Q2 2024 Delcath Systems Inc Earnings Call

Speaker Change: Greetings and welcome to Delcath Systems second quarter 2024 earnings conference call.

Operator: Systems' Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Hoffman, Delcath General Counsel. Thank you, Mr. Hoffman. You may be seated.

Speaker Change: At this time, all participants are in a listen-only mode.

Speaker Change: A brief question and answer session will follow the formal presentation.

Speaker Change: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Hoffman, Delcath General Counsel,

David Hoffman: Thank you, and once again, welcome to Delcath Systems' second quarter 2024 Earnings and Business Highlights call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Senior Vice President of Finance; Kevin Muir, General Manager, Interventional Oncology; Boyo Vukovic, Chief Medical Officer; and Martha Rook, Chief Operating Officer.

Speaker Change: Thank you, Mr. Hoffman. You may begin.

Speaker Change: Thank you and once again welcome to Delcath Systems second quarter 2024 earnings and business highlights call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pennell, Senior Vice President of Finance,

Speaker Change: Kevin Muir, General Manager, Interventional Oncology, Boyo Vukovic, Chief Medical Officer, and Martha Rook, Chief Operating Officer. I'd like to begin the call by reading the Safe Harbor Statement.

David Hoffman: I'd like to begin the call by reading the Safe Harbor State. 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.

David Hoffman: Actual results may differ materially 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 statement, Please see risk factors detailed in the company's annual report on Form 10-K, those contained and 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.

Speaker Change: This statement is made pursuant to the Safe Harbor for Forward-Looking Statements described in the Private Securities Litigation Reform Act of 1995.

Speaker Change: All statements made on this call, with the exception of historical facts,

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: Actual results may differ materially from those expressed or implied in forward-looking statements due to various risks and uncertainties.

Speaker Change: 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,

Speaker Change: Please see risk factors detailed in the company's annual report on Form 10-K .

Speaker Change: Those contained and 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.

David Hoffman: Any forward-looking statements included in this call are made only as of the date of this call, and 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 second quarter 2024 results is available on our website, www.delcath.com, 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.

Speaker Change: 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.

Speaker Change: Our press release with our second quarter 2024 results is available on our website www.delcath.com under the Investors section and includes additional details about our financial results.

Speaker Change: Our website also has our latest SEC filings, which we encourage you to review.

Speaker Change: A recording of today's call will be available on our website.

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

Gerard Michel: Thank you, everyone, for joining us today. During today's call, we will review Delcath's second quarter financial results. Our ongoing commercial activities, including projections for both site activation and average treatment rates for the balance of the year, as well as some important medical and clinical updates. In the second quarter, Delcath reported $7.8 million in total revenue, including $6.6 million in U.S. revenue from Hesado and $1.2 million in European revenue from Kemoset.

Gerard Michel: Thank you everyone for joining. During today's call, we will review Delcath's second quarter financial results.

Gerard Michel: Our ongoing commercial activities including projections for both site activation and average treatment rates for the balance of the year, as well as some important medical and clinical updates.

Gerard Michel: In the second quarter, Delcath reported $7.8 million in total revenue, including $6.6 million in U.S. revenue from House Auto and $1.2 million in European revenue for Chemoset.

Gerard Michel: As we have previously described, the key drivers of our revenue ramp in the U.S. are center activation and, once activated, the average number of treatments per center. From a high level, we are thrilled with our overall progress in terms of our ramp, and we're very, very encouraged about what the coming quarters will bring. Now, to be specific, in terms of site activation, we ended the second quarter with seven active sites, and as of today, we have eight active sites.

Gerard Michel: As we have previously described, the key drivers of our revenue ramp in the U.S. are center activation and, once activated, the average number of treatments per center.

Gerard Michel: From a high level, we are thrilled with our overall progress in terms of our ramp, and we're very, very encouraged about what the coming quarters will bring.

Gerard Michel: Now to be specific, in terms of site activation, we ended the second quarter with seven active sites and as of today we have eight active sites.

Gerard Michel: While this fell just below the number we projected in our last call, the treatment rate of just under two per month per center is well ahead of our previously communicated projected rate. I'd like to dig a little deeper into both metrics and turn first to find out center activation.

Gerard Michel: While this fell just below the number we projected in our last call, the treatment rate of just under 2 per month per center is well ahead of our previously communicated projected rate.

Gerard Michel: I'd like to dig a little deeper into both metrics and turn first to center activation.

Gerard Michel: While activation has been a bit slower at some centers than anticipated, there is no systemic reason for the increase in time for center activation, but instead, it's just simply a function of the complexity of activating a center, given the number of stakeholders involved. It's important to note that we haven't seen any center in the activation process halt the process. From our ongoing conversations with the centers, we are confident that all the centers that are in the process, which today stand at over 20 centers beyond our currently active sites, will be active in 2025.

Speaker Change: While activation has been a bit slower at some centers than anticipated, there is no systemic reason for the increase in time for center activation, but instead it is simply a function of the complexity of activating a center given the number of stakeholders involved.

Gerard Michel: It's important to note that we haven't seen any center in the activation process halt the process.

Gerard Michel: From our ongoing conversations with the centers, we are confident that all of the centers that are in process, which today stand at over 20 centers beyond our currently active sites, will be active in 2025.

Gerard Michel: The eight active centers include Moffitt Cancer Center, Stanford University Cancer Center, Thomas Jefferson University, University of Wisconsin, Regional One Health, or University of Tennessee, UCLA Cancer Center, the University of North Carolina Hospital, and Honor Health Scottsdale. Two additional centers have completed all the required preceptorships and have each scheduled their first treatment this month. Assuming no cancellations, we should end August with 10 treating centers. Additionally, four centers have completed the necessary steps to conduct their first commercial treatment under the guidance of a proctor and are currently in the process of identifying and scheduling a patient for proctor treatment with Hopsatil-Kit.

Gerard Michel: The eight active centers include Moffitt Cancer Center, Stanford University Cancer Center, Thomas Jefferson University, University of Wisconsin, Regional One Health or University of Tennessee, UCLA Cancer Center, the University of North Carolina Hospital, and Honor Health Scottsdale.

Gerard Michel: Two additional centers have completed all the required preceptorships and have each scheduled their first treatment this month. Assuming no cancellations, we should end the August with 10 treating centers.

Gerard Michel: And additional four centers have completed the necessary steps to conduct their first commercial treatment under the guidance of Proctor.

Speaker Change: and are currently in the process of identifying and scheduling a patient for proctor treatment with Hopsato Kit. As I've mentioned in the past, that can be a complex scheduling algorithm, given all the proctors that need to arrive, as well as that fit with the patient's needs as well.

Gerard Michel: As I've mentioned in the past, that can be a complex scheduling algorithm, given all the proctors that need to arrive, as well as how that fits with the patient's needs as well. A further eight centers have currently completed a portion of the preceptorship requirement. To date, we have had over 130 perfusionists, anesthesiologists, and interventional radiologists attend preceptorships, representing over 20 institutions in the U.S., with some institutions sending multiple health care providers.

Speaker Change: A further eight centers have currently completed a portion of the preceptorship requirement.

Speaker Change: To date, we have had over 130 perfusionists, anesthesiologists, and interventional radiologists attend preceptorships representing over 20 institutions in the U.S., with some institutions sending multiple health care providers.

