Q2 2025 Delcath Systems Inc Earnings Call

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Operator: Good morning, ladies and gentlemen, and welcome to the DELCATH SYSTEMS, INC. second quarter 2025 earnings call. All participants will be in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press the star key and then zero on your telephone keypad. Please note that this event is being recorded. I will now hand you over to DELCATH General Counsel, Mr. David Hoffman. Please go ahead.

Good morning, ladies and gentlemen, and welcome to the Double Cat systems, second quarter, 2025 earnings call.

All, but it's been listed on any mode.

A question-and-answer session will follow the formal presentation.

If anyone should require operator assistance during the conference, please press the star key. And then zero on your telephone keypad,

Please note that this event is being recorded.

David Hoffman: Thank you, and welcome to DELCATH SYSTEMS, INC. second quarter 2025 earnings call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Chief Financial Officer; Kevin Muir, General Manager, Interventional Oncology; Vojislav Vukovic, Chief Medical Officer; and Martha Roop, Chief Operating Officer. I would 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.

I will now hand you over to dcat General Council. Mr. David Hoffman. Please come ahead.

Thank you and welcome to delcast systems. Second quarter 2025 earnings call. With me on the call are Gerard. Michelle chief executive officer, Sandra panel Chief Financial Officer. Evan mure, general manager, Interventional oncology voyo vukovic chief medical officer and Martha Rukh Chief Operating Officer. I'd like to begin the call by reading the Safe Harbor statement.

This statement is made pursuant to the safe harbor for forward-looking statements described in the private Securities. Litigation Reform, Act of 1995, all statements. May on this call with the exception of historical facts. May be considered forward-looking statements within the meeting of section, 27A of the Securities Act of 1933 and section 21e of the Securities, Exchange Act of 1934.

David Hoffman: Actual results may differ in a material manner from those expressed or implied in forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in subsequently filed quarterly reports on Form 10-Q, as well as in other reports that the company files from time to time with the Securities and Exchange Commission. Any forward-looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances.

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.

Various risk and uncertainties.

For a discussion of such risk and uncertainties which could cause actual results to differ from those Express or implied in the forward-looking statements, please see risk factors detailed in the company's annual report.

On form 10, K those contained, in subsequently filed, quarterly reports on form 10 Q as well as in other reports that the company files from time to time with the Securities and Exchange Commission.

David Hoffman: A press release with our second quarter 2025 results is available on our website under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Any forward-looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement, any forward-looking statements to reflect subsequent, knowledge, events or circumstances.

Our press release with our second quarter. 2025 results is available on our website under the investor section and includes additional details about our financial results.

Our website also has our latest FEC 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. Michelle Gerard, please proceed.

Gerard Michel: Thank you for joining us today to review our second quarter's financial results and business updates. We continue to make steady progress in building our U.S. business. This quarter marks the fifth consecutive quarter of site and HEPZATO KIT volume growth. Quarterly revenue reached $24.2 million, an increase of over 20% compared to the first quarter of 2025, reflecting continued strong adoption. U.S. sales of HEPZATO KIT were $22.5 million, while CHEMOSAT Hepatic Delivery System sales in Europe were $1.7 million. In the second quarter, we generated $7.3 million in positive cash from operations, net income of $2.7 million, and adjusted EBITDA of $9.8 million. Additionally, we ended the quarter with no debt and approximately $81 million in cash and investments. We finished the second quarter with 20 treating sites, and during the quarter, we activated Northwestern Memorial Hospital, University of Miami Hospital, and University of Virginia Medical Center.

Thank you for joining us today to review our second quarter Financial results and business updates. We continue to make steady progress in building, our us business. This quarter marks the 5th consecutive quarter of sight and Hep volume growth.

Quarterly revenue reached $24.2 million, an increase of over 20% compared to the first quarter of 2025, reflecting continued strong adoption. U.S. sales of Hexada were $22.5 million, while Chemosat sales in Europe were $1.7 million.

In the second quarter, we generated 7.3 million in positive cash from operations net. Net income of 2.7 million and adjusted. EBA 9.8 million. Additionally, we ended the quarter with no debt and approximately 81 million in cash and Investments.

Gerard Michel: Additionally, 10 centers are currently accepting referrals while progressing through the required training and approval process. Crucially, we are scaling intentionally, targeting world-class cancer centers, which could attract patients in both our first ultra-orphan market, as well as partner with us as we look to expand the use of HEPZATO KIT into our pipeline indications, where there are larger patient populations with high unmet need. Based on the current pace, 25 to 28 operational centers are expected by the end of the fourth quarter. Although this is fewer than previously projected, active centers continue to treat patients at a consistent rate. The episodic pace of site openings reflects the complexities of working with large institutions for a novel product, which treats an ultra-orphan population. I am confident that we will continue to open sites, and we have set a goal of 40 sites by the end of next year.

We finished the second quarter with 20 trees. During the quarter, we activated Northwestern Memorial Hospital, University of Miami Hospital, and University of Virginia Medical Center. Additionally, 10 centers are currently accepting referrals while progressing through the required training and approval process.

crucially we are scaling intentionally targeting world-class Cancer Centers, which can attract patients in both our first Ultra orphan Market as well as partner with us, as we look to expand the use of peps into our pipeline indications, where there is larger patient where there are larger, patient, populations with high unmet need

Based on the current Pace 25 to 28 operational. Centers are expected by the end of the fourth quarter. Although this is fewer than previously projected active centers, continue to treat patients at a consistent rate.

Gerard Michel: To support the expanding number of both target sites and actively treating sites, as we outlined on the last few calls, we recently expanded our U.S. sales force reported six regions, each staffed with a liver-directed therapy manager, oncology manager, and a clinical specialist. During the second quarter, average treatments were approximately two per month per center, with expectations for similar averages for the remainder of the year. Due to recent slower U.S. site activations, full-year revenue guidance has been adjusted to $93 to $96 million. Forecast for 2025 gross margins remain between 83% and 85%, with continued positive non-GAAP adjusted EBITDA and positive cash flow for the rest of the year. The total HEPZATO treatment volume in 2025 is projected to increase by over 175% versus 2024. We have proceeded with plans to enter into the National Drug Rebate Agreement, or NDRA, with the U.S.

The episodic pace of sight, openings reflects the complexities of working with large institutions for now, the product, which creates an ultra orphan population. I am confident that we will continue to open sights and we have set a goal of 40 sites by the end of next year.

To support the expanding number of both Target sites and actively treating sites as we outlined on the last few calls. We recently expanded our Us sales force from 4 to 6 regions. Each staff with a liver directed therapy manager, oncology manager, and a clinical specialist.

During the second quarter average treatments for approximately 2 per month per center with expectations for similar averages for the remainder of the year.

Due to recent slower U.S. site activations, full-year revenue guidance has been adjusted to $93 million to $96 million for 2025. Gross margins remain between 83% and 85%, with continued deposits of 9 gap, adjusted EBITDA, and positive cash flow for the rest of the year.

The total hex Auto treatment volume in 2025, is projected to increase by 170 by over 175% versus 2024.

Gerard Michel: Department of Health and Human Services. The NDRA enables Medicaid and Medicare coverage for outpatient drugs, while requiring manufacturers to provide rebates to state Medicaid programs according to statutory formulas. Entering into the NDRA requires participation in the 340B Drug Pricing Program, which enables eligible hospitals to purchase HEPZATO KIT at reduced prices. Participating in these programs should increase market access and aligns with Medicaid and Medicare coverage requirements. Since July 1st, 2025, HEPZATO KIT has been sold at 340B prices to eligible facilities, with approximately 50% of kits distributed being sold at the discounted price. For HEPZATO KIT, both rebate and discounts are 23.1% of the published WAC price. Earlier projections had suggested a larger proportion of centers qualifying as disproportionate share hospitals or DISH hospitals, but the actual list varies quarterly, and some customers with multiple facilities are purchasing via non-DISH facilities.

We have proceeded with plans to enter into the National Drug rebate agreement or ndra with the US Department of Health and Human Services. The ndra enables Medicaid and Medicare coverage for outpatient drugs. While requiring manufacturers to provide rebates to State Medicaid programs. According to statutory formulas,

Entering into the India. Ndra requires participation in the 340b drug pricing program which enables eligible hospitals to purchase heater kit at reduced prices.

Participate participating in these programs should increase Market access and aligned with Medicaid and Medicare coverage requirements.

Rebate and discounts for 23.1% of the published wac price.

Gerard Michel: Volume distribution under the 340B program is expected to remain at roughly 50% for the next few quarters. In the third quarter, the estimated net effect will be a 10% to 15% reduction from the second quarter average revenue per HEPZATO KIT. Of course, this will be largely or partially offset by ongoing growth in volume. Looking beyond uveal melanoma, we are investing in further research and development for HEPZATO, as we believe HEPZATO and its underlying CHEMOSAT Hepatic Delivery System platform hold significant potential to benefit a wide range of patients with liver cancer. As discussed on previous calls, preparations are underway to conduct company-sponsored trials in liver-dominant metastatic colorectal cancer and liver-dominant metastatic breast cancer, both of which allow us to approach large markets with clear unmet need.

Earlier projections had suggested a larger proportion of centers qualifying as disproportionate share hospitals (DSH hospitals), but the actual list varies quarterly, and some customers with multiple facilities are purchasing via non-DSH facilities.

Volume distribution. Under the 340b program is expected to remain at roughly 50% for the next few quarters.

In the third quarter, the estimated net effect will be a 10 to 15% reduction from the second quarter, average revenue per hips out of Kit. Of course, this will be largely or partially offset by ongoing growth in volume.

Looking Beyond UVO melanoma. We are investing in further research and development for hepat as we believe hepat and its underlying hepatic delivery system platform holds significant potential to benefit a wide range of patients with liver cancer.

Gerard Michel: Both phase two trials for these indications have received FDA clearance, and the colorectal trial has received CTA authorization in Europe and the U.K. As a reminder, both phase 2 trials will evaluate the safety and efficacy of HEPZATO KIT in combination with the standard of care versus standard of care alone in patients receiving third-line treatment for metastatic CRC and second or third-line treatment for patients with liver-dominant HER2 negative metastatic breast cancer. Each trial will enroll approximately 90 patients across 20 to 30 sites in the United States and Europe. Both trials have a primary endpoint of hepatic progression-free survival. We anticipate patient dosing for the metastatic colorectal trial to begin within weeks, with the first patient having been randomized just yesterday, and enrollment for metastatic breast cancer to follow in the first quarter of 2026.

As discussed on previous calls, preparations are underway to conduct company. Sponsored trials and liver dominant, metastatic colorectal cancer. And liver dominant metastatic breast cancer, both of which allow us to approach large markets with clear unmet need

Both Phase 2 trials for these indications of received FDA clearance. And the colorectal trial has received CTA authorization in Europe and the UK.

As a reminder, both Phase 2 trials will evaluate the safety and efficacy of ABS Auto in combination with the standard of care. For a standard of care alone. In patients, receiving third line treatment for metastatic CRC and second or third line. Treatment with liver. For patients with liver dominant hair to negative metastatic breast cancer.

Each trial will enroll approximately 90 patients across 20 to 30 sites in the United States. In Europe, both trials, have a primary endpoint of hpat progression free survival.

Gerard Michel: For metastatic colorectal, we expect the release of interim data as early as the second quarter of 2027, with an anticipated release of primary endpoint results in mid-2028, with overall survival date expected to follow in 2029. For our metastatic breast cancer trial, we anticipate interim data release as early as the fourth quarter of 2027, with anticipated release of primary endpoint results in mid-2029, with overall survival date expected to follow in 2030. We continue to have advisory board meetings with oncology subspecialties to prioritize our next set of indications to pursue. There is strong interest in intrahepatic cholangiocarcinoma and cutaneous metastatic melanoma, among others. Another potential area of development includes combination or sequence with immunotherapy agents such as immune checkpoint inhibitors. Preclinical studies suggest a strong rationale for combining HEPZATO KIT with immune checkpoint inhibitors to improve efficacy for patients with liver metastases.

We anticipate patient dosing for the metastatic colorectal trial to begin within weeks. But the first patient, having been randomized, just yesterday and enrollment for metastatic breast cancer to follow in the first quarter of 2026.

For metastatic colorectal. We expect the release of interim data. As early as the second quarter of 2027 with anticipated release of primary endpoint results, in mid 28, with overall, survival of State expected to follow in 2029 for our metastatic breast cancer trial, we anticipate iterm data releases early as the fourth quarter of 2027.

With anticipated release of primary endpoint results, in mid 2029 with overall survival with data expected to follow in 2030.

Gerard Michel: Upcoming read-outs from the randomized phase 2 Chopin trial are expected to inform the feasibilities of these combination approaches. We look forward to the presentation of these results at the ESMO conference in October 2025. I'm really thrilled with how the team is executing on the clinical front, and we are well positioned to approach some exciting new opportunities in a host of cancer indications where we can leverage our footprint of sites to reach more patients and have some real impact to patient outcomes. With that, I will now hand the call over to Sandra Pennell for a detailed financial review.

We continue to have Advisory board meetings with oncology sub Specialists, to use to priorities on prioritize. Our next set of indications to pursue there is strong interest in inpatient and cutaneous metastatic melanoma among others. Another potential area of development includes combination or sequence with immunotherapy, agents, such as such as immune checkpoint Inhibitors, preclinical studies suggest a strong rationale for combining hepat, with immune checkpoint Inhibitors to improve efficacy for patients with liver metastasis.

Upcoming reads from The randomized. Phase 2 shopano Conference in October 2025.

I'm really thrilled with how the team is executing on the clinical front and we are, well, positioned to approach. Some exciting new opportunities in the host of cancer indications where we can leverage our footprint of sites to reach more patients and have some real. Have some real impact in patient outcomes.

With that. I will now hand the call over to Sandra for a detailed financial review.

