Delcath Systems, Inc. (DCTH)

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Delcath Systems, Inc. (DCTH)

Lazard Capital Markets 9th Annual Healthcare Conference Call

November 13, 2012 08:00 am ET


Eamonn P. Hobbs – President and Chief Executive Officer


Eamonn P. Hobbs

Good morning everyone, and thanks so much for attending and your interest in Delcath. First our forward-looking statement. Well, Delcath is a cancer therapeutic company, and we are focused on technology that allows us to gain control over disease in the liver. The liver is a site for uncontrolled diseases, often life threatening and tends to not respond to systemic treatments, and transitions very quickly to palliative care.

We plan on being a fully integrated company, and are building infrastructure to develop and commercialize some products in Europe and North America, while pursuing opportunities in other parts of the world. In Europe, we are commercial. Our Gen 2 system was introduced in June, and we just had good news on reimbursement in Italy last week.

We believe that our first product CHEMOSAT may extend the lives of a large number of cancer patients. Our problem is quite significant. Metastatic disease to liver, brain, or lungs is often the life limiting aspect of a patient’s disease. In contrast to the brain and lungs, the liver does not respond to any of the existing therapies very well. Systemic chemotherapy has very limited utility in the liver because the chemotherapeutic agents are metabolized, that is what the liver does, so they are ineffective because to dose escalate usually it doesn’t work because of the inherent toxicities of the dose escalation.

So focal therapies are often used, but have very limited utility because they are focal. Existing treatments, surgical resection, the gold standard, can be quite effective, but is extremely limited in that there is a very, very small number of patients that are amenable to that. There are a large number of other focal therapies, and at the other end of the spectrum is systemic therapy, oral or IV administered chemotherapeutic agents.

So this broad spectrum, it spans from systemic chemotherapies to focal chemotherapies, is interesting in that systemic chemotherapies have certain advantages and disadvantages. They are minimally invasive, but they have minimal utility in the liver. They could work quite effectively in a patient’s extrahepatic disease, but in the liver have not shown great efficacy.

Focal therapies have shown great efficacy, but only on the lesion that is treated. You can’t resect the entire liver without doing a transplant. So in diffused disease, resection is quite limited, all the other focal therapies are see a tumor, treat a tumor, and have inherent limitations. So, we have created a middle ground of isolated hepatic perfusion, which allows us to use dose escalation with manageable toxicities, and have shown great therapeutic effect.

So here is a picture of the problem. Often we look at radiographic images of the liver and see these numerous golf balls in the liver, and think that that is what the disease is, these isolated tumors and if you can resect them out, there will be healthy liver tissue that will heal and the patient can progress. And rarely that is the exactly the case. So, surgical resection can actually be quite effective in approximately 10% of patients. The other 90% of patients have what you see on the screen here, and that is literally millions of micro metastasis or micro tumors that obviously can’t be resected out of the liver.

So focal therapies, embolization for example, chemoembolization, radioembolization, you can’t embolize the entire liver or the liver would die. It needs blood supply. You can embolize a small piece of the liver, but again that is not going to treat this kind of systemic, excuse me, organ-wide diffused disease. So our technology is really aimed at the 90% of patients that aren’t great candidates for focal therapy.

So, our solution, our proprietary CHEMOSAT system, isolates the liver circulation, delivers an ultrahigh concentration of chemotherapy, which in our first product is melphalan to the liver, and filters most of the chemotherapy out of the blood prior to returning it to the patient, a very simple, straightforward concept.

The procedure typically takes approximately 2 hours to complete, and involves a team, including an interventional radiologist and a perfusionist. CHEMOSAT with Gen 2 has demonstrated minimal systemic toxicities and impact to blood components in initial commercial use and may in fact complement systemic therapy because of the extremely low impact to the bone marrow. And CHEMOSAT has been used now in well over 200 patients, and through our clinical development program and early commercial launch.

So here is a schematic of this system. You can see that the isolation of the liver is really isolation of the venous output of the liver that is created by a double balloon catheter that is placed in the largest vein in the body in the inferior vena cava. Another catheter is put in through the other leg, into the femoral artery, and then guided into the hepatic artery, where the chemotherapy is delivered.

So the liver actually sees normal blood flow, there is no ischemia, there is no real challenge to deliver, and the chemotherapy even with extreme dose escalation has shown very little, if any, hepatotoxicity. So this is a very benign procedure for the liver. The third catheter is actually the return loop, where the cleaned blood is actually returned to the venous system through the jugular vein and is a small catheter.

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