Q3 2024 Delcath Systems Inc Earnings Call
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Bryan Goodman: Produced by Bryan Goodman Music Greetings and welcome to the Delcath Systems third quarter 2024 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: Greetings and welcome to the desktop systems third quarter 2024 earnings call. At this time all participants are in a listen only mode. A 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.
Operator: 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.
Speaker Change: Reminder, this conference is being recorded it is now my pleasure to introduce Mr. David Hoffman, Our Paas General counsel. Thank you you may begin.
David Hoffman: It is now my pleasure to introduce Mr. David Hoffman, Delcath General Counsel. Thank you. You may begin.
David Hoffman: Thank you and once again welcome to Delcath Systems third 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, Vojo Vukovic, Chief Medical Officer, and Martha Rook, Chief Operating Officer.
David Hoffman: Thank you and once again welcome to Delcath systems third quarter 2024 earnings and business highlights call with me on the call are Gerard Michel Chief Executive Officer, Sandra P&L Senior Vice President of Finance.
David Hoffman: Kevin you are general manager intervention, all oncology boils, Lukavica, Chief Medical Officer, and Martha Roke, Chief operating officer I'd like to begin the call by reading the Safe Harbor statement. The statement is made pursuant to the safe Harbor for forward looking statements described in the private securities.
David Hoffman: 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.
David Hoffman: He gave some reform act up 1995.
All statements made on this call with the exception of historical facts may be considered forward looking statements within the meaning of section 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934.
David Hoffman: 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 risk 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. Any forward-looking statements included in this call are made only as of the date of this call.
David Hoffman: Actual results may differ materially from those expressed or implied in forward looking statements due to various risk and uncertainties.
David Hoffman: A discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward looking statements.
David Hoffman: Please see risk factors detailed in the Companys annual report on Form 10-K.
David Hoffman: It was 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.
David Hoffman: 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.
David Hoffman: We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge events or circumstances.
David Hoffman: Our plus release with our third quarter 2024 results is available on our website. under the Investor section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review.
Our press release with our third quarter 'twenty 'twenty. Four result is available on our website.
David Hoffman: Under the investors section and includes additional details about our financial results.
David Hoffman: Our website also has our latest S E C filings, which we encourage you to review it.
David Hoffman: A recording of today's call will be available on our website.
Speaker Change: 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.
David Hoffman: Now I would like to turn the call over to Gerard Michel. Gerard, please go ahead.
Gerard Michel: Thank you, everyone, for joining us. This past quarter's results continue the strong growth we have seen since the launch of Hepsato kit this past January. I am very encouraged by our progress with both center activations and treatment rates. In the third quarter, we reported $11.2 million in total revenue. including $10 million in U.S. revenue from Hepzato and $1.2 million in European revenue from ChemoSat.
Thank you everyone for joining us this past quarter's results continued the strong growth we have seen since the launch of a subtle shift this past January.
Speaker Change: Very encouraged by our progress with both center Activations and Triple right.
Speaker Change: In the third quarter, we reported a $11 $2 million in total revenue.
$10 million in U S revenue, sometimes plateau at $1.2 million in European revenue most of that.
Gerard Michel: As we have previously reported, the $10 million in quarterly Hepzato revenue was a critical milestone triggering an approximately $25 million financing from Warren Exercises. The key drivers of our revenue ramp in the U.S. are center activation and the average number of treatments per center. In terms of center activation, we finished the quarter with 11 active centers with an additional center becoming active in October, and as of today, we have 12 active centers. In the third quarter, we activated Massachusetts General Hospital, Ohio State, Honor Health. and University of California, San Diego. In early October, we activated Duke, and we have another center scheduled to treat their first patient in the next two weeks.
Speaker Change: As we have previously reported.
Speaker Change: Million dollars quarterly upside of revenue was a critical milestone drinking and triggering an approximately $25 million financing from warrant exercises.
Speaker Change: The key drivers of our revenue ramp in the U S. Our center activation in the average number of treatments et cetera in terms of center activation. We finished the quarter with 11 active centers.
Speaker Change: Additional center, becoming active in October.
We have 12 active centers.
Speaker Change: Third quarter reactivated, Massachusetts General Hospital, Ohio State on our health.
Speaker Change: And University of California, San Diego.
Speaker Change: Early October we activated do we have another center scheduled to treat the first patient in the next two weeks.
Gerard Michel: There are a further five centers which recently fully completed preceptorships and have started screening for their first patient. We should exit the year with at least 15 treating centers, and sometime in the first quarter have 20 treating centers. Our 2025 goal is 30 centers by the end of the year. Importantly, and to reiterate for prior calls, we haven't seen any center in the activation process halt the process.
Speaker Change: There are further five centers, which recently completed fully completed preceptorships.
Speaker Change: <unk> screening for their first patient.
Speaker Change: Extra year with at least 15 treating centers and sometime in the first quarter up 20 treating centers are 20 to $25 30 centers by the end of the year.
Speaker Change: And to reiterate from prior calls we haven't seen any summer in the activation process halt the process.
Gerard Michel: I'm very proud of our progress with center activations, and I appreciate our investors' patience and understanding regarding the complexity of the process and the inherent variability in the time required to activate a center.
Speaker Change: I'm very proud of our progress with center Activations and I appreciate our investors patients and understanding regarding the complexity of the process and the inherent variability in the time required to activate a summit.
Gerard Michel: Now I'd like to delve into a second important metric, average treatments per center. Our average treatment rate post per month, post activation, averaged just under two treatments per month in the third quarter. Given the pattern of many of the new centers having low volumes for the first few months, we expect this average treatment rate to stay flat for the foreseeable future as we continue to add new centers. The one exception may be this coming quarter, the first holiday season since the launch of Hepatocytokin. Based on conversations with centers, we expect that due to hospital schedules and patient preferences, there will be effectively one and a half to two weeks fewer treatment days in the fourth quarter, leading to a lower treatment average over the entire quarter.
Speaker Change: Now I'd like to delve into a second important metric average treatments per center, our average street, but great posts per month post activation average just under two treatments per month in the third quarter.
Speaker Change: Given the pattern of many many of the new centers, having low volumes. The first few months. We expect this average treatment rates stay flat for the foreseeable future as we continue to add new centers the one.
Speaker Change: One exception, maybe this coming quarter. The first holiday season since the last launch of Pep subtle chip.
Speaker Change: My conversations with centers, we expect that due to hospital schedules at patient preferences, there will be a flexibly, one and a half to two weeks fewer treatment days in the fourth quarter, leading to a lower tree, but average over the entire quarter, we shouldn't lose treatments, but the timeframe between treatments will likely be extended for a subset of patients.
