Delcath Systems, Inc.
Q2 2014 Earnings Call Transcript

Published:

  • Operator:
    Good day, ladies and gentlemen and welcome to the Delcath Systems’ Second Quarter 2014 Conference Call. My name is Christel, and I will be the operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, the conference is being recorded for replay purposes. I would now like to turn the call over to your host for today, Mr. Michael Polyviou with Investor Relations. Please proceed.
  • Michael Polyviou:
    Thank you, Christel, and good afternoon, everyone. Thank you for joining us today for this conference call and webcast to provide an update on Delcath’s fiscal second quarter 2014 results, as well as recent developments. A replay of the conference call will be available approximately for two hours after the conclusion of today’s call, and it will be available for seven days. The operator will provide replay details at the conclusion of today’s call. A live webcast of this call is also available at www.delcath.com, and the call will also be archived on the company’s website. Before we begin, I’d like to remind you that some of the statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties, and actual results could differ materially from these – from those projected in any forward-looking statements. Factors that could cause actual results to differ are discussed from time-to-time in the company’s filings with the SEC, including our annual report on Form 10-K and our reports on Form 10-Q and 8-K. These documents are available on the Investor Relations section of our website, and we encourage you to review the material. The company has no obligation to publicly update, or revise these forward-looking statements to reflect events or circumstances after the date they are made. Participating on today’s call are Delcath’s Interim Co-President and Co-CEO’s, Jennifer Simpson and Graham Miao. Jennifer is also Delcath’s Executive Vice President, Global Head of Business Operations; and Graham Miao is Delcath’s Executive Vice President and Chief Financial Officer. Following their opening remarks, we will open the call to questions from analysts and the institutional investors. And with that, I’d like to turn the call over to Jennifer.
  • Jennifer Simpson:
    Thanks, Michael and good afternoon everyone. This afternoon, I’d like to provide updates on our two main priorities
  • Graham G. Miao:
    Thank you, Jennifer, and good afternoon everybody. Our financial results this quarter illustrate our continued progress to enhance operational efficiencies, reduce our cash spend, and strengthen Delcath’s financial condition. During the quarter, net cash used in operating activities was $4 million, a 62% reduction compared to the $10.5 million in the comparable period in 2013. The reduction was driven by the decrease in new drug application or NDA submission-related costs, and improved organizational and operational efficiencies. Importantly, we have met our cash utilization guidance for the last five quarters. Based on our successful efforts, we are revising our cash utilization guidance lower for the remaining quarters of the year. We now expect our average quarterly cash utilization to be in the range of $4 million to $5 million for the remainder of the year, as compared to the previous guidance of $5 million to $6 million per quarter. As of June 30, 2014, cash and the cash equivalents were $27.3 million. We believe that the actions we have taken will enable the company to adhere its strategies for at least the next four quarters. Turning to the income statement, for the second quarter ended June 30, 2014, we’ve recognized $251,000 in revenue. This compares with no revenue, recorded during the second quarter of 2013. For the six months of 2014, we’ve recognized revenue of $561, 000, as compared to $81,000 for the six months of 2013. As we have mentioned previously, we expect the revenue ramp to be slow until permanent reimbursement is secured in Europe. Total operating expenses during the second quarter of 2014 decreased by approximately 41% to $6.1 million from $10.3 million for the same period in 2013. the decrease is primarily due to a significant reduction in expenses related to the company’s NDA submission to the FDA, as well as the company’s overall cost management efforts. The reduction also reflects our more streamlined operations. Total operating expenses for the six months were $11.4 million, down 45% from the $20.8 million in operating expenses recorded during the first half of 2013. During the second quarter, we signed a sublease with a tenant for 50% of our corporate office space in Manhattan. As a result of the sublease, we’ve recorded a non-cash restructuring charge of $855,000, which is reflected in SG&A expenses in the second quarter. We expect to achieve a total net cash savings of $2.6 million over the remaining lease term of approximately seven years. We continue to explore strategies to further optimize our cash utilization. For the second quarter, operating loss was $5.9 million, as compared with an operating loss of $10.6 million, during the same period in the prior year. The operating loss for the first six months of 2014 was $11 million, as compared with $20.8 million for the first half of 2013. In summary, we continue to strive to optimize the use of our resources and the streamline operations. We are focused on our European commercialization efforts and our Connecticut development program. We look forward to updating you on a progress of our strategy. With that, let me turn the call over to the operator, and open the call for questions.
  • Michael Polyviou:
    Christel, we are ready to take questions now.
  • Operator:
    (Operator Instructions)
  • Michael Polyviou:
    Christel, I believe we don’t have any questions. So I want to hand call back over to Jennifer and Graham.
  • Graham G. Miao:
    Thank you very much for participating in the second quarter call. And we look forward to updating you for the upcoming quarter.
  • Michael Polyviou:
    Thank you, Graham.
  • Operator:
    Ladies and gentlemen, that concludes today’s presentation. You may now disconnect. Have a great day.

Other Delcath Systems, Inc. earnings call transcripts: