Delcath Systems (NASDAQ:DCTH) reported record third-quarter revenue of $35.1 million, up 71% from a year earlier, as use of its HEPZATO KIT increased across U.S. treatment centers. The company also raised its full-year revenue outlook and reported higher net income and positive operating cash flow.
Chief Executive Officer Gerard Michel said the results reflected approximately 0.6 new patient starts per site per month during the quarter. Delcath had 33 active U.S. treatment centers, including newly added University of Nebraska and AdventHealth sites, and expects at least 36 centers by year-end.
HEPZATO Growth Drives Results
HEPZATO KIT revenue rose to $32.7 million from $19.3 million in the prior-year quarter, Chief Financial Officer Sandra Pennell said. HEPZATO volume increased 19% from the second quarter and 72% year over year. CHEMOSAT revenue increased to $2.4 million from $1.3 million.
Gross margin improved to 89% from 87%. Net income rose to $7 million from $0.8 million, while adjusted EBITDA, a non-GAAP measure, increased to $11.5 million from $5.3 million.
Research and development expenses climbed to $11 million from $8 million, primarily because of additional clinical staff and trial activity. Selling, general and administrative expenses rose to $13.1 million from $10.3 million as the company invested in commercial expansion.
Delcath ended the quarter with $104.3 million in cash and investments and no debt. It generated $8.2 million in operating cash flow, compared with $4.8 million a year earlier. Pennell cautioned that quarterly profitability could vary as the company invests in its treatment network and clinical development.
Outlook Reflects Holiday Scheduling
Delcath raised its 2026 total revenue guidance to $115 million to $117 million and expects HEPZATO KIT volume growth of at least 41% over 2025. It also projected a full-year gross margin of 87% to 89% and positive adjusted EBITDA.
The outlook implies fourth-quarter revenue of $25.8 million to $27.8 million, below the third-quarter result but approximately 25% to 34% higher than a year earlier. Michel said the company expects to lose close to two weeks of treatment scheduling because of holidays, accounting for most of the sequential decline. He added that new patient starts generally fall in the fourth quarter.
Michel said October results were included in the guidance but did not disclose the figures. He noted that fourth-quarter new patient starts last year were approximately 0.3 to 0.35 per site per month and said assuming a continued rate of 0.6 would be aggressive.
Centers Expand Capacity
Michel attributed the third-quarter performance to several factors, including more frequent use of HEPZATO alongside or in sequence with systemic therapies, growing patient awareness, fewer headwinds from clinical trials and efforts to establish backup treatment teams at centers.
Chief Commercial Officer Kevin Muir said growth in new patients was broad-based, while larger centers, including MD Anderson and Mass General, increased capacity and treatment activity. Delcath also said the 1,000th commercial HEPZATO treatment in the U.S. took place during the third quarter.
Two additional centers had patients scheduled for treatment in the coming weeks, Michel said, although he cautioned that scheduled procedures can be canceled and center activation projections are uncertain. Muir said integrated networks such as AdventHealth can help refer patients to treatment centers.
Clinical Programs Advance
Delcath’s phase 2 colorectal cancer trial is enrolling at a pace that supports an interim analysis around the middle of 2027, Michel said. In response to an analyst’s question, he said the company could provide an interim update in the second or third quarter of next year.
Enrollment in the breast cancer trial has been slower than initially anticipated, and Delcath is not yet providing a timeline for an interim analysis. Michel said the first patient was dosed in July at the European Institute of Oncology in Milan and that multiple sites are recruiting in Europe and the U.S.
The company also plans an investigational new drug submission for cholangiocarcinoma in early 2027 and is working on an oxaliplatin-based hepatic delivery program. Michel said the company expects to complete ongoing preclinical development of the latter program by mid-2027 to support a subsequent submission, pending FDA agreement.
About Delcath Systems (NASDAQ:DCTH)
Delcath Systems, Inc is a medical technology company focused on liver-directed cancer treatments. The company develops and commercializes systems designed to deliver high concentrations of chemotherapy to the liver while limiting exposure to the rest of the body.
Its primary product in the United States is the HEPZATO KIT, a liver-directed therapy that combines the company’s proprietary hepatic delivery system with melphalan hydrochloride for injection. HEPZATO is approved for the treatment of adult patients with unresectable metastatic uveal melanoma involving the liver, without extrahepatic disease or with limited extrahepatic disease that is not clinically significant.
Outside the United States, Delcath markets the corresponding system under the CHEMOSAT brand.