Gerard Michel: We are confident that the 12 centers that are currently in the process of activating will successfully activate within the next six months. Now I'd like to dig a little into a second metric, average treatments per center, which has been higher than we projected during our last call. Adjusting for the date of center activation, the average treatment by center was just under two per month in the second quarter. Not surprisingly, some centers had notably greater volumes than others, but given the commitment required to become a REMS-certified active treating center, we believe that the vast majority of treatment centers are either currently active or undergoing activation. We started the third quarter with seven active sites, with eight active sites as of today.

Speaker Change: We are confident that the 12 centers that are currently in the process of activating will successfully activate within the next six months.

Speaker Change: Now I'd like to dig a little into a second metric, average treatments per center, which has been higher than we projected during our last call. Adjusting for the date of center activation, the average treatment by center was just under two per month in the second quarter. Not surprisingly, some centers have notably greater volumes than others.

Speaker Change: But given the commitment required to become a REMS-certified active treating center, we believe that the vast majority of treatment centers either currently active or undergoing the activation process will become meaningful revenue contributors.

Speaker Change: We started the 3rd quarter with 7 active sites, with 8 active sites as of today. As I mentioned before, we anticipate we can end the 3rd quarter with 12 active sites. We expect to reach 15 early in the 4th quarter and anticipate having 20 centers by the end of 2024 or shortly thereafter.

Gerard Michel: As I mentioned before, we anticipate ending the third quarter with 12 active sites. We expect to reach 15 early in the fourth quarter and anticipate having 20 centers by the end of 2024 or shortly thereafter.

Gerard Michel: Well, Epsilon treatments in the second quarter averaged just under two treatments per month for the active treating centers, adjusted for when centers started treating patients. We estimate treatments will average between one and a half to two treatments per center for the balance of the year, somewhat under the second quarter average, but above what we projected in our last call. This is based in part on a pattern we're seeing where some centers treat an initial group of patients and then pause for a month or more before treating additional patients.

Speaker Change: While epsilon treatments in the second quarter averaged just under two treatments per month for the active treating centers, adjusted for when centers started treating patients.

Speaker Change: We estimate treatments will average between one and a half to two treatments per center for the balance of the year Somewhat under the second quarter average, but above what we projected in our last call

Speaker Change: This is based in part on a pattern we are seeing where some centers treat an initial group of patients and then pause for a month or more before treating additional patients.

Gerard Michel: Besides assessing patient outcomes, the pause provides an opportunity for our centers to evaluate the explanation of benefits from payers before approving a study for a patient. As many of you know, this is a common dynamic for the rollout of premium, innovative new procedures and therapies within hospitals. Even in situations such as ours, where the product has the benefit of a product-specific J-code, which greatly reduces the risk of underpayment. Some of you may have seen this morning's press release, in which we shared that on August 1st, we were informed by CMS that we were granted new technology add-on payment status for HPSADO, effective for starting October 1st. 2024.

Speaker Change: Besides assessing patient outcomes, the pause provides an opportunity for our centers to evaluate the explanation of benefits from payers before approving a steady flow of patients.

Speaker Change: As many of you know, this is a common dynamic for the rollout of premium innovative new procedures and therapies within hospitals, even in situations such as ours, where the product has the benefit of a product-specific J-code, which greatly reduces risk of underpayment.

Speaker Change: Some of you may have seen this morning's press release in which we shared that on August 1st we were informed by CMS that we were granted new technology add-on payment status for HPSADO, effective for starting October 1st.

Gerard Michel: This additional payment under NCAP designation will help cover the costs associated with the treatment for the small percentage of Medicare patients that might require an inpatient stay. As a reminder, most patients do not end up being billed as inpatients, and thus, for those Medicare patients who are billed on an outpatient basis, the product is reimbursed to the hospital under J code at ASP plus six percent. Given the pace of revenue ramp-up, we continue to expect that we will achieve $10 million in quarterly U.S. revenue by the fourth quarter of this year, which is expected to trigger approximately $25 million in cash proceeds from the exercise of the remaining tranche of warrants that were issued as part of our financing in March 2023.

Speaker Change: This additional payment under NCAP designation will help cover the costs associated with the treatment for the small percentage of Medicare patients that might require an inpatient stay.

Speaker Change: As a reminder, most patients do not end up being billed as inpatient, and thus for those Medicare billed patients in an outpatient basis, the product is reimbursed to the hospital under J code at ASP plus 6%.

Speaker Change: Given the pace of revenue ramp, we continue to expect that we will achieve $10 million in quarterly U.S. revenue by the fourth quarter of this year, which is expected to trigger approximately $25 million in cash proceeds.

Speaker Change: from the exercise of the remaining tracts of warrants that were issued as part of our financing in March 2023.

Gerard Michel: Chemoset sales in Europe have increased over 100% over the same period last year. The majority of the growth is from Germany and is a result of having a dedicated commercial presence in the market for over a year.

Speaker Change: T-Mofsat sales in Europe have increased over 100% over the same period prior year. The majority of the growth is from Germany and is a result of having a dedicated commercial presence in the market for over a year. We are in the process of submitting for reimbursement in the UK and we now understand that that review will take place next year.

Gerard Michel: We are in the process of submitting for reimbursement in the UK, and we now understand that that review will take place next year. Additionally, we estimate that approximately 40% of all metastatic UV melanoma patients in the Netherlands are being treated with ChemoSat. Those patients are almost all being treated as part of the ongoing CHOPIN trial. We have started commercial sales in Sweden but expect most sites to enroll in an IIT we are sponsoring there, looking at sequencing if and whether with ChemoSat, which I will describe in greater detail in a moment. We are early in the process of identifying and opening commercial centers in France, Italy, and Spain. We believe it is important to have multiple trading centers in all major European markets.

Speaker Change: Well, we estimate approximately 40% of all metastatic UV melanoma patients in the Netherlands are being treated with ChemoSat. Those patients are almost all being treated as part of the ongoing CHOPIN trial.

Speaker Change: We have started commercial sales in Sweden, but expect most places to enroll in an IIT we are sponsoring there, looking at sequencing if and even with chemosat, which I will describe in greater detail in a moment.

Speaker Change: We are early in the process of identifying and opening commercial centers in France, Italy, and Spain.

Speaker Change: We believe it is important to have multiple trading centers in all major European markets. But as I've mentioned before we are being measured in our investment given the low price point in Europe and have chosen to manage the EU market on a break-even basis.

Gerard Michel: But as I've mentioned before, we are being measured in our investment, given the low price point in Europe, and have chosen to manage the EU market on a break-even basis. Recall that ChemoSat has a broader pan-solid tumor device label, and some of our European sites have over a decade's worth of experience with ChemoSat. The value of Europe in the short to medium term is as trial sites and a source of publication, both in metastatic uveal melanoma and other tumor types. These activities can support both EU and U.S. adoption.

Speaker Change: Recall that ChemoSat has a broader pan-solid tumor device label, and some of our European sites have over a decade's worth of experience with ChemoSat. The value of Europe in the short to medium term is as trial sites and a source of publications.

Speaker Change: both in metastatic uveal melanoma and other tumor types. These activities can support both EU and US adoption.

