Delcath Systems Inc (DCTH) 2009 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Delcath second-quarter 2009 financial results conference call. (Operator Instructions). This conference is being recorded today, Monday, July 27 of 2009, and at this time I would like to turn the conference over to Doug Sherk. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone, and thank you for joining us for Delcath Systems' second-quarter conference call. With me today is Eamonn Hobbs, the President and Chief Executive Officer of the Company -- I should say newly appointed President and Chief Executive Officer of the Company -- and board member, Rich Taney. In addition, Jason Rifkin, Senior Vice President of Clinical Operations, and Barbara Keck, Controller, are joining us today.

During today's call they will discuss the Company's progress since the last call in late April, as well as other relevant business updates. A taped replay of the conference call will be available beginning approximately one hour after the call's conclusion and will be available for seven days. This replay can be accessed by dialing 800-406-7325 for domestic callers and 303-590-3030 for international callers. Both numbers require the passcode 411-7854 followed by the #. Today's call is also be webcast live via the Company's website at www.delcath.com, and the call will also be archived on the website.

Before we begin, let me quickly reference the Private Securities Litigation Reform Act of 1995 which provides a Safe Harbor for forward-looking statements made by the Company. Today's call may contain forward-looking statements which are subject to certain risks and uncertainties and uncertainties that can cause actual results to differ materially from those described. Factors that may cause such differences include but are not limited to uncertainties relating to the Company's ability to successfully complete Phase 3 clinical trials and secure regulatory approval of current or future drug delivery systems and uncertainties regarding the ability to obtain financial and other resources for any research, development and commercialization activities. These factors and others are discussed from time to time in filings with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only of the date they are made. The Company has no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date they are made.

With that, I would like to turn the call over to Rich Taney.

Thank you, Doug. Good afternoon, everyone. Let me begin by thanking our loyal shareholders for joining us today. It has been thrilling to lead Delcath into its current state and impressive to see how the Company has progressed over the past two and a half years.

We are at an exciting time in the life of the Delcath. When I first took over the day-to-day leadership responsibilities of the Company, the board and I both recognized that for Delcath to maximize shareholder value, there would come a time to transition the Company's leadership to someone with an established track record of commercialization in the medical device industry, proven relationships with clinicians and thought leaders and proven ability to successfully launch a new medical technology into the marketplace.

We also recognized that two and a half years ago the circumstances limited our ability to attract a leader with those qualities. Since then Delcath has made tremendous progress. In July we decided that the time was right to bring on the leader of the Company needed to take Delcath to the next level, and we asked Eamonn to accept our offer to expand his role from board member to President and CEO. We are delighted that he did just that.

Eamonn has served on Delcath's Board of Directors since October 2008. During his career, he has founded two medical device companies and has identified, developed and brought to market numerous devices. In addition, he is an honorary fellow of the Society of Interventional Radiology. He is on the organization's strategic planning committee. Eamonn is also a member of the Society of Cardiovascular and Interventional Radiology and sits on the Board of Directors of the Medical Device Manufacturers Association, the Society of Interventional Radiology Foundation and the American College of Phlebology Foundation. The relationships Eamonn has developed through these activities will benefit Delcath as we move toward commercialization, and I look forward to Delcath's success under his leadership.

So with that brief introduction, I would like to turn the call over to Mr. Eamonn Hobbs, President and CEO of Delcath Systems.

Thank you, Rich, for that very gracious introduction. I echo Rich's thanks to our loyal shareholders for their continued support as we move through this exciting time and thank you all for joining us for our review of our recent progress.

Since the last conference call in late April, our shares have risen by approximately 30%, and we have been included in the Russell 3000 and Russell 2000 Indexes. Because we have a number of new shareholders, I would like to begin today with a brief overview of what I see as the Delcath opportunity. Then we will walk through our recent developments and take your questions.