Sandra Pennell: Thank you, Gerard. Revenue from our sales of HEPZATO KIT was $22.5 million, and CHEMOSAT Hepatic Delivery System was $1.7 million for the second quarter of 2025, compared to just $6.6 million for HEPZATO KIT and $1.2 million for CHEMOSAT Hepatic Delivery System during the same period in 2024. The second quarter shows growth of over 20% over the first quarter of 2025 in both revenue and volume of kits sold. We recognize gross margins of 86% in the second quarter, compared to just 80% for the same period in the prior year. Research and development expenses for the quarter were $6.9 million, compared to $3.4 million for the same period in the prior year. Selling, general and administrative expenses for the second quarter were $11.4 million, compared to $6.8 million for the same period in the previous year.

Thank you, Gerard.

Revenue from our sales of assado is 22.5 million and chemo, set was 1.7 million for the second quarter of 2025 compared to just 6.6 million, parrado and 1.2 million for chemo set during the same period in 2024, the second quarter shows growth of over, 20% over the first quarter of 2025 and both revenue and volume of kits sold.

We recognize gross margins of 86% in the second quarter compared to just 80% for the same period in the prior year.

Research and development expenses for the quarter were 6.9 million compared to 3.4 million dollars for the same period in the prior year.

Sandra Pennell: Our second quarter 2025 net income was $2.7 million, compared to a $13.7 million net loss in the second quarter of the previous year. Non-GAAP positive adjusted EBITDA for the second quarter was $9.8 million, compared to an adjusted EBITDA loss of $0.8 million for the second quarter of 2024. We ended the quarter with approximately $81 million in cash and investments, and quarterly positive operating cash flow of $7.3 million, compared to $2.2 million operating cash flow in the previous quarter. As of today, we have no outstanding debt obligations and no outstanding warrants. As a reminder, the exercise of series F warrants resulted in $16.2 million of funding in 2025. The warrants were issued in May of 2020 as a component of a private placement at an exercise price of $10 per share and expired on May 5th. We expect to remain cash flow positive throughout 2025.

Selling General and administrative expenses for the second quarter were 11.4 million compared to 6.8 million for the same period in the previous year.

Our second quarter, 2025 net income was 2.7 million compared to a 13.7 million net loss in the second quarter of the previous year.

Non-gaap positive adjusted, Evita for the second quarter was 9.8 million compared to an adjusted Evita loss of 0.8 million for the second quarter of 2024.

Quarterly positive operating cash, flow is 7.3 million compared to 2.2 million operating cash flow in the previous quarter.

As of today, we have no outstanding debt obligations and no outstanding warrants. As a reminder, the exercise of a series of warrants resulted in $16.2 million of funding in 2025. The warrants were issued in May 2020 as a component of a private placement at an exercise price of $10 per share and expired on May 5.

Sandra Pennell: Thank you all for participating today. That concludes our prepared remarks. I'd ask the operator to open the phone line for questions and answers. Thank you.

We expect to remain cash, flow positive throughout 2025.

Thank you all for participating today that concludes our prepared remarks and I'd ask the operator to open the phone lines for questions and answers.

Thank you.

Operator: Thank you. We will now be conducting the question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star and then two to leave the question queue. For participants making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Marie Thibault of BTIG. Please go ahead.

Thank you.

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if you'd like to call the Christian please press star and then 1 on your telephone keypad,

a confirmation turn will indicate that an is in the Christian queue.

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Marie Thibault: Good morning. Thanks for taking the questions and congrats on yet another good quarter. Wanted to start here with a question about the NDRA program and what you are seeing. I know it has only been one month since that was activated, but what you are seeing so far in terms of awareness from centers, any tailwinds to volume that you are starting to see with this increased access, and how this might be playing into the revised guidance you have given us. If there are any details on the cadence you would like to see for the next two quarters, that would be helpful for us as well.

Office question comes from Marie Talbot of btig. Please go ahead.

Gerard Michel: Sure. Marie, good to hear from you. Probably a little premature to say whether or not there will be any tailwinds. Prior to us participating in the NDRA, we often, I think, always got questions from sites as to whether or not sites that were DISH hospitals as to whether or not we participated, and they were generally a little disappointed when we said no. Now they are happy that we are. But in terms of any breaks being removed, I think that will play out over a number of quarters before we can sort that out. In terms of getting to 25 to 28 centers by the end of the year, the pace of that, which I think you were asking, I think we can do about one to one and a half per month for the balance of the year to get to that number.

Good morning. Thanks for taking the questions and congrats on yet another good quarter. Um, wanted to start here with a question about the ndra program. And what you are seeing. I know it's only been 1 month since that was activated. But what you are seeing so far in terms of awareness from centers, um, any Tailwind to volume that you're starting to see with this increase access and um how this uh might be playing in the uh revised guidance. You've gave us if there's any uh, details on the Cadence, you'd like to see for the next. Um, 2 quarters that would be helpful for us as well.

Sure. Um, good to hear from you. It's probably a little premature to say whether or not there'll be any Tailwind. Um,

You know, prior to us participating in the ndra, um, we often I think always got questions from sites as to whether or not sites with with that word dish hospitals as to whether or not we participated and they were generally a little disappointed. When we said no, uh, now they're happy that we are. Um, but in terms of any breaks being removed, I think that'll play out over a number of quarters. Um, before we can, uh, sort that out.

Marie Thibault: Okay. That's really helpful. I wanted to check, I think I recall that your sales team, you were going through an expansion. Just want a progress update on how that expansion has been going, how you found productivity, how that is helping with perhaps utilization at the centers.

Um, in terms of, um, you know, getting to 25 to 28 centers by the end of the year that the pace of that, which I think you were asking to, I think we can do about 1 to 1 and a half per month for the balance of the year, um, to get to that number.

Okay, that's really helpful. Um and then I wanted to check, I think I recall that your sales team you were going through an expansion. Um, just want to progress update on how that expansion has been going. How you found productivity? Um, how that is helping with uh, perhaps utilization at the centers.

Gerard Michel: It is completed. As you probably remember, it's six regions now. We have three professionals or customer-facing people on the commercial side in each of those regions. One is his job or her job is to be at every treatment, a Clinical Support Specialist. Another job is to open the sites and kind of manage the sites, Liver-Directed Therapy Manager. The last is an Oncology Manager, and they're more like a typical pharmaceutical oncology rep. They're all in place. Obviously, there's always a little bit of growth pains as you realign territories, hire new people. I think about as well as one could be expected, and I think that they've all hit their stride at this point.

uh,

It's it is completed as you probably remember, it's 6 6, 6 regions. Now we have

um, 3 professionals or customer may facing people on the commercial side in each of those regions 1's.

Marie Thibault: Very good to hear. Thanks for taking the questions.

Uh, 1 is, um, his job or her job is to be at every treatment, um, clinical support specialist. Another job is to open the sites and kind of manage the sites. Uh, liver directed therapy, uh, manager. And the last is an oncology manager and they're more like a typical pharmaceutical oncology rep. They're, they're all in place. Um, obviously there's always a little bit of growth, you know, growth pains, um, as you realign territories, hire new people. Um, but I think about as well as 1 could be expected, and I think that they've all hit their stride at this point.

Oh, very good to hear. Thanks for taking the questions.

Operator: The next question comes from John Newman of Canaccord Genuity. Please go ahead.