Gerard Michel: In addition to the significant commercial activity, we continue to support both internal and external efforts to add to the growing body of evidence that the PHC procedure, whether utilizing melphalan delivered by Delcath ChemoSat or the Hepatitis C Kit, is an important treatment option for patients with liver-dominant uveal melanoma, as well as potentially other liver-dominant cancers. In the second quarter, we announced the publication of key results from the Pivotal Phase III-Focused Trial Hepatitis Kit in patients with unrespectable metastatic uveal melanoma in the journal Annals of Surgical Oncology.

Speaker Change: In addition to the significant commercial activity, we continue to support both internal and external efforts to add to the growing body of evidence.

Speaker Change: that the PHC procedure, whether utilizing melphalan delivered by Delcath ChemoSat or the Hipsado kit, is an important treatment option for patients with liver-dominant UV melanoma, as well as potentially other liver-dominant cancers.

Speaker Change: In the second quarter, we announced the publication of key results from the Pivotal Phase Re-Focused Trial Heptadocyte and Patients with Unreceptible Metastatic Uveal Melanoma in the journal Annals of Surgical Oncology.

Gerard Michel: We expect additional results from the FOCUS study to be presented and published in the coming months. For example, an efficacy analysis in clinically important subgroups of patients in the FOCUS study has been accepted as a poster presentation at the upcoming ASMO conference in September. As we continue to roll out commercial use of HPSADO in the U.S., we are also engaging medical oncologists in the U.S. and E.U. to discuss integration of HPSADO into treatment algorithms and combination sequencing with available treatment options for metastatic uveal melanoma. There is significant interest in the medical community to evaluate Hepatitis S in different treatment settings.

Speaker Change: We expect additional results from the FOCUS study to be presented and published in the coming months.

Speaker Change: For example, an efficacy analysis in clinically important subgroups of patients in the FOCUS study has been accepted as a poster presentation at the upcoming ASIMO conference in September .

Speaker Change: As we continue to roll out commercial use of Hepzato in the U.S., we are also engaging medical oncologists in the U.S. and E.U. to discuss integration of Hepzato into treatment algorithms and combination sequencing with available treatment options in metastatic uveal melanoma.

Speaker Change: There is significant interest in the medical community to evaluate Apsado in different treatment settings.

Gerard Michel: As an example, I would like to point to a recent single case publication published in Frontiers of Oncology on the successful treatment of a metastatic UV melanoma patient with chemosat following failure with immune checkpoint inhibitors and codentifos. As I mentioned a moment ago, we're expecting a new IIT to enroll and start treating patients in Sweden this quarter. This IIT will evaluate the sequencing of immune checkpoint inhibitors, ipilimumab and nebulimumab, or ipinivo, followed by chemoset treatment and compare it to therapy with ipinivo as the control. This IIT is the second IIT, the first being CHOPAN, which evaluates ipinivo first in sequence with chemoset, with chemoset as

Speaker Change: As an example, I would like to point to a recent single case publication published in Frontiers of Oncology on successful treatment of a metastatic UV melanoma patient with ChemoSat following failure on immune checkpoint inhibitors and to dentifrost.

Speaker Change: As I mentioned a moment ago, we're expecting a new IIT to enroll and start treatments of patients in Sweden this quarter. This IIT will evaluate sequencing of immune checkpoint inhibitors, ipilimumab, inibilimumab, or ipinido.

Speaker Change: followed by ChemoSat treatment, and compare against therapy with Ipiniogel as the control. This IIT is the second IIT, the first being Chopin, which evaluates Ipiniogel first in sequence with ChemoSat as the control.

Sandra Pennell: In discussions with medical oncologists, we are aware that physicians and patients are very interested in exploring Hepatitis C or chemotherapy based on a body of published evidence of possible synergies between chemotherapy and immunotherapy and Immune Therapy in Solitude. We have heard multiple anecdotal reports of physicians utilizing chemo sets and immunotherapy in combination or sequence without waiting for the completion and publication of the SHPAN study results. On that note, the CHOPIN study continues to progress, with 70 of the total plan's 76 patients enrolled.

Speaker Change: In discussions with medical oncologists, we are aware that physicians and patients are very interested in exploring Hep C or chemo combinations of immunotherapy based on a body of published evidence of possible synergies between chemotherapy and immune therapy.

Speaker Change: and Immune Therapy in Solid Tumors.

Speaker Change: We have heard multiple anecdotal reports of physicians utilizing chemo set and immunotherapy in combination or sequence, without waiting for the completion and publication of the SHIP-HAN study results.

Sandra Pennell: Currently, the investigators are anticipating final analysis of the primary endpoint to occur in mid-2025, with presentation of results in the second half of 2025. As a reminder, the primary endpoint of the CHOPIN trial is progression-free survival at one year. This analysis depends on collecting the appropriate number of events, so the timelines for data readout are, by definition, somewhat uncertain. We continue to plan to initiate one or more clinical studies of hepatochemosis in an additional indication over the next six months, and we recently conducted two scientific advisory boards focused on colorectal and breast cancer to better define a development path. We will provide updates on our clinical development plan later this year. I will now hand the call over to Sandra to share some details on our financial plan. Sandra

Speaker Change: On that note, the CHOPIN study continues to progress with 70 of the total planned 76 patients enrolled.

Speaker Change: Currently, the investigators are anticipating final analysis of the primary endpoint to occur in mid-2025, with presentation of results in the second half of 2025.

Speaker Change: As a reminder, the primary endpoint of the CHOPIN trial is progression-free survival at one year. This analysis depends on collecting the appropriate number of events, so the timelines for data readout by definition are somewhat uncertain.

Speaker Change: We continue to plan to initiate one or more clinical studies.

Sandra: of Hepatitis B. We will provide updates on our clinical development plan later this year. I will now hand the call over to Sandra to share some details on our financial position.

Sandra: Sandra?

Sandra Pennell: Revenue from our sales of Hepzato was $6.6 million, and ChemoSat was $1.2 million for the three months ended June 30, 2024 compared to $0.5 million for ChemoSat during the same period in 2023. Our gross margins were 80% in the second quarter. For the three months ended June 30th, 2024, research and development expenses were $3.4 million compared to $3.6 million for the three months ended June 30th, 2023. The change in research and development expenses is primarily due to a decrease in clinical trial activities, offset by an increase in personnel-related expenses in medical affairs and regulatory costs associated with an approved product.

Sandra: Thank you, Gerard.

Sandra: Revenue from our sales of Hepzato were $6.6 million and ChemoSat were $1.2 million for the three months ended June 30, 2024, compared to $0.5 million for ChemoSat during the same period in 2023. Our gross margins were 80% in the second quarter.

Sandra: For the 3 months ended June 30, 2024, research and development expenses were $3.4 million compared to $3.6 million for the 3 months ended June 30, 2023.

Sandra: The change in research and development expenses is primarily due to a decrease in clinical trial activities offset by an increase in personnel-related expenses in medical affairs and regulatory costs associated with an approved product.

Sandra Pennell: For the three months ended June 30th this year compared to the same period in 2023, selling general and administrative expenses increased to $6.8 million from $4.8 million, seeing increases due to activity for the commercial launch, including marketing related expenses and additional personnel on the commercial. We ended Q2 with $19.9 million in cash and investments, and cash used in operations was approximately $4.5 million in the second quarter. On August 1st, the Loan With Avenue fully matured and final payment was made.