Gerard Michel: We shouldn't lose treatments, but the timeframe between treatments will likely be extended for a subset of the patients.
Gerard Michel: I'd like now to turn to our chemo set sales in Europe. While revenue was roughly flat versus the prior quarter, it did increase over 100% over the same time period last year. Going forward, we expect modest but consistent year-on-year growth. As previously mentioned, given the relatively low price point in Europe, we have chosen to manage the EU market on a roughly break-even basis. Recall that we believe that the near to mid-term value of our efforts in Europe is to identify and utilize sites for clinical trials and as a continuing source of publications, both in metastatic uveal melanoma and other tumor types, both of which will support EU and U.S.
Speaker Change: I'd like now to turn to our Cmos that sales in Europe.
Speaker Change: While revenue was roughly flat versus the prior quarter and it did increase over 100% over the same time period last year.
Speaker Change: Going forward, we expect modest but consistent year on year growth.
Speaker Change: As mentioned given the relatively low price point in Europe, we have chosen to manage the EU market on a roughly breakeven basis.
Speaker Change: Recall that we believe that the near to midterm value of our efforts in Europe is to identify and utilized sites for clinical trials and as a continuing source of publications both in metastatic uveal melanoma and other tumor types, both of which will support EU and U S adoption. She most of that has a broader pan solid tumor device label.
Gerard Michel: adoption. ChemoSat has a broader pan-solid tumor device label, and some of our European centers have over a decade's worth of experience with ChemoSat. We are early in the process of identifying and opening commercial-end trial centers in France, Italy, and Spain, expanding beyond our current major treating centers in the UK, Germany, and the Netherlands. We believe it is important to have multiple treating sites in all major European markets.
Speaker Change: All of our European centers have over a decade's worth of experience Cmos that we are early in the process of identifying and opening commercial line trial centers in France, Italy, and Spain, expanding beyond our current major treating centers in the UK, Germany and the Netherlands. We believe it is important to have multiple treating sites in all major European markets.
Gerard Michel: In addition to the significant commercial activity, we continue to support both internal and external efforts to add to a growing body of evidence that the percutaneous hepatic perfusion procedure enabled by our hepatic delivery system, whether utilizing Melphalan's liver by Delcath chemosat or the hepato kit, is important treatment option for patients with liver-dominant uvea melanoma, as well as potentially other liver-dominant cancers. Detailed in today's release, in the third quarter, there were numerous presentations and publications based on both the FOCUS study and a number of retrospective studies from a variety of independent investigators. A subgroup analysis from the FOCUS trial presented at ESMO 2024 demonstrated similar outcomes in overall survival, overall response rate, and progression pre-survival between patients with and without extrahepatic lesions or based on prior therapy.
Speaker Change: In addition to the significant commercial activities, we continue to support both internal and external efforts to add to a growing body of evidence.
Speaker Change: But the percutaneous hepatic profusion procedure enabled by our biotic delivery system, whether utilizing milk blends liver by adult club he must have that or the upside of kit.
Speaker Change: As an important treatment option for patients with liver dominant uveal melanoma as well as potentially other liver dominant cancers.
Speaker Change: As detailed in today's release and the third quarter. There were numerous presentations and publications based on both the focused study and a number of retrospective studies from a variety of independent investigators.
Speaker Change: Subgroup analysis from the focused trial presented at ESMO 2024 demonstrated similar outcomes in overall survival overall response rate and progression free survival between patients with and without extra hepatic lesions or based on prior therapy. In addition, tumor responses were observed throughout the entire treatment period supporting the strider.
Gerard Michel: In addition, tumor responses were observed throughout the entire treatment period, supporting the strategy to continue treatment until best response is achieved. These are very important factors in both choice of therapy and duration of treatment.
Speaker Change: Due to continued treatment until best responses achieved these are very important factors in both choice of therapy duration of treatment.
Gerard Michel: A 30-patient study was published in the Annals of Surgical Oncology by researchers at Moffitt Cancer Center in Tampa, Florida. This study reported that Hepzato used in first- or second-line therapy for metastatic uveal melanoma provided better disease control in the liver and improved progression pre-survival compared to both immunotherapy and other liver-directed therapies. A 167-patient study published in the journal Therapeutic Advances in Medical Oncology by investigators from the University of Tübingen, Germany, reported that first-line liver-directing therapies, including chemosats, significantly improved melanoma-specific survival in patients with liver metastases from uveal melanoma compared to first-line systemic therapies. We believe that this is an important finding because in cancers where the liver is the life-limiting organ, specifically metastatic uveal melanoma, liver-directed therapy may be a more appropriate option than systemic therapy.
Speaker Change: A 30 patient study was published in the Annals of surgical oncology by researchers at Moffitt Cancer Center in Tampa, Florida. This study reported that hops that are used in first or second line therapy for metastatic uveal melanoma provided better disease control in the liver and improved progression free survival compared to both immunotherapy and other liver directed therapies.
Speaker Change: 167 patient study published in the journal therapeutic advances in medical oncology by investigators from the University of tubing, and Germany reported that first line liver directed therapies, including Chemostat significantly improved the melanoma specific survival in patients with liver metastases from using a well known well compared to the first.
Speaker Change: Systemic therapies, we believe that this is an important finding because in cancer of the liver is the life limiting Oregon, specifically metastatic uveal melanoma liver directed therapy may be a more appropriate option than systemic therapy.
Gerard Michel: Finally, a 33-patient study was published in the ESMO Journal of Gastrointestinal Oncology by researchers from the University Hospital of Leipzig. The study, which included previously treated patients with unresectable intrahepatic metastases from seven different cancer types, reported a hepatic disease control rate of 91%, with six patients, or over 18%, achieving complete response in the liver. Median hepatic progression pre-survival was 52 weeks across all patients. This is another strong signal that our hepatic delivery system platform, whether chemoSAT or hepSATO, may have a role in treating other cancers. We continue to engage medical oncologists in the U.S. and EU to discuss integration of HEPZATO into treatment algorithms and combinations or sequencing with available treatment options of metastatic uveal melanoma.
Speaker Change: Finally, a 33 patient study was published in the journal of Gastro intestinal oncology by researchers from the University Hospital Leipzig.
Speaker Change: Saudi which included previously treated patients with Unresectable intra hepatic metastases from seven different cancer types reported that Patrick disease control rate of 91% with six patients over 18% achieving complete responses in the liver medium hepatic progression free survival was 52 weeks across all patients. This is another.
