Delcath Systems Inc Stock

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Good morning, ladies and gentlemen, and welcome to the Valcat Systems second quarter 2026 earnings conference call. As This time, online is in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6th, 2026. I would like to turn the conference over to Mr. David Hoffman, Delcat General Counsel. Please go ahead, sir.

Thank you, and welcome to Delcat System's second quarter 2026 earnings call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pinnell, Chief Financial Officer, Kevin Muir, Chief Commercial Officer, Boyo Vukovic, Chief Management Officer, and 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. of historical facts may be considered forward-looking statements within the meaning of Section 27A, the Securities Act 1933, and Section 21E of the Securities Exchange Act of 1934. Although the claim is not completely correct, 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 Actual results may differ in a material manner from those expressed or implied in forward-looking statements due to various risks and uncertainties. In discussion of such risk and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in filed quarterly reports on Form 10-Q, and the following. as well as in 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.

Press release with our second quarter 2026 results is available on our website under the Investors section and includes additional details. Our website also has our latest SEC filings, which we encourage you to review. The recording of today's call will be available on our website. Now I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you for joining us today, now well into our third year of commercial launch, to continue to deliver revenue growth and operate as a profitable business supported by a platform with the potential to address larger patient populations well beyond metastatic uveal melanoma. We delivered a strong second quarter driven by $27.2 million in HIPPSADO kit revenue, up 21% over the second quarter of 2025, a significant achievement given the introduction of 340B pricing in July of 2025. We activated two new treatment centers, bringing our total to 31, and sustained a healthy flow of new patients into our existing sites. Our commercial execution in metastatic uveal melanoma is now self-funding the investment needed to extend our liver-directed platform into other cancers where the liver is a dominant site of disease. We remain on track to activate approximately six additional centers by year end, which would bring us to 37 active centers. We are not simply opening more centers, we are opening the right centers. Most of our targets are part of one of two overlapping groups of institutions.

The first is National Comprehensive Cancer Network Member Institutions, or NCNN, an alliance of 34 leading cancer centers that help define oncology standards of care. The second is the National Cancer Institute's Comprehensive Care Centers. 58 institutions federally designated for excellence in cancer research, clinical trials, and multidisciplinary patient care. approximately 80% of our active treatment centers hold NCI comprehensive designation. Nationally, we are now represented at 41% of the 58 NCI comprehensive care centers and approximately half of the 34 NCCN member institutions. Our 2026 activations continued that pattern. This year we added MD Anderson, UT Southwestern, Mayo Clinic Scottsdale, the Knight Cancer Institute at OHSU and the Herbert Irving Comprehensive Care Center at Columbia. All NCI comprehensive cancer centers with MD Anderson Pearson, UT Southwestern, and Mayo Clinic, also NCCN member institutions. These are among the nation's leading referral destinations for complex oncology care and liver directed therapy.

By adding institutions with this level of academic influence and referral reach, we are building a network that supports both near-term growth long-term leadership in metastatic UV melanoma and in the additional indications we intend to pursue. Beyond activating new centers, we are focused on increasing physician awareness and consideration of PHP for appropriate patients through targeted medical education, peer-to-peer engagement, and continued evidence generation. New patient starts remained solid in the second quarter, averaging approximately 0.5 new patients per site per month. Because patients typically receive a series of hep-sido treatments over up to three quarters, second quarter starts generate volume that flows into the back half of the year and support our full year revenue outlook. The data from the Chopin trial, a randomized phase two study published in the Lancet of Oncology earlier this year, continues to accelerate broader adoption of combination approaches at leading centers. And at ASCO this year, investigators from Mapa Cancer Center presented a trials in progress abstract describing an ongoing phase two study of upset blood cells. followed by Keventfust in HLA-A2 positive patients with metastatic uveal melanoma. We believe this and future planned combination therapy trials will be critical to moving Hepzato more consistently to a co-first-line setting.

Turn into clinical development beyond metastatic eulia melanoma. We remain confident in hep cytokine's potential in other liver-dominant cancers, and we continue to work with investigators to generate supporting data. At ESMO Breast Cancer in May 2026, independent investigators presented a retrospective analysis of 15 heavily pre-existing cancer-related cancers. pretreated patients with liver-dominant metastatic breast cancer treated with percutaneous hepatic perfusion. Nine of the 15 patients showed a hepatic partial response, supporting further evaluation of this approach in that setting. Turning to our sponsored trials, in our sponsored phase 2 trial in metastatic colorectal cancer, we now have 13 centers actively screening. Consistent with the acceleration we anticipated on our last call, recruitment has improved as we have added sites and applied specialized training and streamlined onboarding. We estimate that approximately 6,000 to 10,000 U.S. patients annually have liver-dominant disease in the third-line setting.

In HER2 negative metastatic breast cancer, we recently dosed the first patient at the European Institute of Oncology in Milan. Direct sites are activated in screening with additional sites in the activation process. We estimate a similar sized addressable population in this indication. Beyond these two programs, we continue to evaluate additional liver dominant indications through our scientific advisory board and physician feedback. And we we are preparing for pre-IND meetings with the FDA later this year to discuss new potential indications. Based on our first half of results and trends early in the third quarter, we are raising our full-year revenue guidance. Sandra will take you through the numbers and our updated outlook.

Sandra? Thank you, Jay.

Thank you, Gerard. Total revenue in the second quarter of 2026 is $29.1 million compared with $24.2 million in the second quarter of 2025. This includes $27.1 million of HEP-SATO kit revenue and $2 million of chemoSAT revenue. This represents 17% sequential HEP-SATO volume growth over the first quarter of 2026. and 30% volume growth versus the same period in 2025. Now turning to 2026 guidance, we are increasing our full year revenue guidance to range from $104 million to $108 million, which reflects at least a 28% growth in HEPs Auto Kit volume over 2025. Our decision to raise guidance is driven primarily by first half performance, particularly the pace of new patient starts. We've also modestly reduced the seasonal step down we had assumed for the third and fourth quarters. Part of last year's seasonality came from centers operating with a single REM-certified treatment team where staff absences translated directly into lost treatment capacity.

We have since worked with centers to train backup teams, including some of our highest volume sites, which should ease that constraint. In addition, enrollment in ongoing clinical trials during 2025 reduce the number of patients available for our treatment. Growth margin for the quarter was 90% compared to 86% in the second quarter of 2025. We are guiding to full-year 2026 growth margin between 86% to 89%, and we also expect to report positive adjusted EBITDA for the full year. Research and development expense in the second quarter was $10.4 million compared to $6.9 million in the prior quarter. in the prior year quarter, driven primarily by continued investment in our clinical organization and ongoing phase two trials. Selling general and administrative expense in the second quarter was $13.4 million compared to $11.4 million in the prior year quarter, reflecting our investment into continued commercial expansion and increasing marketing activities. Net income for the second quarter in both 2026 and 2025 was $2.7 million.

On a non-GAAP basis, adjusted EBITDA for the quarter was $7.6 million compared to $9.8 million in the second quarter of 2025. We ended the quarter with cash investments of $95.9 million, cash provided by operations with $5.7 million in the quarter, and we purchased a small amount of common shares in the second quarter under the company's approved $25 million ShareVect 5X program. To date, we have purchased approximately $9 million worth of common shares. I want to thank you all for participating today, and I'll ask the operator to open the line for Q&A. Thank you.

Thank you. Ladies and gentlemen, we now begin the question and answer session. If you'd like to ask a question, please press star, follow by number one on your telephone keypad. If your question has been answered, you would like to withdraw from the queue, please press star, followed by the number two. And if you're using a speakerphone, please lift your hands up before pressing any keys. One moment please while we compile the roster. The first question comes from Mary Thibault with Bancorp VTIC. Please go ahead.

Hi, thank you for taking the questions. I wanted to ask a question here just sort of on the referral pathway and some of the efforts I know that you've been making on the commercial side. So, you know, wanted to understand how the referral network efforts have been progressing. I know you've been working on for a few quarters. you know, are there ways to sort of describe, you know, the outreach that you've been making to the medical oncologist that is translating into incremental new patient starts? And then second, I'll just ask my follow-up here. wanted to follow up, I think there was an effort to try to mitigate summer seasonality, get you know second treatment teams trained at various centers. Just an update on how that has been progressing as well. Thanks for taking the questions.

Good to hear from you. In terms of the referral network, I would say about a third of the referral network is a CTO. static network and that is within the institutions we are currently part of. oncology networks that are part of that. So there we know who the oncologists are. They have a meaningful number of patients. Meaningful could be two, three, four, but on a relatively consistent basis. The other part of the referral network, and probably should be kind of a called a just-in-time referral, are the many, many doctors who just get one patient. Now, many of those patients eventually make their way to one of our treating sites or one of our targeted sites that will open in the next, you know, one month to two years as we continue to expand. But many of those are not.

And what we have to do is find them in real time if we wanna get them first in line, if we don't wanna lose patients who progress too quickly. Our efforts there right now are multifaceted.

Thank you. Jeremy, can everyone hear me? We lost you for a while, Gerard. We lost you for a minute.

Okay, all right, so where did you lose me? The parallels of cell phones.

We were just past kind of talking about those folks that only see one patient. We got a little bit past that. Right. So what we need to do is get a just-in-time network. That's kind of the term I'm using internally with the team.

Right now we're using claims data that lags, but we generally know patients who've been recently diagnosed. Recently could be anywhere from a month to six months given claims lags. And we try to get in front of those doctors a number of different ways. We'd like to do better than that. We're investigating use of other forms of data that are refreshed more frequently. That's not in place yet, but we will get it in place. We recognize that we have, you know, a higher hill to climb in terms of execution than something like an Immunocore in that, you know, community oncologists can't use our product.

But we have definitive plan. We are definitely working that right now. So we are actively finding patients who've had a recent biopsy and stuff. and we're working to improve that over time. It is and will be a core part of our strategy. Now, your second question, was about training additional docs at centers. We've had several centers, but I think our efforts led to backup teams. And at least one or more of those are very high volume centers that it was critical to do that in. I wouldn't say that we have backup teams everywhere we would like to, a meaningful percentage of our volume now is covered by centers of backup teams.

Thank you so much. Thank you. Your next question comes from John Newman with Canaccord Genuity. Please go ahead.

Hey guys, thanks for taking my question. Really nice execution on the quarter. I had a couple of questions here. So I'm curious as to how much of the increased guidance for the year could be related to better uptake, excuse me, due to the SHOPAN data. Also wondering if you can discuss your enrollment expectations for both colorectal and the breast cancer studies. And I'm wondering with those two studies if you're able to utilize overlap between existing centers that are already using Hep-SATL for liver meds due to uveal melanoma. Thank you.

All right, so first part of your question in terms of how much of the increase is from Chopin. You know, it's all anecdotal. The data, the claims data is rather thin. For some reason, our claims data comes in very slow relative to other treatments. But our anecdotal experience is that more and more of these patients are getting combination therapy, and that's undoubtedly a result of the Chopin data. In terms of site recruitment, which I think was your third question, we're not going to give guidance on that. I think the only guidance we're going to give is that we expect an interim readout for colorectal sometime late next year, and we're not providing guidance on breast. But we are encouraged by both, an uptick in both trials.

in terms of site activation enrollment. And there was a second question there, I'm embarrassed to say I lost it. Could you remind me, John, what it was? Sure, just curious if you're able to utilize existing centers that are using HEP-STATO in terms of also,.

signing them up for enrollment with breast and colorectal cancer? Yes, I would say the majority of centers in the US already were part of already REMS activated for mum. In Europe, it's a lower percentage. We're actually activating some new centers Can you guys hear me? I got another message that audio dropped. We can hear you. We also have a number of, in Europe, it's a smaller number of percentage that percentage of centers that were mums centers, I'd say, you know, maybe 60, 40. existing centers and new centers in the trial. Okay, great. Thank you.

Thank you. Your next question comes from Chase Knickerbocker with Craig Holland. Please go ahead.

Good morning. Congrats on a really nice quarter and thanks for taking the questions. I just wanted to dig in a little bit more on kind of the implied kind of second half. in your guidance. And so if we kind of look at that, it assumes a pretty meaningful kind of slowdown still. With that in mind, can you just maybe kind of talk through exactly when you started seeing that softness in kind of new patient starts last year, and then kind of what you've seen so far through July, early August. Have you seen any green shoots from some of the programs that you put in place to try to train additional treatment teams, et cetera?.

Without going into specific numbers, I will say, Chase, that the bulk of our increase in guidance is due to... an impressive first half of the year. We have tempered the downturn we expect in the second half. partly due to frankly less demand from clinical trials. And the second part is really just a two week lead. We only have a two to three week vision idea of what's going to happen going forward. that looks reasonably strong. So we've tempered the overall seasonality as well. I would say the bulk of our increase in guidance is based on our performance in the first half of the year. And as you well know, new patients start to drive business over two to three more quarters.

And so fair to say that we haven't seen, you know, to date, you know, the same kind of, you know, softness in new patient starts, you know, at least yet. And then just kind of second follow-up. would just be kind of the visibility that you have to kind of center ads in the back half of the year here.

You know kind of and how you're thinking about that year in target yes, I'll ask Kevin in a moment the comment on how we feel about the additional Six centers in terms of it's fair to say we haven't seen the softness yet This is about when we saw it last year kind of two week look forward at this point It dropped dramatically. No, we haven't seen that yet But again, I think I want to caution listeners that we don't have a very long, you know, forward-looking visibility into these things. It's about two to three weeks. This time last year, we saw some softness in that two- to three-week period. We're not seeing that quite yet. But that's only two to three weeks.

Kevin? Yes, thanks, Gerard, and thanks for the question, Chase. Looking kind of strong for the number of new sites we're bringing on. It's a kind of get them in bits and starts when training is completed. So we have a number of sites that are in the queue to get our preceptorship and proctorship and it's just a matter of time until they open for the remainder of the year. So I feel very strong that we can.

obtain a surgical of 37. Yes, our goal of 37, my friend. I also would say we have at least one patient scheduled, maybe two right now, and then one more looking for patients. Now these can, you know, patients can get scheduled, that one I mentioned, but these are on the cusp. And what we found is the on the cusp ones can go in weeks, they can go in months. But there's a healthy on-deck circle here. It's not – the 37 is well within our reach, but – So, you know, fingers crossed a bit as we know it's episodic, but it's not a soft pipe calling. Helpful color, guys. Thank you. Thank you.

Your next question comes from Sam Pankula, RMConf with HC Wainwright. Please go ahead. Thank you. This is RK from HC Wainwright. Good morning, Gerald and Sandor.

couple of couple of quick questions here you know I'm trying to bring.

the gap between the 30% Hepsadal volume growth and the of 20 some percent revenue growth. So how much of that gap is from, 340B or Medicaid or just the site mix. The second question is on the gross margin. You know, you have your exit and last quarter, the 90 percent. but your guidance asks for a little bit lower than that for the full year. So is that basically coming from the top line or is there something else that's going on? Sandra? Yes, I can answer both questions.

questions with regard to the Q2 volume as well as the revenue from prior years. So, reminder that 340 pricing which reduced our effective ASP from about 185 or down to about 170, 173,000 per kit. this year versus what we recognized last year. So even though revenue is only up 21%, it's actually representative of 30% volume. So 100% of that difference between those two figures is due to 340 . With regards to gross margin, yes, we had a great quarter in Q2, recognizing 90%, which is up from 86% a year ago and is above our original guidance of 85 to 87% for the full year. Now, the Q2 improvement reflects better overhead absorption, favorable manufacturing, performance and obviously increased HEP-SATO volume. As we go into the remainder of the year, we do have to be a bit conservative around additional manufacturing costs, so the full year is 86 to 89%.

