Delcath Systems, Inc. (DCTH) | Investment Case

1. Company Snapshot

1.a. Company Description

Delcath Systems, Inc., an interventional oncology company, focuses on the treatment of primary and metastatic liver cancers in the United States and Europe.The company's lead product candidate is HEPZATO KIT, a melphalan for injection/hepatic delivery system to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects.Its clinical development program for HEPZATO is the FOCUS clinical trial for patients with metastatic hepatic dominant Uveal Melanoma to investigate objective response rate in metastatic uveal melanoma.

It also provides HEPZATO as a stand-alone medical device under the CHEMOSAT Hepatic Delivery System trade name for Melphalan or CHEMOSAT for medical centers to treat a range of liver cancers in Europe.Delcath Systems, Inc.was incorporated in 1988 and is headquartered in New York, New York.

Show Full description

1.b. Last Insights on DCTH

Delcath Systems' recent performance faced challenges due to pricing pressure and slow hospital onboarding, affecting its addressable market. Despite meeting Q3 earnings estimates with $0.02 per share, a year-ago loss of $0.03 per share, concerns persist. The company's CHOPIN trial results and preliminary Q3 financials showed promise, with $20.5 million in total revenue. However, a "Moderate Buy" rating from analysts, with a target price of $24.00, indicates cautious optimism. Ongoing clinical trials and potential broadening of adoption for PHP in combination with immunotherapies may influence future performance.

1.c. Company Highlights

Last Price	8.62
Change Percentage	0.47%
Open	8.48
Previous Close	8.58
Market Cap ( Millions)	299
Volume	611086
Year High	18.23
Year Low	8.33
M A 50	10.65
M A 200	12.61

FCF Yield	1.29%
Dividend Yield	0.00%
ROE	3.40%
Debt / Equity	0.95%
Net Debt / EBIDTA	-251.13%
Price To Book	2.94
Price Earnings Ratio	138.21
Price To FCF	77.39
Price To sales	4.36
EV / EBITDA	19.97

2. Delcath Systems' Q2 2025 Earnings: Strong Revenue Growth and Improved Cash Flow

Delcath Systems reported a strong second quarter of 2025, with revenue reaching $24.2 million, a 20% increase from the previous quarter. The company's U.S. sales of HEPZATO were $22.5 million, while CHEMOSAT sales in Europe were $1.7 million. The company generated $7.3 million in positive cash from operations, net income of $2.7 million, and adjusted EBITDA of $9.8 million. Earnings per share (EPS) came in at $0.07, beating estimates of $0.026. The company's gross margin remained strong, and it expects to maintain a gross margin between 83% and 85% for the full year.

Publication Date: Aug -23

                                    📋 Highlights
                                    Revenue Growth::
                                                Q2 revenue rose to $24.2M (20% QoQ), driven by $22.5M in U.S. HEPZATO sales and $1.7M in European CHEMOSAT sales.
Financial Strength::
                                                Generated $7.3M positive cash flow from operations, net income of $2.7M, and adjusted EBITDA of $9.8M, with $81M in cash/investments and no debt.
Site Expansion::
                                                Active treating sites grew to 20, targeting 25–28 by Q4 2025 and 40 by 2026, supported by a U.S. sales force expanded to 6 regions.
R&D Investment::
                                                Q2–Q4 R&D spending to increase by 37%–40%, driving a 140% annual rise in 2024, with Phase II trials for HEPZATO in colorectal and breast cancer cleared by FDA.
NDRA Impact::
                                                Joined the National Drug Rebate Agreement to secure Medicaid/Medicare coverage, aiming to boost market access, alongside a revised 2025 revenue guidance of $93M–$96M.

                                

Operational Highlights

The company has made significant progress in expanding its operational capacity, with 20 treating sites currently active and expecting to reach 25 to 28 operational centers by the end of the fourth quarter. Delcath has set an ambitious goal of 40 sites by the end of next year. To support this expansion, the company has increased its U.S. sales force from 4 to 6 regions. Management discussed the potential benefits of the National Drug Rebate Agreement (NDRA) program, including increased volume and access to more patients.

Research and Development

Delcath is investing in further research and development for HEPZATO, with Phase II trials in liver-dominant metastatic colorectal cancer and liver-dominant metastatic breast cancer. Both trials have received FDA clearance, and the company expects to release interim data and primary endpoint results in the next few years. The CHOPIN trial readout at ESMO Congress 2025 is expected to provide valuable insights and allow Medical Science Liaisons (MSLs) to discuss the data with physicians.

Financial Guidance and Valuation

Delcath has adjusted its full-year revenue guidance to $93 million to $96 million and expects to remain cash flow positive throughout 2025. The company's valuation metrics, such as the P/S Ratio of 8.75 and EV/EBITDA of 28.19, indicate a premium valuation. However, with an expected revenue growth rate of 42.8% next year, the company's valuation may be justified. The P/E Ratio of 178.29 may seem high, but it is partially explained by the company's significant earnings growth.