Speaker Change: Strong signal that our hepatic delivery system platform, whether chemostat or hips auto may have a role in treating other cancers.
Speaker Change: We continue engage medical oncologists in the U S and EU to discuss integration Sato into treatment algorithms and combination or sequencing with available treatment options in metastatic uveal melanoma and the third quarter, a new investigator initiated trial. The scandium three trial started screening patients in Sweden. This 40 patient.
Gerard Michel: In the third quarter, a new investigator-initiated trial, the Scandium 3 trial, started screening patients in Sweden. This 40-patient trial is comparing randomized treatment with two cycles of ChemoSat six weeks apart, followed by treatments with ipilimumab and nivolumab, with the control arm being ipilimumab and nivolumab alone, which is one of the global standards for care for metastatic uveal melanoma. This trial is distinct from the CHOPIN trial being run in Leiden University in the Netherlands, which starts with ipilimumab and nevolumab and sequences in two chemosat treatments. At this time, the CHOPIN trial is fully enrolled with 76 patients, and we are anticipating analysis of the primary endpoint, progression-free survival at one year, to occur in mid-2025.
While as comparing randomized treatment with two cycles of chemo.
Speaker Change: Six weeks apart followed by treatments 50 aluminum bat, a needle Dubai with the control arm being if giving them a map and Ebola alone, which is one of the global standards for care for metastatic Uveal melanoma.
Speaker Change: This trial is distinct from the Chopin trials being run in Leiden University in the Netherlands, which starts with if they lose my math NEVA Lamar and sequences to chemo treatments at this time. The Chopin trial was fully enrolled 76 patients and we are anticipating analysis of the primary endpoint progression free survival at one year to occur in mid 2025.
Gerard Michel: We expect presentation of the results in the second half of 2025.
Speaker Change: We expect presentation of the results in the second half of 2025.
Gerard Michel: During the past quarter, Delcath has engaged in discussions with a number of internationally recognized medical oncologists at leading cancer centers with the objective of identifying the next Hepatoclinical Development Target. liver dominic metastatic colorectal cancer and metastatic breast cancer were identified and endorsed by experts as potential new indications for HEPSADO. Delcath is planning to initiate two phase two randomized clinical trials to compare safety and efficacy of HEPSADO plus standard of care versus standard of care alone in these two indications. The metastatic colorectal clinical trial is designed to enroll approximately 90 patients and will be conducted at more than 20 study sites in the U.S.
Speaker Change: During the past quarter Delcath less engaged in discussions with a number of internationally recognized medical oncologists at leading cancer centers with the objective of identifying the next steps out of clinical development targets Liberty, Dominic metastatic colorectal cancer and metastatic breast cancer were identified endorsed by experts that's potential.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: The Metastatic Colorectal Clinical Trial is designed to enroll approximately 90 patients and will be conducted at more than 20 study sites in the U.S. and Europe. The protocol is complete and the lead investigator for the colorectal...
Gerard Michel: and Europe. The protocol is complete and the lead investigator for the colorectal cancer clinical trial has been identified. Patient enrollment and treatment is expected to begin the second half of 2025.
Speaker Change: Cancer clinical trial has been identified. Patient enrollment and treatment is expected to begin the second half of 2025. The phase two trial of patients with liver-dominant metastatic breast cancer will start somewhat later, likely in the fourth quarter of 2025.
Gerard Michel: The phase two trial of patients with liver dominant metastatic breast cancer will start somewhat later, likely in the fourth quarter of 2025.
Gerard Michel: From a financial perspective, the company is in a strong position. Our third quarter operating cash burn was only $3.6 million, and given our revenue ramp, we are on the cusp of being cash flow break-even. We have more than adequate resources to fund further expansion of both our commercial and our clinical development activities. The future of the company is extraordinarily promising, given our expected revenue growth, strong balance sheet, and the ability to further develop our hepatic delivery system platform across additional diseases.
Speaker Change: From a financial perspective, the company is in a strong position. Our third quarter operating cash flow was only $3.6 million, and given our revenue ramp, we are on the cusp of being cash flow breakeven.
Speaker Change: We have more than adequate resources to fund further expansion of both our commercial and our clinical development activities.
The future of the company is extraordinarily promising,
Speaker Change: and the ability to further develop our hepatic delivery system platform across additional diseases. I will now hand the call over to Sandra to share further details on our financial position.
Sandra Pennell: I will now hand the call over to Sandra to share further details on our financial position. Thank you, Gerard. Revenue from our sales of EPSATO was $10 million and QMOSAT was $1.2 million for the three months ended September 30, 2024, compared to $0.4 million for QMOSAT during the same period in 2023. Revenue grew 44% over the second quarter of 2024. Growth margins were 85% in the third quarter. For the three months ended September 30, 2024, research and development expenses were $3.9 million compared to $4.6 million for the three months ended September 30, 2023. The change in research and development expenses is primarily due to lower costs associated with the expanded access program incurred in previous periods, offset by an increase in medical affairs and regulatory costs associated with an improved product.
Sandra P&L: Thank you, Gerard. Revenue from our sales of Epsato was $10 million and KumoSat was $1.2 million for the three months ended September 30, 2024, compared to $0.4 million for KumoSat during the same period in 2023. Revenue grew 44% over the second quarter of 2024. Growth margins were 85% in the third quarter.
Sandra P&L: For the three months ended September 30, 2024, research and development expenses were $3.9 million compared to $4.6 million for the three months ended September 30, 2023.
Sandra P&L: The change in research and development expenses is primarily due to lower costs associated with the expanded access program incurred in previous periods offset by an increase in medical affairs and regulatory costs associated with an improved product.
Sandra Pennell: For the three months ended September 30, 2024, compared to the same period in 2023, selling general and administrative expenses increased to $7 million from $6.2 million. The increase is due to activities for commercial launch, including marketing related expenses and additional personnel in the commercial. He ended Q3 with $14 million in cash investments, and cash used in operations was approximately $3.6 million in the third quarter, compared to $4.5 million in the previous quarter.
Sandra P&L: For the three months ended September 30, 2024, compared to the same period in 2023, selling general and administrative expenses increased to $7 million from $6.2 million. The increase is due to activities for commercial launch, including marketing-related expenses and additional personnel on the commercial team.
Sandra P&L: The end of Q3 with $14 million in cash investments and cash used in operations was approximately $3.6 million in the third quarter compared to $4.5 million in the previous quarter.
Sandra Pennell: On August 1st, the loan with Avenue fully matured, and on October 30th, the loan with Roslyn fully matured, and final payment was made on both. As of today, we have no outstanding debt obligations. All tranche B warrants from the March 29th, 2023. Pipe were exercised by the NOVA on March 6, 2024. expiration date, resulting in approximately $25 million in post We do expect our cash from operations and the cash received from the recent warrant exercises to sustain operations through profitability and begin to fund trials into additional indications.
Sandra P&L: On August 1st, the loan with Avenue fully matured, and on October 30th, the loan with Roslyn fully matured, and final payment was made on both. As of today, we have no outstanding debt obligations.
Sandra P&L: All tranche B warrants in the March 29, 2023 type were exercised by the November 6, 2024 expiration date, resulting in approximately $25 million in proceeds.
Sandra P&L: We do expect our cash from operations and the cash received from the recent warrant exercises to sustain operations through profitability and begin to fund trials into additional indication.
Operator: 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? Thank you. At this time, we will conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for our first question.
Speaker Change: Thank you. At this time, we will conduct a question and answer session.
Speaker Change: If you would like to ask a question, please press star 1 on your telephone keyboard.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for our first question.
Marie Thibault: Our first question comes from Marie Thibault with BTIG. Please proceed. Marie, your line is live.
David Hoffman, Sandra Pennell, Unknown Executive
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: Our first question comes from Marie DeBolt with BTIG. Please proceed.
Alex: Hello, can you hear me? Yes, we can hear you.
David Hoffman, Sandra Pennell, Unknown Executive
Hello, can you hear me?
Gerard Michel: Hey, this is Alex on for Marie. I just wanted to ask a question of clarification. Since you mentioned that Q4 is coming quarter due to the dynamics of the holiday season, we expect to see some fewer treatment days. So is this like a cadence that we can expect moving forward? Like, is this going to be a seasonality? Do you expect this to be the case as we move forward with the launch in like 2025 and beyond?
Yes, we can hear you.
Speaker Change: Hey, this is Alex on for Marie. I just wanted to ask a question of clarification since you mentioned that Q4 is coming quarter due to the dynamics of the holiday season, we expect to see some fewer treatment days. So is this like a cadence that we can expect moving forward? Like, is this going to be a seasonality? Do you expect this to be the case as we move forward with the launch in like 2025 and beyond?
Gerard Michel: Yeah, so we've we've, you know, starting several weeks back, we started querying both the interventional radiologists and medical oncologists about what they thought the pace would be over the holidays. For typical infused chemotherapy, you probably don't see much seasonality. This is a procedure in the clinical trial. There was a certain amount of flexibility of timing between treatments from the max of six. And I think what patients are doing, not all, but some patients are choosing to spend the holidays with their families and, you know, push a treatment off into January, perhaps. So we don't think we're gonna lose any business.
Speaker Change: Yeah. So we've, we've, uh, you know, starting several weeks back, we started querying, um, both the interventional radiologists, the medical oncologists about what they thought the pace would be over the holidays. Um,
Speaker Change: and I think what patients are doing, not all, but some patients are choosing to spend the holidays with their families and, you know, push a treatment off into January, perhaps.
Gerard Michel: So one and a half to two weeks is our best guess for the, you know, fewer number of treatment days in the fourth quarter. It is at this time, you know, an estimate. I do think there will be seasonality, the degree of seasonality, you've got my best guess right now of what it'll be, but I wanna emphasize that these are not, this is not lost business. This is business that gets stretched out into the following.
Speaker Change: So we don't think we're going to lose any business. So one and a half to two weeks is our best guess for the, you know, fewer number of treatment.
David Hoffman, Sandra Pennell, Unknown Executive
Alex: Great, thank you.
Sandra Pennell: And I just had a follow-up since you guys mentioned that you guys are going to start two Phase II RCTs in colorectal and breast cancer next year. So how should we think about increasing R&D spend with these RCTs? Yes, you know, Q4 R&D expenses should be relatively flat from Q3, but the new indication expense is more relevant in 2025. You know, at this point, the full year R&D probably range anywhere from $35 to $40 million. At this time, that includes base R&D as well as new indications.
Speaker Change: Great, thank you. And I just had a follow-up since you guys mentioned that you guys are going to start two phase two RCTs in colorectal and breast cancer next year. So how should we think about the increase in R&D spend with these RCTs?
Speaker Change: Yes, you know, Q4 R&D expenses should be relatively flat from Q3, but the new indication expense is more relevant in 2025. You know, at this point, the full year R&D.
Speaker Change: probably range anywhere from 35 to 40 million. At this time, that includes base R&D as well as new indications.
Alex: Great.
John Newman: Thank you so much. The next question comes from John Newman with Canaccord. Please proceed.
Great, thank you so much.
Speaker Change: The next question comes from John Neumann with Canaccord. Please proceed.
David Hoffman, Sandra Pennell, Unknown Executive
John Newman: John Newman, your line is live.
David Hoffman, Sandra Pennell, Unknown Executive
David Hoffman, Sandra Pennell, Unknown Executive
John Newman, your line is live.
Sudan Loganathan: Next question comes from Sudan Loganathan with Stevens. Please proceed. Yes, thanks for taking my questions and congrats on the great quarter on the education side. So my question is kind of pinging off again, the seasonality or what to expect, you know, with the fourth quarter, does that also mean that preceptorship and kind of onboarding of sites are kind of, you know, will be done before kind of the holiday season or during some of these weeks, will there be kind of a break in, you know, kind of completing that process for some of the ones coming on board?
David Hoffman, Sandra Pennell, Unknown Executive
Next question comes from Sudan Lovington with Stevens. Please proceed.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: Yes, thanks for taking my questions and congrats on the great quarter on the execution side. So my question is kind of pinging off again, the seasonality or what to expect, you know, with the fourth quarter. Does that also mean that preceptorship and kind of onboarding of sites are kind of, you know, will be done before kind of the holiday season or during some of these weeks will there be kind of a break in, you know, kind of completing that process for some of the ones coming on board?
Gerard Michel: Yeah, definitely. Just as with preceptors are done at treatments, proctorships are done at treatments. So yeah, they will, by definition, be a slowdown there. You know, I highlight we have a good five plus out there actively now seeking patients. So we do have a good pipeline of sites ready to go. I don't think it'll slow down.
Speaker Change: Yeah, definitely. Just as with the preceptors are done at treatments, proctorships are done at treatments, so yeah, they will by definition be a slow down there. You know, I'd highlight we have a good five-plus out there actively now seeking patients.
Speaker Change: So we do have a good pipeline of sites ready to go. I don't think it'll slow down. You know, I don't think I don't think that would have a material.
Sandra Pennell: You know, I don't think I don't think that would have a material effect on our overall progress in terms of projections, in terms of site activation. And then my follow-up is just on the financial side, the $3.6 million warrants, the $10 exercise price you have expiring in December 2024, I believe, and some in May 2025. Is these funds also kind of year-marked or expected to kind of hit and also really help with the launch of these trials next year, or just how are you viewing the cash inflow, not just from the business, but also from these other, from the warrants that you have also?
Speaker Change: effect on our overall progress in terms of in terms of projections in terms of site activation.
Speaker Change: Okay. And then my follow-up is just on kind of the financial side, the $3.6 million warrants at the $10 exercise price you have expiring in December 2024, I believe, and some in May 2025. Is these funds also kind of year-marked or expected to kind of hit and also really help with the launch of these trials next year? Or just how are you viewing the cash inflow, not just from the business, but also from these other, from the warrants that you have also? David Hoffman, David Hoffman, Unknown Executive I'm going to hand this off to Sandra so she can reply.
Sandra Pennell: I'm going to hand this off to Sandra so she can reply. Yet right now we are not. Including that additional $36 million in our cash forecast in terms of what we need to fund additional indications and the business. We believe that our cash on hand, which means I... And the $25 million that came in from the Trunchbee warrants, as well as cash earned from revenue and operations, should fund the syndication. Gotcha. I appreciate it.
Yet right now we are not.
Sandra P&L: Including that additional 36 million in our cash forecast in terms of what we need to fund additional indications and the business. We believe that our cash on hand
Sandra P&L: and the $25 million that came in from the Tranche B warrants as well as cash earned from revenue and operations should fund the syndication.
Sudan Loganathan: Thanks for answering the questions and congrats again on the quarters.
Speaker Change: Gotcha. I appreciate it. Thanks for answering the questions and congrats again on the quarters. Thank you
Gerard Michel: Thank you.
Swayampakula Ramkanth: This question comes from Swayampakula Ramkanth with H.C. Wainwright. Please proceed.
Speaker Change: This question comes from Swayyam Kapoor Ramkoth with H.C. Wainwright. Please proceed.
Swayampakula Ramkanth: Thank you.
Gerard Michel: Good morning, Gerard and Sandra. Sigma Theta Sigma Theta I'm just trying to understand some of the metrics around the number of treatments some of these physicians are performing. Is the interval between treatments similar to what you had seen in the FOCUS trial? And also, you know, compared to what physicians experienced during the trial, how is the real world experience looking? If you have any anecdotal information, that will be helpful. Sure. So I think most of the treatments are still occurring between six to eight weeks. Some might stretch out a little longer. And I suspect what we'll find is that patients who had a treatment sometime, you know, early mid, early fourth quarter will likely have longer than six to eight weeks, because again, they may postpone it to be with their family for the holidays.
Thank you. Good morning, Gerard and Sandra.
Morning, Mark.
If you have any anecdotal information, that would be helpful.
Speaker Change: So I think most of the treatments are still occurring between six to eight weeks. Some might stretch out a little longer. Um, and I suspect, uh, what we'll find is that patients who had
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: early fourth quarter will likely have longer than six to eight weeks, because again, they may postpone it to be with their family for the holidays.
Gerard Michel: But in general, we're seeing six to eight weeks in normal course.
But in general, we're seeing.
Kevin Muir: In terms of anecdotes, let me hand it off to Kevin because he's got a wealth of anecdotes that are helpful. Okay, you know, our field sales team attends all the PHP procedures. And thus far, the treating physicians and the medical oncologists have been generally positive with the outcomes that they're achieving with Hepzato. When you go to the number of procedures, the treatment centers which opened up in Q1 and Q2, so the beginning of this year, they're just now completing their fourth and fifth treatment. So the medical community, as well as we are, we're very excited about the outcomes that we'll see.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: Okay, you know, our field sales team attends all the PHP procedures and thus far the treating physicians and the medical oncologists have been generally positive with the outcomes that they're achieving with Hepzato kit.
Speaker Change: When you go to the number of procedures, the treatment centers which opened up in Q1 and Q2, so the beginning of this year, they're just now completing their fourth and fifth treatment.
Speaker Change: the medical community as well as we are. We're very excited about the outcomes that we'll see, and we'll have more information when the patients complete their cycles.
Kevin Muir: And we'll have more information when the patients complete their cycle. And I would add, I mean, the message we're getting back from the medical oncologists and the IRs, and it's anecdotal, but they generally believe the response rates they're seeing are far greater than what we're seeing in the FOCUS trial. Now, whether or not that's absolutely true or not, it's hard to say. It may have to do with patient selection. We may have gotten, unfortunately, the worst of the worst in the FOCUS trial. I think we're getting patients earlier on now, and there's, again, anecdotally, they're all claiming they see much better response rates, to the point they're saying, well, what did you do differently?
Speaker Change: I would add, the message we're getting back from the medical oncologists and the I.R. is anecdotal, but they generally believe the response rates they're seeing
Speaker Change: are far greater than what we've seen in the FOCUS trial. Now, whether or not that's absolutely true or not, it's hard to say. It may have to do with patient selection. We may have gotten, unfortunately, the worst of the worst in the FOCUS trial. I think we're getting patients earlier on now, and there's...
Speaker Change: Again, anecdotally, they're all claiming they see much better response rates. To the point, they're saying, well, what did you do differently? We haven't done anything differently.
Kevin Muir: We haven't done anything. I think, in general, they're very, very pleased with the results you're seeing. Perfect.
Speaker Change: In general, they're very, very pleased with the results you're seeing.
Swayampakula Ramkanth: Then, Kevin, I have a couple more questions, maybe it's you, Gerard, on the Scandium and the Shoping Trials.
Speaker Change: Perfect. Then, Kevin, I have a couple more questions. Maybe it's you, Gerard, on this Candium and the showpin trials.
Gerard Michel: So, do you think these studies by themselves are enough to get in front of the FDA for indication expansion, or once you get data from these two studies, you may have to do another study in the U.S. as well to get in front of the FDA? There's nothing that prohibits physicians now from sequencing these products. So I don't believe, you know, that indication expansion. would really be necessary. I don't think we really necessarily have to push for that at all.
So, do you think these studies by themselves are enough?
to get in front of the FDA.
Speaker Change: for Indication Expansion, or once you get data from these two studies, you may have to do another study in the U.S. as well to get in front of the FDA.
Speaker Change: So, I don't believe that an indication expansion would really be necessary, and I don't think we really necessarily have to push for that at all. I think that the important thing is...
Gerard Michel: I think that the important thing is. It opens the door for kind of a, theoretically, maybe even a basket trial for where patients have been on I.O. therapy across a number of different cancer types and start failing once they have liver mets, which is a very, very common dilemma for patients. I think that opens up the opportunity for us looking across cancer types to do a trial for patients who are failing on I.O. In terms of metastatic UV and melanoma, I think the data will be the data and the doctors will act appropriately, and I don't think we need to seek any type of regulatory adjustment or label expansion.
It opens the door for kind of a
Speaker Change: Theoretically, maybe even a basket trial for patients have been on IL therapy across a number of different cancer types and start failing once they have liver mets, which is a very, very common dilemma for patients.
Speaker Change: I think that opens up the opportunity for us looking across cancer types.
Speaker Change: to do a trial for patients who are failing on IO. But in terms of metastatic UV and melanoma, I think the data will be the data and the doctors will have, will act appropriately and we don't, I don't think we need to seek any type of regulatory adjustment or label expansion.
Swayampakula Ramkanth: Perfect, perfect. Great.
Swayampakula Ramkanth: Thanks for taking my questions and talk to you folks. Thanks so much, RK.
Speaker Change: Great, thanks for taking my questions and talk to you folks soon.
John Newman: The next question comes from John Newman with Canaccord. Please proceed. Hi, guys. Good morning.
Thanks so much, R.K.
Speaker Change: The next question comes from John Neumann with Canaccord. Please proceed.
John Newman: Thanks for taking my questions. You know, I'm curious, what types of data we might expect to see from the Chopin trial next year? And then also, just timing on the TRC and breast cancer trials that you're expected to start next year. I'm just curious as to how you're thinking about enrollment there. Thanks.
John Neumann: Hi, guys. Good morning. Thanks for taking my questions. You know, I'm curious, what types of data we might expect to see from the SHOPEN trial next year? And then also, just timing on the TRC and breast cancer trials that you're expected.
John Neumann: to start next year. I'm just curious as to how you're thinking about enrollment there. Thanks.
Vojislav Vukovic: Sure, I'm going to ask Boyd to answer those questions.
Sure, I'm going to ask Boyer to answer those questions.
Vojislav Vukovic: Hey, John, this is Vojvod Vukovic. Thanks for your questions. I think your first one was regarding the Schwann trial data. As Gerard mentioned earlier during the prepared remarks, the enrollment of this 76 patients large randomized phase two trial is complete. That's how I'm standing. The patients are undergoing treatments and based on the information that we have, the investigators are expecting a data readout mid next year, which would put them in a position to present the data in the second half of next year. It's a randomized trial. It's a blinded trial. We do not have data insights, so we can't share any information beyond what we just said.
Hey John, this is William Kovic.
As Gerard mentioned earlier during the prepared remarks,
John Neumann: The enrollment of this 76-patient large, randomized phase 2 trial is complete. That's our understanding. The patients are undergoing treatments, and based on the information that we have, the investigators are expecting data readouts mid-next year, which would put them in a position to present the data in the second half of next year.
John Neumann: It's a randomized trial, it's a blinded trial, we do not have data inside, so we can't share any information beyond what we just said.
Vojislav Vukovic: And the second question was really, I think, regarding recruitment of patients into the upcoming colorectal and breast cancer trial. Is that correct?
John Neumann: And the second question was really, I think, regarding recruitment of patients into the upcoming colorectal and breast cancer trials, is that correct?
Vojislav Vukovic: Yes.
Vojislav Vukovic: Okay, so we plan to start operational activities including patient enrollments on both trials in the course of next year. We've initiated activities on both trials, and we expect recruitment to start mid-July. 25 for colorectal and towards the end of 25 for the breast cancer trials. These trials are randomized trials, 90 patients each, and we expect that the enrollment will take approximately two years.
David Hoffman, Sandra Pennell, Unknown Executive
Yes.
John Neumann: Okay, so we plan to start operational activities including patient enrollments on both trials in the course of next year.
Speaker Change: We have initiated activities on both trials and we expect recruitment to start mid-July.
Speaker Change: 25 for colorectal and towards the end of 25 for the breast cancer trials. These trials are randomized trials, 90 patients each, and we expect that the enrollment will take approximately two years.
John Newman: Okay, great. Thank you.
David Hoffman, Sandra Pennell, Unknown Executive
Okay, great. Thank you
Yale Jen: Once again, to ask a question at star 1 on your telephone keypad, our next question comes from Yale Jen with the Laid Law.
Speaker Change: Once again, to ask a question at star one on your telephone keypad. Our next question comes from Yale Jen with the lead law, please proceed.
Yale Jen: Please proceed. Good morning and thanks for taking the question. My first one is that given the ramp up is doing very well, are you guys already started approaching the medical oncologist and getting more referral and getting a greater awareness of them or that's something that you would do maybe starting next year? Yeah, Kevin's team is definitely approaching medical oncologists at centers where we're not treating. It happens we're getting a fair number of referrals right now to active sites. And now admittedly, most of those referrals, not all of them, many of those referrals are coming from centers that are going through the preceptorship and training program.
Good morning and thanks for taking the question.
My first one is that...
Speaker Change: Given the ramp up is very well, it's doing very well. Are you guys already started approaching the medical oncologist?
Speaker Change: and getting more referral and getting a greater awareness of them, or that's something that you would do maybe starting next year.
Speaker Change: Kevin's team is definitely approaching medical oncologists at centers where we're not treating. It happens we're getting a fair number of referrals right now to active sites.
Speaker Change: And now admittedly most of those referrals not all of them many of those referrals are coming from centers that are Going through the preceptorship and training program. They want to treat patients
Gerard Michel: They want to treat patients. They're not up and running yet, either because of training or sometimes it's just committee reviews that sometimes are just structurally every six months or something. So we're getting referrals from those. We are, have gotten referrals from centers we're not targeting. One of our sites is all referrals. They had no, essentially no uveal, melanoma, this is to speak of, so they're all referrals. And what we have to do is partner with the oncologist. The way Kevin has set this up is... We talk to the oncologists and we say, hey, are you interested in getting referrals?
Speaker Change: They're not up and running yet. It's a training or sometimes it's just committee reviews and sometimes it's just structurally every six months or something.
So we're getting referrals from those.
We are
Speaker Change: have gotten referrals from centers we're not targeting. One of our one of our sites is all referrals, they had no
Speaker Change: Essentially no uveal melanoma. This is to speak of so they're all referrals
Speaker Change: And what we have to do is partner with the oncologist, the way Kevin has set this up.
is
Speaker Change: We talk to the oncologists and we say, Hey, are you interested in getting referrals? We tell them, they generally say, yes. We ask them where are your patients coming from now?
