Delcath Systems Q2 Earnings Call Highlights

Key Points

• Revenue and outlook improved: Second-quarter revenue rose 20% year over year to $29.1 million, driven by a 30% increase in HEPZATO KIT volume. Delcath raised its 2026 revenue guidance to $104 million–$108 million and expects positive adjusted EBITDA.
• Commercial expansion continued: Delcath ended the quarter with 31 active treatment centers and remains on track to reach approximately 37 by year-end. New patient starts and backup REMS-certified teams are intended to support capacity and treatment volume.
• Pipeline development is advancing but faces enrollment challenges: Phase II trials in metastatic colorectal and HER2-negative breast cancer are underway, while the company evaluates additional indications. Delcath said enrollment has been slower than expected because of coordination and training requirements at treatment centers.

Delcath Systems NASDAQ: DCTH reported second-quarter 2026 revenue of $29.1 million, up from $24.2 million a year earlier, as growth in HEPZATO KIT sales supported continued commercial expansion and investment in clinical programs beyond metastatic uveal melanoma.

HEPZATO KIT revenue totaled $27.1 million, which Chief Executive Officer Gerard Michel said was 21% higher than the comparable 2025 period despite the introduction of 340B pricing in July 2025. Chief Financial Officer Sandra Pennell said HEPZATO volume increased 17% sequentially from the first quarter and 30% year over year.

The company reported net income of $2.7 million, unchanged from the prior-year quarter. Adjusted EBITDA was $7.6 million, compared with $9.8 million in the second quarter of 2025. Delcath ended the quarter with $95.9 million in cash and investments and generated $5.7 million in operating cash flow.

Raised Revenue Outlook

Delcath increased its full-year 2026 revenue guidance to a range of $104 million to $108 million. Pennell said the updated outlook reflects first-half performance, particularly the pace of new patient starts, as well as a more modest assumed seasonal decline in the second half.

The forecast implies at least 28% growth in HEPZATO KIT volume from 2025, according to the company. Delcath also expects full-year gross margin of 86% to 89% and positive adjusted EBITDA.

Second-quarter gross margin was 90%, compared with 86% a year earlier. Pennell attributed the improvement to better overhead absorption, favorable manufacturing performance and higher HEPZATO volume. She said the company remains conservative on the full-year margin outlook because of potential additional manufacturing costs.

Pennell said the difference between HEPZATO’s 30% volume growth and 21% revenue growth was entirely attributable to 340B pricing. She said the program reduced the company’s effective average selling price from roughly $185,000 per kit to approximately $170,000 to $173,000 per kit.

Treatment-Center Expansion and Referral Efforts

Delcath activated two new treatment centers during the quarter, bringing its active network to 31 centers. The company remains on track to add approximately six additional centers by year-end, targeting 37 active centers.

Michel said the company is prioritizing institutions with academic influence and referral reach, particularly National Comprehensive Cancer Network member institutions and National Cancer Institute-designated comprehensive cancer centers. About 80% of Delcath’s active treatment centers have NCI comprehensive designation, while the company is represented at 41% of the 58 NCI comprehensive cancer centers and about half of the 34 NCCN member institutions, he said.

Centers added this year include MD Anderson, UT Southwestern, Mayo Clinic Scottsdale, Oregon Health & Science University’s Knight Cancer Institute and Columbia University’s Herbert Irving Comprehensive Cancer Center, according to Michel.

New patient starts averaged approximately 0.5 per site per month during the second quarter. Michel said patients may receive a series of HEPZATO treatments over as many as three quarters, meaning second-quarter starts can contribute treatment volume through the second half of the year.

In response to seasonal capacity constraints, Delcath has worked with treatment centers to train backup REMS-certified teams. Pennell said staff absences at centers with only one certified team had reduced capacity in the prior year. Michel said a meaningful percentage of company volume is now covered by centers with backup teams, including some higher-volume sites.

Michel also described the company’s referral strategy as a combination of established networks within current institutions and “just-in-time” outreach to physicians who may encounter only one eligible patient. Delcath uses claims data to identify recently diagnosed patients and is evaluating other data sources that could be refreshed more frequently, he said.

Clinical Development Beyond Uveal Melanoma

Delcath continues to pursue applications for its liver-directed platform in other liver-dominant cancers. Michel highlighted a retrospective analysis presented at ESMO Breast Cancer in May involving 15 heavily pretreated patients with liver-dominant metastatic breast cancer treated with percutaneous hepatic perfusion. Nine of the 15 patients experienced a hepatic partial response, he said.

The company’s sponsored Phase II metastatic colorectal cancer trial now has 13 centers actively screening patients. Delcath estimates that roughly 6,000 to 10,000 U.S. patients annually have liver-dominant disease in the third-line colorectal setting. Michel said the company expects an interim colorectal readout sometime late in 2027.

In HER2-negative metastatic breast cancer, Delcath recently dosed its first patient at the European Institute of Oncology in Milan. Six sites are activated and screening, with additional sites moving through activation. The company estimates an addressable population of similar size to the colorectal opportunity.

Michel acknowledged that enrollment in both trials has been below the company’s initial expectations. He said the company underestimated the training and coordination required between interventional radiology teams and oncology clinical-trial teams, particularly at centers less familiar with the procedure. Delcath has added sites, provided specialized training and streamlined onboarding to address those issues.

Separately, Michel said data from the randomized Phase II CHOPIN study, published earlier this year in The Lancet Oncology, has contributed to broader use of combination approaches at leading centers. At ASCO, investigators from Moffitt Cancer Center presented a trials-in-progress abstract for a Phase II study of HEPZATO followed by tebentafusp in HLA-A2-positive metastatic uveal melanoma patients.

Delcath is also preparing for pre-IND meetings with the Food and Drug Administration later this year to discuss potential additional indications, Michel said.

About Delcath Systems (NASDAQ:DCTH)

Delcath Systems, Inc is a specialty pharmaceutical and medical technology company focused on the development and commercialization of its proprietary Hepatic CHEMOSAT® Delivery System, designed to deliver high-dose chemotherapeutic agents directly to the liver while minimizing systemic exposure. The company's core technology performs isolated hepatic perfusion, enabling oncologists to administer concentrated melphalan to patients with primary and metastatic liver tumors, including those arising from ocular melanoma.

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