Delcath Systems, Inc. (NASDAQ: DCTH) is having yet another rough day in the market today. The reason is a bit of a mix. While management has been pushing for a reverse split, investors seem to be against that. From there, many are worried about the fact that news hasn’t been released surrounding the company in quite a while. Although there are some concerns here, and rightfully so, there’s also a glimmer of hope on an otherwise dark cloud. Today, we’ll talk about the situation we’re looking at. Before we do, we’d like to thank our partners at Trade Ideas for being the first to alert us to the movement today. Currently (9:36), DCTH is trading at $0.092 per share after a loss of $0.009 per share or 8.91% thus far today.
Stating The Obvious About DCTH
As mentioned above, there’s a dark cloud hanging over Delcath Systems at the moment, which is the likelihood of a reverse stock split. The company has been campaigning for a reverse split for some time now, and for good reason. The truth is that they need it. However, investors haven’t approved the split. Nonetheless, as mentioned above as well as in previous posts, this is something the company needs. Here’s why…
At the end of the day, the company needs access to capital. A reverse split would give the company access to some convertible note rooted capital, which would likely amount to about $11.8 million in restricted cash. Not only will a reverse split give the company access to cash, but it will also reduce their share count, giving DCTH the ability to get a 180-day listing extension on the NASDAQ.
At the end of the day, it’s all about funding. If the reverse split does take place, funding will be there, and it will likely be enough to fund the company through its next catalyst, ultimately breathing life back into DCTH. I know this isn’t what most investors want to hear, but it’s the truth, and it’s worth keeping in mind.
There Is A Glimmer Of Hope Here
While there are some big concerns that investors have at the moment, there is a bit of hope. In fact, there are 3 reasons to be excited about the company. Here’s how I see it…
First and foremost, an interesting page on the UPMC Hillman Cancer Center website popped up recently. The page discusses percutaneous hepatic perfusion treatments. On the page, the content explains what patients will experience with regard to the treatment in a way that makes it seem as though the UPMC Hillman Cancer Center will be starting to provide these treatments soon.
The interesting part here is that this is one of the treatments that DCTH has been working to get to the market. In fact, there’s an ongoing clinical trial surrounding the treatment. While DCTH hasn’t offered any update with regard to how that trial is going or why the UPMC Hillman Cancer Center would have a page like this on their website, it’s interesting to say the least and suggests that there may be some sort of fast track or compassionate-use program that may be announced relatively soon. This could be the reason for all the silence.
Another reason to be excited about DCTH is their ongoing work with regard to CHEMOSAT. While the treatment has been approved in Europe, it has not yet been approved in the United States. Nonetheless, the company is working hard to bring it there, which will likely lead to several positive catalysts ahead.
Finally, I’m reverting back to something that I’ve offered up quite a bit in the past. At the end of the day, DCTH has incredible assets that many of the big players in oncology would love to get their hands on. So, we can’t count out the possibility of an acquisition.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on DCTH. In particular, we’re interested in learning why the page on the UMPC Hillman Cancer Center website about Delcath’s treatment popped up. We’re also going to continue keeping a close eye on clinical updates. Finally, we’re interested in learning if there is or isn’t an acquisition in the works. We’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!