Sandra: For the three-month end in June 30th this year, compared to the same period in 2023, selling general and administrative expenses increased to $6.8 million from $4.8 million.

Speaker Change: He increases duty activity for commercial launch, including marketing-related expenses and additional personnel on the commercial team.

Speaker Change: We ended Q2 with $19.9 million in cash and investments, and cash used in operations was approximately $4.5 million in the second quarter.

Sandra: On August 1st, the Loan With Avenue fully matured and final payment was made.

Operator: We believe that our current financial resources are adequate to fund operations until the company achieves $10 million in U.S. quarterly revenue, which would likely trigger a warrant exercise resulting in $25 million in proceeds. This $25 million should be sufficient to fund the company until we become cash flow positive under current levels of research and development. As Gerard previously mentioned, we remain confident that we will achieve $10 million in U.S. quarterly revenue by the fourth quarter of this year. That concludes our prepared remarks, and I'd ask the operator to open the phone lines for Q&A. Can you please check for questions?

Sandra: We believe that our current financial resources are adequate to fund operations until the company achieves $10 million in U.S. quarterly revenue, which would likely trigger a warrant exercise resulting in $25 million in proceeds.

Sandra: This $25 million should be sufficient to fund the company until we become cash flow positive under current levels of research and development expenses.

Speaker Change: As Gerard previously mentioned, we remain confident we will achieve $10 million in U.S. quarterly revenue by the fourth quarter of this year.

Speaker Change: That concludes our prepared remarks and I ask the operator to open the phone lines for Q&A. Can you please check for questions?

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. The first question comes from the line of John Newman with Kennecott Generative. Please go ahead.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker Change: You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.

Speaker Change: The first question comes from the line of John Newman with Canaccord Generative. Please go ahead.

John Newman: Hi there. Congratulations on the quarter, and thank you for taking my question. You know, I know it's still a bit early in the launch, but could you comment on what you're seeing in terms of the mean number of treatments for Hepatitis C? And just kind of curious as to how you would expect that trend to progress over the next, say, 12 to 24 months.

Speaker Change: Hi there, congratulations on the quarter, and thank you for taking my question. You know, I know it's still a bit early in the launch, but could you comment on

John Newman: what you're seeing in terms of the mean number of treatments.

Speaker Change: for Hepsato. And just kind of curious as to how you would expect that trend to progress over the next, say, 12 to 24 months. Thanks.

Unknown Executive: Sure, so it's anecdotal at best given, you know, we're really getting this from the reps and the clinical support specialists who are in most of the procedures. But it seems like most patients are progressing on. Unknown Executive, Sean Lee, David Hoffman, Kevin Muir, Sandra Pennell, Delcath

Speaker Change: Sure, so it's anecdotal at best given, you know, we're really getting this from the reps and the clinical support specialists who are in most of the procedures, but it seems like most patients are progressing on.

Speaker Change: It's too early now to say whether or not it will match what we saw in the trial, which was 4.1.

Speaker Change: on average, but I suspect we'll do at least that well over time. But, you know, no indication that it'll be lower than that at this point.

Unknown Executive: Great. I can sneak in one additional question.

Speaker Change: Okay, great. I can sneak in one additional question.

Unknown Executive: Seems like there's a lot of potential for Hapsato beyond the additional approval. You spoke a bit about additional trials beyond Chagopin. Just curious, do you expect that those trials would be sort of smaller, single-arm studies, or would you expect that maybe some of those studies might also have control? Yeah, I think we're going to do a mix of things.

Speaker Change: It seems like there's a lot of potential for HEP SADO beyond the additional approval.

Speaker Change: You spoke a bit about additional trials beyond Chagopin. Just curious, do you expect that those trials would be sort of smaller?

Speaker Change: single arm studies, or would you expect that maybe some of those studies might also have control arm? Thanks.

Unknown Executive: So it will be a mix of things, and the goal will also be a mix. The goal will be ranging from giving adequate data for this so physicians can make an informed judgment for certain patients, whether or not they want to treat and try to get reimbursed for the patient, to informing potential guidelines down the road, all the way to trying to expand the label.

Unknown Executive: Yeah, I think we're going to do a mix of things. So, FOIA right now is working with both advisory committees to think through larger randomized studies with control arms, as well as single and multi-center investigator-initiated trials, and those would probably be more likely to be single-arm, although some of those have the control as well. So I think you'll see a mix of things from this, ranging from sponsor trials that are randomized and have a control arm. We might do some trials, we have some trials in mind that would look at historical data, so a single arm with a control arm being pre-specified, sort of like registry data, for example.

Speaker Change: Yeah, I think we're going to do a mix of things. So, Voya right now is...

Speaker Change: Working with both advisory committees to think through

Speaker Change: Larger randomized studies with controlled arms.

Speaker Change: as well as single and multi-center investigator-initiated trials.

Speaker Change: And those would probably more likely be single arm, although some of those have the control as well. So I think you'll see a mix of things from this, ranging from sponsor trials that are randomized and have a control arm. We might do some trials, we have some trials in mind.

Speaker Change: that would look at historical data, so a single arm with a control arm being pre-specified, sort of like a registry data, for example. So it'll be a mix of things.

Speaker Change: And the goal, again, will be a mix as well. The goal will be ranging from giving adequate data so physicians can make an informed judgment for certain patients.

Speaker Change: Whether or not they want to treat and try to get reimbursed for the patients, to informing potential guidelines down the road, all the way to trying to expand the label. So it will be a mix.

Speaker Change: Great, thank you.

Mari Thibault: Thank you. The next question comes from the line of Mari Thibault with BDIG. Please go ahead.

Speaker Change: Thank you. Next question comes from the line of Mari Thibault with BDIG. Please go ahead.

Gerard Michel: Hi Gerard, hi Sandra, very nice quarter this quarter. I wanted to dig a little bit into the average treatments per center metric. Thank you for giving us that detail. If we were to strip out, you know, the highest volume center, I don't know if it's still Moffitt, I know it was last quarter. Is there a way to think about the average for kind of that remaining group?

Mari Thibault: Hi Gerard, hi Sandra, very nice quarter, this quarter.

Mari Thibault: I wanted to dig a little bit on the average treatments per center metric. Thank you for giving us that detail. If we were to strip out, you know, the highest volume center, I don't know if it's still Moffitt. I know it was last quarter. Is there a way to think about the average for kind of that?

Speaker Change: that remaining group. And you mentioned that they are pausing just to check on billing and things. Is everything going smoothly on that front? I know with the J code going into effect, that was, of course, supposed to help quite a bit.

Gerard Michel: And you mentioned that they are pausing just to check on billing and things. Is everything going smoothly on that front? I know with the J code going into effect, that was, of course, supposed to help quite a bit.

Gerard Michel: Yeah, let me answer the second question first, and I have heard of no... fundamental problem with reimbursement to hospitals when they do things right. I have heard of a couple of cases where they've done things wrong, and they've had to go back and fix it, and then get paid. But if they do things right, they get paid. And if they don't, they always have the opportunity to go back, which takes a little bit longer. So no, there's no fundamental issue there that I've seen at all. Everything's been very positive. Unknown Speaker...

Speaker Change: Yeah, let me answer the second question first, and I have heard of no...

Speaker Change: Fundamental problem with reimbursement to hospitals when they do things right.

Speaker Change: I have heard of a couple of cases where they've done things wrong, and they've had to go back to fix it, and then get paid. But if they do things right, they get paid, and if they don't, they always have the opportunity to go back, which takes a little bit longer. So no fundamental issue there that I've seen at all. Everything's been very positive.

Gerard Michel: In terms of the average treatment rates, I'm going to hesitate from breaking it down to that level. You know, I would say if you stripped out the Moffitts and the Thomas Jeffersons, yeah, the average treatment per week would drop. But I do think most centers will eventually do at least two a month, and many will do more than that. Thomas Jefferson and Moffitt, you know, clearly are bringing the averages up. In addition, as new centers come on, not all of them, but many of them seem to see a couple patients, then wait, and then start, and then hit the gas.

Speaker Change: In terms of the average stripping rates, I'm going to hesitate from giving, breaking it down to that that level. You know, I will say if you stripped out the Moffitts and the Thomas Jeffersons, yeah, the average.

Speaker Change: treatment per week would drop But I do think most most centers will eventually do at least two a month and many will be more than that

Speaker Change: Thomas Jefferson and Moffat, you know, clearly are bringing the averages up.

Speaker Change: In addition, as new centers come on, not all of them, but many of them seem to do a couple of patients, then wait, and then start, and then hit the gas.

Gerard Michel: So those, you know, newer centers really will drive down the average, the downward pressure on the average, but, you know, maturing centers will keep the average kind of flat. So net-net, that's why I think it'll be somewhere between 1.5 and 2 for the balance.

Speaker Change: So that those, you know, newer centers really will drive, I think, the average, the downward pressure on the average, but, you know, maturing centers will keep the average kind of flat. So net-net, that's why I think it'll be somewhere between one and a half, two for the balance of the year.

Gerard Michel: Okay, that's really helpful. For a follow-up here, I wanted to underscore how good your margins were this quarter, both gross margins and OPEX control. Help us think about the sustainability of some of that. Are you needing to add more sales reps to kind of keep up with your launch plans? Was there a reason the control was so good on the operating spend side? Any more detail you can give us there, and thanks for taking the question.

Speaker Change: Okay, that's really helpful. For a follow-up here, wanted to underscore how good your margins were this quarter, both gross margins and OPEX control. Help us think about the sustainability of some of that. Are you needing to add more sales reps to kind of keep up with your launch plans? Was there a reason the control was so good on the operating spend side? Just any more detail you can give us there. And thanks for taking the questions.

Gerard Michel: Sure. I think we're fairly disciplined, you know, on the OPEC side. A lot of the players here have come from another similar company who kind of know how to spend money wisely. We don't need a huge sales force, you know, to reach all the centers. This is going to be a specialty product that is sold in small numbers of centers.

Speaker Change: Sure.

Speaker Change: I think we're fairly disciplined, you know, on the OpEx side.

Speaker Change: A lot of the players here have come from another similar company who kind of know, spend money wisely.

Speaker Change: We don't need a huge sales force to reach all the centers. This is going to be a specialty product that is small number centers.

Gerard Michel: I think in the past, I talked about maybe getting to 25 to 30. You know, our thinking is evolving there. We might decide to get to more like 35 or 40.

Speaker Change: I think in the past I talked about maybe getting to 25 to 30, you know, our thinking is evolving there.

Gerard Michel: That might have a marginal increase in SG&A relative to where we are now, but not a huge increase. In terms of cost of goods, we're great for three, four years before we'd have to do any meaningful type of CapEx, I believe. So we're in good shape there.

Speaker Change: Decide to get to more like 35 or 40 That might have a marginal increase on you know SGMA relative to where we are now, but not a huge increase

Speaker Change: In terms of cost of goods, we're great for three, four years before we have to do any meaningful type of CapEx, I believe.

Speaker Change: So we're in good shape there. So I think the biggest variable really is, and I might be preempting a question, is R&D spend. How much do we decide that we want to invest into R&D?

Gerard Michel: So I think the biggest variable really is, and I might be preempting a question, is R&D spend. How much do we decide that we want to invest in R&D? And we're going to be very thoughtful about that, but there's no doubt we will increase R&D at some point. For some additional trials. We'd be remiss if we didn't, because this product has tremendous potential in many other, much larger indications. But I'm not going to forecast what that number is going to be a year and a half out from now.

Speaker Change: We're going to be very thoughtful about that, but there's no doubt we will, you know, increase R&D at some point. For some additional trials it would just be, we'd be remiss if we didn't because this product has tremendous potential in many other much larger indications.

Speaker Change: But I'm not going to forecast what that's going to be a year and a half out from now. I'll just say, look, we're going to try to be very prudent.

Gerard Michel: I'll just say, look, we're going to try to be very prudent. And, you know, there's an E in EPS and an S in EPS, excuse me, in terms of the number of shares. So we're gonna be very prudent. I'll try to keep the costs down so we don't have to raise much more money going forward.

Speaker Change: And, you know, we understand there's an E in EPS, and that's an EPS, excuse me, in terms of number of shares. So we're going to be very prudent, try to keep the cost down so we really don't have to raise much more money going forward.

Speaker Change: Very good, thank you.

Swayambhukula Ramkant: Thank you. The next question comes from the line of Swayambhukula Ramkant with HCVNY. Please go ahead.

Speaker Change: Thank you. Next question comes from the line of Swayambhukula Ramakant with HCVNY. Please go ahead.

Gerard Michel: Regarding the center activations, Now that you have eight centers activated, or almost 10 by the end of this month, what are the learnings from that if there's any push or pull on it, and how is that helping you not only educate internally but also the preceptors so that the next set of activations goes smoothly?

Speaker Change: Thank you. Good afternoon. Regarding the center activations,

Swayambhukula Ramakant: Now that you have 8 centers activated, or almost 10 by the end of this month,

Swayambhukula Ramakant: What are the learnings from?

Speaker Change: If there's any push or pull on it, and how is that helping you not only educate internally but also the preceptors so that the next set of activations goes smooth.

Gerard Michel: Yeah, I don't think there's any dramatic learnings aside from we need to address, you know, approach stakeholders kind of in parallel and really help try to educate some of the stakeholders in the hospital and get ahead of the various committee approvals and stuff. The preceptorship training stuff is really just a Rubik's Cube of scheduling. As we get further along and we have more proctors available and people who can do preceptorships, it'll get a little bit easier. But right now, it's just... Difficulties in scheduling. Kevin, I don't know if you want to chime in about any learnings in terms of site activation, preceptorship, or anything like that.

Speaker Change: Yeah, I don't think there's any dramatic learnings aside from we need to address, you know, approach stakeholders kind of in parallel and really help try to educate some of the stakeholders in the hospitals.

Speaker Change: and get ahead of kind of the various committee approvals and stuff. The preceptorship training stuff is really just...

Speaker Change: A Rubik's Cube of Skeletal Scheduling.

Speaker Change: As we get further along and we have more proctors available and people who can do preceptorships, it will get a little bit easier, but right now, it's just...