We may see a quarter that dips a little bit below that 90%, and we one that hits 90% again, but that's our current guide. Thank you, Sandra, for taking the questions. Thank you.

Thank you. Your next question comes from Yale Jen with Lalo and Company. Please go ahead.

Good morning and thanks for taking questions and congrats on a good Good quarter performance. Just we have two here. The first one is that I noticed your recent deck in terms of the type of cancer that to liver, you have about eight of them. And just curious initially why you choose the breast cancer and the DRC, given they are not necessarily the highest volume or other factors. Any thoughts on that when you made that decision?.

That's a great question. And we started the conversations as to those two trials, probably a good two years ago. And for CRC, there is a fair amount of, there's a large amount of liver dominance. answer. It's one of the largest, probably the largest outside of primary. The setting we chose, third line, is not the largest. It's actually quite a bit cut down from the overall population of patients with liver-dominant cancer, CRC patients. But the reason we chose that, frankly, was when oncologists and, to a lesser extent, IRs who are fairly unfamiliar with our therapy when we were having conversations about where to start, that's where we got traction. And so it was largely driven by Doc's willingness to participate.

Now, I don't want people to think, well, that's a big negative. It's not. This is a very novel procedure. Oncologists generally prefer systemics. But I think the data, as we generally generate it, will bear out and oncologists will. will change their perception first in terms of trials they want to participate in and then eventually obviously actual commercial clinical usage In terms of breast cancer, that one is a bit less, admittedly, but there was real interest in oncologists in terms of participating in that trial. Yes, it's been slow to enroll and get started, but there were a couple of key KOLs who thought there was a real need here. breast cancer, there's types of breast cancer tumors generally react well to chemotherapy, so that was one reason a number of docs were excited. But these were the starting sets where we could get traction with oncologists being interested. Who knows, if we started now with the level of understanding we have out there, would it be a different set? that we had to start somewhere. I think these are meaningful markets for us and there's a real unmet need in these settings.

And we'll add more, some orphan type indications and some much larger indications going forward.

Okay, great. That's very helpful. Maybe just to tackle that one of the similar themes, which is with the current patient enrollment of those two trials, are they within your expectation or you have different sort of hope in terms of….

pace and other factors? And thanks. Definitely lower than our expectations. There are a number of reasons for that. I think one not so obvious reason is that just as we had to get sites REM certified and up and running, we had that issue with new centers. We also had to educate the critical clinical trial teams. And we found that getting the IR teams, which are less set up for clinical trials, to work with the oncology teams, which are very familiar with trials, but they're not familiar with this type of therapy, getting those teams to work together with a new patient flow, the type of data we need to gather in the IR suite. It was very new to them. Quite frankly, a number of centers that we thought would quickly activate and enroll.

We got the disparate teams together, it became an issue. So with the dimension of change in training, we did not anticipate would be a problem in the clinical trial setting. So just as in the commercial setting, there was a hill to climb that we kind of understood we'd have to do when we started. It was a bigger hill than we thought. We finally found the same thing in the clinical trial, getting the clinical trial teams to work together in this type of trial. was a problem. We lost some centers because of it undoubtedly and the bigger issue was just centers taking a while to get up and running. So again, interesting product, different type of product, but we're working through the issues just as we have commercially.

We're going to work through the issues on the clinical side as well.

Okay, great. This is very helpful and certainly congrats on all the progress and the.

Best of luck to you guys. Thank you. There are no further questions on the phone line. I will turn the call back to Mr. Mitchell for some closing remarks.

Okay, just want to thank everyone for their support, both the investors as well as the internal team here at DelCap. We're getting a lot done and it wouldn't be if it wasn't for the employees of the company who are very dedicated to move things forward for patients and to earn the trust of the investors.

Thank you very much for your time and have a great day.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good morning, ladies and gentlemen, and welcome to the Delcath Systems First Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to David Hoffman. Please go ahead.

Thank you, and welcome to Delcath Systems First 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; Vojislav 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. All 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, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in filed quarterly reports on Form 10-Q as well as in 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.

Our press release with our first quarter 2026 results is available on our website under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website.

Now I would like to turn the call over to Gerard. Gerard, please proceed.

Thank you, David, and welcome, everyone. We've had a very successful first quarter marked by 4-centre activations and record new patient starts in the first quarter, both of which are core growth drivers for the business. In addition, we continue to advance numerous commercial and medical initiatives to ensure the long-term growth of HEPZATO with a strong focus on a third critical growth driver, building referral networks to quickly connect eligible patients with treating centers. To support center activations, increased utilization at existing centers and expanded referral patterns, we have nearly completed our U.S. commercial expansion into 9 regions. In addition, the expanded MSL team is fully trained and in the field, educating physicians about metastatic uveal melanoma with a focus on the CHOPIN results.

As of today, we have 29 REMS-certified sites, and we are in active discussions with over 50 potential new centers. And 38 of these centers have had one or more members of a potential treatment team take the time to travel and be preceptive. While not all of these centers will be activated and the practice can take over a year in some cases, there is clearly broad-based interest in this therapy, which bodes well for the long-term growth of the business. As we note on every call, it is very difficult to predict pacing. And given where we are at this point in the year, we are modifying our year-end activated center build to 37 active centers with 40 active center treatment centers sometime in the first quarter of 2027.

In patient center activation, we are focused on changing prescribing patterns by expanding the set of appropriate patients that treating teams consider for PHP through education, fostering peer-to-peer conversations and evidence generation. First quarter 2026 new patient starts per site have tracked at or slightly higher than the first quarter of 2025 at approximately 0.7 new patients per site per month. New patient starts contribute to revenue over subsequent quarters as patients receive a series of treatments. We expect the strong first quarter new patient starts to offset the reduced site activation pace.

Based on conversations with some treating physicians, we know that the publication of the CHOPIN results in Lancet Oncology is already changing treatment patterns at certain centers. One piece of publicly available anecdotal evidence is the recent webinar hosted by the patient advocacy group at Kurinsight, during which Dr. Sid Padia, an interventional radiologist from UCLA, shared his experience treating metastatic uveal melanoma patients with HEPZATO. Some of the patients Dr. Padia is treating with PHP are also being treated with immunotherapy. And he noted on the webinar that his results with these patients are consistent with or perhaps superior in the positive results reported from the CHOPIN trial. As a reminder, CHOPIN response rates improved from approximately 40% with HEPZATO alone to about 76% when HEPZATO was combined with immunotherapy, including some cases of complete response. The combination arm demonstrated a survival benefit with a clear separation between survival curves of both 1 and 2 years.

Dr. Padia characterized these study results as extremely encouraging and consistent with his clinical experience. Many metastatic uveal melanoma patients are managed outside REMS-certified centers. So earlier identification and streamlined referral processes are essential. One important approach to enhancing referral patterns is to use multiple data sources to identify physicians treating newly diagnosed metastatic patients and promptly connect these patients with a suitable HEPZATO treatment center. As these networks mature, we expect referrals to be an important driver of new patient starts across our footprint.

I now would like to turn to our clinical development programs. In our ongoing metastatic colorectal cancer trial, we continue to activate new trial sites and now have a total of 13 centers who can actively screen CRC patients. We have implemented specialized training modules and streamlined onboarding processes to continue to accelerate site readiness and ensure protocol adherence. We are on track to activate nearly all of the currently targeted 26 trial sites by the end of this year and anticipate presenting interim results in late 2027. To date, we have enrolled 7 patients. While this pace has been slower than initially anticipated, we believe the program is picking up momentum.

Our second program in metastatic breast cancer now has 4 clinical trial sites that are prepared to screen patients with additional sites opening soon. Since breast cancer physicians typically have less experience with liver-directed therapies compared to those treating metastatic colorectal cancer, we are conducting targeted education and outreach initiatives to increase awareness of HEPZATO's potential benefit to patients with metastatic breast cancer. We are targeting 15 trial sites and expect to activate them by late 2026. We will provide guidance related to the readouts from this trial later this year as operational progress supports more precise forecasting.

We are seeing growing interest in HEPZATO beyond colorectal and breast cancer and are exploring clinical trial designs into additional indications, guided by physician input and advisory board feedback. Based on the results of the CHOPIN trial, there is strong enthusiasm from the medical community to investigate a CHOPIN-like combination regimen to treat liver involvement in patients with a variety of solid tumor types. I look forward to sharing updates on these plans later in the year.

I will now ask Sandra to review our financial results.

Thank you, Gerard. Total revenue in the first quarter of 2026 was $25 million compared with $19.8 million in the first quarter of 2025. This included $23.3 million of HEPZATO KIT revenue and $1.7 million of CHEMOSAT revenue. Gross margin for the quarter was 85% compared to 86% in the first quarter of 2025. Research and development expenses in the first quarter was $9.8 million compared to $5 million in the prior quarter, driven primarily by continued investment in our clinical organization and the ongoing Phase II trial. Selling, general and administrative expense in the first quarter was $13.1 million compared to $11.3 million in the prior year quarter. This reflects our investment into the continued commercial expansion and increased marketing activities. Net loss for the first quarter was $1.1 million compared to net income of $1.1 million in the prior year first quarter.

On a non-GAAP basis, adjusted EBITDA for the quarter was $3.4 million compared to $7.6 million for the first quarter of 2025. We ended the quarter with $89.3 million in cash and investments and no debt. Cash provided by operations was $0.9 million in the quarter. We also purchased approximately 300,000 common shares for about $3 million in the first quarter under the company's approved $25 million share buyback program. To date, we have purchased $9 million worth of common shares.

Turning to 2026 guidance. We are confident we will achieve total revenue of at least $100 million, which reflects 20% growth in HEPZATO kit volume over 2025. Our guidance takes into account expected seasonal trends in the third and fourth quarters, much like in 2025 when new patient starts rates declined partially due to scheduling challenges. Forecast for 2026 gross margins remain between 85% to 87%, and we now expect to report positive adjusted EBITDA for the remainder of the year.

I want to thank you all for participating today. This does conclude our prepared remarks, and I'd ask the operator to open the phone lines for Q&A.

[Operator Instructions] Your first question comes from Marie Thibault with BTIG.

I wanted to ask my first here on the volume you're seeing per site. Certainly encouraging to hear that that's more than offsetting kind of the slightly slower pace of activations. So I just want to understand what was driving that. It sounds like perhaps CHOPIN is having a bit of an effect. I know in the past, competing or other trials might have been a distraction. So if you can just tell us a little bit more about some of the dynamics behind driving that higher volume.

Yes. I think it's primarily CHOPIN as well as new sites come on board. Not all of them, but as some of the new sites come on board, when they see the results, they start increasing their volume. So I think it's both things, what they see in practice and the CHOPIN results as well. Clinical trial headwinds are probably reduced a bit from probably similar time last year. But I think the majority of the effect, as best as I can sort out, is CHOPIN and then doctors just seeing the scans and seeing the tumor shrinkage.

Great to hear. Simple enough. And then I'll ask a follow-up, I think, for Sandra. When we think about the spending trajectory this year, I recall that it is expected to be higher in 2026 than it was in 2025. Can you just give us any more detail, if you have it at this point, on visibility for cadence of that spending, how you see some of the investments in R&D and commercial expansion unfolding throughout this year?

Absolutely. So I know in the previous call, we did mention R&D for full year 2026 would be about a 90% increase over 2025. But based on a little bit of acceleration in the enrollment in both trials, we're likely going to see a full year increase closer to the 70% to 75% over 2025. R&D, we will likely see a decent increase in Q2, about 20% over Q1, and start to level off, but about 10% over the remainder of the year and into the fourth quarter. SG&A, probably about a 60% increase in 2026 over 2025 due to the sales force expansion and just increases in selling costs as we grow. Q2 for SG&A, probably a 10% to 15% increase over Q1 due to those marketing initiatives and then increase just modestly each quarter thereafter.

The next question comes from John Newman with Canaccord.

Congrats on the continued progress. I just wondered if you could talk a little bit about the factors involved regarding the change to the site addition guidance. Obviously, it looks like that's going to be offset by increased patient volume, which is great. But just curious if you could discuss a little bit the different factors that went into that change there.

Really, the visibility we have in terms of -- there's always about half a dozen or more sites roughly that look like they could go any week. And so the pipeline is full. I want to make sure that's clear. If I don't have patients that I know are scheduled for treatment or multiple patients going through screening, then I'm a little reluctant to say, hey, I'm going to get a couple of sites in the next month or two. The average pace has been a little over — since we've launched has been, I think, about 1.1, 1.2 per month. But if I don't see sites ready to treat a patient or having one scheduled, then I say, all right, I'm going to have another dry month or two, and I pull that out. So, under that framework, I'm saying, yes, it's more likely we'll be 37. Could it be 38 or 39? Yes. But I think 37 is probably a more likely number. And it's as simple as that. We just don't see anything in the next month or so, so I kind of reduce it.

And then one quick follow-up. On the CHOPIN data, which I think are really fantastic and should be really beneficial, I'm curious if you're seeing most of the new sites that you're in discussion with kind of citing that as a factor for their enthusiasm, or if it's sort of balanced between new and old sites. I'm just curious if perhaps you're seeing kind of the new sites pick up on this in terms of wanting to get on board with the product? Or is it kind of balanced across older existing sites and the new sites?

All right. So if you're asking the level of enthusiasm from CHOPIN, I think it's both new and existing. There are some existing sites that have been doing a CHOPIN -like protocol from day one when they became active. And there are others that have moved over to that given the data. I would argue that probably most new sites are planning to do a CHOPIN -like protocol, a combination of immunotherapy and PHP. But Kevin, why don't you chime in? You're a little closer to it than I am in terms of would you say almost all the new sites are going with the CHOPIN? Or is it more 50-50?

I would say that the majority of them will be going with the CHOPIN -like protocol. We hear a lot about just combination treatments in general, but CHOPIN specifically. Now it is kind of important to note the new sites we have been engaged with for months. As you just pointed out, the site opening process takes a considerable amount of time. So when we talk with these sites as they are bringing us on, there are many conversations between peer-to-peer groups as well as our medical and clinical team as well. So everyone is well versed in the CHOPIN -type protocol. And so I would anticipate the majority of them that are coming on in the future will embrace that.

The next question comes from Sudan Loganathan with Stephens.

My first question is regarding the ESMO breast cancer data that you also provided. I noticed that the adverse event profile showed some Grade 3/4 adverse events in about 8% of patients. Additionally, the median overall survival is around 6 months for untreated liver metastatic breast cancer patients, or maybe around the 4- to 5-month range. So just kind of curious on how you're viewing this first set of data for this indication and how this kind of dictates how you go forward?

Yes. These were all very heavily pretreated patients. And I think probably one of the most important parts of the data is -- although the adverse event profile you mentioned may seem high to oncologists, these events are easily managed and all are resolvable. I think there's not much that can be done for these types of patients that were treated. So I think we're quite happy with the data and glad it's there to help improve recruitment, site activation and recruitment in the clinical trial. I'll ask Vojislav, is there any other commentary you want to add regarding those results?

Yes, sure. So thanks for the question. In addition to the comments that Gerard made, I'd like to point out that the patients who were treated with HEPZATO in this data review received a median of four prior systemic treatments. That means they have been receiving multiple chemotherapies and many, if not most, of the patients have residual toxicities. So these are not the patients that we have treated before in the FOCUS or Phase III trial, which are typically very little pretreatment or no pretreatment at all. So the safety profile depends also on the line of treatment in which you administer PHP.

And regarding your comment about the survival, these are patients with breast cancer and they develop liver metastases. Typically, that's the final stage of the disease where patients have just a few months of life left. So seeing 6 months is actually, in that context, not so bad. And doctors expressed a great deal of satisfaction when we talk to them about being able to manage this very difficult stage of the disease.

I appreciate the details. And then additionally, I just wanted to ask, even as we go into the second half of this year, could we still anticipate a few other data readouts or just other updates on either breast cancer or colorectal cancer indications going forward?

Yes. There's not going to be any data readouts. I mean we'll keep you apprised of how the trials are proceeding in terms of open sites and patients. But there won't be any data readouts from us. As you know, the product has been on the market as a stand-alone device in Europe for over a decade. And often data comes out that we don't know investigators or clinicians have submitted for a poster presentation or publication. So could something else come out? Yes, but not from the company.

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

This is Jake on for Chase. Just first, regarding the goal of 40 sites by the first quarter of 2027, for the incremental 11 sites, how much are you relying on the three new sales territories? And what are you seeing from the funnel there?

Yes. The territories are not new geographies, okay? So we are just slicing the existing territories from 4 to 6 to 9 into smaller territories, so there's more concentrated effort. So there's no particular territory. I think the reason to increase -- there's no particular region where we're going to get more business. As sites are opened, it takes effort to manage open sites. So, to maintain the same level of effort in terms of activating the sites and the same pace of activating the sites, we have to put more bodies in the field. Now these are very experienced reps, bodies. But we have to put more experienced people out there to manage the existing accounts and to maintain the same level of site activation effort.

Okay. And then on guidance, just on a run rate basis, you're already at the $100 million floor just with this quarter. What are your assumptions for the remaining 3 quarters for revenue?

Yes. Well the assumptions, as I mentioned before, are that we will see the same seasonal impact we saw in the third and fourth quarter of last year. Now we could be wrong there. In hindsight, it could very well be that we're being overly conservative. But we have a very small end in terms of understanding to what extent seasonality will impact things. There are certain aspects of the seasonality that we think we can address and are trying to address. The specific one that we are trying to handle is if at an important center, there is only one full treatment team, let's say there's only one IR or there's only one anesthesiologist who's trained. If they go on vacation, by definition, the capacity has dropped at that center.

So, we have implemented a special incentive to the sales force. If you get a second treatment team trained up and going, there will be something in it for the rep. That is yielding some additional backup treatment teams. And I'm hopeful that, that will offset some of the seasonality we saw. There's also seasonality, I think, by patients deciding in certain times of the year, they would rather not be treated. They'll postpone treatment or postpone getting started. That is difficult for us to impact. But for those aspects we can impact, specifically maintaining capacity in terms of training teams, we're doing what we can. But again, getting back to the core of your question, what assumptions are we utilizing given we're already at a run rate to hit guidance, we're assuming we see the same level of seasonality as last year. And again, that might be overly conservative. But I think it's best to guide that way and also to be clear about our assumptions underlying the guidance.

The next question comes from John Newman.

I had a question about the recent data that you were just discussing earlier on the breast cancer work that was done in Europe. It was interesting, I noticed that the median number of cycles was 1. And I'm wondering if you think that's representative of what we'll see going forward when you test this treatment in perhaps a different set of breast cancer patients and also whether that median cycle may have just been limited by either patient survival or just physicians that maybe hadn't had a lot of experience with the treatment.

Yes. I will note that the clinical protocol calls for 2 treatments. So I would think that would be the median when the trial reads out. In terms of why they only received one, I have some theories, but let me ask Vojislav to comment.

Yes. As Gerard mentioned, this was not a prospective trial. This is basically reflecting data from real-world clinical practice. And the practicing physicians were probably making decisions which they thought in the absence of any guiding data are the best for the patients. So just to remind you, these are heavily pretreated patients with a median of 4 prior treatments, quite exhausted with lots of residual toxicities. And I think physicians were probably being cautious and trying to manage the disease, perhaps not to achieve the best possible efficacy, but rather to control the disease and prolong patients' lives, which will be typical the treatment goal after first or second line. So I think that the median number of cycles simply reflects the different treatment objective compared to if you treat patients at an earlier stage in the patient journey.

The next question comes from Yale Jen with Needham & Company.

You refer in the press release that you have 36% volume growth year-over-year of the same quarter. I just wonder whether if you compare to the fourth quarter of last year, what that readout might be? And then I have a follow-up.

Sandra, do you have the quarter-on-quarter growth off the top of your head? Sandra, you might be on mute.

You're correct. I was on mute. I want to say we're mid-20% volume growth from Q1 2026 over Q4 2025.

Okay. Great. That's very helpful. Maybe just a follow-up here that we know that the referral, obviously, is the long-term sort of expansion sources. And so we know that you guys already started the process. And just curious what will be the measurement or other sort of follow-up to track how the referral track is being done and improvements if needed, so on and so forth. So any color on that front?

Yes. It's interesting that you asked that question because it's something I've grappled with Kevin. Just what we want to do is incentivize our oncology managers to get the referrals going. It is somewhat difficult to know when the patient shows up at the center because obviously, we have the compliance. You can't exactly quiz the doctor on where did this patient come from that sort of thing. So, it's difficult to know, hey, did our referral process lead to this specific patient. We definitely know of cases, many, many cases where the work of the oncology manager resulted in a patient ending up at one of our treating centers. So, it is working. In terms of measuring it on a specific metric, we're grappling with that an accurate metric. We're grappling with that ourselves.

How do we follow that. We have some ideas. But right now, I can't point to a specific way we're going to measure that. And it's unlikely that we're going to be able to tell you ever get to the point where we can say, hey, X percent of our patients or the rate of referral is Y per site. I don't think we'll ever get there. Because again, it's HIPAA compliant, you can't quiz the docs, but we're focused very, very much on it.

The next question comes from Charles Wallace with H.C. Wainwright.

This is Charles on for RK from H.C. Wainwright. So, the first question I have is, I was curious for the CHOPIN publication in the ESMO clinical practice guidelines, are you seeing these 2 publications translate into increased physician adoption in Europe? I know it's a little early, but should we expect kind of that to grow in 2026 from these?

Yes. I think the European growth is significantly hampered by reimbursement issues. I think many centers in Europe are doing a combination type regime. But to be frank, a lot of European oncologists are less aggressive than they are in the U.S. But I can't really comment as to whether or not I think is it going to grow to increase revenue in Europe over the long-term, certainly. For this particular year, I think we just have to assume that we're going to see probably modest single-digit growth in Europe. What will change that is getting reimbursement in the U.K., which we've been working on for quite a while as well as establishing commercial businesses in Spain, France and Italy, and we're working hard on that as well.

In terms of the overall impact on the business, given the price point in Europe, I wouldn't just call it a rounding error, certainly, but it's a plus or minus 10% thing on EBITDA for the business. It's not a huge driver. But we're focused on Europe, as I've mentioned before, primarily at least for the short to medium-term as areas where we can generate data. The drug is approved, the device is approved to deliver melittin to the liver. It is not tied to a specific tumor type. Now most of the usage is in uveal melanoma because that's where most of the data is. But it's a great place to generate run IITs and generate data in other tumor types. So right now, Europe's importance is generation of data. We manage it on a breakeven basis. At some point, we may relaunch the product as a combination drug device as a HEPZATO and try to reset the price point, but that's many, many years down the road.

I guess one more follow-up for me. So, on the pipeline for mCRC, I think you mentioned that there's 13 sites, but it's been slower-than-expected enrollment with -- I think you said 7 patients. So, I was just curious when you expect enrollment to pick up and ultimately complete for this study?

Sure. Vojislav, you mind taking that?

Sure. You're correct. We have opened 13 sites, and we have enrolled thus far 7 patients. Based on the momentum that we've observed over the last several months, we feel confident that the momentum, both in terms of site openings and patient screening and enrollment is picking up. So, we believe that enrollment will proceed in this year and next year and that we'll be able to share interim results publicly by the end of next year, '27.

Thank you. We have reached the end of the question-and-answer session. And this concludes today's conference, and you may now disconnect your lines. Thank you all for your participation.

Greetings, and welcome to Delcath Systems' Fourth Quarter 2025 Earnings Conference Call.

[Operator Instructions]

Please note, this conference is being recorded. It is now my pleasure to turn the conference over to Mr.David Hoffman, Delcath's General Counsel. Thank you. You may begin.

Thank you, and welcome to Delcath Systems' Fourth Quarter and Year-End 2025 Earnings Call.

With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Chief Financial Officer; Kevin Muir, General Manager, Interventional Oncology; Vojislav 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. All 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, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in filed quarterly reports on Form 10-Q as well as in 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. Our press release with our 2025 results is available on our website under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website.

Now I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thanks, David. 2025 was a pivotal year, delivering over 40% volume growth and record revenue of $85.2 million, including $20.7 million in the fourth quarter alone. Today, we operate 28 active treatment centers and the highly anticipated CHOPIN data demonstrating clear clinical benefit when PHP is sequenced for checkpoint inhibitors is slated for publication. Entering our third year of launch with strong momentum, we are confident that continued site activations, commercial expansion and the CHOPIN results will drive meaningful revenue acceleration and create substantial shareholder value.

2025 was a pivotal year in which we achieved over 40% volume growth and achieved record annual revenue of $85.2 million. We currently have -- excuse me for that, a little bit of a glitch on the screen here. We have organized our commercial strategy around 3 priorities: expanding site capacity; changing prescribing patterns; and building referral networks. We tracked our progress against these priorities through 3 internal KPIs, the number of site activations, the rate of new patient starts per site per month and the average number of treatments per patient.

We use these KPIs internally to model our projections and set guidance. The latter KPI, treatment number per patient has remained consistent at approximately 4 cycles per patient since launch. The first 2 KPIs have shown significant variability as expected in the launch phase of any product, especially when treating an ultra-orphan patient population where small changes in patient numbers can have a large impact. Despite this variability, we are very encouraged by the trends we are seeing.

The first strategic priority, expanding site capacity is a function of the number of active sites and the volume of patients our sites can treat. We had a strong surge in activations early this year, bringing 3 new sites online, specifically MD Anderson, UT Southwestern and Mayo Clinic Scottsdale. We now have 28 Risk Evaluation and Mitigation Strategy, REMS, certified treatment sites. Leading cancer centers continue to engage, and we are targeting 40 active treatment centers by the end of 2026.

The pace of activations will likely be variable. Given the planned timing of the sales force expansion as well as the anticipated increase in interest and support following dependent publication of CHOPIN results, we expect more activations to occur in the second half of 2026 compared to the first half. The expansion of U.S. commercial team divides the country into 9 regions. Consistent with our current structure, each region will be staffed with a liver-directed therapy manager, an oncology manager and a clinical specialist.

This structure allows us to maintain a steady pace of site onboarding, while also servicing our existing accounts. In addition to the expanded commercial team, we have revamped our medical affairs team with both new leadership and a new team of MSLs. Total site capacity is a function of open sites and the total number of patients a center can treat. Our 2026 projections regarding total site capacity, which can vary by month, assumes a similar summer seasonality pattern that we experienced last year. Seasonality is partially driven by the small number of REMS-certified team members at a treating site. For instance, when key personnel take vacation, sites cannot easily add new patients. While we are working to minimize this seasonality by increasing bench strength, we anticipate some seasonal loss of capacity in the late summer.

Our second strategic priority is changing prescribing patterns by expanding the set of patients our treating oncologists consider appropriate for PHP. We are off to a strong start in 2026, having treated new patients per site per month at a rate of approximately 0.75 for the first 2 months of 2026, similar to the pace we saw in the first quarter of 2025. For context, for the full year in 2025, the average rate was 0.5 new patients per site per month with significant seasonality.

For those modeling projections, keep in mind, new patient starts impact revenue for the next 3 quarters. The expansion of both the commercial and medical field forces previously mentioned will also support our efforts to ensure all treating professionals are properly educated about HEPZATO KITand thus can appropriately consider its usage. Oncologist feedback remains positive with PHP clearly addressing a significant unmet need in liver metastases from uveal melanoma. Recent 2025 publications and real-world evidence have reinforced the value of early and effective liver-directed therapy. In a recent uveal melanoma webinar hosted by A Cure In Sight, several of our strongest HEPZATO advocates highlighted that initiating PHP treatment earlier in the disease course can meaningfully improve outcomes by reducing tumor burden, and that combining HEPZATO with systemic therapies can further enhance effectiveness.

We expect increasing impact from the CHOPIN Phase II data. As a reminder, this investigator-initiated trial showed that sequencing PHP with ipilimumab, nivolumab delivers statistically significant and clinically meaningful improvements in 1-year progression-free survival, overall survival and Objective Response Rates versus PHP alone, all within a very short 10-week treatment window. The ability to quickly initiate this combination therapy addresses concerns about delaying systemic therapy and the combination itself addresses concerns regarding treating patients with extrahepatic disease.

Leading centers such as UCLA, Massachusetts General Hospital are already adopting CHOPIN-inspired protocols, including flexible sequencing and combination used with agents like tebentafusp eligible patients. These data are helping both to establish HEPZATO as a preferred first-line liver-directed option and to expand the patient populations our treating oncologists are comfortable referring for PHP treatment. We are also actively engaging key opinion leaders to support potential uptakes to the NCCN guidelines for metastatic uveal melanoma, following publication of the CHOPIN data with the goal of further highlighting the established role of HEPZATO KIT in this disease.

Our third strategic priority, developing referral patterns is critical to ensure eligible patients are identified and efficiently referred to one of our treating centers. The majority of patients with uveal melanoma are initially diagnosed with metastatic disease and manage a community or non-PHP institutions, making early referral a critical lever for both patient capture and better outcomes. To address this systematically, we are currently leveraging a variety of data sources to identify oncologists who have a patient who has very recently been diagnosed with metastatic disease before treatment decisions are locked in.

Our oncology managers then engage those physicians to provide education on treatment options and the locations of our treating centers. Again, the expansion of both the commercial and medical field forces will also support this third strategic priority, the development of referral networks to our treating centers. We believe this upstream approach is already producing results and strengthen these referral networks across the country is a top priority and will be a meaningful driver of new patients per site going forward.

Collectively, these 3 priorities and the underlying KPIs support the 2026 guidance Sandra will share shortly. We are confident that consistent execution in expanding site capacity, higher utilization at existing centers and the active referral development will deliver continued long-term growth. I will now turn to an update in our clinical development programs. In our ongoing metastatic colorectal cancer trial, we continue activation of new trial sites and now have a total of 8 centers actively screening patients.

While opening and training sites for medical device clinical trial is more complex than a clinical trial with conventional drugs, we are on track to activate nearly all of the currently targeted 26 trial sites by mid-2026 and to present interim data results in late 2027. Our second program in metastatic breast cancer has one active clinical trial site and additional sites are opening soon. Compared to physicians who treat metastatic colorectal cancer patients, breast cancer doctors have much less experience with liver-directed therapies. This lower level of awareness requires extensive communication and education on the potential benefits of PHP for patients with metastatic breast cancer.

We are now targeting 15 trial sites and expect to activate them by late 2026. We will provide guidance related to the readouts from the metastatic breast cancer trial later this year once progress of operational activities allows for more precise forecasting. Based on the results of the CHOPIN trial and the resulting interest in the medical community, we are evaluating combination PHP immune checkpoint inhibitor trials in various tumor types where there are clear areas of unmet need in the subset of these patients with liver metastases. We have had numerous well-attended advisory boards, and it will take another 3 to 6 months to finalize development plans for future combination trials and other indications. I look forward to sharing future updates on this topic.

I will now ask Sandra to review our financial results.

Thank you, Gerard. Revenue from our sales of HEPZATO was $19 million and CHEMOSAT was $1.7 million for the fourth quarter of 2026 compared to $13.7 million for HEPZATO and $1.4 million for CHEMOSAT during the same period in 2025. Full year 2025 revenue was $78.8 million from HEPZATO and $6.4 million from CHEMOSAT compared to $32.3 million for HEPZATO and $4.9 million for CHEMOSAT in 2024.

We recognized gross margins of 85% in the fourth quarter and 86% for the full year compared to 86% and 83% for the same periods in the prior year. Research and development expenses for the quarter were $9.4 million compared to $2.9 million for the same period in the prior year, while full R&D expenses in 2025 were $29.2 million compared to $13.9 million in 2024.

The growth in R&D spending was primarily driven by ongoing investments in our clinical team and the initiation of the Phase II clinical trial evaluating HEPZATO in combination with Standard of Care for mCRC and mBC. We do expect our R&D expenses to increase in 2026 by nearly 90%. Selling, general and administrative expenses for the fourth quarter were $10.5 million compared to $7 million for the same period in the prior year. Full year 2025 SG&A was $43 million compared to $29.6 million in 2024. SG&A expenses versus last year have increased primarily due to continued commercial expansion and overall increase in general business functions. We also expect our SG&A expenses to increase in 2026 by nearly 50%.

Our fourth quarter 2025 net loss was $1.9 million compared to $3.4 million net loss in the fourth quarter of the previous year, while full year 2025 net income was $2.7 million compared to a loss of $26.4 million in 2024. Non-GAAP positive adjusted EBITDA for the fourth quarter was $2.4 million compared to positive adjusted EBITDA of $4.6 million for the same period last year. Adjusted EBITDA for the full year was $25.1 million compared to adjusted EBITDA loss of $2.5 million for the same period in 2024.

We ended the year with approximately $91 million in cash and investments and quarterly positive operating cash flow of $8.3 million and full year operating cash flow of $22.5 million. 628,572 common shares were repurchased for $6 million through December 31, 2025, under the approved $25 million share buyback program. As of today, we have no outstanding debt obligation and no outstanding warrants.

Turning to 2026 guidance. We are guiding to total revenue of at least $100 million for the year, which represents greater than a 20% increase in HEPZATO KIT procedure volume and greater than 10% growth in CHEMOSAT. The revenue guidance reflects the 340B pricing change. And based on our current and projected customer mix, we do expect the 340B pricing impact to result in an average selling price of around $175,000 per kit for HEPZATO, approximately a 10% discount of our published list price.

Given the concentrated nature of our customer base, this dynamic will continue to introduce some variability in realized pricing as we add new sites and as center's 340B eligibility kind of fluctuates quarter-to-quarter. Forecast for 2026 gross margins are between 84% and 87%. We appreciate your participation today. This does conclude our prepared remarks, and I'll ask the operator now to open the phone lines for Q&A. Thank you.

[Operator Instructions]

Our first question comes from the line of Marie Thibault with BTIG.

I wanted to ask my first one here on some of the assumptions around your guidance. You gave us a lot of details on pricing and volume expectations, but I just wanted to clarify, you mentioned seasonality. Is that your third quarter that you're talking about when you talk about summer seasonality? And because we had the NDRA come in last year, maybe you could remind us on the magnitude of that seasonality just because things were a little bit noisy with that pricing change.

And Sandra, on the pricing, you said $175,000 I think, for this year. That's a little higher than where you kind of exited the year. Just love to hear a little bit about the trends behind that.

Sure. Thanks. I'll deal with the seasonality at a high level. We do expect seasonality in the third quarter. While not all of the seasonality last year was due to physicians and perhaps patients taking the time off. A great deal of it was. And although we are trying to increase staffing at the hospitals or REMS-certified teams at the hospitals. It is a tall order to get docs to sign up for this when they're only going to be occasionally doing it. So expect to see it again this year.

Sandra, you can counter the magnitude of the seasonality as well as the pricing question.

Thank you, Gerard. Yes, we want to remind everyone that each patient is worth $0.75 million. So there we're going to try to temper the seasonality in the third quarter. So you may see a bit of a maybe flat to modest growth from Q2 to Q3, similar to what we saw in 2025 and then with that growth starting back up from Q3 to Q4.

So from a pricing perspective, yes, we did have a slight price increase. Our list price went from $187.5 last year to $189.1. Again, this is limited by inflation. And then we're seeing a more favorable mix. I think we have said, Marie, in previous calls that we thought we were going to have more of a 20% discount on the list price, but seeing that some of our higher-end users tend to -- are not 340B eligible at the moment, we have had some favorability there and really more of a 10% decrease in price per unit. Again, we'll continue to update everyone if that changes significantly outside of $175,000.

And just to summarize because we're throwing a lot at you there. From Q2 to Q3, from a volume perspective because it was noisy last year with the pricing, we expect only modest growth, perhaps even flat given the seasonality we saw last year. We have small numbers to work with, but that's -- or a small amount of history, that's what we're assuming. And as Sandra mentioned, we were tracking closer to 12% net effective reduction on price due to 340B across all our customers. It's looking like it's closer now to -- getting closer to 10%, so a bit in our favor.

And then, one, we look at your websites from time to time. You mentioned the REMS certification process. You also mentioned some clinical trial centers. So I wonder if you could just remind me of the difference between your HEPZATO KIT REMS site, your HEPZATO KIT site? And then how we should be thinking about the differentiation between the sites that are commercial and those that are purely clinical as we keep track of some of these metrics?

Yes. I'm glad you asked that. It's -- our intention is for the HEPZATO KIT REMS site to be compliant. And for it to be compliant for the FDA, we can't put hospitals on that are accepting referrals, but have yet to do their first patient. We want patients to know where to find treating centers even if they have yet to do their first, but are accepting referrals. So that's why we put together the hepzatokit.com website with a physician finder on that as well.

Now I did say in the past that we believed REMS-certified centers, even if they are clinical trial centers needed to be put on that first FDA website. Upon further digging, it's a bit of a gray area. But on further digging, we reached the determination that it's probably best not to put them on. So actually, I'm glad you asked the question because this is a change. So if investors want to know and analysts how many treating centers there are, you just go to hepzatokitrems.com. Everybody there is either actively treating lung patients or is REMS certified and will soon treat a lungs patient. So we do have some clinical trial overlap, but we'll only put those on there that are going to be commercial centers.

So short answer is look at hepzatokitrems.com for the number of treating centers. If you're a patient, go to hepzatokit.com because that's all the centers that are accepting referrals. Does I confuse the matter even more?

No, that was pretty clear.

Our next question comes from the line of John Newman with Canaccord Genuity.

I just had 2 here. On the CHOPIN study, really impressive data last year. Gerard, just curious on the timing on the publication there. Anything you could tell us? And then also just how you plan to use that study in the United States and when we might start to see an effect? And then from an operations perspective on the business, you've got 2 really interesting and important clinical studies running in colorectal and breast cancer. Just curious if you're more focused on those studies and making sure that they enroll quickly and proceed or if you're kind of balancing that with keeping the business cash flow positive this year?

Okay. Thanks for the questions. In terms of timing of CHOPIN, as I think everybody on the call knows, this is an investigator-initiated trial. So we're told that it's imminent. I think probably within the next month or so, it will be published, but I can't absolutely promise that. In terms of how we will use it, it's going to be used in a multifaceted way. The medical affairs, I mean, the sales reps will certainly make the treating physicians aware that it exists and give them access to the publication.

We will make our medical science liaisons and our senior medics at the company available to ask, answer detailed questions about how doctors might interpret the data and safely use the combination. And thirdly, I do believe, a number of KOLs believe that the guidelines should be updated based on these data, both from the perspective of highlighting HEPZATO is probably the liver-directed therapy to use for most patients as well as showing that combination therapy with Ipi/Nivo can be safely utilized and perhaps even downgrading the role of clinical trials in the guidelines. So that's another clinical -- critical way we're going to try to utilize the data.

In terms of prioritizing clinical development versus cash flow positive, we have a very healthy balance sheet of over $90 million. I don't think there's any need for us to focus on positive cash flow from quarter-to-quarter that would simply hinder the long-term value of the company for perceived optical gain. So we may go cash flow negative on some quarters, but we think that's the right thing to do for the long-term value of the business.

Our next question comes from the line of Chase Knickerbocker with Craig-Hallum.

Just a quick one to start. As far as commercially, can you give us a sense for kind of the average treatments per patient, kind of an update there. But even more so, like how long it's taking a single patient to kind of get to that average number of treatments? Is it kind of been every 6 to 8 weeks? Or is it -- are we seeing a little bit longer in the real world?

Average still is spot on within probably 4, 4.1. That has changed very little. How long it takes them, it's more of a decay curve. What's the probability of getting to the next treatment. Any single patient might just get 1 or up to 6. Some are going past 6. In terms of -- the interval before treatment, it's probably stretching out closer to 8 than to 6. Every site is different. It's -- the actual interview is probably 7-points-some-odd at this moment. I think in the low 7s, like 7.2, 7.3. That does vary a fair amount quarter-to-quarter, but -- well, a modest amount quarter-to-quarter. I don't think it's going to go past 8. I don't think it's going to drop down to 6. It's going to be in that realm.

And then just on your guide, kind of with that in mind, can you kind of walk us through what it assumes as far as new patient starts? Because if you use that kind of number that you gave around kind of $0.75 million, you could theoretically get to a number that can be above $100 million range? So should we think about it conceptually as a floor? And then just walk us through what you're kind of assuming as far as new patient starts for the year?

Yes. We're assuming we average close to $0.5 million which is what we saw last year. And with growing sites, that means growing revenue. We're assuming, as we said before, that the first 2 quarters of the year are stronger than the third quarter and then the fourth quarter rebounds, which is what we saw last year. We think it's prudent to think that as we gain more sites, which we keep the average new patient per site per month, consistent with what we saw last year. In other words, the average site doesn't get incrementally more productive as we add new sites, which is some of the older sites get more productive than reach a cap. The newer sites take a while to reach their stride on average.

But as we add more sites, we are delving further and further into the overall TAM. And I think it should be encouraged to investors that we don't think the average productivity will decline. It will keep steady as we add sites.

And then I may have missed this, Gerard, but just kind of an updated thought as far as kind of cadence of new center adds this year. I realize it can be pretty variable. But just as we think about our models and kind of the pipeline that you have right now, I'm sorry if I missed it, again.

Yes. No, I think there are 2 things that will, I think, increase the pace in the back half of the year. That's the addition of more reps. We're going from 6 to 9 regions as well as we reinvigorated our Medical Affairs Group. We have an expanded team in the field right now. So increased field presence. And then the second thing will be with the publication of CHOPIN results. We believe that will take a bit of time to really make its mark. And I think that will be in the back half of the year. So as a function of all of that, we expect more centers being activated in the back half of the year than the front half of the year.

Got it. And then, Sandra, maybe just last one. Any sort of guidepost that you'd be willing to give us just around either kind of R&D spend or kind of EBITDA kind of same kind of question, but any sort of help as you kind of think about how you're kind of modeling patient enrollment in your ongoing studies?

Yes. So we are expecting, like I said, a healthy growth of nearly 90% in 2026 over 2025. Now again, this is dependent on making sure we get those sites opened and enrolled. R&D just in the first quarter alone should increase over Q4, probably nearly 20% and go up about I don't know, maybe 15% each quarter thereafter. So we see a big bolus this first quarter with -- primarily due to CRC.

With regards to SG&A, again, we're expecting nearly 50% increase overall this year, primarily due to the sales and marketing initiatives and the commercial expansion. Q1 alone will probably go up nearly 30% to 40% over Q4 and then more of a flat or modest increase each quarter thereafter. So hopefully, that will give you a little bit more information for your modeling from an expense side.

Our next question comes from the line of Sudan Loganathan with Stephens.

My first question is around the third quarter. You mentioned kind of having a potential seasonality to be mindful about in that -- for that specific quarter. But you guys have a lot of other potential catalysts coming through such as CHOPIN publication and also the focus on the regions that you kind of split out for the sales force.

So is there any catalysts or anything else to kind of rally around for the third quarter that could maybe help mitigate some of the seasonality, also maybe even some more site starts coming online that quarter that could potentially help? Is there anything you can kind of give details on?

I think the one aspect of the seasonality that will take -- probably will always be with us to some extent is that there's just at our high-producing sites, they're flat out. They book room time and physician schedules ahead of time and they fill it with patients. The -- when some of the -- 1 or 2 of those members take time off, they lose capacity and they generally just treat existing patients. They don't bring on new patients. So for us to kind of counter that effect, we'd have to efficiently kind of refer patients to other centers that seem to have capacity, and that's tough to do.

So we just think it's prudent despite the fact that we're trying to increase bench strength at these various centers. We think it's prudent just to take that into account to assume it's going to happen again. Are there upside potentials? Yes. Could CHOPIN have an even larger impact than we're anticipating? Yes, of course. Could we increase the number of site activations because of CHOPIN? Yes, that's an upside as well. So yes, we're hopeful for upside, but we think it's prudent just to be, I think, not overly conservative, but reasonably conservative in our guidance.

Got you. And then one quick one. Again, I don't run the CHOPIN potential, if you could potentially quantify that into new patient start number. I think you mentioned kind of leveling off around that 0.5 patients per site per month. Could CHOPIN add 0.1 or 0.2 to that? Just kind of curious if you ever quantified it.

I'm going to stay as far away from that question as possible.

Our next question comes from the line of Charles Wallace with H.C. Wainwright.

This is Charles on for RK. So on the seasonality, you mentioned that the procedure growth and also the site activation may be weighted in this back half. But as you add more patients from these sites, do you expect that the discount will expand from the current 10%? And are you still targeting a 20% discount as potentially more 340B patients get added to this mix?

Yes. So I think the discount for the 340B centers is 23.1%. What matters then after that number is the mix, obviously, that we see. It's very difficult for us to be precise as to what we think the discount will be. It was running close to 12%. It's swung closer to 10%. And when I use those numbers, I mean the effective average value per kit that we're getting, the discount off of AMP or ASP. It's -- I think we're just going to -- we've modeled 10% for the year, which is a little bit better than we were seeing probably in the third quarter. It's closer to what we saw in the fourth quarter.

Looking forward and doing the best we can at the mix of hospitals that we think will come on board. We came up with the 10%. But it's -- sometimes we don't know until we're finishing -- we're ready to ship a product to a hospital. Sometimes it's even after the fact that we find out whether or not they want to claim 340B pricing. If some of them roll on and off, the DISH eligibility, that's Disproportionate Share Hospital. And some of them actually choose not to use it because they want to use a different legal entity. So it's highly complex. But I think for now, just stick with the 10%, that's what we're modeling.

Perfect. And then on -- one more question on gross margin. You reached 86% in 2025. Do you expect to maintain this level in 2026?

Yes. We're guiding -- sorry. Yes, we are guiding right now 84% to 87% in 2026. So I think it's obviously dependent on the quarter sales as well as any pricing impacts over this next year, but even potentially hitting close to 90% in 2027 and beyond.

Our next question comes from the line of Bill Maughan with Clear Street.

So with the pricing reset around mid-'25, are you pleased with the amount of volume increase that you feel you've gotten from that expansion into 340B hospitals? And then you've spoken before about one of HEPZATO's major competitors for patients being competitive trials. So can you just comment on anything you've seen from those competitive trials in terms of increasing or finishing enrollment that might leave more patients available to you?

Sure. I think it's impossible for us to state whether or not we are getting increased volume due to 340B pricing. Just as a reminder, it's not that there wasn't access to these hospitals, it was a matter of how much margin, frankly, would they make for each kit. And not surprisingly, we're not going to have a hospital tell us, hey, we're using more of this because we make more money, just to be blunt about it. I think in such a severe disease such as this, I don't think it's going to have a huge impact.

And we'll never know, by jokingly saying, unless we have a kind of a parallel universe experiment. We just won't know. It certainly isn't a hindrance. I think that we could just be certain of that. In terms of competitive pressure from clinical trials, around the second quarter of last year, there was a large expansion of Replimune active sites as well as Thomas Jefferson bringing on a number of single center trials at their center, which definitely took some patients out of the mix.

Thankfully, the IDEA trial, which was a big one, finished enrolling late last year. So that pressure has diminished. So I think we have a steady headwind. It's definitely a bit less than we saw than that was ongoing last year, if we just simply count the number of patients being recruited by the ongoing trials that you can see listed on clinicaltrials.gov.

Our next question comes from the line of Yale Jen with Laidlaw.

Just 2 here. The first one is, I appreciate you highlight some of the major efforts in terms of last year. One of those is the referral development. I'm just curious whether going forward, would that be more of an emphasis given that will potentially create much more flow of patients from much larger sources?

Yes, it has to be -- thanks for the question. It has to be because as we get deeper into the TAM, we're not going to be looking for patients that are less, let's call it, educated and were seeking out our sites. And to do that, we have to get patients who -- their doctor who is likely a doc who treats cutaneous melanoma just quickly says, hey, Ipi/Nivo for rather HLA-2 negative or Tebe for HLA-2 positive. Cutaneous melanoma, docs don't -- in their normal mixed practice, don't refer a lot of patients for liver-directed therapy.

It's not first on their mind. So we need to get in front of those docs who have patients who aren't like online, looking for the latest and greatest. We need to get in front of those docs early, introduce them to a physician at one of our treating centers, educate them on the product so they can offer that option to their patient. So yes, it is a critical important activity for us to continue to deliver growth.

Okay. Great. That's very helpful. One other question is that given some of the sites already been treating patients for quite a while or maybe a couple of quarters up to now. Do you feel the -- most of those sites are having -- would you be able to deepen the patient to be treated over there? Or you feel that for all those sites, you are pretty much steady state that fewer patients -- less -- more patients can be added per site?

Yes, there are certain centers that are -- we have a set of centers. I think MGH would be a good example that -- for them to do a lot more patients, they're going to have to book more room time and get another team. We'd love it if they did that. We're ready and willing to help them on the training of the new team members. But that would be the dial that has to be turned to increase their capacity. There are other centers that we are in a much lower share than we should be. And it's usually a mix of reasons, clinical trials being one of them.

Another reason being that the physicians just think of a narrow set of patients like no -- let's say, no extrahepatic disease, which is not a limiter for our label. But some of these docs just say, hey, cancer is a systemic disease. I'll only treat this patient if they only have hepatic disease. So the first one of those is we'll try to impact with -- by changing guidelines, if at all possible, to deemphasize clinical trials.

And the second one, we'll try to put the data in front of the docs saying, look, you can treat these patients with extrahepatic disease with the systemic and our product at the same time. And that's kind of an educational component. So trying to change guidelines, which again, is not a slam dunk or modify guidelines as well as educating these doctors in some of the higher volume centers where we have a low share. That's the second component of it.

So our high-volume centers that are believers, if they can expand their capacity, which we have modest ability to influence, that's one driver. The second is changing treating patterns at a lower share hospitals where there is a high volume and the expanded MSL force, the expanded sales force, the CHOPIN data, perhaps some changes in the guidelines, all should help us there.

And maybe the last question here to squeeze in. I know it's awfully difficult to predict or -- but do you feel the NCCN guideline potential addition to that could happen maybe later this year or maybe early next year or that's too elusive to predict?

They've all been known to have off-cycle meetings. I think this one, the schedule is November. They've all been known to have off-cycle meetings. That is -- all we can do is discuss the available data with the KOLs share our perspective that perhaps there's some areas of the guidelines that should be modified based on the latest data, and they really need to drive it.

We can send notes in pharma companies requests in or information into the guideline committees. But at the end of the day, when guidelines change, it's because the KOLs believe. So we can help foster the conversation amongst them, but then it really is up to them to drive it. And we're hopeful that they will. But again, this is more of a physician-initiated activity than a company-initiated activity.

Congrats on the great years, and I look forward to additional growth.

This concludes our question-and-answer session. I'd like to turn the floor back over to Gerard Michel for closing comments.

Thank you all for joining us today and for your continued support and thoughtful questions. Our mission at the company is simple, to improve survival and quality of life for patients with liver metastases by delivering the most effective liver-directed therapy available. None of this progress will be possible without the dedication and hard work of our entire team and the support of our investors who are in many ways, part of the team. And I want to thank every one of them. We look forward to sharing our continued momentum with you throughout 2026. Have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

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” BTIG, LLC, Research Division

” Canaccord Genuity Corp., Research Division

” Craig-Hallum Capital Group LLC, Research Division

” Stephens Inc., Research Division

” H.C. Wainwright & Co, LLC, Research Division

” Laidlaw & Company (UK) Ltd., Research Division

” Clear Street

Ladies and gentlemen, good morning, and welcome to the Delcath Systems Third Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. David Hoffman, Delcath's General Counsel. Please go ahead.

Thank you, and welcome to Delcath Systems' Third Quarter 2025 Earnings Call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Chief Financial Officer; Kevin Muir, General Manager, Interventional Oncology; Vojo Vukovic, Chief Medical Officer; and Martha Rook, Chief Operating Officer.

I'd like to begin the call by reading the safe harbor statement. This statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All 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, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in subsequently filed quarterly reports on Form 10-Q as well as in 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. Our press release with our third quarter 2025 results is available on our website under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website.

Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you for joining us today to review our third quarter financial results and business updates. Many of you joined our October 20 business update call, where we reported the compelling results from the investigator-sponsored CHOPIN trial, and you may have also seen our announcement about the first patient dosed in our CRC trial. I'm immensely proud of our clinical and medical affairs team as they work to bring our technology to an ever-growing set of patients with unresectable liver metastases.

On the commercial front, the third quarter was impacted by a number of factors, including the 340B pricing related to NDRA participation, which resulted in an approximate 13% reduction in average revenue per kit sold versus the prior quarter. We expect a similar average price level in the fourth quarter.

While there was a slowdown in the pace of site activation from June to August, we have returned to a steadier pace, activating 4 new sites in the past 2 months. There are currently 25 REMS-certified treatment sites. Major cancer centers continue to show interest in joining, and based on our current conversations, we are planning to be in the 26 to 28 active treating centers by the end of 2025 and 40 centers by the end of next year.

It is important to note that the 40 center target excludes clinical sites, which will appear on our website as required by REMS related regulations. We aim to build referral networks to these locations as many of our targeted clinical sites have few metastatic uveal melanoma patients. On our quarterly calls, we will distinguish sites with minimal commercial activity that are clinical sites to give investors a clear understanding of our site activation progress.

Currently, one site, City of Hope, is active in the colorectal trial and has not yet treated any metastatic uveal melanoma patients, although they anticipate doing so. To support both the expansion of sites and active expansion of sites and actively treating sites, as we outlined in previous calls, we grew our U.S. sales force in 2025 from 4 to 6 regions, each staffed with a liver-directed therapy manager, oncology manager and clinical specialists.

By the second quarter of 2026, we plan to expand even further to 9 regions, enabling the commercial team to both prioritize building referral networks and maintain a steady pace of site activation. As previously reported, in late summer, we experienced a slowdown in new patient starts, partially due to summer seasonality. Each HEPZATO treatment necessitates the collaboration of a trained perfusionist, anesthesiologist and an interventional radiologist after the assessment period.

During holiday periods, scheduling capacity challenges are difficult to overcome and new patients may start alternative therapies. Fortunately, patients currently under treatment continue to return at expected rates, averaging 4 treatments per patient. The feedback from oncologists consistently indicates HEPZATO continues to address a significant unmet need for patients with liver mets resulting from uveal melanoma.

Importantly, we believe the CHOPIN protocol, which starts with systemic therapy, may provide increased schedule flexibility in clinical practice since some physicians may just decide to extend systemic therapy duration while waiting for HEPZATO treatment team availability.

Aside from seasonality, we believe that competition for clinical trials increased in the middle of the year. Specifically, the Replimune-sponsored trial for RP2 expanded the number of clinical sites to 24 and Thomas Jefferson continues to initiate their own single center trials. This competitive dynamic ebbs and flows as new trials start and others end.

We're confident that the compelling results from the CHOPIN trial should lessen the competitive impact from trials as the CHOPIN data is disseminated and physicians experience firsthand durable patient responses using the CHOPIN protocol. As you know, as a result of the changes in the rate of new patient starts, last month, we adjusted our 2025 annual guidance to $83 million to $85 million.

On our October 20 business update call, we discussed in detail the positive results of the trial that were presented at ESMO by Professor Ellen Kaptein from Leiden University. In summary, the primary endpoint was met with 1-year PFS significantly higher at 54.7% in the combination group versus 15.8% in the perfusion group. The combination also significantly improved median overall survival, 23.1 months versus 19.6 months and best overall response rate, 76.3% versus 39.5%. All results were statistically significant.

During the update call, Dr. Vukovic discussed the significance of these findings with Dr. Vincent Ma, Assistant Professor and Medical Oncologist at the University of Wisconsin. Dr. Ma, an experienced user of HEPZATO, expressed that he was impressed by the high objective response rate observed in the CHOPIN trial. He noted that the CHOPIN trial results are potentially practice-changing and are consistent with the scientific rationale underlying this combination therapy. The presentation at ESMO and a replay of our call with Dr. Ma is linked on our website.

The combination treatment evaluated CHOPIN achieved extraordinary efficacy and acceptable safety despite the treatment duration being limited to just 10 weeks with no maintenance therapy. Importantly, no other prospective trial in metastatic uveal myeloma has shown a higher response rate, longer PF or OS. In clinical practice, after completing the 10-week CHOPIN induction period, physicians may choose to add maintenance therapies with the potential to extend the benefits achieved by combining PHP and IPI+NIVO as an induction strategy.

The option of this combination liver-directed systemic therapy regime may accelerate uptake given some oncologists are uncomfortable postponing systemic treatment, and we do know this has caused some patients considered appropriate for HEPZATO therapy to be put on other treatments. In addition to addressing barriers related to physicians not wanting to postpone systemic therapy, and the episodic scheduling constraints. The CHOPIN trial should also alleviate the concerns of the subset of physicians who are reluctant to use HEPZATO to treat patients with extrahepatic disease.

Despite the fact that the FOCUS trial included patients with extrahepatic mets and that hepatic failure is usually the ultimate cause of death, some physicians are reluctant to use liver-directed therapy in patients with extrahepatic disease. Since the CHOPIN protocol obviously includes systemic therapy, which can treat extrahepatic disease, we believe this specific objection will diminish as the CHOPIN results are broadly disseminated.

Delcath is actively engaging with healthcare professionals currently using HEPZATO as well as those planning to utilize it. Our team remains committed to meeting regularly with key opinion leaders to foster transition towards establishing this approach as a first-line option for appropriate patients. With the favorable results from CHOPIN and ongoing positive patient outcomes, our field teams will work with clinicians to better understand how combination therapy might be used to improve patient outcomes.

Beyond our current focus on uveal melanoma, we are committed to advancing research and development for HEPZATO. We are confident that HEPZATO and its proprietary hepatic delivery system platform offers substantial potential to improve outcomes for a broad spectrum of patients with liver metastases.

As mentioned in earlier calls, we are conducting 2 company-sponsored trials in liver-dominant metastatic colorectal cancer and liver-dominant metastatic breast cancer. These studies target large patient populations with unmet clinical needs. Both trials have a primary endpoint of hepatic progression-free survival. Patient dosing for the metastatic CRC trial began in August of this year with enrollment for metastatic breast cancer likely to follow in the first quarter of 2026.

For metastatic CRC, we expect the release of interim data as early as the second quarter of 2027 with an anticipated release of primary endpoint results in mid-2028 and overall survival data expected to follow in 2029. For our metastatic breast cancer trial, we anticipate interim data release as early as the fourth quarter of 2027 with anticipated release of primary endpoint results in mid-2029 and overall survival data expected to follow in 2030.

In collaboration with experts and key opinion leaders, we continue to evaluate a number of other tumor types and indications for HEPZATO. There is strong interest and scientific rationale to develop HEPZATO in patients with intrahepatic cholangiocarcinoma, cutaneous metastatic melanoma and non-small cell lung cancer.

Immune checkpoint inhibitors are approved and widely used in these 3 cancer types, and there are clear areas of unmet need in the subset of these patients with liver mets that provide an opportunity to develop HEPZATO in combination with checkpoint inhibitors. It will take another 3 to 6 months to finalize development plans for future combination trials in other indications. The team is executing effectively on the clinical front, and we are prepared to pursue new opportunities in various cancer indications.

I will now ask Sandra to briefly review our financial results.

Thank you, Gerard. Revenue from our sales of HEPZATO was $19.3 million and CHEMOSAT was $1.3 million for the third quarter of 2025 compared to $10 million for HEPZATO and $1.2 million for CHEMOSAT during the same period in 2024. We recognized gross margins of 87% in the third quarter compared to 85% for the same period in the prior year.

Research and development expenses for the quarter were $8.0 million compared to $3.9 million for the same period in the prior year. Selling, general and administrative expenses for the third quarter were $10.3 million compared to $7.0 million for the same period in the prior year. Our third quarter 2025 net income was $0.8 million compared to $1.9 million net income in the third quarter of last year.

