Delcath Systems, Inc. (NASDAQ: DCTH) is, to me, one of the most interesting stocks on the market today. Trading at just $0.06 per share, the stock has commanded the attention of the masses. Just look at the image of the StockTwits heatmap below. So, what's the big deal? Why are so many people bullish on DCTH? I'll do my best to answer that question today.
The DCTH Bulls Are Awaiting Big Catalysts
At the end of the day, there are plenty of reasons to be bullish on DCTH, considering the catalysts that are coming this direction. First and foremost, a data release is expected from the company as soon as later this month. The data release has to do with the Phase 2 clinical trial that combines Melphalan with the company's Hepatic Delivery System. The goal of the combination is to treat liver cancer as well as intraheptic cholangiocarcinoma (bile duct cancer).
Of course, no one knows what the results of the Phase 2 trial will be as of yet, but there's a real reason for excitement here. After all, to put the demand for a treatment like this into perspective, approximately 8,000 people in the United States are diagnosed with bile duct cancer every year with more than 40,000 people being diagnosed with liver cancer. Considering that nearly 50,000 people are diagnosed with these cancers every year, there is an inherent medical need for a positive treatment. However, the interim data from this study isn't the only catalyst coming in this direction.
It's also worth mentioning that DCTH is currently in the process of working on a Phase 3 clinical trial. The trial is investigating Melphalan Hydrochloride for injection for use with the Delcath Hepatic Delivery System in patients with Hepatic Dominant Ocular Melanoma.
Yes... I'm Breaking Out The Term... Takeover!
While there are no rumors suggesting that a takeover is going to take place any time soon, nor an indication that DCTH would even be interested in selling the company, the evidence that I'm seeing suggests that the company is a prime takeover candidate, and will be moreso as more data is released.
You see, the oncology space is a massive one, and it's massively profitable at that. Thinking for a second about what the studies mentioned above would represent in the oncology space if they go well gives a hint at where I'm heading with this. At the end of the day, the Phase 2 and Phase 3 clinical data are expected to be overwhelmingly positive. If this proves to be the case, what we're looking at when we look at Delcath Systems is a company with a market cap of only about $11 million and incredibly valuable intellectual property.
Now, imagine that you are the CEO of a company like Bayer. You've got STIVARGA for the treatment of liver cancer as well as other oncology focused drugs. Now, you look up and see that DCTH is close to getting a competing drug to the market. Do you risk the loss of market share or consider buying the company while it is in its infancy, and for lack of a better word, cheap? The bottom line is that if things go well with these clinical studies, they may be the catalysts that cause large companies to vie for an acquisition.
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What We'll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on DCTH. In particular, we're interested in following the company through the ongoing studies and excited to see the results released. Nonetheless, we'll continue to follow the story closely and bring the news to you as it breaks!
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