The next question comes from John Neumann of canaccord genuity please. Go ahead.

John Newman: Hi, team. Thanks for taking my question and also congrats on a good quarter. Gerard, I just have a question on the NDRA program as well. We get a lot of questions from investors here. Just curious, over the long term, if you could talk about perhaps the potential for volume to expand and why 340B is actually attractive to these hospitals. I think people are kind of looking at the very short term, but I'm just curious if you could comment on the long-term potential opportunity here.

Hi team. Thanks for taking my question and also congrats on a good quarter. Um, you know, Gerard, I just had a question on, um, the ndra program as well. You know, we get a lot of questions from investors here. Um, just curious over the long term if you could talk about, perhaps the potential for volume to expand and sort of why um 340b um is actually attractive, uh, to these hospitals. I think people are kind of looking at the

Gerard Michel: Sure. I am not surprised investors are hungry for more detail because most companies, when they launch, are either in this or out of this. You rapidly understand what the average value per unit is, factoring in the various discounts. For us, we stepped into it midstream because of some changes in, let us just say, guidelines from CMS and enforcement discretion, etc. So we were forced into it all of a sudden. I think net effect, what that means is two things. One is based on how things are running right now, and you know we are not that far into it, a month and change. We think about half of our sites will take advantage of this statutory discount. The net effect of that is probably a 10% to 15% reduction between the second quarter and the third quarter in terms of value per kit sold.

Very short term, but I'm just curious if you could comment on sort of the long-term potential opportunity here.

Sure. And I'm not surprised investors are, um, are hungry for more detail because most companies when they launched are either in this or atomists

Gerard Michel: Offsetting that is the more difficult thing to quantify, and that is, to whatever extent were certain hospitals saying, "Look, we are just not going to make enough to cover our costs in certain types of patients," and either that would maybe limit their excitement to joining us, to working with us, or more likely, and although one would hope this does not happen, I think there is occasionally some screening out of patients who might be underinsured. When hospitals look at this on a portfolio basis with this 340B NDRA program, for a portion of their business, those that participate, they are now making a much larger margin, and on a portfolio basis, the product becomes a bit more attractive to them. Will I ever be able to say how much more business did we get because of it? No.

Value per unit is um factoring in the various discounts for us. We kind of stepped into it uh Midstream because of some changes in uh this to say guidelines from CMS and and enforcement discretion Etc. Um so we kind of were forced into it all of a sudden. Um I think net effect what that means is 2, things 1 is um based on how things ran are running right now and you know, we're not that far into it a month and change. Um, you know, we think about half of our sites will take it half of our volume will take advantage of this uh, statutory discount. Um, the net effect of that is probably a 10 to 15% reduction, um, between the second quarter and the third quarter in terms of, you know, value per kit. Sold, um, offsetting that is the more difficult thing to quantify and that is hey, to whatever extent we're certain hospitals. Saying, look,

Um, we are just not going to make enough to cover our costs. Um, in certain types of patients, um, and um, either that would maybe limit their excitement to joining us, you know, to working with us or more likely. Um, and although 1 would hope this doesn't happen. I think there's occasionally, um, some screening out of patients, who might be underinsured, um, when hospitals, look at this, on a portfolio basis with this 340b ndr ndra program, um, for a portion of their business, those are participate. Um,

Gerard Michel: Am I fairly certain that there will be increased volume to some extent if we could run parallel universe experiments? Yes, but I am reluctant to try to quantify that. I think it will be meaningful, but it will take a bit of time to probably materialize. That is a very long-winded answer, Jenna. I hope that is helpful.

I'm making, um, you know, much larger margin and on the portfolio basis. Um, the the the product that comes a bit more attractive to them, um, do will I ever be able to say, you know, how much more business did we get? Because of it? No. Um, am I fairly certain that there will be increased volume to some extent if we could run, you know, parallel universe experiments. Yes. But I, I'm reluctant to try to quantify that. I think it'll be meaningful, but it will take a bit of time, you know, uh, to probably materialize.

John Newman: No, it is. This is a bit of a complicated topic that we are not used to hearing much about, but we appreciate all the detail here. Thank you.

And that's a very long-winded answer General. I hope that's helpful.

No, it is. It's uh, this is a sort of a complicated topic that um, we're not used to, uh, hearing much about, but we appreciate all the detail here. Thank you.

Operator: The next question comes from Chase Knickerbocker of Craig-Hallum Capital Group. Please go ahead.

The next question comes from. Chase Knickerbocker of Craig Helm. Please go ahead.

Jake: Good morning, everyone. This is Jake on for Chase. Thanks for taking the questions. Just regarding the NDRA, are you guys seeing any increased urgency to get centers up and running or hearing anything from centers since joining the program?

Good morning everyone. This is Jake conferred, Chase. Thanks for taking the questions.

um,

Just regarding the ndra. Are you guys seeing any increased urgency to get centers up and running or hearing anything from centers since joining the program?

Gerard Michel: No. I think the reason for that is, although that might, to the extent that any existing center that is accepting referrals or is trying to get to the point where they will accept referrals, to the extent that was good revenue integrity folks, and there are different names in every hospital for it, but let us use that term. To the extent that they were a little reluctant or wondering, you know, how thin would the margins be or, you know, can they cover their costs? You know, it is a much easier conversation to have for those that have DISH eligible facilities. But they are one of, and I am probably not exaggerating when I say up to a dozen different gating items to get this thing approved in hospitals.

No. And I think the reason for that is

Gerard Michel: I do not think anyone is pulling us forward because they are saying, "Hey, we are going to make a lot of money." I am thankful for that because at the end of the day, with a cancer treatment, you do not want that to be a driver on either end of the equation. But no, I would not say I see increased urgency in terms of, "Geez, look at this. This is much more, much better." At the end of the day, what drives us forward are physicians interested in doing the right thing by their patients and hearing from other docs that they are seeing, you know, extraordinary results in some patients, and then they just need to get through a lot of bureaucratic gating items.

Although that might be extent that any, an existing Center that's accepting referrals, or was getting trying to get to the point where, like set referrals to the extent, that was the revenue Integrity, folks, and there's different names in every hospital for it. But let's, let's use that term to the extent that they were a little reluctant or or wondering, you know, how thin would the margins be or, you know, can they cover their costs? You know, it's a much easier conversation to have for those that have Dish eligible facilities. Um but they are 1 of and I I probably not exaggerate when I say up to a dozen different gating items to get this thing approved in hospitals. Um, I don't think anyone's pulling us forward because they're saying, hey we're going to make a lot of money and that I'm thankful for that because the end of the day with a cancer treatment you don't want that to be a driver on on either end of the equation. Um but no I wouldn't say I see increased urgency in terms of just look at this. Um this is much more much better. You know, at the end of the day what drives us forward are

Physicians interested in doing the right thing by their patients um and hearing from other docs that they're seeing, you know, extraordinary results in some patients. Um and then they just need to get through a lot of bureaucratic dating items.

Jake: Thank you. That was helpful. If we could just turn to R&D for a second. Now that trials are starting to spin up, can you give us some thoughts on how we should be thinking about R&D? How does that ramp and when the trials are going to fully get going in terms of spend and what we should be modeling for?