Non-GAAP positive adjusted EBITDA for the second quarter was $5.3 million compared to positive adjusted EBITDA of $1.0 million for the same period in 2024. We ended the quarter with approximately $89 million in cash and investments and quarterly positive operating cash flow of $4.8 million compared to $7.3 million operating cash flow in the second quarter. As of today, we have no outstanding debt obligations and no outstanding warrants.

Forecast for 2025 gross margins are expected to be between 85% and 87% with continued positive non-GAAP adjusted EBITDA and positive cash flow for the rest of the year. The total HEPZATO treatment volume in 2025 is projected to increase by nearly 150% versus 2024.

We thank you all for participating today, and this does conclude our prepared remarks, and I'd ask the operator to open the phone lines for Q&A.

[Operator Instructions] The first question comes from the line of Marie Thibault from BTIG.

I'll keep my questions to just one here. I wanted to understand, I'm glad to see that the pace of center activation has picked up again. I wanted to understand what's built into your Q4 expectations in terms of some of that competitive clinical trial activity you called out in Q3, some of the seasonality, it sounds like it's recovered, but are you expecting any seasonality from the winter holidays? Just a little more granularity on what we should expect for Q4.

Yes. When we put together that guidance, we did assume there'd be a modest amount of seasonality in the fourth quarter. Keeping in mind that we haven't been through too many seasons to-date, it's hard to really know. We were surprised by the summer seasonality, as you know. We assume it's prudent to put some expectation there.

In terms of clinical trial competition, we kind of assume the same level that we started seeing midyear, so short answer is we factored both in.

We take the next question from the line of John Newman from Canaccord Genuity.

I just wondered if you could comment on how you expect the site additions to roll out going forward into 2026? Whether you think the current pace of additions through the balance of 2025 is a good indicator there?

Yes. I mean right now, I think it's probably prudent to assume that the site additions will accelerate in the back half of the year because we're going to have 9 regions at that point. I think if you want to do a 40-60 split in terms of them coming on board, that might be reasonable.

We take the next question from the line of Chase Knickerbocker from Craig-Hallum Capital Group.

This is Jake on for Chase. As you get up to those 9 sales territories, are there any steps that the team is taking to improve utilization on some of the lower volume accounts?

Yes. Without a doubt, I mean, I think probably the biggest lever to pull for us in terms of lower utilization sites or 2 biggest levers are, one, for sites that aren't getting that many patients because some of the sites we initiated were big liver centers that didn't have that many patients, but we're very interested in the product, us building referral networks to those sites. Again, that's part of the reason for the expansion of the sales force as well as we've recently expanded the medical affairs team.

Probably the second lever to pull, quite frankly, is changing physician prescribing behavior. If some of the lower utilization sites we've heard things such as the patient has extrahepatic mets. I'm not confident using liver-directed in this patient upfront. Clinical trials at some of the larger centers take a lot of patients. I think the CHOPIN data disseminating that data is going to be very important to try to blunt that.

I guess the third thing is, where there are some of the higher using sites, which you haven't asked about that are capped out in terms of capacity. I think the CHOPIN -- this isn't the protocol they used, but it's not a stretch to say, hey, docs might put patients on another few weeks of checkpoint inhibitors if they need to wait to get a slot for HEPZATO and still put them on HEPZATO.

Then do you expect CHOPIN to start impacting utilization sometime in '26, mid-'26?

'26, yes. I think it would be a stretch to expect to see a step change in the fourth quarter. I think as the quarters roll on in 2026, there's likely to be a meaningful publication that comes out of this trial, hopefully in December, but again, that's out of our hands. It's an investigator-initiated trial. Yes, I think increasingly, as 2026 moves on, there will be more of an impact.

We take the next question from the line of Sudan Loganathan from Stephens Inc.

This is Kesav on for Sudan. Just got a quick one on my end. Since neutropenia is common with trifluridine and tipiracil and bevacizumab, how are investigators addressing this in the Phase II HEPZATO in combo trial? Is this through GCF usage or dosing adjustments?

Probably both, but I'm going to ask Vojo to comment.

Sure. You correctly pointed out that the standard of care regimen for colorectal patients in third line can cause some bone marrow toxicity. We also know that PHP with melphalan can also have hematological toxicity. Patients will be managed using appropriate standard supportive care and those adjustments and drug holidays will be also factored in. It's all defined in the protocol.

G-CSF as well as.

Yes.

Of course, the standard of care, right? The answer is yes to both of the G-CSF and if necessary, delays in dosing.

We take the next question from the line of RK from H.C. Wainwright.

This is RK from H.C. Wainwright. Quick question from me is how to think through your participation in the NDRA program? How we should think about its influence on your profitability and revenue growth not only in 2026, but beyond? What is your long-term plan in terms of trying to sustain growth against the NDRA?

Sure. In terms of the NDRA and implications for revenue growth, this is a onetime step down due to the NDRA. We don't anticipate – although, we don't know, we don't anticipate there being a dramatic change in average revenue per kit. We have to see as we sign up new sites, how many of them actually participate. 90-some-odd percent of major academic hospitals have an NDRA legal entity. What we're finding is only about half of them end up participating because of where the site of care is, for this product.

Assuming we continue to have the same rate of participation, the average discount or average reduction, I think, will stay the same. In terms of what will that do in terms of revenue growth overall, does it have -- does it make a difference on volume? Impossible to know, and I've said this on one-on-one calls unless we have kind of a parallel universe to run an experiment on. I expect that there are some sites that economics did play a role. For such a severe disease, you would hope that wasn't the case, but it might. So net-net, there's probably some volume increase, but we'll never know how much.

In terms of profitability, talking about gross margins, I'll toss that to Sandra, who is sitting right here.

Yes. RK, overall, we've mentioned in the past, as we build up the R&D program from a profitability standpoint and a cash flow perspective, it might be a little bit bumpy over the next couple of years. However, from a gross margin perspective, we are still expecting probably 85% to 80% into 2026, depending on some cost efficiencies that we can gain and beyond 2026, potentially high 80%.

I think it's also important to note with our healthy cash balance, I just don't see any need to raise capital just to get to the bottom line of the issue.

One quick question, if I may, as a follow-up. I think on the October 20 call, you were stating you had 24 active centers. Now you're saying 25 active centers. and you're giving a guidance of adding maybe 3 more by the end of this year. What's the chance that you can overshoot that 28 number? Any commentary there will be helpful.

No, it's highly unlikely we'd overshoot it. Are there 7 or so on deck? Yes. Do I think 4 of them are going to come out? No. I think it's 1 to 3.

We take the next question from the line of Yale Jen from Laidlaw & Company.

We understand there's another European investigator sponsored study ongoing as a combo with the checkpoint inhibitors. Could you guys give us a little bit color on the status as well as when they report data, was there any impact in terms of the sort of practice of the sequels of the 2 treatments? Or any comments on that? And I have follow-ups.

Yes, you're referencing the SCANDIUM-3 trial, I believe. Similar to CHOPIN, except they flipped the first drug that's used, they use Euro CHEMOSAT first and then they move on to IPI+NIVO. That's recruiting rather slowly. I don't have a time line at all as to when I'd love to have a time line, but I don't have a time line right now for when that might read out. I think it's kind of in the too distant future right now for projection purposes to think about.

Maybe just one more here. Given that you will have a constant growth in the top line, but at the same time, you will have increased expenses on the R&D side, especially when you start the second breast cancer trial. Could you give us a little bit color in terms of how you -- how is the capital allocation between those 2 events, those things you are planning?

Yes. In terms of capital allocation, I think we're really taking this on a program-by-program basis. It's actually how I work with the Board. We have a fixed R&D budget every year for either ongoing trials, in this case, CRC and breast as well as a fixed budget for IITs. We do our homework on, I'll pick one, non-small cell lung cancer, we're digging into now in combination with our checkpoint inhibitors.

We're going to look at the protocol, the subset of patients. I suspect it will make a lot of sense to do it, but we have a lot of homework yet to do. If it looks like a positive NPV project, not to sound like a business an MBA student here, but basically, if it looks like it makes sense, stands on its merits. We've got plenty of capital on the balance sheet. I think we can fund it off of our own top line. As I've said before, if something looks really compelling and the cost of capital is adequate, we fund it in other means. We'll pick up the programs one at a time. I'm not sitting here with a fixed R&D budget in mind. Instead, again, we look at that on a program-by-program basis.

We take the next question from the line of Bill Maughan from Clear Street.

Bill from Clear Street. After CHOPIN kind of broadly validated systemic treatment with HEPZATO, trying to read that through to breast and colorectal, given that it's not a combination with IO, but it is a combination between HEPZATO and systemic, how much read-through do you see from the success of CHOPIN into these new combinations? Do you see the potential or attraction for adding in maybe a checkpoint inhibitor to that treatment paradigm in those specific indications?

Yes. In terms of -- right now, those trials are both sequenced with systemic chemo, which has stacking toxicities, and that's one of the hassles we've had with or options we've had with trying to integrate this therapy into existing treatment protocols. That's one of the beauties of working with checkpoint inhibitors is that you don't fundamentally have stacking toxicities.

Now, you mentioned colorectal. That is as well as some subsets of breast don't use checkpoint inhibitors. In colorectal, the liver mets are the most common thing. The portal vein, which is -- goes right into the liver is exposed almost immediately with either antigens from the tumor or tumor cells themselves. There is a theory out there that the reason checkpoint inhibitors don't work in much of CRC is because of the exposure of the liver, which has reduces -- increases systemic immune tolerance.

Maybe we could turn -- make cold tumors hot, to use an old phrase. Vojo has -- who's sitting here with me, has talked to a variety of KOLs about that. We're still kind of thinking through that one. Our first areas to go after are places where IOs are firmly established, have good efficacy and there are high rates of liver mets, for example, non-small cell lung cancer, cutaneous melanoma, ICC.

Then just maybe a little more granular one. You specifically called out Thomas Jefferson as a hospital that's running its own trials and potentially competing with you for patient enrollment. Can you quantify that at all?

Let me see. Vojo, do you know how many patients TJ has in their single center trials, and that's why I pulled them. They probably more than anybody else has their own single center trial going. Lots of centers do single center trials, but Thomas Jefferson in uveal melanoma is probably top of the list. How many?

109 patients.

109 patients for their single center trials, yes.

That's the most current one. Other centers from trials of 20, 30 patients and Thomas Jefferson is the one that we referenced in the combination of liver-directed and immunotherapy is 109 patients.

As there are no further questions, with that, we conclude the conference of Delcath Systems. Thank you for your participation. You may now disconnect your lines.

Greetings, and welcome to the Delcath Systems Business Update Call.

[Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, David Hoffman, General Counsel for Delcath Systems. Thank you. You may begin.

Thank you, and welcome to Delcath Systems Business Update Call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Chief Financial Officer; and Vojo Vukovic, Delcath's Chief Medical Officer. In addition, we will share a prerecorded conversation between Dr. Vincent T. Ma, Assistant Professor and Medical Oncologist at the University of Wisconsin's Department of Medicine and Dr. Vukovic.

I'd like to begin the call by reading the safe harbor statement. This statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All 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. The preliminary estimated financial results for the quarter ended September 30 of 2025, included in this call have not been reviewed by Delcath's independent auditors and may change as a result of the continued review. Such preliminary results are subject to the finalization of quarter end financial and accounting procedures.

For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in subsequently filed quarterly reports on Form 10-Q as well as in 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.

Our press release with a summary of the CHOPIN trial results and our press release containing the preliminary 2025 Q3 financial results are available on our website under the Investors section. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website.

Now I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you for joining us today to review the CHOPIN trial results and a summary of preliminary third quarter 2025 financial results. Yesterday, Delcath's Chief Medical Officer, Vojo Vukovic, had an opportunity to discuss the CHOPIN trial results with Dr. Vincent Ma, a current user of HEPZATO KIT for the treatment of metastatic uveal melanoma patients. Dr. Ma is an Assistant Professor of Medical Oncologists and the Immuno-Oncologist, Oncology Therapeutics Director of the Phase I program at the University of Wisconsin Carbone Cancer Center. He is a clinical investigator and translational scientists with a research program dedicated to melanoma and advanced cutaneous malignancies, recognized as an emerging national expert in uveal of melanoma. He leads and collaborates on multiple grants, clinical trials and scholarly publications focused on improving outcomes for patients with this disease. Delcath retained Dr. Ma to review the CHOPIN trial results and provide his feedback. Dr. Ma's comments are his own and do not constitute medical advice.

Let me first recap the trial results that were presented Saturday by principal investigator and lead author, Professor Ellen Kapiteijn from Leiden University. The CHOPIN trial randomized 76 patients 1:1 to receive PHP alone at weeks 1 and 7 or 4 cycles of ipilimumab and nivolumab every 3 weeks over approximately 9 weeks with 2 PHP treatments at weeks 1 and 7. The trial protocol did not include additional PHP treatments beyond 2 treatments or nivolumab maintenance monotherapy. Once the 9-week treatment period was completed, patients were moderate without further treatment until progression. Key eligibility criteria included unresectable hepatic metastases, with 50% or less unresectable disease and limited extrahepatic disease.

The primary endpoint was 1-year progression-free survival. Secondary influence included safety, best overall response rate and overall survival and hepatic progression-free survival. The primary endpoint was met with 1-year progression-free survival of 54.7% in the combination group versus 15.8% in the perfusion group. The combination also significantly improved overall survival, 23.1% versus 19.6 months and best overall response rates, 76.3% versus 39.5%. All of these efficacy advantages were statistically significant.

Grade 3 or higher treatment-related adverse events were more frequent in the combination group, 81.6% versus 40.5% but most were manageable with standard care. Interestingly, this rate of adverse events in the combination arm were consistent with those seen in the FOCUS pivotal trial.

To better explore the importance of the results, I will now share the prerecorded discussion between Dr. Vukovic and Dr. Ma. I will then discuss the implications of these results for Delcath as well as share preliminary third quarter 2025 financial results and full year guidance and open the floor for questions.

Dr. Ma, thank you for taking the time for speaking today regarding the results from the CHOPIN trial.

Good to be here to discuss these important results.

All right. So Dr. Ma, can you describe at the beginning right now, what's your political practice and your research interest and how they pertain to the CHOPIN trial?

Yes. So just a little bit about myself. So I'm a medical oncologist at the University of Wisconsin, Carbone Cancer Center. And I specialized, particularly in melanoma and advanced cutaneous malignancy but I also -- the immuno-oncology therapeutics lead in our early-phase program. And so about 10% of my practice is actually caring for patients with uveal melanoma. And so one particular research focus of mine is actually understanding the poor prognostic nature of liver mets, particularly in patients treated with immunotherapy.

And so my group and I have sort of published several articles over the years and presented several studies on this topic particularly in melanoma. And our group was actually instrumental in opening an early phase clinical trial at the University of Michigan, where I did my training looking at combining liver-directed radiotherapy with immunotherapy to actually help enhance immunotherapy efficacy.

That's really interesting. So this phenomenon, how well documented is the role of liver mets in reducing systemic ipi/nivo or other immune checkpoint inhibitor efficacy. And how large of a clinical problem is it?

Yes, great question. So prior to me joining faculty at the University of Wisconsin, I was actually involved in a variety of translational research at Michigan where we actually correlated liver metastases with worse immunotherapy outcomes. The mechanisms that we propose is that liver mets actually siphons and actually deplete activated CD8 positive T cells from circulation, causing almost a systemic immune desert, sort of diminishing the effects of immune checkpoint inhibitors. And this hypothesis actually translates very well to uveal melanoma, which unlike cutaneous melanoma is considered to be an immunologically cold tumor. And part of the explanation for this may be due to the disease and propensity to metastasize the liver.

And so my team and I actually published previously a mets analysis and found that liver mets across all solid tumors actually leads to worse survival outcomes particularly wind treated with immune checkpoint inhibitors. And it continues to be, at this point, an unmet need to identify better or optimal liver-directed therapy strategies for these patients.

Okay. Thank you for this extensive explanation. It's a real clinical problem. Now would you mind describing your experience, specifically with HEPZATO? For example, how many patients have you treated and what type of treatment regimen protocol you utilize in clinical practice?

Yes, absolutely. So at our institution, we actually treated our first patient with HEPZATO or melphalan PHP in March 2024. And really since then, our institution has done over 60 procedures on 15 patients. And I will admit, I was pleasantly surprised to see that nearly all our patients had some degree of liver tumor volume reduction and actually also with very minimal complications. Most patients actually recovered within a week after each PHP treatment, and we're able to continue to work and travel in between cycles. And so at our institution, the typical path of getting patients evaluated is through medical oncology, such as myself. And every newly diagnosed metastatic uveal melanoma patient seen by medical oncology, really the intent here is for the consultation to review all local and systemic therapy options, including clinical trials.

And so oftentimes, I go through the eligibility, review the pros and cons of every treatment. And in some cases, we do a multidisciplinary tumor board discussion. After initial consultation, if we determine the patient is fit enough for HEPZATO, patients are then referred to our interventional radiologist, Dr. Orhan Ozkan for the procedure. And really most unique about our institution is the ability to do real-time CT angiography on the day of PHP procedure. So we can actually assess with contrast the anticipated distribution of the melphalan and make minor adjustments with the catheter location, in particular, to optimize drug delivery to the whole liver and tumor.

All right. That's really quite clear. Now with the release of the CHOPIN results, what do you think of the results? And in your opinion, how CHOPIN results impact your practice in the treatment of metastatic uveal melanoma patients?

Yes. It was great to be at the conference yesterday to witness these results, this oral presentation. But yes, I mean, the Phase II results of the CHOPIN trial actually affirms the similar impressively high percentage objective response rate with combination ipi/nivo plus PHP as in their Phase Ib portion of the study, which, I mean, is the highest objective response rate. It was 75% plus seen for any prospective Phase II trial for any uveal melanoma study. And although the trial comparison and interpretation should always be taken with caution as the cohorts are often dissimilar, when we look at the median progression-free survival of other studies, for example, so we see that, for example, for tebentafusp it's 3.3 months, ipilimumab and nivolumab is anywhere from 2.7 to 5.5 months.

But what we saw with the ipi/nivo plus PHP, the median PFS was 12.8 months, so impressively numerically higher. And although PFS is an informative endpoint for treatment efficacy, overall survival is also an important patient-centered outcome to take into consideration. And fortunately, as a secondary endpoint, overall survival seem to also favor the combination approach, where Dr. Kapiteijn mentioned a median overall survival of 23.1 months compared to PHP alone, which was much shorter.

Now I do think the results of the CHOPIN trial are practice changing and aligns with the scientific rationale for the combination therapy, which is what we had primarily done a lot of research on. And in my opinion, the main challenge with adopting the use of combination ipi/nivo plus PHP is going to be the considerably high rates of grade 3 plus adverse events. But in the presentation, it was reported around 81.6%. But if we compare that to what we also saw in the FOCUS trial, the rates were actually similar at around 80% for patients who were just treated with PHP alone, albeit in the FOCUS trial, they received 6 cycles of therapy of PHP.

Now it seems that most of the adverse events were hematologic with the combination therapy per Dr. Kapiteijn, which interestingly enough is not a common immune-mediated adverse event with immune checkpoint inhibitors. I think it would be important to see probably in a future published article, what the non-hematologic and specifically the immune-mediated adverse events were in the combination.

And so I think ongoing correlative studies right now are needed to just better understand the underlying immune versus cytotoxic mechanism. But nevertheless, I think based on the presented Phase II CHOPIN trial results, I think the combined use of ipi/nivo and PHP should be at least considered and offered to patients who are eligible and certainly fit enough to receive combination therapy. But I think future consideration should be made to at least evaluate this role of combination regimen in uveal melanoma patients both hepatic as well as extrahepatic disease that is not amenable for definitive therapy, which we can see in this patient population.

Notably, I think Dr. Kapiteijn mentioned in the CHOPIN trial that only about 20% to 30% of patients had known extrahepatic disease. But my suspicion is that they probably were presumably definitely treated at the time of trial enrollment.

All right. Thank you for the extensive review of the key highlights and results. Now in the CHOPIN trial per design, patients were treated with only 2 PHP treatment cycles. Do you think that the efficacy of the CHOPIN trial could have been improved if some additional PHP treatments were introduced?

And I think the second question is also nivolumab maintenance is often used after ipilimumab induction and that nivo maintenance was not part of the CHOPIN trial. So what are your thoughts around the number of PHP treatment cycles and the nivolumab maintenance question.

Yes, great question and a good follow-up, especially after the presented results. So I would just kind of speak to our own institutional experience that we saw a correlation between the number of PHP treatments with liver tumor volume reduction. We found that most patients can actually tolerate 6 doses or 6 cycles of PHP in some patients and the maximal tumor volume reduction in liver was not seen until after the 6 treatment. So I actually do think that the efficacy could be better achieved with more PHP treatment. But what, of course, would need to be balanced with the toxicity risk, particularly in this case of the hematologic side effects that were reported.

Now in the CHOPIN trial, the combination ICI plus PHP arm reported a 80% plus grade 3 plus adverse event rate with numerically higher rates of hematologic side effects compared to PHP alone. But from an institutional experience, we see that these hematologic or cytopenias recovery is often a bit -- that's often slower with successive cycles of PHP. So that's a caution that we have to take into account of if we're thinking of incorporating more of those into a combined modality.

Now the question about the nivolumab maintenance, I think, should have probably been incorporated into the combined PHP plus ipi/nivo treatment schema. I think just thinking about some good correlative studies to think about, presented earlier this year at ASCO 2025, the DANTE trial did a comparison between 1 versus 2 years of anti-PD-1-based therapy in advanced stage melanoma subjects. who were treated with 2 years. And what they actually found was that patients who were treated with 2 years had a numerically higher 2-year progression-free survival than a 1-year course of anti-PD-1 therapy.

And so it makes sense that from an immunologic and a treatment perspective, more therapy seems to make more sense to provide better durability. But of course, barring any ICI limiting toxicities, I think it's still, generally speaking, considered standard of care to continue nivolumab maintenance therapy after an initial induction of ipi/nivo.

All right. Thank you for these really interesting insights. Now thinking about the potential of synergy between the PHP treatment and the immune checkpoint inhibitor treatment, we've seen really these great results in patients with metastatic uveal melanoma. Now in your opinion, what are the implications for other cancers? Is this concept that we have seen in MUM? Do you think it's feasible to evaluate them to test in other cancer types?

Yes, absolutely. I mean there's something to be said and some conclusions that can be drawn from the CHOPIN trial, which is that the study suggest the importance of aggressive upfront management with a multi-modality therapy. We know a substantial percentage of patients with liver mets regardless of the origin, respond poorly to ICI therapy. We published this. Waiting for patients to progress with ICI before receiving liver-directed therapy or even vice versa is potentially risky. And I will say this, time and time again as a medical oncologist, I see that the driver of morbidity and even mortality comes from liver met progression. It is oftentimes frequently seen as the cause of things like weight loss, cachexia, altered mentation, hypoalbuminemia that leads to edema, coagulopathy.

And I think sequencing therapy separately poses a risk to patients of not being eligible for later-line therapies due to declining performance status, whether it's due to disease progression or toxicity. And I think as ICI therapy is, at this point, FDA approved across multiple, if not nearly all solid tumor types, I think understanding effective strategies to overcome ICI resistance from liver mets with earlier introduction of liver-directed therapies such as PHP is a definite ongoing unmet need.

Dr. Ma, thank you again for taking the time to speak with me today about the results from CHOPIN trial and your insights. Again, thank you so much.

Thank you, Vojo Vukovic, and the Delcath team certainly for inviting me to participate in this milestone update call.

As we just heard, these results clearly demonstrate the benefits of treating early with a combination of systemic checkpoint inhibitors, ipilimumab and nivolumab and PHP. The option of this 10-week induction regime may accelerate uptake given some oncologists are uncomfortable postponing systemic treatment. Of equal importance are the potential longer-term implications given the numerous indications such as non-small cell lung cancer and cutaneous melanoma, where ICI therapy or immune checkpoint inhibitor therapy is a mainstay and liver metastases are common. We have already scheduled advisory boards to discuss potential protocols in these and other patient populations.

Now turning to our financial results and revised guidance. For Q3, we are reporting preliminary unaudited revenue of $20.5 million, gross margins of 87%, net income of $0.8 million, operating cash flow of approximately $4.8 million and positive adjusted EBITDA of $5.3 million. As of September 30, 2025, the company is preliminarily reporting $88.9 million of cash, cash equivalents and short-term investments.

In the third quarter, the effect of the 340B discounts associated with NDRA participation was an approximate 12% decrease in average revenue per HEPZATO Kit. We expect a similar average price level in the fourth quarter. While there was a slowdown in pace of site activations from June to August, we have returned to a more steady pace, activating 4 new sites in the past 2 months. We currently have 24 active sites with Memorial Sloan-Kettering Cancer joining most recently. Interest from major cancer centers remain strong, and we remain confident that it is a case of when rather than if they will become active. We still expect 40 centers to be operational by the end of next year.

Historically, our sites have acquired new patients at a rate between 0.4 to 0.7 per month per treating center. In Q3, we observed a marked decrease in the number of new patient starts per site, driven at least partially by seasonality. The process for new patient starts can take 2 months from initial visit to an oncologist and subsequent referrals and treatment. During the late summer, we saw this process disrupted due to scheduling issues.

We have seen a rebound in new patient rates from the summer low but the impact of these lost patients will continue through the fourth quarter as new patients drive subsequent retreatments. We are confident, however, that total new patient recruitment will steadily increase as additional sites come online. We are prioritizing working with centers to train additional health care professionals to administer HEPZATO to avoid disruptions due to scheduling conflicts.

Most importantly, we believe the CHOPIN data will change this dynamic since patients can quickly start ipi/nivo treatment. I want to stress that we do not believe the decline in revenue for both the quarter and the year reflects physician perspectives regarding the positive effects of treatment with HEPZATO. The feedback from oncologists to use HEPZATO consistently indicates HEPZATO addresses a significant unmet need. We believe there's a meaningful untapped demand for HEPZATO, and we remain focused on finding creative solutions to the distinct challenges that often arise with novel innovative therapies.

As a result of the change in the rate of new patient starts, we have decided to lower our guidance to $83 million to $85 million for the total revenue for 2025. Forecast for 2025 gross margins are between 85% and 87% with continued positive non-GAAP adjusted EBITDA and positive cash flow for the rest of the year. The total HEPZATO treatment volume in 2025 is projected to increase by approximately 150% versus 2024.

That concludes our prepared remarks. I'd ask the operator to open the phone lines for Q&A. And please note, we will be limiting our financial-related responses to only the information provided during this call and the preliminary financial related release issued on October 18.

[Operator Instructions] Our first question comes from the line of Marie Thibault with BTIG.

Thank you so much for hosting this and also please pass on our thanks to Dr. Ma for his prerecorded comments. Very interesting.

I want to ask 2 quick questions here. One on the CHOPIN data and then one on the financials. First, on the CHOPIN data, I want to understand if we could see any sort of real-life impact to adoption of PHP, HEPZATO-PHP as a result of this. In my mind, it sort of points to there could be more interest in a combination therapy by tumor boards or considering a more, I guess, multimodal approach to some of these tumors. And so I wanted to understand if that's something we should come to expect or if there's more clinical work that needs to be done before doctors can be considering that.

Maria, as you might expect, my sampling so far of what docs think of this as maybe n equals 7 to 8 at this conference. The majority of them believe they will adopt this, at least in the U.S., believe they will adopt this regime. And that -- now that's coming from docs who are already using it, to be honest. But I do think it will help across the board for 2 reasons. One, there are an awful lot of docs who just are plain uncomfortable postponing systemics. They've been trained their whole lives that you go off to liver-directed therapy when there's really no other option and you exhaust all lines of systemic therapy.

So with those docs now, they can kind of -- I don't know how to put it, have their cake and eat it too and that we can get them started on systemics. They're getting the benefit of that, and they're also getting the liver directed, which is the life-limiting organ for these patients.

The second thing is that we definitely lose some patients due to scheduling hassles, especially if the patient is coming from a referral center, getting referred to another oncologist at a treating center and sometimes the duration, they have to get into a -- find an open slot in the IR suite. And sometimes we lose patients because of that. This will give a longer lead time. And I expect, although I don't know this, I expect some docs will work in an extra week or 2 of ipi/nivo as necessary to fit in the PHP. So I think it will help from that angle as well.

And then third, there's just simply a lot of docs are very interested in the systemic immunotolerance that's known to occur with liver mets. And I think for those docs, this will be fascinating data and may move the needle with their practice patterns as well.

Okay. It seems like very practical data, very interesting. My follow-up on financials. There was a mention in yesterday's press release or Saturday's press release about discounting under the drug rebate agreement. I wanted to understand how much of an impact that was in Q3 and what's sort of being assumed in Q4 now that we know some of the seasonality is behind you, what's being assumed in the discounting?

Marie, this is Sandra. It's consistent with what we mentioned, I believe, in our previous call in August that the discounts are anywhere from 10% to 15% overall. That's a range we did see in Q3, and we expect to see in Q4 as well.

Yes. So it's basically 50% of the sites of volume basically at 23.1%. And that's how we get to roughly a 12% discount on average per kit.

Our next question comes from the line of John Newman with Canaccord Genuity.

First of all, congrats on really fantastic CHOPIN data, very unexpected to see the magnitude of benefit there. I just had 2 questions this morning. The first one on CHOPIN, you plan on submitting those data for compendia listing in the United States? And if so, what might be the time line?

The second question I have is a financial question. Would you say that the impact in the third quarter in terms of the sales decline had more to do with the effect of the 340B discount or the challenges that you noted with scheduling treatments?

Yes. On the first question, Vojo is sitting here next to me. Yes, Vojo is certainly going to be working with KOLs for guidelines. In terms of compendia, generally, the way that works in the U.S. is if it's published in a certain set of journals, which I think this likely will be, it's automatically included in compendia. It's kind of an automatic, as I understand it, effect. So guidelines, yes, compendia, I think if it's in a decent journal, it will have -- it will essentially be on compendia.