Kevin Muir: Difficulty in scheduling. Kevin, I don't know if you want to chime in about any learnings in terms of site activation, preceptorship, or anything like that.

Kevin Muir: Sure. Thanks, Gerard.

Kevin Muir: Gerard, I like the analogy, the Rubik's Cube of scheduling. And so the more sites that we have active and the more procedures that we have, it lessens, or it increases, I should say, it increases the opportunities for preceptorships and proctorships. So in that respect, it should make the account activation cycle a bit easier. The other thing is the 8 to 10 centers that we're working with right now. It allows for peer-to-peer conversations that kind of happen organically behind the scenes.

Kevin Muir: or it increases, I should say, it increases the opportunities for preceptorships and proctorships.

Speaker Change: In that respect, it should make the account activation cycle a bit easier. The other thing are 8 to 10 centers that we're working with right now. It allows for

Speaker Change: [inaudible]

Kevin Muir: So physicians call each other, and hospitals do so for some manner of checking on reimbursement and understanding how to set things up. So the net-net of all of this is that these centers will help us and should kind of streamline the activation process as we go forward with the second half of the year.

Kevin Muir: When these centers are will help us and should kind of streamline the activation process as we go forward the second half of the year

Gerard Michel: Thank you. Regarding the NTAP that you received, and the HPSADA kit received just earlier this month. How does that benefit in terms of adoption, and would that help in any way in terms of increasing the number of... procedures per center?

Speaker Change: Thank you. And regarding the NTAP that you received, the HPSADA kit received just earlier this month,

Speaker Change: How does that benefit in terms of adoption and would that help in any ways in terms of increasing the number of procedures per center?

Gerard Michel: Yeah, I don't think, I don't think... Getting NTAP is going to make much of a difference in terms of uptake. I think it is helpful for hospitals when they have infrequent inpatients. It will lessen the financial burden on the house. It's a rather complex formula, They have to have a certain loss amount, and then it covers a certain percentage up to a certain percentage, which I don't think it's worth going into that little detail because I don't think it's that critical.

Speaker Change: Yeah, I don't think, I don't think...

Speaker Change: Getting NTAP is going to make much of a difference in terms of uptake. I think it is helpful for the hospitals when they have, you know, the infrequent inpatients.

Speaker Change: It will lessen the financial burden on the hospital.

Speaker Change: It's a rather complex formula, they have to have a certain loss amount, and it covers a certain percentage, up to a certain percentage, which I don't think it's worth going into that level of detail, because I don't think it's that critical. I think the most important thing, or telling thing, is it's more...

Gerard Michel: I think the most important thing or telling thing is it's more... It's more of a sign of how innovative this therapy truly is. You know, people look at, ah, it's Melphalan, it's a device, et cetera, but the bar to get the new technology add-on payment is pretty high. You really do need to prove that you're an innovative therapy doing something that nothing else does out there

Speaker Change: It's more of a sign of how innovative this therapy truly is.

Speaker Change: You know, people look at, ah, it's melphalene, it's a device, et cetera. But the bar to get the new technology add-on payment is pretty high. You really do need to prove that you're an innovative therapy doing something that nothing else does is out there.

Gerard Michel: And I think it's fantastic that we have it, and I think... You know, although it seems unrelated, the physician reaction we're getting from the radiologists and oncologists who are using the product, the response rates they're seeing, they're incredibly positive. So, it just shows that, you know, this is a filter, it's old school chemo. But it is truly something new that's making a real difference for patients. And I think that's why we got ENTAP. It is, you know, a modest tailwind, but it's not that big of a deal because we really don't need it.

Speaker Change: And I think it's fantastic that we got it. And I think...

Gerard Michel: Thank you. One last question from me on UK reimbursement since the couple hospitals in the UK that have used them, and others, how is that going to play into the reimbursement review when it comes time?

Gerard Michel: Yeah, I have no doubt we're going to get reimbursement. They went from a, you know, a semi-annual review to an annual review. That was a surprise to us, and that's what pushed it back into next year. That just was a recent change in how often they do the reviews, but we'll get reimbursement. I have no doubt about that. The question is, what will the reimbursement be? I don't have high hopes that it'll be, you know, a significant step up from where we are right now, but we're going to continue to invest in it on a measured basis because I think it, as clinical sites and as sources of publications, it's a very, very important strategic asset to have. [inaudible]

Gerard Michel: Perfect. Thank you very much, Gerard.

Sudan Loghannachin: Thank you. The next question comes from the line of Sudan, Loghannachin. Stevening. Please go ahead.

Gerard Michel: Hi Gerard, Sandra, and the Delcath team, congrats on a great quarter. I have two questions. My first question is regarding the marketing strategy. Is the main focus geared towards selling the kit to hospitals to bring on more additional sites or trying to, you know, focus that more on patient and physician awareness? And then as you go into next year and progress with this launch, you know, will there be any changes to that marketing strategy?

Gerard Michel: And then secondly, at what quarterly and yearly revenue run rate and off-ex range do you anticipate you need to be at to achieve a break-even or a positive EPS? I understand you might also have aspirations and other indications for HIPAA etiquette, but is getting to break-even a casual positive or at least a track towards that, a potential goal to achieve prior to taking on new clinical endeavors?

Speaker Change: Changes to that marketing strategy, and then secondly at what quarterly and yearly revenue run rate and Opex range do you anticipate you need to be yet to achieve a breakeven or positive EPS.

Speaker Change: And you might also have aspirations in other indications for hips adequate, but it break getting to breakeven or casual possible at least the track towards that a potential vote to achieve probably to take.

Speaker Change: On new clinical endeavors.

Speaker Change: Sure I think it's Andrew why don't you pick up.

Sandra Pennell: Sure, I think Sandra, why don't you pick up where you think we need to be to hit break even? Okay, uh, on a quarterly basis, you know, under the current R&D staff.

Speaker Change: Where do you think we need to be at to hit breakeven.

Speaker Change: Okay.

Andrew: On a quarterly basis under current R&D spend.

Andrew: Yeah.

Sandra Pennell: Yeah, you know, currently, probably around 60 to 80 kits, just depending on a quarter in order to be breakeven or cash flow positive. You're obviously dependent on additional SG&A, marketing spend, and R&D that will be incurred the rest of this year. But, you know, I think we're well on the course of becoming cashflow positive, hopefully by Q1 of 2025.

Andrew: Currently probably around.

Andrew: The.

Andrew: 60 to 80 kits, just depending on our quarter in order to be breakeven or cash flow positive.

Andrew: Obviously dependent on additional SG&A marketing spend.

Andrew: R&D that will encourage the rest of this year, but you know we think we're well on the course, it becoming cash flow positive.

Andrew: Hopefully by Q1 of 2025.

Gerard Michel: And that's about $13 million a quarter in revenue. All right, now, in terms of the focus. Mark. I mean, right now, I think, you know, Kevin Chaiman, if you disagree, we're probably probably 80% site activation, you know, 20% trying to get patients to the sites that'll switch over time. But, you know, all the elements of the marketing mix are important at the moment. Kevin, maybe I don't know if you want to give a couple sentences about our priorities now and how that might evolve over the next year, year and a half. Sure. And I think with, with, with the

Andrew: And that's about $30 million a quarter in revenue.

Andrew: Yep.

Speaker Change: Alright, now in terms of the focus.