The Delcath opportunity begins with the market. We believe the regional oncology therapy market is large and untapped with an annualized sales opportunity estimated to be approximately $3 billion. To address this market opportunity, Delcath has developed what I believe is a superior system that is currently undergoing clinical evaluation at 12 leading cancer centers in the United States. The Delcath System has to date been generating successful results in clinical trials and patient enrollment, and our Phase 3 metastatic melanoma trial is building.

Another key element to the Delcath opportunity is that Delcath retains worldwide rights to the PHP system, and our technology is protected by 27 patents.

And finally, since the Delcath PHP system is a platform technology, I see great potential for its extension to treat cancer in other organs and body regions, including use in patients with primary liver cancer, HCC, metastatic colorectal cancer, and neuroendocrine tumors and other metastatic cancers. In addition, I look forward to testing the device in patients with infectious diseases such as hepatitis C virus.

I'm looking forward to leveraging my relationships within the medical community and delivering this exciting treatment modality to oncology patients worldwide. We have a lot of hard work ahead of us, but I view the Delcath opportunity as having huge potential and I look forward to working with the team and the board to fully capitalize on that opportunity.

Let me now take you through the recent highlights. As I mentioned, patient enrollment in our Phase 3 metastatic melanoma trial is building. At our annual meeting in June, we announced that enrollment had passed the $0.70 percentile, and as of today, enrollment has further increased to 79 patients.

We remain on target to complete enrollment of 92 patients in our Phase 3 metastatic melanoma trial before year-end of 2009. Of those patients, 38 have been randomized to receive the Delcath PHP treatments, and 41 have been randomized to receive best alternative care. Of those 79 patients, 41 were treated at the National Cancer Institute, and another 38 patients were treated at other clinical centers around the United States.

Since our last call with you in late April, we have screened 40 potential Phase 3 melanoma patients in addition to the 18 new patients who were found to be eligible and have enrolled in the trial. Increased patient and civilian awareness of the Delcath System is one factor behind the growth in enrollment, and a major factor behind the increased awareness is the recent media coverage of our treatments' benefits to patients.

Just last month CNN profiled a patient who had been treated by our system, and this tremendous coverage followed up earlier reports on ABC News, the Associated Press and a television station in Denver. By the way, all of these stories are on our website.

The patients are being enrolled into 12 centers currently participating in the trial. The FDA recently granted us the approval to increase the maximum number of centers in our trials to 28. However, given the recent enrollment momentum, we don't at this time expect to expand the incentive participation beyond 15.

We still believe we can complete enrollment in the Phase 3 trial before the end of the year, and if that schedule holds, we would expect to file with the FDA by mid-2010 and to gain CE Mark approval, which would allow for marketing outside the USA by June 2010.

In addition to completing enrollment in the Phase 3 trial, there will be other milestones we need to meet before we file with the FDA. One was the submission of our safety data to our DSMB upon reaching the 75th percent of enrollment milestone. The DSMB is scheduled to meet on September 10 to review the safety data.

Finally, I would like our listeners today to know that we will be presenting at the Canaccord Adams Global Growth Conference in Boston on Thursday morning, August 13. In addition, we have been invited to present at the Rodman & Renshaw Global Investment Conference which will be held September 10 and 11 in New York, and on September 29 we will present at the Maxim Group Growth Stock Conference in September. We are also scheduling meetings with investors around the country over the next few weeks, and if you would like to meet, please let the folks at the EBC Group know.

Those are my prepared remarks for today. Operator, we are now ready to take questions.

(Operator Instructions). Jason Mills, Canaccord Adams.

Good afternoon, Eamonn, Rich and Jason. Good to hear your voice on a conference call again, Eamonn.

Well, thank you very much.

Look forward to hearing more of it. Thanks for the update. I guess the first question is, during the Phase 3 clinical trial in so far as you are able to help us out with this, do you have a sense for the patients that are crossing over to the PHP arm at this point? Any update there?