Gerard Michel: We tell them, they generally say yes. We ask them, where are your patients coming from now? In our teams, you know, I'll remind you that every one of our four regions has a clinical support specialist who's in every procedure and makes sure things go smoothly. We have a livery directive manager who their job is to open the centers to kind of manage them. And then the third component is an oncology manager in each region we have. And their job is to develop those referral networks.
Speaker Change: In our teams, you know, I'll remind you that every one of our four regions Has a clinical support specialist who's in every procedure and make sure things go smoothly. We have a liver directed Manager who their job is to open the centers that kind of manage them. And then the third component is an oncology manager
Gerard Michel: It's still early days for us to be successful. You know, we're going to have to, I think, you know, we're going to have to really lean heavily into referrals next year and the year thereafter to be successful. But yeah, we're well on our way. We're learning how to do it. It's a very fragmented market. But you know, we'll get there. And yes, we're having success with referrals. But we, you know, we got to do better and we will do better. Okay, great. That's very helpful.
Speaker Change: in each region we have, and their job is to develop those referral networks.
Speaker Change: It's still early days for us to be successful. You know, we're going to have to, I think, you know, we're going to have to really lean heavily into referrals next year and the year thereafter.
David Hoffman, Sandra Pennell, Unknown Executive
Gerard Michel: Maybe another question here is that you anticipate to start a CRC, a trial in CRC later in the press. Just curious what sort of clinical data or clinical information you have so far to support these two indications to pursue? Yes, sure. So the first set of data we're going to have is from, for colorectals, primarily from a surgical procedure called intrahepatic perfusion. This, the concept of the hepatic delivery system, chemoset-hepzado, really came from a surgical procedure that is rarely done nowadays, if ever, because of very high levels of morbidity and mortality. But essentially, at a number of sites, Leiden University, unsurprisingly, a site in Sweden, and then I think the other one was Pittsburgh, would basically take the liver, put it on a heart-lung machine, for lack of a better way to explain it, and put very high doses of chemo, usually melt-in-the-liver.
Speaker Change: Okay, great. That's very helpful. Maybe another question here is that.
Speaker Change: You're anticipated to start a CRC, a trial in CRC later in Brest. Just curious what sort of clinical data or clinical information you had so far to support these two indications to pursue.
Speaker Change: This, the concept of the hepatic delivery system, chemosat hepsato, really came from a surgical procedure that is rarely done nowadays, if ever, because of very high levels of morbidity and mortality.
Speaker Change: But essentially doctors at a number of sites, Leiden University unsurprisingly, a site in Sweden, and then I think the other one was Pittsburgh, would basically take the liver put it on a heart-lung machine for lack of a better way to explain it, and put very high doses of chemo, usually in ultimate the liver.
Gerard Michel: Two of the places that was most commonly done were. Uveal melanoma, as well as colorectal. So there's very strong data, and I could tell you to take a look at our investor deck. We've summarized some of that data in colorectal. So whether or not, you know, surgically you're putting high doses of melphalin in, or whether or not you're doing it with our HDS, we would expect to see the same results. And I think that the ORR in those studies were about in the high 50s or low 60s, if I remember correctly. So that's the data there.
Um...
Two of the places that was most commonly done were
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: or whether or not you're doing it with our HDS, we would expect to see the same results. And I think that the ORR in those studies were about in the high 50s or low 60s, if I remember correctly.
Gerard Michel: For breast cancer, it's thinner. It's based on about a dozen or so patients across a number of different centers in Europe over the years. We've seen some profound responses, in fact, some complete responses in breast cancer patients. So we've seen some pretty good response rates. In breast cancer carcinoma, breast cancer is generally more susceptible to chemo as well. So I think there's a very good rationale for use of here. So about a dozen patients across centers, we've seen some response rates, and just the general type of tumor that it is gives us some hope that this will be a good thing for patients.
Speaker Change: So that's the data there for breast cancer. It's a it's thinner It's based on about a dozen or so patients across a number of different centers in in Europe over the years
Speaker Change: We've seen some profound responses, in fact, some complete responses in breast cancer patients.
Speaker Change: So we've seen some pretty good response rates in breast cancer, carcinoma. Breast cancer is generally more susceptible to chemo as well. So I think there's a very good rationale for usage here. So about a dozen patients.
David Hoffman, Sandra Pennell, Unknown Executive
Yale Jen: Okay, great. That's very helpful. And congrats, again, on the great quarter.
Speaker Change: Okay, great. That's very helpful and congrats again on the great quarter.
Chase Knickerbocker: The next question comes from Chase Knickerbocker with Craig Hallam. Please proceed. Good morning. Thanks for taking the questions. Maybe just to start, are we learning, you know, more kind of about how long it takes to fully activate a center? I know we kind of asked this question last quarter as well, but kind of any new thinking there, and then speak to kind of how those learnings kind of inform your confidence that, you know, you'll get, you know, eight of these kind of 10 centers that are in the works activated at some point in Q1, and then any of those centers that look, you know, like a similar profile to your three largest customers.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: The next question comes from Chase Knickerbocker with Craig Hallam. Please proceed.
David Hoffman, Sandra Pennell, Unknown Executive
Good morning. Thanks for taking the questions.
Speaker Change: maybe just to start are we learning you know more kind of about how long it takes to fully activate a center I know we kind of asked this question last quarter as well but kind of any new thinking there and then speak to kind of how those learnings kind of inform your confidence that you know you'll get you know eight of these kind of ten centers that are in the works activated at some point in q1 and then any of those centers that look you know like a similar profile to your three largest customers thanks
Gerard Michel: Thanks. Yeah, I be. What we're learning is, it's very, very, very hard. issues that usually slows this down, so it's very hard to predict. This is a very, very complex... Activation process. With that said, we are getting it done, and once we're done, we're done. I'm guessing the mean time frame now, and I'm going to look across the cabinet and see what type of pace he makes at me, but I'm guessing the mean activation time now is north of six months. 6 to 9 months. You know, when we started, guess what? It was a couple of months because those are the first ones that came on board.
Yeah, I, we...
All right.
Speaker Change: What we're learning is it's very, very, very hard to predict.
Speaker Change: You could be flying through it, and then you hit, I don't want to say a roadblock, but hit, you know, something that takes a bit of time.