Gerard Michel: Sure. Sandra, can you help out with that?

Thank you, that was helpful. Um if we could just turn to R&D for a second now that trials are starting to spin up. Can you give us some thoughts on how we should be thinking about R&D? How does that ramp? And and when the trouser and fully get going in terms of spend and what we should be modeling for

Sandra Pennell: Absolutely. So, R&D increased already in Q2 over Q1 by about 37%. This is fully loaded with the stock comp in there. We can expect probably another 40% in Q3 increase as we start to really ramp up in CRC and MVC, and probably another 25% to 30% increase in Q4 over Q3. Overall, from 2024, this will result in a full year, probably about a 140% increase. That does include a significant increase in stock comp from prior year. It probably makes up about 20-plus percent of the balance in R&D in 2025.

Sure Sandra. Can you help out with that?

Significant increase in stock comp from prior year probably makes up about 20 plus percent of the balance in R&D.

Jake: Great. Thank you.

Um, in 2025.

Great. Thank you.

Operator: The next question comes from Sudan Loganathan of Stephens. Please go ahead.

Sudan Loganathan: Hi. Good morning, Gerard, Sandra, and the Delcath team. Congrats on another strong quarter, and thank you for taking my question. First, I wanted to ask on the CHEMOSAT readout from ESMO. At what capacity can you market or educate physicians with the outcomes of the CHEMOSAT trial expected at ESMO Congress 2025 in October? Will this data be something your MSLs will be able to talk to or your sales reps will be able to talk to when meeting with prospective or existing active sites?

The next question comes from Sudan loan. Nathan of Stevens? Please go ahead.

Hi, good morning. Gerard Sandra. And the Doug Catt team. Congrats on another strong quarter and thank you for taking my questions. Uh, first I wanted to ask on the the Chapan uh read out from uh esmo and what capacity can you Market or educate Physicians with outcomes of the ship and trial expected? It has more Congress 2025 in October. Will this data be something? Your MSL will be able to talk to or a sales recipe to talk to, uh, when meeting with prospective or existing active sites?

Gerard Michel: That's a great question that we've discussed internally. At a minimum, the MSLs will be able to talk about it. Whether the reps can talk about it, I think they can certainly share the publication. They, in terms of detailing and saying, "You know, this is the new treatment paradigm. You should sequence in this following manner," that's probably verboten. I think in terms of sharing a publication, if the docs ask about it, that's perfectly fine. Also, in terms of putting in touch with our MSLs, that certainly will happen. It's kind of a slight gray area because you know it is on-label to use this just for two or six, whoever you want, and the Chopin protocol of initially two. We'll probably try to stay somewhat on the conservative side and have most of the detailed conversations occur with the MSLs.

Yeah. You it's a a great question that we've discussed internally at a minimum the msl's will be able to talk about it. Um what are the Reps can talk about? And I think they can certainly um share the publication. Um they in terms of detailing and saying you know this is the this is the new treatment Paradigm you should sequence in this following manner, that's probably verboten um but I think in terms of you know sharing a publication if the docs ask about it, that's perfectly fine. And also in terms of um putting in touch of ourselves

That's certainly will happen. It's kind of a slight gray area because, um,

you know, it is on label to use this just for 2 or 6 however you want and the she'll fan protocols initially too. Um,

but we'll probably try to stay some on the conservative side and have most of the detail conversations occur with the msl's.

Sudan Loganathan: Got it. Great. Secondly, if I could ask, I think if I heard correctly, you made a slight adjustment to the number of active sites you are anticipating by the end of Q4 to be 25 to 28 versus the prior guidance of 30 by the end of the year. Since you are also mostly retaining your product sales guidance ranges, does the continued strength really come from the number of treatments per site per month, being at two or higher still for the existing vacuum sites and even the ones that are potentially coming on between now and the end of the year?

Gerard Michel: When we first issued guidance just a couple of months ago, I think it is important for me to kind of share, and I have talked a lot of you one-on-one about this, why we did that, share why we decided to issue guidance. When we quite frankly quickly found out that we needed to participate in 340B and NDRA due to some rule guideline changes, we realized that it would be very difficult for investors and analysts to kind of tease apart what the heck does that mean. Now we have another variable, the discount, but also how many sites are participating in the discount. We also knew our volume was ahead of what consensus was out there in the street.

Great. Um, and secondly, if I could ask, I think if I heard correctly, you made a slight adjustment to the number of active sites, you're anticipating by end of fourth quarter, to be 25 to 28 versus the prior guidance of 30, right in the year since you're also mostly retaining your product sales. Guidance ranges. You know, does the continued strength really coming from the number of treatments per site per month, you know, being at 2 or higher still for the existing vacuum sites and even the ones that are potentially coming on between now and the end of the year.

yeah, so, when we first issued guidance, um,

Just a couple months ago, I think it's important that for me to kind of share and I've talked a lot of the you 1 on 1 about this. Why we did that um share why we decided to issue guidance. When we we kind of quite frankly quickly found out that we needed to participate in 340 B and ndra

Gerard Michel: We thought it would be possible, probably really prudent, even though I did not want to issue guidance until starting next year because of the difficulty in predicting site activations. We thought it was best to kind of put some bounds out there to invest in the community, given this new kind of variable out there. With that said, if you are asking why it did not come down more, which I think, we tightened it a little bit and moved it down slightly, we are doing okay. We are slightly over two treatments per center, which is great. Some of the centers that are coming on board, we think will be higher volume centers as well. So that gives us a fair amount of confidence as well and just a modest adjustment in the guidance.

Do this and, you know, rule guideline changes. Um, we realize that it'd be very difficult for investors and analysts to kind of tease apart. What the heck does that mean? Um, now we have another variable um, the discount, but also how many sites are participating in the discount? Um, we also knew our volume was ahead of what consensus was out there on the street. Um, and we thought it'd be Poss probably really prudent, even though I didn't want to issue guidance, until starting next year because of the difficulty in predicting site activation, um, we thought it was best to kind of put some bounds out there, uh, to invest in community. Um given this new kind of variable out there. Uh,

Sudan Loganathan: Gotcha. That is great. On the last point, I am assuming most or all of the adjustment from the product revenue guidance changes is coming from HEPZATO KIT and not from CHEMOSAT Hepatic Delivery System. I just want to say if that is a correct assumption to make.

You know, with that said um if you're asking why I didn't come down more which I think you know we tightened it a little bit and moved it down slightly. Yeah, we're we're doing okay, we are slightly over 2 treatments per Center, um, which is great. Um, some of the centers that are coming on board, we think will be higher volume centers as well. So that gives us a fair amount of confidence as well, um, and just a modest adjustment in the guidance.

Gerard Michel: All right. You asked, is most of the growth coming from HEPZATO KIT, not CHEMOSAT Hepatic Delivery System?

Got you, that's great. Uh, and then the last point, you know, I'm assuming most of our or all of the adjustment from the product Revenue. Guidance range is coming from a good and not from chemo set, and just want to see if if that's the correct assumption to make

Sudan Loganathan: The changes in the range for the product revenue guidance range, is that primarily due to changes in HEPZATO KIT expectations or CHEMOSAT?