So far 18 patients have crossed over out of the 41 in the BAC arm, and that shows us two things. One, that patients in the BAC arm are progressing and thereby qualifying for crossover.

Not surprising I would guess from your standpoint?

Not at all.

Right. And you mentioned 12 centers participating during the quarter. You expect to expand to 15. As Rich and I have talked about for the last year or so, the pace of new centers coming on board has been quite impressive over the last 12 months. It took a little while to get over the hump, Rich, but once you did, it seemed to be that the floodgates have opened. I'm wondering have you identified the three additional centers you plan to start the program? And I'm just wondering beyond that, if you have actually identified the additional 13 that perhaps may not get involved in this trial that could be involved in further studies down the line?

Yes, we have definitely identified those. We have yet to choose the next three. We have a long list that we are negotiating with, and our current feeling is that it is likely that three more will come on before the end of the trial. But the additional centers on the list will be candidates for future trials as we don't want to get them started and run out of pivotal trials to work with them on.

Right. It also costs money to open a center as Rich has talked about in the past. So with respect to additional trials, perhaps you could spend a minute and help us -- give us more color with respect to your strategies as it relates to some of the other disease states that you talked about in your opening remarks and your strategy as it relates to addressing those with the system moving forward in terms of partnerships or however you would see it the most prudent and effective to address all the different opportunities that you mentioned.

Well, I see the Delcath PHP system as really an extremely broad platform technology that has potential applications in treating additional diseases in the liver, additional cancers like colorectal, primary liver, neuroendocrine, but also for other organs that -- where cancer can be treated like the kidneys, the lungs, potentially brain, pelvis, and outside of cancer, the ability to treat infectious diseases like hepatitis C as we have talked about.

So there is a real broad spectrum of opportunities to pursue additional indications, and our strategy to pursue those indications is really tied to three legs. The first leg is to have a laserlike focus to get our first approved indication for malignant melanoma meds to the liver and become a commercially viable company selling devices. We are going to do that with our CE Mark for o-US markets. About the middle of next year, we should start commercial operations outside the US and in the US approximately a year thereafter with the gaining of FDA approval.

The other two legs really are associated with teaming up with strategic partners who we will work with to pursue additional indications and open up the platform. So at this time, we are very actively involved with both domestic potential strategic partners that are primarily pharmaceutical companies who have stables of chemotherapeutic agents that we can dramatically enhance the performance and market sizes, as well as o-US potential partners, especially in the Asian markets where most of the diseased livers in the world resigned, and those would be China, Korea and Japan.

So the three legs again are commercialization of the PHP device system first o-US and then US and then domestic partnerships with a very strong strategic angle to them and then o-US partnerships, especially in Asia.

Got it. That is helpful. With respect to your o-US strategy, upon CE mark approval you are modeling I think mid-2010. What is your strategy to address the market there in terms of your distribution? And then also part and parcel to that, perhaps you could give us an update on your manufacturing strategy as you enter the commercial stage? Obviously you have got to be thinking about scaling up.

Well, as far as o-US distribution, we are going to be looking for strategic partners that are well suited to distribute the Delcath System in selected o-US marketplaces, as well as being capable of expanding the indications that the system is utilized and approved for. And so we are already in the process of identifying those partners who will ultimately either facilitate distribution or actually be the distributor. And I see that -- I think we have plenty -- ample time to get all that set up by the middle of next year when we are ready to begin distribution operations.

With regard to the scale-up, we are transitioning from being a developmental stage company to an operational one, which means we need to create operational facilities for manufacturing, distribution, sales and marketing, first for o-US markets and then domestic. And that process is underway. I would expect that we will be opening an operations facility prior to -- well before the end of the calendar year.

Okay. That is helpful. One more and I will get back in queue. Your cash burns seem to be about on par with what the Company reported in Q1. Should we expect this level going forward?

