Delcath Systems Reports Strong Q2 Growth Amid Challenges

Delcath Systems, Inc. ((DCTH)) has held its Q2 earnings call. Read on for the main highlights of the call.

Delcath Systems, Inc. recently held its second-quarter earnings call, revealing a balanced outlook for the company. While there was notable revenue growth and positive cash flow, challenges such as slower site activations and increased expenses were acknowledged. Adjustments in financial guidance due to the 340B program also posed potential hurdles. However, the company’s proactive initiatives in research and development and pipeline expansion position it well for future growth.

Significant Revenue Growth

Delcath Systems reported a significant increase in quarterly revenue, reaching $24.2 million, which marks an over 20% rise compared to the first quarter of 2025. This growth was largely driven by U.S. sales of HEPZATO, contributing $22.5 million to the total revenue.

Positive Financial Performance

The company showcased a strong financial performance by generating $7.3 million in positive cash from operations, achieving a net income of $2.7 million, and reporting an adjusted EBITDA of $9.8 million. Delcath ended the quarter with no debt and approximately $81 million in cash and investments.

Expansion of Treating Sites

Delcath expanded its network by activating Northwestern Memorial Hospital, University of Miami Hospital, and the University of Virginia Medical Center. By the end of the second quarter, 20 treating sites were active, with expectations to reach 25 to 28 operational centers by the end of the fourth quarter.

R&D and Pipeline Expansion

The company initiated trials in liver-dominant metastatic colorectal cancer and liver-dominant metastatic breast cancer, receiving FDA clearance and CTA authorization in Europe and the U.K. These efforts underline Delcath’s commitment to expanding its research and development pipeline.

Successful Financial Management

Delcath reported an increase in gross margins to 86% from 80% in the previous year. The company also achieved a non-GAAP positive adjusted EBITDA of $9.8 million, a significant improvement from a loss of $0.8 million in 2024.

Slower U.S. Site Activations

Despite the overall progress, the company faced slower U.S. site activations, leading to an adjustment in full-year revenue guidance to $93 million to $96 million. This reflects fewer operational centers than initially projected.

Impact of 340B Drug Pricing Program

Approximately 50% of HEPZATO kits were sold at discounted 340B prices, resulting in an estimated net effect of a 10% to 15% reduction from the second quarter average revenue per kit.

Increased R&D and SG&A Expenses

Research and development expenses rose to $6.9 million from $3.4 million, and selling, general, and administrative expenses increased to $11.4 million from $6.8 million compared to the prior year.

Forward-Looking Guidance

Delcath Systems provided updated guidance reflecting their business progress and future expectations. The company anticipates total HEPZATO treatment volume for 2025 to increase by over 175% compared to 2024. Delcath plans to expand to 25 to 28 operational centers by the end of the fourth quarter and aims for 40 sites by the end of 2026. Future clinical trials, including those for liver-dominant metastatic colorectal and breast cancer, are expected to begin releasing interim data in 2027.

In conclusion, Delcath Systems, Inc.’s earnings call highlighted a balanced outlook with strong revenue growth and positive financial performance, despite facing some challenges. The company’s strategic initiatives in expanding treating sites and advancing its R&D pipeline position it well for future growth, with optimistic forward-looking guidance.