Conclusion on Cash Flow and Debt

Delcath ended the quarter with no debt and approximately $81 million in cash and investments, providing a strong foundation for future growth. The company's Net Debt / EBITDA ratio of -2.65 indicates a healthy debt position. With a ROIC of 3.58% and ROE of 3.4%, the company is generating returns on its investments, albeit modestly.

3. NewsRoom

Delcath: Temporary Headwinds Are No Cause For Concern

Nov -06

Source: seekingalpha.com

Delcath Systems, Inc. (DCTH) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

Delcath Systems, Inc. (DCTH) Q3 Earnings Match Estimates

Nov -04

Source: zacks.com

Analysts Set Delcath Systems, Inc. (NASDAQ:DCTH) Target Price at $24.00

Oct -31

Source: defenseworld.net

Delcath Systems, Inc. (DCTH) Discusses CHOPIN Trial Results and Preliminary Q3 Financials Transcript

Oct -20

Source: seekingalpha.com

Delcath: Large Upside With Limited Downside Risk

Oct -20

Source: seekingalpha.com

Delcath Systems Announces Preliminary Third Quarter 2025 Financial Results

Oct -18

Source: businesswire.com

Delcath Systems Announces Investigator-Initiated CHOPIN Clinical Trial Meets Primary Endpoint

Oct -18

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.40%)

6. Segments

Hepzato Kit

Expected Growth: 12.4%

Growing incidence of liver cancer, increasing adoption of targeted therapies, and Delcath's Hepzato Kit's ability to deliver high doses of chemotherapy directly to the liver drive market growth.

7. Detailed Products

CHEMOSAT

CHEMOSAT is a hepatic delivery system that allows for the administration of high doses of chemotherapy directly to the liver, while controlling systemic exposure to the chemotherapy agent.

Melphalan/HDS

Melphalan/HDS is a chemotherapeutic agent used in conjunction with CHEMOSAT to treat liver cancer.

GENERIC Melphalan

A generic version of the chemotherapeutic agent melphalan, used to treat various types of cancer.

8. Delcath Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Delcath Systems, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the ongoing development of new technologies.

Bargaining Power Of Customers

Delcath Systems, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are specialized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Delcath Systems, Inc. relies on a few key suppliers for critical components, which gives these suppliers some bargaining power. However, the company's strong relationships with its suppliers and its ability to negotiate contracts mitigate this risk.

Threat Of New Entrants

The barriers to entry in Delcath Systems, Inc.'s market are relatively high, including significant capital expenditures and regulatory hurdles. This makes it difficult for new entrants to join the market.

Intensity Of Rivalry

Delcath Systems, Inc. operates in a highly competitive market with several established players. The company must continually innovate and improve its products to maintain its market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	39.31%
Debt Cost	6.72%
Equity Weight	60.69%
Equity Cost	6.72%
WACC	6.72%
Leverage	64.78%

11. Quality Control: Delcath Systems, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Radius Health

A-Score: 4.9/10

Value: 6.8

Growth: 3.4

Quality: 1.4

Yield: 5.0

Momentum: 9.0

Volatility: 3.7

1-Year Total Return ->

NeueHealth

A-Score: 4.8/10

Value: 9.8

Growth: 3.6

Quality: 4.6

Yield: 0.0

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

Ligand Pharmaceuticals

A-Score: 4.8/10

Value: 4.4

Growth: 4.4

Quality: 3.9

Yield: 0.0

Momentum: 10.0

Volatility: 6.0

1-Year Total Return ->

Delcath Systems

A-Score: 3.9/10

Value: 1.2

Growth: 5.8

Quality: 6.5

Yield: 0.0

Momentum: 8.0

Volatility: 2.0

1-Year Total Return ->

BeyondSpring

A-Score: 3.7/10

Value: 8.3

Growth: 5.8

Quality: 6.7

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

Accuray

A-Score: 3.6/10

Value: 7.8

Growth: 5.0

Quality: 2.2

Yield: 0.0

Momentum: 4.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

41.15%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.72%

Delcath Systems, Inc. - US24661P8077

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DCTH

1.c. Company Highlights

Weak Momentum

Fairly Valued

Average Quality

Revenues Beats

Medium Volatility

Strong Momentum

Earnings Miss

Revenues Miss

Earnings Beats

Average Yield

Average Growth

Better Quality

Expensive

Stable Momentum

2. Delcath Systems' Q2 2025 Earnings: Strong Revenue Growth and Improved Cash Flow

Operational Highlights

Research and Development

Financial Guidance and Valuation

Conclusion on Cash Flow and Debt

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.40%)

6. Segments

Hepzato Kit

Expected Growth: 12.4%

7. Detailed Products

CHEMOSAT

Melphalan/HDS

GENERIC Melphalan

8. Delcath Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Delcath Systems, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.62$

Current Price

8.62$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA