Warren....thank you for your honesty! Even as early investors we too were in the dark with how Delcath proceeded with their first NDA submission to the FDA which was rejected because it did not have any patient safety data. That was a huge red flag. So Delcath went and did a new NDA which now included the required safety data. The data revealed that 7% of the patients treated had died due to high toxicity from the drug Melphalan which is used to saturate the liver. Upon completion of the procedure approx. 15% of the Melphalan was still circulating in the body. The Gen 1 filter was the cause and that is why Delcath needed to develop the Gen 2 filter. All the phase 2 and phase 3 patient trials were performed using the old Gen 1 filter.
Hobbs tried to get the FDA to accept the Gen 2 data but for some reason, it was not allowed during the ODAC meeting. I firmly believe that the new filter has now solved the problem but without a new patient safety trial per FDA, they will not approve this procedure. So where are we now? Delcath needs to raise additional capital to move forward with the new trial plus continue to pay their very high overhead. It will be difficult now to attract new investors to raise additional cash so what will they do? This company will run out of money soon and will need to go into survival , cutting back to the bare bones in order to be able to complete their new trial and submit to FDA. Just doing a reverse stock split is not the answer and it is being done to prevent them from being delisting from NASDAQ.
After reading the German reimbursement report it is apparent that they will not be getting enough revenue to sustain operating costs from their Europe operations. So what's next? Delcath must raise a significant amount of money to continue funding operations and also pay for the new phase II patient safety trial being required by the FDA. A new round of funding must be completed soon however it will be difficult to attract new investors this time around. So how will they raise additional capital? Voting on a reverse split will not be the answer. Delcath should consider filing for bankruptcy to get protection from its creditors. This will also get them out of their "iron-clad" high rent lease in their Manhattan office. Delcath management must do everything possible now to be able to survive until the new safety trial is completed and I have no doubt that it will be successful. After emerging from bankruptcy "debt free", new investors will come around again. Maybe then consider doing a reverse spit which will now survive more favorable odds.
Delcath should consider filing Chapter 11 Bankruptcy to get relief from its current debt. Once they re-organize they can roll-out their new plan to move forward. Currently it will be impossible to attract any new investors especially after announcing their plans to do an r-s. What other options do they have?
The news from Germany was not good! The question is; "does Delcath get paid upfront for the 618 kits or do they allow the hospital to get reimbursed first?" The kits are sold between $12K - $15K/ each so if we take the lower price of $12K then Delcath extended $7.4M to hospitals and was only reimbursed $1.6M. That doesn't even cover salaries of Delcath employees in Europe.
This company will need to go to the well once again to raise additional money to fund the new patient safety study for Gen 2 in US being required by the FDA plus all on-going expenses which include rent and overhead (salaries) This is a big nut thanks to Hobbs.
For 2014 reimbursement, a total of 618 medical procedures were submitted to the InEk for consideration.
16% or 96 procedures receiving Value 1 Status (mandated reimbursement)
6% or 36 procedures receiving Value 4 Status (negotiated reimbursement)
78% denied coverage or un-evaluated or Value 2 (declined for reimbursement)
So in conclusion, 22% of the procedures were paid for by insurance and 78% of the patients were denied coverage.
It appears that DCTH now has new investors that did not get crushed in the last massacre which happened right after the ODAC meeting on September 13, 2013 which voted unanimously 0-16 to not approve this procedure. Eamond Hobbs stepped down as CEO and an emergency shift of executives was put into place. Despite some wins in Europe regarding acceptance and payment for a very costly medical procedure, Delcath can not make enough money to pay their executive salaries and the high cost of rent in Manhattan. They are currently stuck in a lease they can't get out of. So what do they do, they go to the well and continue to suck more money out of investors like you. .
After that ODAC meeting people lost 90% of their investment in this stock with no hopes of regaining their money. The FDA will require Delcath to perform another patient trial to prove the safety and effectiveness of their Gen 2 filter. This trial will consume a lot more money and time which may bankrupt this company in the end. Many European countries will never accept this procedure until it gets accepted in the US.
Delcath plans to do a RS (reverse stock) split in order to bring the share price over $1.00 again and drop outstanding shares to a respectable number. Having been an investor a long time I can tell you that a RS is a disaster for shareholders. If you have 50K shares and they do a 1-5 split, then your 50K shares drops to 10K, and yes, the share price increases 5X so theoretically you have the same amount of money. But here's the kicker, the new share price will drop again in what is called a retracement and that is when you will lose the rest of your investment.
Do some research with Celsion (formally Cheung Labs). Early investors lost everything when this company decided to do a 1-15 reverse split which bankrupted all their original investors. Now years later new investors are chasing that same rainbow with same inept management in place and nothing positive to show for it