I would expect as we start to ramp up operations there will be an increase in our burn. We are still calculating that, but as you would well imagine bringing on an operations and distribution sales and marketing, it is going to increase our burn rate.

Right. And that will start to show up in the third quarter? The way I took it is that would be sort of as you get closer to finishing enrollment?

Definitely it is going to start to show up in the third quarter.

Okay. Very helpful.

Yale Jen, Maxim Group.

It seems to be a very good start here. I'm a little bit new to the story, so I would like just to start with the DSMB meeting. You are anticipating some temper. What was expected to be reviewed by DSMB meeting at this time is just purely the safety or there is more to it?

Well, the DSMB meeting is a routine meeting that will be held September 10 where the data from the trial will be reviewed for a number of aspects. The first and foremost, of course, is safety. And other considerations that the DSMB will take into account are the power that is coming out of the study so far. If for instance the study already reached a level of statistical significance, then there could be a recommendation that the study is completed and that there is no reason to continue to randomize patients. Anything else do you think the DSMB would do, Jason?

As Eamonn just stated, the toxicity, the safety, that is really their primary focus.

Okay. Great. Should I assume this will be the last DSMB meeting before completing enrollment?

That is correct.

Do you guys think about anything possibly that could stop the trial early, or is it way too early to think about that at the moment?

Well, certainly we have no concerns regarding safety. We don't see any reason that the trial would not be allowed to complete. As we reach the September 10th time, the study will be very, very far along. We were at the $0.70 percentile in early June. So it is unlikely I think the DSMB would curtail the trial before we reached the 92 patient enrollment level.

Okay. Great. Lastly, I just want to get a little bit flavor in terms of some other indications, particularly in the infectious side that you just mentioned to see whether are any other colors you may add to it for the time being?

Well, we are very, very interested in the potential for the system to treat infectious diseases. And where we are in that program is we are in the preclinical stage and would expect that assuming that that goes well that we would be entertaining entering a Phase 1 or Phase 1/2 level within a year.

And lastly for the neuroendocrine study, that would investor anticipate in the not-too-distant future there is additional data to come out? Or is most of the data has been presented already and going into how should we think about the data outside of your endocrine studies?

That arm of the Phase 2 study continues to enroll patients, and once that trial is fully enrolled, data will be presented.

Okay. And would that be a sort of topline data first and (inaudible) later on in some sort of medical conferences to give a broader sort of exposure?

That is correct. That data will be presented at medical conferences as it is completed.

Gabe Hoffman, Accipiter.

The first question, just the two parts on your balance sheet. It looks like you have got about $8.9 million in cash and equivalents, and the burn was about $2.8 million in the quarter on a cash basis.

So two parts. One would be how long you expect that cash to last under your current plans? Where you get -- were -- your sort of minimum comfort level is in terms of months or quarters of runway?

And finally, if any of the -- if you have any warrants or anything -- and I apologize for not knowing in advance; I'm new to the story -- but if there are any warrants or other things which the Company has some sort of call feature on where your stock trades over a certain price for a certain time that you can force conversion and get more cash that way?

Well, as far as runway goes, we anticipate that we have enough cash to get us through the next two quarters, and we are still working out the details of the plan to ramp up the operational side of the business. But even with that -- having said that, I think we are pretty comfortable that we have enough to get through the remainder of the calendar year.

With regard to warrants with call features, I don't believe we have any. Do we? Yes, I don't believe we can force a call on our warrants. But yes, everyone agrees that we cannot.

Okay, fair enough. And I apologize again -- I'm relatively new to the story -- just curious in terms of if you could walk through some basic assumptions on powering of your Phase 3 melanoma study. In other words, what is your assumption for the number of months of PFS in the comparator arm, PFS obviously being the primary endpoint? What sort of absolute difference -- I assume it is in terms of months -- are you powered to detect? For example, 85% powered to detect a two-month difference or whatever that may be?

In terms of the hepatic progression free survival that has been outlined with the FDA with our special protocol assessment, we are shooting for 7.73 months of hepatic progression free survival versus what is estimated for the best alternative care at four months.

So what sort of -- you are basically shooting -- you are basically powered at some relatively high percentage to detect roughly a 90% increase in PFS over comparator?

We are powered at 85% for the 92 patients that we are hoping to enroll in the study.

To get that sort of 3.7 month PFS difference?

That is correct.

Okay. That is very helpful. Thank you.

Larry Haimovitch, HMTC.

Congrats on your first conference call.

Thank you very much.

Not first ever, but first at Delcath. A lot of the questions I had were answered already. Lots of good questions. I just wanted to understand one thing, and that is, you are using -- your product is kind of a combination or a hybrid product of a drug and device. I just was curious about the regulatory path. Which agent -- which part of the agency do you deal with, and have there been any issues because you are obviously not a pure device, at least not how I understand it?

Well, that is an excellent question, and this is a combination product from a regulatory perspective in that there is a device component, which is the Delcath PHP system, and that requires a PMA. But there is also a necessity to get specific drug labeling that will allow for the drug to be dosed and used with the Delcath PHP system. So there is a 505B2 aspect, NDA aspect to the regulatory path as well.

So from a regulatory perspective, we are a combination product. From a commercial perspective, the way I see the Company progressing is as a device company that is partnered with pharmaceutical partners.

The pharmaceutical companies really have a tremendous upside benefit from working with Delcath in that we can take their chemotherapeutic agents that they have already gotten approval for and at specific labeling that will allow them to increase the efficacy of their drug in patients where it can provide tremendous benefit.

And, in addition, this is the first device I have ever worked with in my career that actually increased the amount of drug that could be used while increasing efficacy at the same time. Usually devices do the exact opposite and dramatically reduce the amount of drug that is necessary to reach a therapeutic level. So there has always been a bit of tension between device companies and Pharma companies on those issues.

In this one it is the exact opposite. There is synergy for a win for the Pharma company, a win for the device company, and most importantly, there is a win here for the patients who are getting a new treatment alternative that was not available to them before.

Yes, as you might imagine, the thrust of the question is that sometimes we have seen situations where the device side and the drug sides do not see eye to eye, and you get into a regulatory nightmare. It sounds from your explanation like you are fine in that regard, and I know you are fairly new to the Company. But what's your thoughts or what's the thoughts of the others that are there in the room about that? Are you feeling from what you have seen very comfortable that there is not likely to be a turf battle, so to speak, or any other issues that could affect the ultimate approval of the product?

Well, I have had that nightmare, and I have had recurring nightmares actually about the FDA, and this is my third combination product that I have been involved with in my career. I seem to be somehow destined to constantly be involved with combination products. But in this particular case, drugs have taken the lead very clearly, and we think that is very favorable in that I have been involved where there was not a clear lead in other situations. And that definitely lead to some difficult situations for the Company in my prior lives.

In this case it is as clear cut as it gets. We also benefit from a special protocol assessment in SPA and orphan drug status. So I would not want to tell you that we are all counting our chickens, but we do feel -- we do take some comfort in that we are benefiting from all the bells and whistles you can benefit from going into a very complex combination product regulatory approval. So that's a very long way of saying that I think we are on the right track, and I think the regulatory pathway is as clear as it is ever going to get.

Do you have any thoughts or speculation at this point on whether you would need to go to a panel meeting? This is a unique and relatively new -- quite a new concept. Would you expect that a panel meeting would be part of the regulatory path to FDA approval?

Well, I have a little shrine at my house where I bring incense hoping that we're actually not going to go to panel, but I'm not sure how efficious the little shrine is going to be.

How about the leprechaun?

Absolutely. The leprechaun is holding the incense actually.

Fair enough. Okay. Thanks very much.

Bart Blout, Sawtooth Capital Management.

Two separate questions. Number one, in the event of 18 crossover patients, do you expect that to -- what part do you expect that to play in the outcome of your overall results?

The patients that are being treated as crossover patients contributed to our safety and our toxicity data. Now these patients are treated differently and not part of necessarily that 7.73 first four month analysis. But the more patients that are treated with the PHP system does add to that safety profile that we will be presenting to the FDA. So those crossover patients are certainly beneficial to our application. And that is further to the fact that these patients are fortunate that they show that any patient enrolled in this randomized trial will be able to get the PHP system regardless of what arm they are randomized to if they, in fact, do progress in their livers.

So by separating them you want -- let's say, by being good human being, you want hurt your overall results then, or they will be indicated as such, right?

These patients should not have any impact on our submission regarding hepatic progression free survival. If anything, these patients will benefit our application to the FDA.

Okay. Then the second question is, with respect to money, do you want to license or do you want to raise money in the market?

Well, we are considering both of those, and I think the facts and circumstances of the availability of one or both of those routes is going to dictate where we will actually end up. So by that, I mean we cannot predict when a strategic partner would come to the table with a potential infusion of capital. But we are certainly pursuing that with vigor, and our assumptions with regard to the raising money in the capital markets is that we would certainly take into account what we are capable of raising via strategic partnerships. So -- but we are going to have to play that by ear as we go along.

The reason why I ask is it has been a long pregnancy, and typically in these type of situations, I know the shareholders that have been around a long time would far prefer you to get it elsewhere because it seems like the more loyal you are, the more you get -- in other words, the last guy in gets the best deal in the public market. And the first guy in does not get any, you know, extra reward besides exhibiting more patients. So what would be the time period or what events would have to occur in your mind before there would be some company that would seize the opportunity to license your product and bring forth revenue?

You know, I certainly understand it would be preferable to current investors if the Company could finance all of its growth through means other than the capital markets.

Having said that, we are pursuing those means. I would not want to get into too much detail there. As you could well imagine if they were listening right now, I would not want to discuss any negotiations in any great detail.

But what I would say is that we are very serious about attracting and taking on strategic partners in order to facilitate the growth of Delcath. Predicting when those deals come to fruition is very difficult. I have quite a bit of experience with Asian partnerships, and they do take time to put together. The Asians are very thoughtful and very methodical, and they do a very thorough job of due diligence. So rushing them only makes the process even longer, not shorter. So we are engaged at the current time and on multiple fronts, and we are pursuing those.

With regard to the growth of your Company, Delcath, the good news is that we are transitioning from being a developmental stage company to an operational one that is looking forward to finally getting to revenues and those starting hopefully mid-2010 or in the very near term. And this is a very positive turn of events for the Company, and even if it does require additional capital, it is going towards an extremely positive long-awaited outcome for the Company.

So you are saying that there is somebody signing a licensing agreement or whatever is data dependent?

Well, certainly. The due diligence that potential partners conduct has certainly been picking up. Their interest level has picked up significantly because of the progress we have made in the Phase 3 pivotal trial. And as that trial becomes fully enrolled and completed, it is a very, very significant asset that is hopefully extremely convincing to potential partners. So that is what the Company is all about.

Yes, and then lastly, the people that are possibly considering would a Pharma company that produced the product be a consideration, or would that not be smart from -- like what is there, just about two people that supply most of the stuff that is the chemo?

Well, definitely our most likely strategic partners are pharmaceutical companies that already are marketing the chemotherapy agents that can benefit from the Delcath System. So the current drug that we are using, melphalan, is sold under a brand name of Alkeran by SmithKline, GSK. The drug recently went generic and is -- actually in June, right the day before our annual meeting, and is now being also marketed by Bioniche Pharma in the United States. So there are two suppliers in the United States now of melphalan.

Outside of the United States, there is a very broad spectrum of manufacturers and marketers of melphalan, including GSK with the branded Alkeran and then numerous generic companies. But we are also interested in -- other strategic partners are interested who have other chemotherapeutic agents that can benefit from the system. So I would not want to limit it to just melphalan.

[Tony Keller], Raymond James Financial Services.

Thank you for the opportunity, but my questions have already been answered. Thank you very much.

[Mark Enbody], private investor.

I was just wondering has there been any work on the filters, any new applications, any new filters? I know that we took a stake or bought some stock in one filter company. I would just like a general update.

Well, the filter development program is progressing. We have made tremendous progress in being able to provide the filters pre-sterilized and pre-primed. So that is a tremendous benefit for the clinicians as far as the ease of use, and that was always in the cards as we moved towards commercialization. So a lot of progress there.

We have numerous development programs going on to optimize the filter further both for the current drugs, as well as future potential indications.

Thank you for taking my call.

Gabe Hoffman, Accipiter.

What is the interval of assessment specified in the protocol to detect PFS? For example, is it every four weeks, every six weeks, every eight weeks or something --?

For the Phase 3 melanoma trial, the assessments are done every six weeks, eight weeks and 12 weeks after that. So a patient is going to be randomized into the trial, and their first set of skins will be six weeks, and they will evaluate hepatic progression free survival at that point. And then if the patient does not progress, they will continue getting their treatments on either arm. And then once they do, in fact, progress on those intervals, they will have the option to cross over.

And then after week 12, presumably it is every four weeks thereafter?

It is actually every eight weeks thereafter.

Every eight weeks thereafter. Great. And I noted from your prior transcript that under the SPA you would need 73 events. Now with 61 patients that were enrolled at the time of your last call and you are up to 79 now, if we sort of went through the assumptions that you have outlined and things went according to plan, should we be thinking about essentially eight months from today, eight to nine months, if you will, eight to 10 months as when you would have enough events and we would see the data? Or could you help me with how one might think about that timeframe if I should be thinking about it differently?

As far as last patient out?

Well, when you would actually have enough events to issue a press release with the results.

In terms of thinking about the events versus enrollment, I think the best bet is to assume that there will be 92 patients enrolled in this trial, and then the events will be analyzed at that point.

Right. I mean obviously based on your rate of enrollment, you would certainly reach full enrollment before hitting 73 events. But you would not wait until you saw events for all 90-someodd patients to release the data or would you?

You know, I think it is most likely that we would complete the trial and look at the events of all 92 patients before releasing the data. I think that is the most likely scenario. And we estimate that that would put the data release at somewhere in the April timeframe of next year.

Now does that -- how are the assumptions that you would have been kind enough to provide earlier, is that based upon an assumption of 73 events? And, therefore, if you waited for all 92, you would have somewhat increased power, or were those figures based on seeing all 92 events?

No, we should have -- well, depending on how many drop out of the trial, which we have not seen a lot of to date, assuming that we had 92 patients that were active, we should have a higher power. (multiple speakers) a higher number of (multiple speakers)

I guess if you could just help reconciling to the powering that you had provided 7.73 versus 4, maybe a more clear way to ask the question would be what is the implied number of events to get that 7.73 at 4 months 85% power to detect?

You know, the best way probably to answer your questions would be to meet with you either in person off-line -- (multiple speakers)

Certainly I will get in touch with the group you had mentioned. (multiple speakers). Thank you so much.

It would be our pleasure to do that.

(Operator Instructions). Steven Rosner, SLD Capital Corporation.

I met you at the annual meeting. I sat through the slideshow, and I saw the other studies that were going through at the NCI. And the one that I saw that we are really progressing along on the Phase 2 was the pancreatic that we are kind of -- well, we are kind of -- we are getting great results, but we are kind of stalled out with needing one or two more patients. How are we going to move along with that one since it is a great field to be in?

