this will be a net neutral to a net positive for us in terms of ASP without any impact on volume one way or the other.

Operator: The next question comes from Yale Jen. Please go ahead.

Yale Jen: Congrats on a very good quarter. I just wanted to get a little bit deeper on the fourth quarter. We already have one month passed in October. So what do you -- I mean, you get from your new guidance, I'm just curious whether -- how was the October numbers in line with your expectation for the fourth quarter?

Gerard Michel: I'll just say that the fourth quarter -- I mean, the October numbers clearly input into the guidance we gave. Other inputs are what we saw in past fourth quarters in terms of new patient starts as well as -- I mean, last year, the new patient starts were 0.3 to 0.35 in Q4. So if we assumed continued 0.6, I think we'd be being a bit. So, I'm not going to speak to precisely what we're seeing in October, but we're very comfortable with our guidance.

Yale Jen: Okay, great. That's very helpful. And again, congrats on the overall good quarter.

Operator: [Operator Instructions] The next question comes from Swayampakula Ramakanth with H.C. Wainwright. Please go ahead.

Swayampakula Ramakanth: This is RK from H.C. Wainwright. Congratulations on the quarter. And I guess now we got rid of the third quarter cobwebs from last year. So that's good. Thinking through the 0.6 new starts per site per month that you stated for the third quarter, where did that additional starts come from? Was there new patients or repeat treatments? And also, is the growth that you're seeing, are they broad-based among some of your mature centers that have been with you for a while now?

Gerard Michel: Yes, so the 0.6 new patient starts by definition are new patients, but obviously returning patients pad out the numbers, but I'll let Kevin give some color on where we're seeing this coming from.

Kevin Muir: Thank you, Gerard. As he mentioned earlier in the call with the 0.6 new patients, that is -- it's been pretty broad-based across our treatment centers. However, our larger centers have increased capacity and have increased the treatment team. So, centers like MD Anderson, Mass General, have really picked up the level of treatments that they do in enrolling new patients.

Swayampakula Ramakanth: Gerard, you also stated Advent, which is an integrated health network, as a key addition during this quarter. How much energy is being spent in trying to get such centers on board? Because as you stated, once you get some of these centers up, you can have broad-based patient adoption or adoption into the system.

Kevin Muir: Well, what's exciting for us is when sites like AdventHealth come on that have over 50 hospitals within their integrated network, they also have a host of primary care centers, general oncologists that are within that integrated network that help us funnel patients with metastatic uveal melanoma to these treatment centers. So Advent in and of itself is large, but it's not unique. A lot of our other centers, some of those that I mentioned, have these similar networks of aligned oncologists that are now beginning to refer their patients into specific treatment centers that offer HEPZATO KIT.

Swayampakula Ramakanth: One last question. I think you said, 36 centers is what you're looking at for the end of the year. What's the push and pull on that number? Could we be seeing, you know, more than that number?

Gerard Michel: Yes, we mentioned we have two additional sites with patients scheduled right now in the next week, I think. A couple weeks. And the danger there is they get canceled and that happens occasionally. And we probably have three others where we think it's possible that you get a patient in by December. And I think, as everybody knows, I've been woefully inaccurate in my projections for new centers, but I've also overperformed on the new starts per center, so we've done okay. But we've got a good, kind of the two that are scheduled, there's probably six or so that could go. Now out of that, two go, three go, four go, I don't know. We'll see.

But I want to give color because I know there's an appetite to know what's going on out there in terms of center starts. I'm, you know, letting you know everything we have. And I think given the variability we've seen in the past, hopefully you guys understand that there's, you know, no guarantees on those numbers, but we are definitely headed in the right direction.

Operator: There are no questions at this time. This now concludes the conference call for today. Thank you for your participation. You may now disconnect your lines.

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