Margaret: Margaret I mean, right now I think you know Kevin chime in if you disagree we're probably focuses 80% site activation you know 20% trying to.

Margaret: You don't get the patients to the sites.

Speaker Change: That'll switchover time, but all elements of the marketing mix are important.

Speaker Change: Moment, Jeff maybe I don't know if you want to give a couple a.

Jeff: A couple of sentences about our priorities now and how that might evolve over the next year year and a half.

Jeff: Sure and I think with with the patient population that we have right now one of our main goals is to is to the 20% is to drive awareness and increased patient access to what we think is the.

Kevin Muir: Sure. And I think with the patient population that we have right now, one of our main goals is to, that 20% is to drive awareness and increase patient access to what we think is a wonderful option for these patients. And while opening sites is important, it's not our main goal. Our main goal is not to open as many sites as we can. As Gerard pointed out in his remarks, we started with a goal of 20 and with our ultimate goal of probably roughly around 40 sites. But it's more the quality of the sites. Are we going to the correct sites? Are we giving patients access at these sites? So that's been our focus, opening the right sites and getting patients access to them.

Jeff: Wonderful option for these patients.

Jeff: Wow.

Jeff: Opening sites as important if not our main goal. Our main goal is not to open as many sites as we can as Troy pointed out in his remarks.

Troy: We've we've started with a goal of 'twenty and with our ultimate goal.

Troy: Probably roughly around 40 sites and it's more the quality of sites, where we go into the correct sites.

Troy: Are we giving patients access at these sites. So that's been our focus opening the right sites and getting patient access to those sites.

Speaker Change: Thanks I appreciate it.

Speaker Change: Thank you.

Operator: Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Chase Knickerbocker with Craig Hallum Capital Group.

Speaker Change: To all the participants that do my best Star one to ask a question.

Speaker Change: Next question comes from the line of Gs Knickerbocker, but great.

Speaker Change: Craig Hallum Capital. Please go ahead.

Gs Knickerbocker: Good afternoon, everyone. Thanks for taking the questions just first for me.

Chase Knickerbocker: Good afternoon, everyone. Thanks for taking the questions. Just first, from me, are there any other high-end, you know, early adopters in the pipeline, kind of like Moffitt or Thomas Jefferson? Or should we think of kind of everyone else from here as those that, you know, maybe pause a bit after a couple of patients and kind of generally drag down that average number of kids per center per month number, you know, over the first quarter or so of them being active?

Speaker Change: Are there any other high end.

Speaker Change: Early adopters in the pipeline you know kind of like Moffitt are Thomas Jefferson or should we think of kind of everyone else from here as does that maybe pause a bit after a couple of patients and kind of generally dragged down that average kits per center per months number you know over the first quarter sales of them being active.

Gerard Michel: I think, you know, there's a third surprise center for us that I wouldn't say that they're at that level but might approach it given some reasons. Activity.

Speaker Change: I think theres a third supra.

Speaker Change: Surprise center to us, but I wouldn't say that they're let that.

Speaker Change: That level, but might approach it given some recent activity and I think there'll be a number of others.

Speaker Change: That will reach that level.

Gerard Michel: And I think there'll be a number of others that will reach that level. I think some of the centers opening that, you know, weren't at that level in terms of a book of business once they had our treatment, they will increasingly become kind of a destination for a lot of patients. So I don't think that

Speaker Change: And I think some of the centers were opening that.

Speaker Change: We're in at that level in terms of a book of business.

Speaker Change: Once they have our treatments they will increasingly become kind of a destination for a lot of patients.

Speaker Change: So I don't think that.

I don't think we're going to have a ton of centers doing six a week.

Gerard Michel: You know, I don't think we're going to have a ton of centers doing six a week. But will we end up having quite a few centers that are doing maybe one a week? and quite a few senators being, you know, more than four or five, yeah, I think so, eventually. So, you know, if you look at the Pareto analysis of centers, those are the big guys who you mentioned. I think a lot of centers, once they have our therapy, will end up treating patients that aren't appropriate for our therapy, but they're going to start bringing them in, so they'll start becoming destinations.

Speaker Change: But where we end up having quite a six a month excuse me, but we ended up having quite a few centers that are doing maybe one a week.

Speaker Change: Quite a few centers being more than four or five years I think so eventually.

Speaker Change: So if you look at.

Speaker Change: If you look at the kind of the Credo analysis of centers those are the big guys, who you mentioned, but.

Speaker Change: I think a lot of centers once they have our therapy will end up treating patients.

Speaker Change: That arent appropriate for our therapy, but they're going to start bringing a bet so they'll start becoming destinations.

Speaker Change: Should we think of kind of a max level kind of per week treatments that you know some of those high adopters could do I mean any way for us to kind of think about that if kind of what the constraint is on the high end and then second of the centers that are kind of a waiting that initial commercial treatments scheduling did we get a sense of.

Gerard Michel: Should we think of kind of a max level kind of per week treatments that, you know, some of those high adopters could do? I mean, any way for us to kind of think about that of kind of what the constraint is on the high end? And then second, of the centers that are kind of awaiting that initial commercial treatment scheduling, do we get a sense of kind of how long it takes to activate those patients?

Speaker Change: Kind of how long it takes to activate those patients I know, we kind of gave a lot of numbers on the call. So forgive me if I'm, making you repeat yourself, but just kind of those four for example that were just kind of a waiting the schedules to lineup do we have a kind of a general kind of feel for how long that takes.

Gerard Michel: I know we kind of gave a lot of numbers on the call, so forgive me if I'm making you, you know, repeat yourselves, but just kind of those four, for example, that we're just kind of awaiting the schedules to line up, do we have a kind of a general kind of feel for how long that takes?

Gerard Michel: No, it's been all over the map, and that's why, you know, I was off of it in my projections. I thought we'd have... Unknown Speaker 10 by the end of last quarter, and we didn't. We had, you know, seven now, and in about three or four weeks, we should be at two or three weeks; we should be at 10. Nobody, you know; patient doesn't get a cold, and all the proctors can show up, etc.

Speaker Change: No it's been all over the map and Thats why you know I was I was off a bit in my projections I thought we'd have.

Speaker Change: You know 10.

Speaker Change: By the end of last quarter, and we didn't we had you know seven that we're at eight and in about three or four weeks, we should be at a two or three weeks, we should be attentive.

Speaker Change: Nobody.

Speaker Change: If a patient doesn't get a cold and all the practice can show up et cetera.

Gerard Michel: It really is all over the map. In terms of what you think of, you know, what is a max or run rate? You know, we have a couple centers in Europe where, if it's not summer vacation, you know, we're doing pretty regularly one a week. And that seems to be kind of a natural.

Speaker Change: It really is all over the map.

Speaker Change: Yeah.

Speaker Change: In terms of what you think of you know what is.

Speaker Change: Max or run rate you know, we have a couple of centers in.

Speaker Change: In Europe.

Speaker Change: Summer vacation are doing pretty regularly one a week.

Speaker Change: And that seems to be kind of a natural.

Speaker Change: High volume rate for centers, although we've had we had one center recently do three in one day.

Gerard Michel: High-volume rate for centers, although we had one center recently do three in one day, believe it or not. So that center may end up being a six-a-month, seven-a-month type place. So I think as people get, you know, six or seven a month, but right now, I think for a month it will likely be what the high end does for a bit. And others are going to be one or two a month.