Gerard Michel: A slight change in CHEMOSAT Hepatic Delivery System expectations and a change, I think, both. CHEMOSAT Hepatic Delivery System is tough because the end in terms of treating centers that really contribute to revenue is fairly small. I think three or four centers probably account for 70% of the business. A bunch of docs being out because they are sick, which actually happened at one of the sites in Germany, can really swing it around. I think two-thirds of the change is probably from HEPZATO KIT and a third, give or take, from CHEMOSAT Hepatic Delivery System.

Sudan Loganathan: Great. Thanks. And again, congrats on the great quarter.

All right, you you asked is most is most of the growth coming from hexad, not uh, chemo. The changes, the the changes in the range for, uh, the product Revenue, uh, guidance range is that primarily due to changes in healthcare expectations or, or chemotherapy a slight change in chemo set expectations. Um, and it changes I think both um now uh, chemos tough because the n in terms of, you know, treating centers that really contribute to revenue is fairly small. I think 3 or 4 centers probably account for 70% of the business. Um, so, you know, a bunch of docs being out because they're sick, which actually happened to 1 of the sites in Germany, um, can really swing it around. Um, but I, you know, I take 2/3 of the change is probably from hips Auto on a third give or take from chemo sap.

Again, congrats on on the great quarter.

Operator: The next question comes from Bill Maughan of Clear Street. Please go ahead.

Bill Maughan: Hey, good morning and thanks. Just looking, it is kind of a multi-part question on treatment rates at sites. You are currently at around two per month per center, and you have indicated that should be similar through year-end. Do you see that changing meaningfully in the currently activated centers beyond this year, either up or down? As you grow to a target of 40 by the end of next year, given those are probably not the first 20 most attractive sites to add, do you expect them to have a lower treatment per month per center? Thank you.

The next question comes from Bill Morgan of Clear Street. Please go ahead.

Hey, good morning and thanks. Uh, so just looking, it's kind of a multi-part question on, uh, on, uh, treatment rates at sites. So you're currently at around, uh, 2 per month per Center, and, and you've indicated that should be similar through year end. Um, do you see that changing meaningfully in the currently activated centers Beyond this year, either up or down? And then, as you grow to, to a target of 40, by the end of next year, uh, given those are probably the

Gerard Michel: Yeah. In terms of the last point, less attractive because it is the next 20, I am not sure about that. They may have less of a book of business of uveal melanoma patients, but part of what we are going to do is build referral networks to those centers. One of the dynamics that we are aware of and are working on plans to deal with is some centers, some of the heavy volume centers run out of capacity. So we kind of have two things to do there. One is keep that in mind as we are building referral networks, and centers that we know do not have enough slots to treat, we will try to adjust that referral pattern to other centers that are under capacity.

Not the, you know, first 20, most attractive sites to add. Do you expect them to have a lower, uh, treatments per month per Center? Thank you.

Yeah, I, in terms of the last point, less attractive because it's the next 20, I'm not sure about that. They may be.

Have less of a book of business of UV or melanoma patients but you know part of what we're going to do is is build referral necklace to those centers. Um

1 of the Dynamics that I is, you know, we are aware of and

Are working on plans to, um, deal with is some centers. Some of the heavy volume centers run out of capacity. Um,

so, we kind of have 2 things to do their 1 is

Keep that in mind as we're building referral networks and centers. That we know

Gerard Michel: A second dynamic is to try to see if we can actually get centers to increase either room time or train a second team. In some centers, it is room time. In some centers, it is just the team that is available. I know one center was treating at a rate that required some of the team members to come in on their days off. I think it is a testament to what they think of the therapy that they are willing to do that, but that is probably not sustainable. So we are trying to see what we can do about getting more people trained up. But that is kind of the dynamic in the growth.

don't have enough slots, uh, to treat. We'll try to adjust that referral pattern to other centers that are under capacity. Um, a second Dynamic is just try to see if we can actually get, uh, centers to. You know, increase either room, time or train a second team in some centers its room time and some centers. It's just uh, the team that's available. Um, I know 1 Center was treating

Gerard Michel: Some centers reach a cap, and either we need to refer, I will not say refer around them, but refer to other centers to the extent we can do that, or try to help them build a case that they can expand capacity. If we are successful in that, then I do believe we will start seeing increasing growth beyond two in terms of on an average basis.

Uh, at a rate that required some of the team members to come in on their days off. Uh, you know, it's, it's I think it's a testament to what they think of the therapy that they're willing to do that. But that's probably not sustainable. So we're, you know, trying to see what we can do about getting more. People trained up, but that's kind of the dynamic in the growth, some centers, you know, reach a cap and either we need to refer, I don't say refer around them but refer to other centers. Um, to the extent, we can do that or try to help them build a case that they can expand capacity. If we are successful in that,

Then I do believe, we'll start seeing increasing growth Beyond 2 in terms of an average basis.

Sudan Loganathan: Thank you.

Thank you.

Operator: The next question comes from Yale Jen of Laidlaw & Company. Please go ahead.

Yale Jen: Good morning, and thanks for taking the questions. Congrats on the top line this quarter. Just a few quick ones. The first one is in terms of the ESMO presentation, to your best knowledge, what kind of data will be presented? That is the first one.

The next question comes from eilen of late, law and Co. Please go ahead.

Good morning and thanks for taking the questions of Congress on the, uh, Top Line this quarter. Uh, just a few quick ones. The first 1 is that in terms of uh the Asimo to your best knowledge, what kind of data will be presented uh, and

Gerard Michel: Okay. So you are talking about the Chopin study at ESMO?

So that this is the first 1.

Yale Jen: Yeah.

Gerard Michel: Okay. All right. Vojislav, do you mind responding to that?

Okay. So talk about the chopan study at esmo. Yeah, broke up a little bit. Okay, all right. Well, do you mind uh, responding to that?

Yale Jen: Sure. Thanks for the question. The Chopin trial, just to remind you, is comparing the two treatments. One arm is the HEPZATO KIT alone, CHEMOSAT Hepatic Delivery System, and the other is the sequential use of CHEMOSAT with Epinevo. The primary endpoint of the study is one-year progression-free survival. Our understanding is that the analysis is underway, and it is the intention of the investigators to present the primary endpoint results along with safety and secondary efficacy results at the ESMO conference. Okay, great. That is very helpful. One other question here is that in terms of you going to reduce the center to be activated from 30 to 25, maybe 25 to 28, is there a specific reason for doing that? We just like to know a little bit of the colors on that as well.

Sure. Um thanks for the question uh the shop. And I'll just remind you um is comparing the 2 treatments. The 1 arm is the CHP alone that's chemotherapy

and the other is the sequential use of chemotherapy with EPO the primary endpoint of the study, is 1 year progression through survival. And our understanding, is that the analysis is on the way. And it has been tension of the investigators to present the primary endpoint results along with safety in the secondary efficacy, uh, results at the FM conference,

Okay, great. That's very helpful. And uh 1 of the question here is the in terms of you going to reduce the center to be activated from 3225. Maybe 25 to 28 uh

Gerard Michel: Sure. I will say there is definitely not one specific reason. If it really, I wish there was. It would be easier to deal with, perhaps, but it really has to do with the complexity of activating these very large, most of them large academic centers. Kevin, do you mind just adding a little bit of color as to what is going on and just the center in the field force?

