DCTH Delcath Systems, Inc.

NASDAQ
$16.73

Delcath Systems, Inc. Q2 F2026 Earnings Call Transcript

Thursday, August 6, 2026

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Conference Operator
Operator
Yeah, I'll ask Kevin in a moment to comment on how we feel about the additional
Gerard Mitchell
President & Chief Executive Officer
Thank you very much. visibility into these things. It's about two to three weeks. This time last year, we saw some softness in that two to three-week period. We're not seeing that quite yet.
Unknown
Investor Relations Moderator
But, you know, that's only two to three weeks. Kevin?
Kevin [Last Name]
Chief Commercial Officer
Yes, thanks, Gerard, and thanks for the question, Chase. We are looking kind of strong for the number of news sites were bringing on. It's a kind of get them in fits and starts when training is completed. So we have a number of sites that are in the queue to get our preceptorship and proctorship. And it's just a matter of time until they open for the remainder of the year. So I feel very strong that we can obtain Gerard's goal of 37. Yeah, our goal of 37, my friend.
Gerard Mitchell
President & Chief Executive Officer
I also would say we have at least one patient scheduled, maybe two right now, and then one more looking for patients. Now, patients can get scheduled, that one I mentioned, but these are on the cusp. And what we found is the on-the-cusp ones can go in weeks, they can go in months. But there's a healthy on-deck circle here. The 37 is well within our reach. You know, fingers crossed a bit as we know it's episodic, but it's not a soft pipe calling.
Conference Operator
Operator
Helpful caller, guys. Thank you. Thank you. Your next question comes from Sam Pankula with HC Wainwright. Please go ahead.
RK
Analyst, HC Wainwright
Thank you. This is RK from HC Wainwright. Good morning, Gerard and Sandra. Morning. A couple of quick questions here. I'm trying to bridge the gap between the 30% volume growth and the 27% revenue growth. So how much of that gap is from 340B or Medicaid or just the site mix? And the second question is on the gross margin. You know, you exited last quarter at 90%, but your guidance asks for a little bit lower than that for the full year. So is that basically coming from the top line, or is there something else that's going on?
Unknown
Investor Relations Moderator
Sandra?
Sandra [Last Name]
Chief Financial Officer
Yes, I can answer that. both questions with regard to the Q2 volume as well as the revenue from prior years. So, reminder that 340 pricing which reduced our effective ASP from about 185 or down to about 170, 173,000 per kit this year versus what we recognized last year. Even though revenue is only up 21%, it's actually representative of 30% volume. So 100% of that difference between those two figures is due to 340B. With regards to gross margin, yes, we had a great quarter in Q2, recognizing 90%, which is up from 86% a year ago and is above our original guidance of 85% to 87% for the full year. Now, the Q2 improvement reflects better overhead absorption, favorable manufacturing performance, and obviously increased HEP-SATO volume. As we go into the remainder of the year, we do have to be a bit conservative around additional manufacturing costs, so the full year is 86% to 89%. We may see a quarter that dips a little bit below that 90% and one that hits 90% again, but that's our current guide.
Unknown
Investor Relations Moderator
Thank you. Thank you, Sandra, for taking the questions. Thank you.
Conference Operator
Operator
Thank you. Your next question comes from Yael Jin with Laylo and Company. Please go ahead.
Yael Jin
Analyst, Laidlaw & Company
Good morning, and thanks for taking questions, and congrats on a good quarter performance. Since we have two here, the first one is that I noticed your recent deck in terms of the type of cancer that to liver you have about eight of them and just curious initially why you choose the breast cancer and the DRC given they are not necessarily the highest volume or other factors. Any thoughts of that when you made that decision?
Gerard Mitchell
President & Chief Executive Officer
And then I'll follow up. Yeah, that's a great question. We started the conversations as to those two trials probably a good two years ago. For CRC, there's a large amount of liver-dominant cancer. It's probably the largest outside of primary. The setting we chose, third line, is not the largest. It's actually quite a bit cut down from the overall population of patients with liver diameter cancer and CRC patients. But the reason we chose that, frankly, was when oncologists and, to a lesser extent, IRs, who are fairly unfamiliar with our therapy, when we were having conversations about where to start, that's where we got traction. and so it was largely driven by Doc's willingness to participate. Now, I don't want people to think, well, that's a big negative. This is a very novel procedure. Oncologists generally prefer systemics, but I think the data as we generate it will bear out and oncologists will change their perception first in terms of trials they want to participate in and then eventually, obviously, actual commercial clinical usage. In terms of breast cancer, that one is a bit less, admittedly, but there was real interest in oncologists in terms of participating in that trial. Yes, it's been slow to enroll and get started, but there were a couple of key KOLs who thought there was a real need here. Breast cancer, there's types of breast cancer tumors generally react well to chemotherapy, so that was one reason a number of docs were excited. But these were the starting sets where we get traction with oncologists being interested. Who knows, if we started now with the level of understanding we have out there, would it be a different set? Yes, but we had to start somewhere. I think these are meaningful markets for us, and there's a real unmet need in these settings. and we'll add more, some orphan type indications and some much larger indications going forward.
Yael Jin
Analyst, Laidlaw & Company
Okay, great. That's very helpful. Maybe just a tag on that from the similar themes, which is with the current patient enrollment of those two trials, are they within your expectation or you have different sort of hope in terms of the pace and other factors. And thanks.
Gerard Mitchell
President & Chief Executive Officer
Definitely lower than our expectations. There are a number of reasons for that. I think one not so obvious reason is that just as we had to get CITES REM certified and up and running, we had that issue with new centers. We also had to educate the clinical trial teams. And we found that getting the IR teams, which are less set up for clinical trials, to work with the oncology teams, which are very familiar with trials, but they're not familiar with this type of therapy. Getting those teams to work together with a new patient flow, the type of data we need to gather in the IR suite, it was very new to them. Quite frankly, a number of centers that we thought would quickly activate and enroll, we got the disparate teams together. It became an issue. So with the dimension of change in training, we did not anticipate would be a problem in the clinical trial setting. So just as in the commercial setting, there was a hill to climb that we kind of understood we'd have to do when we started. It was a bigger hill than we thought. We finally found the same thing in the clinical trial. Getting the clinical trial teams to work together in this type of trial was a problem. We lost some centers because of it, undoubtedly. The bigger issue was just centers taking a while to get up and running. So again, interesting product, different type of product, but we're working through the issues just as we have commercially. We're going to work through the issues on the clinical side as well.
Yael Jin
Analyst, Laidlaw & Company
Okay, great. This is very helpful and certainly congrats on all the progress and best of luck to you guys.
Conference Operator
Operator
Thank you. There are no further questions on the phone line. I will turn the call back to Mr. Mitchell for some closing remarks.
Gerard Mitchell
President & Chief Executive Officer
Okay. I just want to thank everyone for their support, both the investors as well as the internal team here at DelCap. We're getting a lot done, and it wouldn't be if it wasn't for the employees of the company who are very dedicated to move things forward for patients and to earn the trust of the investors. Thank you very much for your time, and have a great day.
Conference Operator
Operator
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.