Speaker Change: Someone in a billing finance group might say, look, I, you know, I need to talk to somebody who
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: It could be, you know, all of a sudden the profusion is
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: Activation process with that said we are getting it done and once we're done. We're done I'm guessing the mean time frame now and look across the Kevin and see what I found a place he makes that me But I'm guessing the mean Activation time now is north of six months
Speaker Change: six to nine months. You know, when we started, guess what, it was a couple months because those are the first ones that came on board. But in terms of competence of getting to the
Gerard Michel: But in terms of competence of getting to the 20, yeah, we'll get there.
Gerard Michel: I think we'll get there in the first quarter. I've been surprised by how long some take and I've also been surprised by how productive some centers are. So we've, you know, net-net we're doing just fine compared to our projections.
David Hoffman, Sandra Pennell, Unknown Executive
Gerard Michel: Unknown Executive, Swayampakula Ramakanth, Sean Lee, David Hoffman, Kevin Muir, Sandra Pennell, Vojislav Vukovic, Delcath Unknown Executive, Swayampakula Ramakanth, Sean Lee, David Hoffman, Kevin Muir, Sandra Pennell, Vojislav Vukovic, Delcath Great. And then, um, yeah, I think many agree that Chopin data, if you, you know, kind of show anything similar to what we saw, um, in earlier stages, um, could be transformative for the company. Can you kind of help us decode kind of what it means for you commercially, if that does occur, um, kind of walk us through how you see, you know, reasonable usage expanding with a data set that, that kind of recreates what we've seen to a degree.
Speaker Change: In terms, is anybody else going to pop up and be like the top three centers? Yeah, I think at least one of those in that mix that we're activating should be, you know, a top four performer. So yeah, we've got some some strong some players with some strong book of business in terms of you being melanoma patients in that list.
Transcription by CastingWords
Speaker Change: Great. And then, yeah, I think many agree that Chopin data, if you, you know, kind of show anything similar to what we saw in earlier stages, could be transformative for the company. Can you kind of help us decode kind of what it means for you commercially, if that does occur? Kind of walk us through how you see, you know, reasonable usage expanding with a data set that kind of recreates what we've seen to a degree?
Gerard Michel: Yeah, if it recreates what we've seen, I would argue that becomes standard of care. And, you know, I would say it increases the ramp of uptake, obviously, increases the peak penetration, obviously. It may change the dynamic of when patients get treatments. If it replicates CHOPAN, I suspect what we'll see is patients will get two, and then they will pause while they're on maintenance therapy with IFINIVO. But unfortunately, these patients all do eventually progress and then they will come back and get additional hepato-treatment. I think you won't notice that in any increased ramp because you're going to get a lot more patients coming in, even though some patients, some of the treatments get stretched out later treatments.
This becomes standard of care.
Speaker Change: And, you know, I, I would say it increases the ramp of uptake, obviously increases the peak penetration. Obviously, it may change the dynamic of
when patients get treatments.
Speaker Change: If it replicates CHOPIN, I suspect what we'll see is patients will get two and then they will pause while they're on maintenance therapy with ipinevo. But unfortunately, these patients all do eventually progress, and then they will come back and get additional hep stato treatments.
Speaker Change: I think you won't notice that in any increased ramp because you're going to get a lot more patients coming in even though some patients some of the treatments get stretched out later treatments but yeah I think the simple answer is bigger peak revenue faster ramp
Gerard Michel: But yeah, I think the simple answer is bigger peak revenue, faster ramp.
Sandra Pennell: And then just last from me, any thoughts, and sorry if I missed this earlier, any thoughts on kind of the amount of R&D investments incrementally that will be required for these two studies, Gerard or Sandra? Thanks. Sure.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: And that just lasts for me. Any thoughts, I'm sorry if I missed this earlier, any thoughts on kind of the amount of R&D investments incrementally that will be required for these two studies, Gerard or Sandra? Thanks.
Gerard Michel: And I'm going to add one more thing to the prior question. And, uh, boy, I was Scribbling on a piece of paper because it's a big issue with him, you know, one of the dynamics we had early on and it's decreasing is, you know, people look at this product, the MedOx and go, it's old school chemo, not terribly exciting. You know, if there's something unique going on with the liver as an immune regulating organ and combining it with checkpoint inhibitors with with Hepzato, there'll be a, you know, a strong surge of interest in medical oncologists, both within uveal melanoma and outside uveal melanoma.
Speaker Change: Sure, and I could add one more thing to the prior question and boy I was
Speaker Change: Scribbling on a piece of paper because it's a big issue with him. You know, one of the dynamics we had early on and it's decreasing is, you know, people look at this product, the medox and go, it's old school chemo, not terribly exciting.
Speaker Change: You know if there's something unique going on with the liver as an immune regulating organ combining it with checkpoint inhibitors with
Speaker Change: with Hepzato, there'll be a, you know, a strong surge of interest in medical oncologists both within uveal melanoma and outside uveal melanoma. So that's an important point to mention as well. But Sandra, do you want to answer questions about R&D?
Sandra Pennell: So that's an important point to mention as well. But Sandra, do you want to answer questions about R&D?
Sandra Pennell: Yes.
Sandra Pennell: Hi, Chase. You know, Q4 R&D expenses. be relatively flat from Q3, but as we move into new indications in these trials and potentially IATs in 2025, we can expect R&D ranging anywhere from $35 to $40 million, depending on the timing. That's including the base R&D as well.
Yes. Hi, Chase. You know, Q4 R&D expenses should...
Sandra P&L: be relatively flat from Q3, but as we move into new indications in these trials and potentially IATs in 2025, we can expect R&D ranging anywhere from $35 to $40 million, depending on the timing. That's including the base R&D as well as new indications.
Chase Knickerbocker: Great, thanks guys, congrats on the progress. Thank you.
David Hoffman, Sandra Pennell, Unknown Executive
Great, thanks guys, congrats on the progress.
Gerard Michel: At this time, I would like to turn the call back to management for closing comments. I want to thank everybody for joining today, and I look forward to giving future updates on both our commercial uptake and, importantly, our future efforts in both colorectal cancer and breast cancer. Thanks so much, everybody, for paying attention and joining today.
David Hoffman, Sandra Pennell, Unknown Executive
Speaker Change: Thank you. At this time, I would like to turn the call back to management for closing comments.
Speaker Change: Okay, I want to thank everybody for joining today and I look forward to giving, you know, future updates on both our commercial uptake and importantly our future efforts in both colorectal cancer and breast cancer. Thanks so much everybody for paying attention and joining today.
Operator: Goodbye. Thank you.
Operator: This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
Speaker Change: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
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Speaker Change: [music].