What is there a specific uh reasons for doing that? And uh would you like to know the colors on that as well?

Sure, I'll say there. There's definitely not 1 specific, reason it it. If, um, it really I wish there was it would be easier to deal with perhaps, but it really has to do with the complexity activating these very large, most of the large academic centers.

But, um, Kevin do you mind just adding a little bit of color as to what's going on and, uh, just the sense from the Field Force.

Kevin Muir: Sure. I will. As Gerard Michel mentioned in his comments, we are scaling intentionally, and our focus is activating the right site. That brings its own layer of complexity in the process. This HEPZATO KIT procedure sits outside traditional care pathways and conventional team structures. Their flexibility is crucial for us to open the sites. One example is perfusion. Perfusion is often the final hurdle before launch. It involves credentialing, scheduling integration, and alignment with surgical workflows. It is also one of our most crucial onboarding steps. Securing perfusion services is essential to procedural success, but it is not universally available. What we are having to do is go into a number of these sites and contract with external providers of perfusion services. We have had a recent wave of success in signing some of these contracts. What we are seeing is an alignment across the board with these hospitals.

Comments: we're scaling intentionally, and our focus is activating the right side. So that brings its own layer of complexity in.

Uh, in the process and this peps Auto Care. Procedure sits outside, traditional care Pathways and conventional team structures. So, their, their flexibility is crucial for us to open the sites. And 1 example is profusion.

Profusion is often the final hurdle before launch. It involves credentialing scheduling integration and alignment with Surgical workflows.

It's also 1 of our most crucial onboarding steps.

Uh securing profusion Services is essential to procedural success, but it's not universally available. So what we're having to do is go in, do a number of these sites and um, contract with with external providers of profusion services.

so, uh, we've had a recent wave of success and uh,

Kevin Muir: I would expect that even though we dropped the guidance on the total number, I think we will see a lot of the sites that we have been trying to get in that have significant patient volume opening in the near future.

Signing some of these contracts. So what we're seeing is kind of an alignment across the board with these hospitals. And I would expect that, uh,

Even though we dropped the, the, the guidance, on the total number, I think, we'll see a lot of the, uh, sites that we have been trying to get in that have significant patient. Volume opening in the near future.

Yale Jen: And maybe just follow up on this one. In terms of, as you mentioned, securing the perfusion services, do you anticipate overall this will, quote-unquote, "improve" going forward? So make it less of a hurdle, for example, in the next year. And thanks.

And maybe just follow up on this 1 in terms of a specific measure securing the profusion services. Do you anticipate overall? This will going to improve going forward. So make a less a hurdle, for example, in in next year.

Gerard Michel: Yeah, I think it will help. I will say, as Gerard mentioned, each one of these sites is kind of a unique beast. There is not one specific thing that holds up an account opening, but definitely, providing and securing perfusion services has been identified, and it is one of the things that we are tackling earlier in the site activation process now than we have been in the past.

And thanks.

Yeah, I I think it will help. I do I will say as George mentioned each 1 of these sites is kind of a unique beast. And uh there's not 1 specific thing that holds up an account opening but definitely uh, providing and securing profusion Services has been identified and it's 1 of the things that we are uh, tackling earlier in the site activation process. Now,

And we haven't been in the past.

Yale Jen: Okay. Thanks a lot. Yeah, go ahead. I'm sorry.

Gerard Michel: am just going to add a little color on that. It is very unusual for a large academic center to say, "Sure, we are happy to work with you to contract with some other third party so we can have your product." In most cases, they tell you to just go, pound sand. This is a testament to the fact that the docs want the product, and they are championing it for us and going through this issue. This really is, and I know investors and analysts have probably heard of it, tired of hearing me say this. This is a very, very unique beast. It does not fit into so many different pathways, team structures, etc.

Okay, great, thanks. Thanks a lot again. Go ahead. I'm sorry, I'm just got a little color on that. It's very

Gerard Michel: The fact that we are getting it into these sites should tell you that there is something here. There is something real. It has been difficult to predict the pace, but we are getting in. It just fits and starts in terms of just the various contracts and bureaucracies, etc., that we need to go through.

It's very unusual for a large academic center to say sure we're happy to work with you to contract with some other third-party so we can have your product in most cases. They tell you to just go you know, pound sand. Um so this is a testament to the fact that, you know, these the docs want the product and they're championing it for us and going through this, this issue. So you know, this really is and I I know investors and analysts have probably heard of you tired of hearing me say this. This is a very, very unique Beast. It doesn't fit into so many different Pathways team structures of

And the fact that we are getting it into these sites, should tell you that there, that there's something here. There's something real. Um, it's been difficult to predict the pace, um, but we are getting in, um, it just, you know, fits and starts in terms of just the various contracts and bureaucracies that Etc that we need to go through.

Yale Jen: Okay, great. I appreciate the detailed explanation. And again, congrats on the quarter.

Okay, great. Uh, appreciate the detail of explanation and again contract on the quarter, right?

Operator: Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, you are welcome to press star and then one to place yourself in the question queue. The next question comes from Swayampakula Ramakanth of H.C. Wainwright. Please go ahead.

Thank you, ladies and gentlemen, just a reminder. If you like to ask a question, you're welcome to Bristol and then 1 to place yourself in the question queue.

Swayampakula Ramakanth: Thank you. This is Yale Jen from H.C. Wainwright. Good morning, Gerard and Sandra. Most of my questions have been asked. I just have one question. After, you know, working with different centers, in terms of getting them trained and, you know, taking patients and go through the procedure, are you folks, do you have a system at this point where you think you can get through this onboarding and training process a little bit sooner than previously? The second part of the question is, now that you are on the 340B program, do you think some of the current centers could easily go beyond the average two treatments per month to say closer to three by the end of this year?

The next question comes from Sam pakula of HC. Wayne Wright. Please go ahead

Thank you. This is okay from headwind, right? Um, good morning, here out and Sandra. Um, what's up my questions? Have been, um, asked, um, I just have 1 question. Um, after, you know, working with, uh, different centers, you know, in terms of getting them trained and, you know, um, taking patients and go through the pro pro procedure. Um, um, um, are, are you folks? Um, you know, how do you have a system at this point where you think you can get through this onboarding and training?

Process. Um, you know, a little bit sooner, um, than previously. And, uh, and the second part of the question is, you know, now that you are on the 340b program. Um, do you think some of the, the current centers, uh, could easily?

Go, you know, um, beyond the average two treatments per month, you know,

To say closer to 3.

Gerard Michel: Yeah, sure. Okay. Let me start with the second question. I do not think that would be like a 50% increase in volume. I do not think we are going to see that due to the NDRA through, you know, 340B program. I do think that it will lead to, on a portfolio basis, if hospitals realize, "Hey, you know, we are covering our costs," and then some, you know, it is a prudent thing to do for the institution not to put the brakes on occasionally. I think that will go away. It will be very hard for us to ever quantify that. You know, I am reluctant to do that. But, you know, I will say it certainly is not going to hurt. Whether or not it is well over, you know, the revenue we lose per kit, hard to say. It may very well be.