Well, the best answer I could give to that question is that we agree that it is a very exciting trial, a very compelling trial. And Jason and I have a meeting with the principles at the NCI in a couple of weeks to discuss that very topic. So we are all very eager to complete that trial, and we are looking for every means to do so in the shortest amount of time.

Yes, because if I remember right the charts were saying that we are extending life between 15 and 18 months on that study?

That is right.

That study is showing great results, and we will end up completing enrollment in that study.

Do you have a timeframe do you think since we only need one or two more patients?

I wish we did. We are going to go meet with the investigators and have an eye to eye and figure out whatever we can do to facilitate that. I mean everybody is looking forward to finishing that trial because it is so obviously a positive trial.

Now the biggest trial I guess if we went -- I'm not sure if we have a Phase 1 in colorectal. Do we or do we not? Since that is probably the largest patient group potential.

We are currently not enrolling a Phase 1 trial for colorectal cancer.

Okay. The other question I had is on your release you put out that you have interviewed 40 more possible patients. Did the 18 come out of those 40, or are these 40 additional ones?

The 18 came out of the 41.

The 18 crossover patients you are referring to?

No, no, I'm talking about since April you have put on 18 new patients into the entire study. You have put on actually 10 since the annual meeting on June 16, which is almost averaging two a week. I'm just trying to figure out of these 40 new interviews, were they -- were those patients -- did they come out of those interviews, or are these additional interviews you have done in the last month or so?

These are patients that have been screened since the last conference call and then since the annual meeting. The patients are continually being screened by the investigators at these centers --

So it is possible since we only need 13 more patients that we may have seen those 13 potentials already in this group?

That is a very interesting question. In fact, a number of the patients that are screened by these investigators and ruled not eligible are ruled not eligible at that time and that they have a significant amount of extra hepatic disease. And if that disease can, in fact, be controlled and then their liver turns out to be the predominant area of disease, then that patient may be eligible at that point.

Okay. So what you are saying is, our interviews have gone up substantially with all the press and everything?

Yes, it is the press. It is a number of factors, and the trial -- the momentum has been building on itself. So as we move forward, there will be more patients being seen by these investigators and screened for this trial. And the same goes for the Phase 2 that is enrolling.

And I do want to just clarify one comment I made. We are not enrolling a Phase 1 trial for colorectal metastases, but we are rolling an arm of the Phase 2 at the National Cancer Institute for patients suffering from metastatic adenocarcinomas, which can include colorectal metastases.

Okay, and so let me ask you another question on medical devices. If this would be approved, let's say, sometime in the middle of next year, this system, would it be eligible for to be used for other diseases off-label if the NCI is testing them at that time and having good results?

Well, when you asked would it be eligible, the clinicians are free to use devices as they see fit in the practice of medicine. Having said that, we as device makers are extremely limited to only marketing devices for their labeled indications. So we cannot market off-label use and --

I understand, but you cannot control everything that they use it for is what you are saying?

That is the practice of medicine, and it is very typical for physicians to use devices off-label as they see fit across all of medicine. So you can read between the lines there.

Yes, I can read. And I'm also very encouraged that you are going to go out -- I know your background is -- I've looked at NGO. They have a lot of institutional ownership, and that is what we lack at this time. And it is very encouraging that you're going to be going out on the road and talking about Delcath.

Absolutely and certainly a tremendous amount of focus on telling the Delcath story to institutional investors, yes.

At this time I'm showing no further questions in the queue. Please continue.

Well, thank you, everyone. We are very encouraged about our recent progress, and we will plan to update you again in October. Thank you for your interest and your support. Have a good evening and all the best to each one of you. Goodnight.

Ladies and gentlemen, that does conclude our conference for today. If you would like to listen to a replay of today's conference, it will be available until August 3 of 2009 at midnight. You may access the replay system at any time by dialing 303-590-3030 or 1-800-406-7325 with the access code of 411-7854#.

Thank you for your participation, and at this time you may now disconnect.