Speaker Change: Believe it or not so.

Speaker Change: You know that center manned up being a six month seven of them up Pike place.

Speaker Change: So I think as people get used.

Speaker Change: Used to this or are willing to.

Speaker Change: Train a second team or you don't have a couple of backup people they might end up doing.

Speaker Change: Six or seven months, but right now I think.

Speaker Change: Four months will likely be what you know the high end does for a bit.

Speaker Change: And others are going to be one or two a month I think eventually we'll see some slice that regularly do.

Speaker Change: One to two a week, but that will take a bit of time and again, we saw center just the other I think two weeks ago or last week at the three in one day.

Gerard Michel: I think eventually we'll see some sites that regularly do, that'll take a bit of time. And again, we saw center just the other two weeks ago that did three in one day. So they were able to push him through.

Speaker Change: So they're able to push them through.

Speaker Change: Got it that's helpful color and then just last for me just maybe speak to a little bit about I know, it's early but the progress that you're having in the community kind of driving referrals to you know some of these centers and then maybe kind of an early look at how your therapy is going to interact with those that are you know.

Gerard Michel: Got it. That's helpful, Culler. And then, just last for me, just maybe speak a little bit about, I know it's early, but the progress that you're having in the community, kind of driving referrals to, you know, some of these centers, and then maybe kind of an early look at how your therapy is going to interact with those that are, you know, with those patients that are eligible for Tibentafust.

Speaker Change: With those patients that are eligible for <unk>.

Gerard Michel: Are those kind of patients who are eligible getting Tibentafust first? Or is this something where, you know, physicians are viewing it as kind of an adjunctive treatment? Just kind of give me an early look there.

Speaker Change: Are those kind of patients who are eligible getting to <unk> <unk> first or is this something where you know physicians are viewing it kind of in line treatment just kind of give me an early look there.

Gerard Michel: We've had patients before Tebby, and we've had patients after Tebby, and it really has more to do with whether the doctor believes that liver-directed therapy should go first. Liver Match is usually what these patients succumb to, so if they're going to prioritize treatment, some doctors want to prioritize liver directive therapy. So it's all over the map, and it'll settle out over time probably one way or another.

We've had patients before Kirby and we've had patients after tenants.

Speaker Change: And it really has more to do with whether the Doc believes that liver directed therapies should go first because this liver Mets unusually what these patients to come to so if they're going to prioritize treatment from docs want to prioritize liver directed therapy.

Speaker Change: So it's all over the map in Italy.

Speaker Change: It'll settle out over time, probably one way or another.

Gerard Michel: But most patients, you know, do live long enough to get more than one line of therapy. So whether they go first on Tevi or first on us, I think patients who are HLA2 positive should get both. It's probably the right thing for the patient. But in terms of referrals, it's still early days. Vollo's team and Kevin's team are both working on Vollo's medical affairs team and Kevin's commercial team are both working on.

Speaker Change: But most patients do live long enough to get more worth more than one line of therapy. So whether they go first on top of your first on US I think.

Speaker Change: Patients who are HLA <unk> positive should get both its probably the right thing for the patients.

Speaker Change: In terms of referrals, it's still early days boils team and Kevin's team are both working on Bouygues Medical Affairs team and Kevin's commercial team are both working on.

Gerard Michel: Setting up referral patterns, we've had, I don't know, quite a few referrals to date. They're usually peer-to-peer referrals. So a lot of times, we've been getting referrals from centers that are waiting to finish their preceptorships or finishing up their, you know, the various approval committees they need to have. They have a patient they wanna have treated, they send them to another site, knowing the patient's gonna come back to them, hopefully, once the fall, the approvals occur at their center.

Speaker Change: Setting up referral patterns we've had.

Speaker Change: I don't know.

Quite a few referrals to date, they're usually peer to peer referrals.

Speaker Change: So a lot of times, we've been getting referrals from centers that are waiting to finish their preceptorships or finishing up there. The various approval committee if they need to have they have a patient they want to have treated they send them to another site knowing the patients to come back to them hopefully.

Speaker Change: You know what.

Speaker Change: Before the approvals occur at their centers. So we've seen those peer to peer referrals.

Gerard Michel: So we've seen those peer-to-peer referrals. And we've also, you know, sent some patients directly to the phone calls we've made and such on the trading sites. In terms of a good, well-oiled machine referral process, we're developing that right now. That's something that will become increasingly important. We're confident we can do it.

Speaker Change: And we've also sent some patients directly due to phone calls that we've made and such.

Speaker Change: Trading sites in terms of are good.

Speaker Change: Well oiled machine referral process, we're developing that right now that's something that will become increasingly important.

Speaker Change: We're confident we can do it it's going to involve a lot of direct patient thing worked through advocacy centers. The advocacy groups are very excited about the products. So we'll work with them. So the patients know where this is available we have a reasonable data as to who's treating these patients. So we know who has just one of them.

Gerard Michel: It's going to involve a lot of direct patient work through advocacy centers. The advocacy groups are very excited about the product, so we'll work with them so patients know where it is available. We have reasonable data as to who's treating these patients, so we know who has just one of them, just two of them, just three of them. We have developed a process where, through emails, phone calls, perhaps surprise visits, we try to get in front of these doctors to tell them about Hepatiocytokin.

Speaker Change: I'm just two of them just three of them and we are we have dual process, where through emails and phone calls.

Speaker Change: Perhaps surprise visits we try to get in front of these docs to tell them about.

Gerard Michel: Because each of these patients is so valuable, it makes sense to hunt down to that level of N equals one, N equals two, or three, but we recognize the importance of that. We're also developing programs where the patient has a reason to get directly in touch with a third party that we work with. Maybe it's help with co-pays, travel, et cetera, but through that process, we'll probably get involved with doctors who have smaller numbers of patients, and that'll help us with referrals there. It's going to be a multi-stakeholder effort. It's still early days to say how well it's working, but we are going to be focused on that.

Speaker Change: About subset of kit.

Speaker Change: Each of these patients is so valuable it makes sense to cut down to that level of N equals one equals N equals two or three but we recognize the importance of that.

Speaker Change: We're also developing.

Speaker Change: Programs, where the patient has a reason to get directly in touch with a third party that we work with.

Speaker Change: Basically it's help with co pays travel et cetera.

Speaker Change: But through that process, we will probably get involved with docs, who have smaller numbers of patients and that will help us with deferrals. There. So it's gonna be a kind of a multi spoke effort.

Speaker Change: Still early days to declare you know, let's say, how well it's working but.

Speaker Change: But we are going to be focused on that.

Speaker Change: Got it thanks, Robert and congrats again on a great early progress here.

Gerard Michel: Got it. Thanks, Gerard. And congrats again on the great early progress here. Thank you.

Robert: Thank you.

Robert: Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time.

unknown: [inaudible]

Speaker Change: Thank you for your participation.

Speaker Change: Uh huh.

unknown: All right, I'm hanging on this.

Speaker Change: Alright, I'm hanging off system.

Speaker Change: [music].

Speaker Change: Yeah.

Yeah.

[music].

Speaker Change: Yeah.

unknown: transcript Emily Beynon