By the end of this year.

I don't think that would be like a 50% increase in volume. I don't think we're going to see that.

Do the ndra, you know, 340b program. Um, I do think that um,

It will lead to, you know, a portfolio basis of hospitals realized, hey, you know, we are covering our costs, and then some, um, you know, it's a prudent thing to do for the institution, not to put the brakes on occasionally, I think that'll go away. It'll be very hard for us to ever quantify that. Um, so, you know, I, I'm reluctant to do that. Um,

But you know, I'll say it certainly isn't going to hurt.

um,

Gerard Michel: But I think what is good about it is it removes the conversation that perhaps was occurring in some of the centers. Now we are not privy to these conversations and puts the bulk of the decision as to whether to use the product or not basically on how good will it be for the patient. That is a win. In terms of, "Hey, have you, you know, have we pulled together, you know, is there a process now, a template that we can go to the next set and get this done faster?" There certainly are some learnings, and I think Kevin just identified one. Perfusion, we found not in all the centers, but in a meaningful percentage, I do not know off the top of my head, what is this, let us say a third or so, perfusion became gating at the end.

whether or not it's well over, you know the the the revenue that we lose per kit, hard to say, it may very well be um but I think what's good about it is

It removes the conversation that perhaps was occurring in some of the centers. Now, we're not privy to these conversations and puts the bulk of the decision as to whether you use the product or not basically on how good will it be for the patient and that's a win.

um, in terms of

Gerard Michel: Kevin's team is getting ahead of that now. Another thing that, you know, Kevin is going to start implementing is in some centers where it is more IR-driven and the oncologist is saying, "Sure," but is not necessarily, you know, making the phone calls and walking the halls to try to get through some of these gating items. They are just kind of like, "Sure, I will do it. I will be part of it." You know, Kevin is introducing, well, I will call oncology proctors. He is going to make a point of trying to get oncologists at other sites that have seen, you know, very strong responses in their patients, try to get them to kind of proctor the oncologist is what you can expect to see.

Hey have you you know have we pulled together you know is there a process now? A template that we can go to the next set and get this done F faster? There certainly are some learnings and I think Kevin just identified 1 professional not in all the centers but in a meaningful percentage, I don't know off the top of my head whether this let's say a third or so, profusion became dating at the end. So Kevin's team is getting ahead of that. Now, um, another thing that, you know, Kevin is going to start implementing is uh,

Gerard Michel: Frankly, for the subset of sites where the oncologist is not leading it, the IR is, so we can get both MDs to lead the charge. So yeah, we are trying to tweak the process. But again, I am reluctant to put a, you know, so yeah, we are going to be 20% faster. It is obviously we had a slight slowdown all of a sudden, and I did not expect that. But again, it is because each of these institutions is very different.

In some centers where it's more IR driven and the oncologist is saying sure but isn't necessarily you know, making the phone calls and and Walking The Halls to try to get through some of these gating items. Um, they're just kind of like, sure. I'll do it. I'll be part of it. You know, Kevin is introducing, um, well, I'll call oncology Proctors. He's going to make a point of trying to get oncologists at other sites that have seen, you know, very strong responses in their patients, try to get them to kind of Proctor the oncologist. This is what you can expect to see frankly for the subset of sites where the oncologist isn't leading it, the the IRS so we can get both both amd's to leave the charge. So yeah, we're trying to tweak the process.

Swayampakula Ramakanth: Okay. Then the last question for me is, now that you have a clinical program starting in Europe for the additional indication, do you see that helping out on the CHEMOSAT Hepatic Delivery System sales at all by any means, not only for the rest of the year, but in 2026, or these are two independent things that it really should not or may not benefit from the sales of CHEMOSAT Hepatic Delivery System?

Um, but again I'd reluctant to put a a, you know, so yeah, we're going to be 20% faster, um, because obviously we had a slight of a slight slowdown on all of a sudden and I didn't expect that. But again, it's because each of these institutions is is very different.

Gerard Michel: Longer term, it will benefit. Europe was primarily driven by a small number of sites in Germany and one or two sites in the U.K. where they essentially, on their own, organically, the product was approved as a device, used it, became believers, and championed it within their own institutions. We had very little, very few clinical sites and participation in Italy, Spain, France, and most of those were IRs. To get a new cancer therapy utilized, you really need the oncologist on board. IRs are helpful, but to a large extent, and I hope they're not listening, I hope they don't get angry with me, but they're subcontractors to the oncologists. Opening clinical sites for colorectal cancer, breast cancer, that will allow us to open sites in countries where we either have no sites, Italy, France, Spain, or currently have sites, but we can expand it.

Okay. And then the last question from me is um now that you have um um uh a clinical program starting in in Europe, uh for the for the additional indication. Do you um see that uh, helping out on the chemo Side sales at all by any means? Um, not only for the rest of the year, but you know in 2026 are, these are 2 independent things that it really should not. Um, or may not benefit from the sales of chemotherapy.

Longer term, it will benefit. Um,

You know, Europe was primarily driven by a small number of sites in Germany and 1 or 2 sites in the UK where they essentially on their own organically, the product was approved as a device used, it became Believers, um, and you know, championed it within their own institutions. Um, we had very little

Very few clinical sites and participation, um, in Italy, Spain, France, and most of those were IRS.

so you know to get a new cancer therapy utilized, you really need the oncologists on board um IRS are helpful uh but to a large extent and you know I hope they're not listening or I hope they don't get angry with me but their subcontractors to the oncologists the

Um, now opening clinical sites for colorectal cancer breast cancer. Um, that will allow us to open sights.

Gerard Michel: Once we have those sites up and running in terms of, for the clinical trial purpose, and that's a huge, huge hurdle. It takes a lot of activation energy, some reason to open a site from the site's perspective. Once we have a site open, it'll be much, much easier to start talking to docs, mostly dermal oncologists, what they're called in Europe. It'll be much easier to have conversations with them and say, "Hey, look, at your center, you have this team that's doing this procedure. Why don't you steer some patients to that because the team's already trained?" So yes. The short answer to your question is yes, it will help CHEMOSAT Hepatic Delivery System sales, but it will take a period of quarters to years to really make a material difference.

In um, in in countries where we either have no sights, um, it'll leave France, Spain or currently have sites but we can expand it. Um, once we have those sites up and running,

In terms of, you know, for the clinical trial purpose. And that's a huge, huge hurdle.

Um why don't you steer some patience to that because the team's already trained. So yes.

The short answer is to your question is yes, it will help chemo set sales, um, and but it will take a period of, you know, of quarters to years to really make a material difference.

Swayampakula Ramakanth: Thank you. Thank you, Gerard, for taking my questions.

Thank you, thank you Jared for taking my questions.

Operator: Thank you. Ladies and gentlemen, with no further questions in the question queue, this concludes the question and answer session. Thank you for attending, and you may now disconnect your services.

Thank you, ladies and gentlemen. With no further questions in the queue, this concludes the question and answer session.

Thank you for attending, and you may not disconnect.