In terms of the revenue slowdown, there were 3 compounding effects. One is the decline in price, average revenue per kit, which we've discussed exhaustively. The second was the slowdown in -- or frankly, the stoppage for about 2 months plus in new site activation, and that has ended and now we're back to a really good clip, kind of the average clip we were at in the past.

And then the last thing was unexpected. It happened very quickly that we saw a very steep drop in new patient enrollment, not the type of drop that you would think to see, hey, we're peaking in revenue. You have to keep in mind that we're talking about, let's call it, roughly 10 new patients a month, okay? And 10 new patients is $7 million revenue swing given our price point over a couple of quarters. So if you get a drop in new patients all of a sudden, you get the law of small numbers. You have -- given the high price, you have a wide swing in revenue.

We do believe at least part of that because we saw cancellations and we saw scheduling issues. We do believe part of it was frankly just summer vacations. We have to have 3 health care providers available for these treatments. There really are no backups trained. It's just an issue of REMS. Now we're trying to get backup docs trained. It's not as simple as one would hope but we're working hard to get that done.

And then also the referrals, if it's oncologist to oncologist to IR, again, there's somewhere in that longitudinal sequence. If someone's out, it's a lot easier just to put them on a systemic quickly or give the case and those patients are gone. But again, I think as we get a wider base of activated centers, we attempt to train some backup teams. And importantly, CHOPIN, where they can start on a systemic, which really doesn't have any scheduling issues, I think we'll be able to mitigate those effects.

Our next question comes from the line of Sudan Loganathan with Stephens Inc.

This is [ Keith ] on behalf of Sudan. Congrats on the CHOPIN trial data. Got 2 quick questions on my end. So on the seasonality aspect, if you could just provide some more color there and its specific impact on patient starts. And then with your current cash and cash equivalents balance alongside the results from CHOPIN, has your long-term strategy in metastatic colorectal or breast cancer deviated?

Yes. Again, our average new patient starts for this year up until the summer months was 0.4 to 0.7, bouncing around there. So maybe an average of 0.6 new patient starts. And every new patient that starts -- again, that's per site. Every new patient that starts leads to about 4 more treatment -- 3 more treatments down the road. So there's a tail effect to the new patient starts. We went from that range I mentioned a moment ago to about 1/3 of that range all of a sudden for about 2 months, and now it's swung back up again. I cannot definitively say that was 100% due to seasonality. I can definitively say we know of quite a few new patient starts that were canceled due to conflicts.

So a subset of them, we certainly saw a signal there. So that's about as much color as I can provide. I frankly shared everything that we've been able to discern from it. Our #1 competitor is still clinical trials. Those are always wax and wane. I don't think that may be a component of it. Other trials, I think the CHOPIN data will help us there. But the most concrete thing I could see was scheduling issues, and that's our theory that at least part of this was due to seasonality.

And the second question was -- thank you, Mike, [indiscernible] whether your strategy has changed. The -- no, the strategy hasn't changed at all in terms of the trials for COC and breast. We've got plenty of cash. We're cash flow positive. And a point in fact, we're very eager to have these advisory boards with the likes of non-small cell lung cancer docs, cutaneous melanoma docs and other places where ICI therapy is used to see if it makes sense to use this product earlier and in combination with checkpoint inhibitors.

Our next question comes from the line of Chase Knickerbocker with Craig-Hallum Capital Group.

Gerard, maybe just to start, can we get a little bit more detail on kind of the specifics as far as where you saw that impact on the average patient -- patients per month kind of enrolled into therapy. I mean was it at some specific centers? Was it kind of across the board? Can you just give us a little bit more of a view?

It was across the board. And this isn't a crystal clear explanation. There are some sites such as I'll mention this one, MGH that frankly didn't start new patients because they're full up. They're doing as many as they possibly can fit in with their slot at the IR suite and with the single team they have. So that one kind of swing cycles in and out as new patients start. Other centers just dropped all of a sudden. I don't want to mention names and specific centers, to be honest. But yes, it was quite a few of them all of a sudden just dropped in terms of new patient starts.

I've had the reps talk to the oncologists. And again, some of them were -- and the IRs and some of them were just simply scheduling issues. People were away. They couldn't fit them in. They put them on another therapy. So that's about as clear as I can be because that's the limit of our understanding at this moment.

We have a hypothesis on maybe why a seasonal impact would be worse kind of this year relative to kind of -- we kind of didn't see the same kind of sequential utilization trends last year. I get it's much smaller numbers than last year.

Yes, just the growth overwhelmed any signal. I think as simple as that.

Can you share where those average monthly patient starts sits today? Have we seen a full recovery?

I'd say we're about 80% there. The only reason I can't go further than that is, frankly, our visibility into new patient starts is all of about 1 to 2 weeks. These they just pop up on the calendar. So we don't have a long lead time to understand this. But yes, I think it's at least 80% back.

So maybe just confirm that, I guess, average kind of treatments per patient has been consistent as far as, I guess, where does that sit? And then the second piece is if we've seen that recovery, can you kind of speak to your confidence on, call it, looking out a quarter or 2 as we look forward into kind of first half next year, kind of returning to utilization trends that we would expect, call it, 2-plus per month? Because again, I have a little bit of trouble kind of reconciling that Q4, Gerard, with that utilization.

I would say just stay tuned to our fourth -- I mean, our third quarter call, and we'll provide more detail.

Got it. And then just one from CHOPIN. Sorry for all the questions. But can you just help me understand kind of how this will be treated for those physicians that do want to adopt some sort of sequencing with checkpoint. Can you kind of share how you would expect it to be treated by insurers? Would this kind of work within kind of existing guidelines as far as liver-directed therapy today? And then just a little bit more detail on the safety side, if you would, as far as how some of those -- a little bit more detail as far as how those AEs cleared up and if there was a need for any meaningful treatment discontinuation, just a little bit more detail under the hood there.

Yes. Let me start with the second one. I'm going to hand that off to Vojo to talk through the safety profile, the 80% versus 40%, roughly 40%.

Sure, Gerard. So at the ESMO conference, the presentation was quite limited. They didn't share the full extent of the safety data. And that's why my ability to really address things in detail will be also limited. We understand roughly that approximately half of the adverse events reported in the combination are hematological, which is attributed to the PHP treatment. And the other half is immunological, which is attributed to the ipi/nivo combination. We also understand that no new safety signals have emerged, meaning the frequency and the intensity of the adverse events is consistent with historical data. PHP produces roughly the similar hematological toxicity and ipi/nivo produces roughly similar immunological toxicity as reported in previous trials.

Also important, there's no overlapping toxicity. So overall, the regimen is acceptably tolerable as stated by the investigator. And we also understand that in terms of discontinuation of treatment, more patients have discontinued because of ipi/nivo than because of PHP. And that's something that is well known ipi/nivo induction treatment is not exactly a very user-friendly treatment. Many patients experience tolerability issues. And again, what we saw here is nothing unusual, nothing that will be different than historical data. So back to you, Gerard.

Yes. And we expect a full publication to come out, hopefully, if not within weeks, 1 or 2 months with all the data. I think the first question was our expectation in terms of how docs will incorporate this into their practice. Is that correct?

Yes, that's correct.

Yes, the insurance coverage. So we have had doctors use this or a very similar treatment regime in a number of centers across the country, and we know they're getting paid. So that's a positive. The second is I am confident this protocol -- these results will be published in a very reputable journal. So that will impact CMS coverage and as well as commercial payer coverage because it will be a solid journal. So combined with the fact that we haven't seen any pushback to date, admittedly, the end might be 10 or 20 patients, but we haven't seen any pushback to date on this, plus the level of journal we expect the publication to come out in. I think we're on solid ground from a reimbursement perspective.

Our next question comes from the line of Yale Jen with Laidlaw & Company.

On very outstanding outcomes. Just got 2 here. First about CHOPIN and the second on the financial side. For the CHOPIN study, do you guys have any reference to think about in terms of the ipi plus nivo compared to what you have learned from the combo study to suggest that this could be -- that the combo will be better than the 2 checkpoint inhibitors combined? And then I have a follow-up.

Sure. So on the ipi/nivo side, there is published data on ipi/nivo [indiscernible] chat about those kind of cross-study comparisons.

Yes. So there are at least 2 prospective, we designed and executed Phase II trials with ipi/nivo in patients with unresectable metastatic uveal melanoma. In those 2 studies, which represent probably the strongest evidence, the response rate of ipi/nivo is in the range of 12% to 18% when it's given as a combination in this patient population. The progression-free survival is roughly 3 months, and the overall survival is typically around 1 year. So that's the historical reference. These are contemporary trials that were published in the last several years.

So when you look at the CHOPIN trial, even the control arm, PHP alone achieves better efficacy. And then the combination arm clearly doubles that efficacy, practically speaking. So here, we have a situation where the combination of PHP and ipi/nivo is 1 plus 1 equals 3. And that's why the authors conclude they likely have observed a synergistic effect.

And I'll just add 2 things. One is the reason Professor Kapiteijn at Leiden University made the control arm PHP is simply because she believes for liver-dominant disease, that should be standard of care, not ipi/nivo because the results with ipi/nivo to date have been very weak. It doesn't really do a heck of a lot. The second thing is they just did 2 PHPs. I expect doctors, at least in the U.S. and others, will continue to treat. So theoretically, we should see even better efficacy.

Okay. Great. Maybe I'll just follow up on this point, which is that should -- I mean, I understand it's not a pure apple-to-apple comparison because of the patient population of those prior study versus the CHOPIN. But nevertheless, would this message of that the checkpoint inhibitor alone versus the checkpoint inhibitor plus HEPZATO is actually much better. Would that be a strong push for physicians to really think about putting the combo as a frontline as a starting -- at the beginning of the study, even they may have a little bit time difference between, which one to be administrated.

Yes. So let me -- I think we kind of have to segment the market to talk about which oncologists are we talking about. There's a set of oncologists who just say, "Hey, I want to start with systemic period" And even though the data with ipi/nivo is pretty thin or tebe has very decent data. So whether it's HLA-2 positive or negative, depends on the scenario. But there are set that are just going to say, I'm starting with systemic. So putting aside the HLA-2 positive for a moment and the HLA-2 negative, now they can start with the systemic and move them on to PHP, that helps a tremendous amount with that audience.

With the tebe appropriate patients, HLA-2 positive, I think it's going to be a mix. Some docs are going to stick with tebe first and then this might become a second-line option. Other physicians, I was just talking to some a few hours ago are going to postpone tebe. It's a mix. I think probably tebe will still win, jump ball in first line for the time being. Hard to say, time will tell.

The other physician segment are docs who really like clinical trials. And I've said before that I think in the HLA-2 negative segment of the market, clinical trials are our largest competitors. I think this data is fairly compelling. I'm hopeful that we will lose less of that. The other -- so that's one patient population in the physician population. An important patient population that we've lost out on a bit are patients with a fair amount of extrahepatic mets.

So some docs, just the way the label was written, have said, "Hey, look, if there's any meaningful amount of extrahepatic mets," even though the patients almost never die from extrahepatic mets, they're generally manageable. They often say, well, it's not hepatic only or hepatic dominant or -- and they don't treat with HEPZATO. This is valuable in that now they can do a systemic to treat the extrahepatic mets as well as liver directed. So from that patient subpopulation amongst some docs, it will be valuable as well. So this will be positive for us in a number of different dimensions.

Okay. Great. That's very helpful. And again, congrats on the outstanding data.

Thank you.

Our next question comes from the line of RK with H.C. Wainwright.

I know a lot of my questions have been answered but I'm just trying to triangulate -- I'm just trying to see how CHOPIN can help with some of the seasonality that we are talking about. I know you gave some color but why -- do you think because of the data, the way it is now with CHOPIN, the wait periods during holidays could be handled by whatever you lose on direct HEPZATO could be somewhat neutralized by having patients put on the CHOPIN protocol. Is that how you're thinking about it?

Yes. So RK, what we witnessed in the past, like is that patients who are already on the product who are coming back for their second, their fourth, et cetera, treatment. They might see their treatment pushed around by a few weeks around schedules but we don't lose them. It's the new patient starts, again, it was at least -- that was part of the issue. And again, we think part of this was scheduling in the summer months. And yes, this should definitely help because they'll go on at nivo and I think doctors will be comfortable if they need to prolong the ipi/nivo, they might do so to get the PHP but they're able to start them on something, which I think will be very helpful because, frankly, and it's understandable, patients and physicians, just given the logistical realities of this, sometimes don't want to wait. And now they have a reason -- they have a tool to have some level of flexibility.

Our final question comes from the line of Bill Maughan with Clear Street.

Congrats on the data. So as you talk about potentially having doctors do more HEPZATO treatments or extend nivo, is that something you expect to be sort of on a case-by-case basis and kind of spread by word of mouth? Or do you think it might be in your plans to formally study that at some point?

And then my second question is now that this systemic IO plus HEPZATO paradigm has proof of concept, the breast and colorectal programs seem to be far more tangible. So if and when those are successful, in order to accommodate the additional TAM, what does an updated commercial effort look like down the road in terms of site activations or additional treatment centers and train doctors?

Yes. Starting with that second one. I think that it's probably premature to talk about expanding the commercial footprint for those opportunities. Those are Phase II trials. They're down the road. If those Phase III trials read out and there's demand -- organic demand because it's not a label, we would probably expand the medical affairs group because that's the appropriate to do it for off-label usage. So we're -- I think probably -- I don't think there's a meaningful pop anytime in the near future on that front.

Okay. And then on extending nivo or having doctors use more...

Yes. So in terms of that, nivo, I'm pretty certain docs will do maintenance therapy, extend that because that is pretty much standard of care in all the published regimes for both cutaneous and uveal melanoma. So we will continue to see nivo. I also don't think docs are going to let patients progress in the liver and not retreat HEPZATO. And that was pretty much a very consistent set of input we've heard over the last few days. Now with that said, if there is indeed more toxicity with the combination, and there seem to be a signal there, although the combination seem to be what we saw in the FOCUS trial. It was the single arm, the PHP only that seem to -- had a much lower AE rate.

But the docs can postpone the PHP until the hematological markers bounce back. And that's kind of what a lot of docs do now. They'll just postpone and wait. So she was trying to stick to a protocol, which is often the case, and it stays -- so they stay very structured and that's compressed -- they have less flexibility.

And if I can just add a comment or 2 to Gerard's points. CHOPIN trial is a European trial and European doctors tend to be somewhat less aggressive when choosing treatments, particularly in first line of cancer patients. So we expect that U.S. doctors will take the learnings from the CHOPIN trial and that is you can safely combine systemic immune checkpoint inhibitors with PHP, and they will probably quite likely expand on that, add additional PHP cycles to achieve better disease control. I mean a number of patients had complete responses in the CHOPIN trial, which is very encouraging for patients and doctors. They will most certainly introduce the nivo maintenance.

And because of the less reimbursement issues, they can retreat with PHP and the checkpoint inhibitors if and when patients progress after remission, which was not done in the CHOPIN trial. So I think there's definitely lots of room for additional treatment, improving and optimizing both the safety and tolerability.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Michel for any final comments.

I just want to say thank you all for listening and most importantly, your continued commitment and belief in our mission. Everyone, have a great day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.