DCTH Q2 2024: 8 Active Sites Now, 20 by Year-End Underpin Growth
- Robust Center Activation and Expanding Pipeline: Executives highlighted an increasing number of active centers—from 8 active sites with expectations to reach 10 by the end of the month and 20 by year-end—supported by over 20 centers in the pipeline, suggesting a strong near-term revenue ramp from site activations.
- Rising Treatment Volumes and Positive Clinical Momentum: The Q&A discussed that many centers are already performing multiple treatments per month, with some high-adopter sites potentially matching or exceeding trial averages of 4.1 treatments. This indicates strong momentum and confidence in the treatment's efficacy.
- Favorable Reimbursement and Regulatory Developments: The receipt of NTAP status, despite being a modest tailwind, validates the innovation behind HEPZATO and helps alleviate the financial burden on hospitals for occasional inpatient cases, reinforcing broader adoption and supporting future revenue growth.
- Delayed Center Activations and Scheduling Complexities: Management noted that scheduling for preceptorships and activations is “all over the map,” leading to unpredictable timelines for site activations. This could slow down the pace of revenue growth.
- Potential Decline in Average Treatment Volumes: When excluding top-performing centers (e.g., Moffitt and Thomas Jefferson), the average number of treatments per center may drop. This disparity raises concerns over whether a sufficient volume will be maintained to meet revenue forecasts.
- Uncertainty in Reimbursement Dynamics: The benefits from the NTAP designation were described as modest, and the delay in the U.K. reimbursement review (moved to next year) adds uncertainty. This could hinder adoption rates and impact cash flow expectations.
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Breakeven Targets
Q: What kits needed for breakeven?
A: Management indicated around 60–80 kits per quarter to generate about $30 million in revenue, targeting cash flow positive status by Q1 2025. -
Treatment Volume
Q: What’s the mean HEPZATO treatment count?
A: They noted anecdotal evidence that most patients progress to 2–5 treatments, and over time, centers should reach the trial’s 4.1 average. -
Center Performance
Q: How do averages drop without high performers?
A: Excluding centers like Moffitt and Thomas Jefferson, most centers are expected to average around 1.5–2 treatments per month. -
Max Capacity
Q: What are the high-adopter treatment levels?
A: Some centers have occasionally reached 6–7 treatments monthly, though scheduling remains variable until processes stabilize. -
NTAP Impact
Q: Does NTAP boost treatment uptake?
A: NTAP is viewed as a modest help for inpatient billing issues but is unlikely to significantly boost overall uptake. -
Referral Network
Q: How are referrals and treatment sequencing handled?
A: Peer-to-peer referrals are increasing, with both pre- and post-tebentafusp strategies guiding patient treatment decisions. -
Activation Learnings
Q: What insights emerged on center activations?
A: Activation challenges largely involve complex scheduling and educating stakeholders, with improvements coming from peer-to-peer interactions. -
High Adopters
Q: Any update on other early high adopters?
A: A third high-adopter center is emerging, suggesting a mix of performance levels that will balance as centers mature.
Research analysts covering DELCATH SYSTEMS.